Price Elasticity of Demand
ECON 312- Principles of Economics
Corn, a national commodity, to some might be considered the miracle crop. It is not only a food source for humans but for livestock as well. Corn production, especially as a renewable source of energy, holds much promise and places hope that this once dwindling cash crop might bring new financial returns and sustainability to an agricultural industry marked with continual shifts in supply and demand. As the earth’s population continues to grow and the demand for alternative fuels becomes mandatory, we will need to continue to research alternative fuel sources and the affects that there production will have on the environment. Supplies and Demands
Grain production is a necessity to sustain life. But what will the demand of corn do to the farmlands of America? How will the increase in corn production affect other necessary commodities such as soybeans? Crude oil prices are also on a constant rise, which also impacts the demand for corn production and the demand for alternative biofuels. According to the article by Scott, the share of total domestic corn production has increased drastically over the last several years as the demand for ethanol continues to increase. This demand for biofuel will alter the way cash crops are farmed a national land transformation will begin. Farmers who once grew soybeans and other grains will change their farming practices to meet the demand that the biofuel industry is placing on it. Another contributing factor for the demand of corn is the livestock industry. As corn is being directed toward ethanol production we are slowly disabling the farmers who have chosen to utilize livestock as their source of livelihood. As the corn is being redirected for biofuel production the amounts available to the farmers will inherently go down causing the amount available to farmers to become more expensive. This...
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