Now that the ethanol idea was a bust, shouldn't prices of corn products go down?

Question

All of the corn that was reserved for ethanol should now go back to being a food source, right? The excuse for corn product (like corn oil) prices going up was that all the corn was being used for ethanol. Well, now that that is a bust, you'd think there would be plenty of corn for food, thus lowering prices. I used to buy a bottle of corn oil for $1.50. A few weeks ago, I paid $2.50. Now I see that it is $3.89 a bottle! WTF? I know food prices are rising because of transportation costs and such, but corn is grown right here in Ohio (or at least it used to be, since many people aren't continuing farming, partly because the cost to farm today makes it unprofitable). I know the flooding in Iowa will become a price burden, but why would corn prices be so high NOW?

Answer 1

it was only recently that the ethanol oil for cars went wrong, and the growing season has not started yet. It will probably take at least 1 year for the prices will see any stabilization or decrease. Not all countries stop producing corn oil for cars. I know the Canadian government made it mandatory for gasoline sold to contain a certain percentage of ethanol, but not sure when this goes into effect. Price will continue to rise because there is a larger demand compared to last year. People are also hoarding, they buy more in anticipation prices are going to rise. Like may parents, they went to costco and bought a few jugs of oil because they are thinking the prices will rise. The corn oil producers also think this way, they know people are willing to pay more now, then lets say in a year. So, they keep prices high. The producers will not lower prices unless they start to make less profit and see a decrease in demand

Answer 2

Sadly, there is little chance of the price of corn falling on international commodity markets because the floods in the American mid-west have devastated the corn crop this year. Since that is the main corn producing area in the world the high prices will continue for some time yet.  One good thing though, it does make buying the more glamorous olive oils more justifiable economically.