ABSTRACT
Few people would have predicted the rapid increase in ethanol production from corn grain that occurred during the last decade. This increase was driven primarily by a “blender’s credit” that subsidized the blending of ethanol with gasoline (Hoekman 2009). The credit, which helped ensure a market for corn ethanol, assured a reasonable return to capital investment and enabled the industry to respond by expanding rapidly. For both farmers and their neighbors, investment in ethanol plants created greater local demand and higher prices for corn grain while also providing an increased number of well-paying employment opportunities that helped reinvigorate the economies in many small rural communities (NAS 2009). Some argue that the number of jobs added to the local economy has been overestimated, and when the increasing corn demand for ethanol production was coupled with that for animal feed to meet increasing demands from Asia, land values and input costs have also increased (Low and Isserman 2009).
