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Purdue Economist: Drought Could Ignite Ethanol Debate

Farms grow corn in Indiana for both food consumption and ethanol production.

Indiana corn producers could find themselves in the middle of a food versus fuel debate if drought conditions the state is experiencing expands nationally, a Purdue agriculture expert says.

Indiana is the fifth largest corn and soybean producer in the country and no major corn producing state has been hit harder by drought this year than Indiana. The dry conditions have already created a 20 percent drop in corn production.

Purdue agriculture economist Chris Hurt says that’s creating a troublesome situation when it comes to ethanol. Gasoline blenders are required by federal law to use a certain amount of ethanol. And so Hurt says the ethanol industry is basically guaranteed the first five billion bushels of corn produced.

“And if there’s only 10 billion bushels and we need 13 billion then everybody else that uses has to fight over that,” he says.

That fight could drive up food prices not only in this country but around the world. Hurt says that will create a debate over whether federal law should be changed. But for now he says the fight will hold off as the industry waits to see how bad the drought becomes.

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