The federal government currently subsidizes ethanol with a fixed payment of $.51/gallon of ethanol blended with gasoline. Ethanol profitability is closely linked to the prices of corn and ethanol. The purpose of this paper was to develop a variable subsidy based on corn and ethanol prices and...

Ethanol, the common name for ethyl alcohol, is fuel grade alcohol that is predominately produced through the fermentation of simple carbohydrates by yeasts. In the United States, the carbohydrate feedstock most commonly used in the commercial production of ethanol is yellow dent corn (YDC). The...