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August 2, 2007
The Ethanol Follies: latest victim is Clorox
The high price of corn taking its toll.
The political program of ethanol production (because this is what it truly has become: a subsidy for farmers and a blandishment for early primary states in the grain belt) has pushed up corn prices with dubious benefits in terms of increasing our energy efficiency and independence from less than reliable oil-exporting nations. This push in corn prices has been rippling through the economy.
Little appreciated is the fact that corn itself is a marvelous source of a wide range of chemicals and feedstuff for our industry. Latest victim: Clorox. The company released sharply lower earnings and "credits" a large increase in input prices - that is, the byproducts of corn. How many employees will lose their jobs, compounding the loss shareholders are already going to endure?