Corn price to drop if ethanol tax credit expires

According to a release by the National Chicken Council, the price of corn will drop by 50 cents per bushel if the tax credit expires at the end of 2010. This finding was included in a report by Dr. Bruce Babcock of Iowa State University.
Quoting the NCC release, Babcock stated, “although the arguments in support of and against the tax credit extension have changed little since the summer, the economic situation and the corn, livestock and ethanol industries have changed dramatically.”
The current high price of corn attributed jointly to domestic demand, diversion to ethanol and exports have resulted in windfalls for corn producers and increased costs for the livestock industry and ultimately consumers. It is estimated that a rise of 50 cents per bushel for corn represents 2.2 cents per dozen eggs or 1.6 cents per processed pound of broiler meat.