As the location and boom-bust cycle in ethanol production
demonstrates, opportunities for wealth creation (in this case,
investing in physical business assets) can be influenced by both
temporal and spatial factors. The ethanol production boom in the
United States was stimulated by rising oil and gasoline prices
relative to corn prices, efficiency improvements in ethanol
processing technology, and Federal and State government policies
that provided incentives for ethanol production. These
temporally-specific drivers, together with comparative advantages
of particular locations for ethanol processing--favorable access to
corn production and transportation infrastructure--led to rapid
expansion of ethanol plants in many rural communities, especially
in the Corn Belt over the last decade. In rural places lacking
these advantages, ethanol production was less likely to be
profitable, and efforts to promote it could impede wealth creation.
Even where such advantages exist, changes in the temporal context,
such as changes in the relative price of ethanol and corn, have
reduced profits and caused some plants to go out of business. This
chart appears in "Creating Rural Wealth: A New Lens for Rural
Development Efforts" in the September 2012 issue of ERS's Amber
Waves magazine.