Oil Prices Impacting Grain Prices - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Oil Prices Impacting Grain Prices

Like the rest of the economy the agriculture industry is headed for a uncertain and marginal future.

That's what one expert says as commodity prices continue to plummet from record highs this past summer.

Farmers across the high plains are wondering how these prices could fall so hard so fast.

But one local economist says as a barrel of oil continues to march downward, the price for corn will as well.

The easing at the pump seems nice to the average pocketbook.

But it's having a heavy impact on farms across the country.

"That affects the break evens for ethanol production. Which is used as a substitute for oil and then that impacts what they can pay for the corn used to produce ethanol," said Dr. Steve Amosson, an economist for the Texas AgriLIFE Extension.

30 to 40 percent of the United States corn crop is used in ethanol production.

And over the summer as the price of oil remained high, so did corn.

Now corn has fallen almost fifty percent. 

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