Pages

Friday, September 16, 2011

The Effect of Food as Fuel

CF industries produces fertilizer, an important input when growing corn.  The company presented at a conference this week and included the following slide showing the dynamics of the current corn market.  It's pretty amazing how much corn production is being converted into ethanol in the last few years.

Stock to use (right scale) is a measurement of the tightness of the corn market, a lower ratio means that supply is tight. We're at levels that are the tightest in at least a decade, at least partially due to policy pushing corn into the fuel stream.  Not surprisingly, the price of corn has benefited (quoted in cents per bushel).


No comments:

Post a Comment

For compliance reasons, I don't post comments to the site, but I do like hearing from readers and am happy to answer any questions. Feel free to use the comment box to get in touch. Please leave an email address in your comment so that I can write back, or email me directly at Skrisiloff@avondaleam.com.