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Abstract

Expansion of the U.S. ethanol industry hinges largely on extension of the Federal fuel excise tax exemption and corn prices. For ethanol to be competitive in the 1990's without the Federal subsidy, crude oil prices would have to increase substantially. This report examines production costs and the relative competitiveness of the ethanol industry. The report evaluates structural characteristics of the industry, including economies of scale and the relative economics of the two primary manufacturers, wet- and dry-mill plants.

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