Thursday, November 01, 2007

Unintended Consequences of Green

From Farmgate, a discussion of corn and soybean outlook:
1) Projections of corn use for ethanol continue to climb upward, putting pressure on corn prices, encouraging acreage shifts, and resulting in reduced supplies of other crops.
2) Higher US prices are encouraging crop production expansion in South America and elsewhere, with an impact on livestock production and the price of meat.
Of course, the expansion in South America is changing tropical forest into monocultural land. As Robert Heinlein wrote, there's no such thing as a free lunch.

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