Flooded Corn Fields = Higher Gasoline Prices
June 19th, 2008This situation represents a massive, slow moving disaster and few people (outside of commodity trading circles) even realize it yet. The criminal corn lobby, and the whores in Congress who service it, are the ones to thank for this.
Via: Reuters:
U.S. gasoline prices, which have already jumped to a nationwide average over $4 per gallon, may get an extra nudge from soaring costs for gasoline-additive ethanol as the worst floods in 15 years hit the Midwest Corn Belt.
The outlook is bad news for American motorists already suffering sticker shock at the gas pumps at the start of the summer driving season.
“If we have prolonged rail and barge delays of getting Midwest ethanol to all the coast, then it will have an absolute upward impact on prices right now,” said Stephen Schork, editor of The Schork Report in Philadelphia. “I could probably see it adding another nickel to another dime to the prices at the pump as we head toward the July 4th holiday.”
The cost of corn-based ethanol, a blendstock that now makes up about 7 percent of the U.S. gasoline pool, has jumped 20 percent in two weeks as flooding damages Midwest corn crops, shuts down distilleries and disrupts rail traffic to get the ethanol to market.
The surge brings the price of ethanol to about $2.90 a gallon, still well below the overall price of finished gasoline. But the increased price of the key ingredient could still filter down to drivers.
