Farm Bill May Hit Ethanol Producers

I was looking at the new Farm Bill passed by the Senate and this part was interesting.

_Increase loan rates for sugar producers.

_Urge the government to buy surplus sugar and sell it to ethanol producers for use in a mixture with corn.

_Cut a per-gallon ethanol tax credit for refiners from 51 cents to 45 cents. The credit supports the blending of fuel with the corn-based additive. More money would go to cellulosic ethanol, made from plant matter.

I wonder how this change will affect corn and sugar prices. Much of the high price of corn is due to its use as fuel for ethanol. Also I wonder if sugar prices will rise now that it might be used to fuel cars and not just to make Americans fat. That 3rd thing may be a terrible blow to some of the ethanol refiners that are right on the bubble as well. I think you might see some consolidation and bankruptcies in that industry in the near future.