A considerable number of farmer-owned ethanol plants have been built in the past few years, with many more planned. In part, farmers' investment in ethanol plants is an attempt to increase grain prices in their local market. We examined this issue by estimating the impact on local grain prices of twelve ethanol plants that opened from 2001 to 2002. We find that these new ethanol plants increased local grain prices, but the impact was not uniform around the plant. Markets downstream from a new plant, where prices tend to be higher, experienced a smaller price impact from the ethanol plant. On average across plants, corn prices increased by 12.5 cents per bushel at the plant site, and some positive price response was felt 68 miles away from the plant.

Spotted knapweed is the most serious range weed problem in western Montana. Although picloram is often used to control knapweed, the economic feasibility of the practice has not been evaluated. We developed a model to economically evaluate spotted knapweed control on rangeland. Model functions describing the dynamics of the plant community preceding and following treatment were derived from field observations in western Montana. Economic returns per management unit were calculated for 3 scenarios: (1) no treatment, (2) containment, and (3) eradication of spotted knapweed. After tax costs and benefits of treatments were analyzed for a 20-year period and discounted to the present. An economic loss in current dollars of S2.38/ha was incurred under the no treatment strategy when 25% of the management unit was initiaily inlested with spotted knapweed and the weed was spreading to new acres and replacing desirable forage. After-tax present value of added AUMs in the eradication strategy was greater than the after-tax present value of added costs, S3.41/ha and Sl .99/ha, respectively. As site productivity, value of an AUM, and rate of knapweed spread to new acres increased, economic returns increased relative to treatment costs. In contrast, herbicide treatment became leas cost-effective as knapweed utilization by livestock increased. Thus, economic feasibility of spotted knapweed control varied with economic and biologic conditions.

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