Gasohol: Prospects and Implications

Gasohol, a mixture of 90 percent unleaded gasoline and 10 percent anhydrous alcohol, has become commercially viable as a motor fuel because of Federal and State subsidies and high prices for petroleum. Significant alcohol production using corn as a feedstock would lead to higher corn production and prices and somewhat lower soybean production and prices. The impact on the U.S. balance of trade would be negligible at current petroleum and commodity prices. High levels of corn use in alcohol production could reduce stocks substantially, and thereby destabilize corn, livestock, and food prices.