The Response of Corn Acreage to Ethanol Plant Siting
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U.S. ethanol production capacity increased more than threefold between 2002 and 2008. We
study the effect of this growth on corn acreage. Connecting annual changes in county-level
corn acreage to changes in ethanol plant capacities, we find a positive effect on planted corn.
The building of a typical plant is estimated to increase corn in the county by over 500 acres
and to increase acreage in surrounding counties up to almost 300 miles away. All ethanol
plants are estimated to increase corn production by less than their annual requirements.