Ethanol
- Thread starter dun
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That is a very interesting article. I have been watching and wondering what is going to happen here.... Seems to be a double edged sword. Can I cut and paste pieces onto here or is that a copyright issue?
ETF
Well-known member
Glad to see people are starting to wake up to the downside of ethanol. It makes perfect sense in Brazil where you can grow sugar cane throughout the country. Not such a great idea here. "There ain't no such thing as a free lunch" is proven true once again.
All writing in italics come from the November 28th Wall Street Journal article that Duns' link pulls up. There is more in there, but I thought this might be of most interest.
Last month, an outside expert advising the United Nations on the "right to food" labeled the use of food crops to make biofuels "a crime against humanity," although the U.N. Food and Agriculture Organization later disowned the remark as "regrettable."
The fortunes of many U.S. farmers, farm towns and ethanol companies are tied to corn-based ethanol, of which America is the largest producer.
Ethanol's problems have much to do with its past success. As profits and production soared in 2005 and 2006, so did the price of corn, gradually angering livestock farmers who need it for feed. They allied with food companies also stung by higher grain prices, and with oil companies that have long loathed subsidies for ethanol production.
In the past, livestock farmers supported ethanol because it was good for the overall farm economy. But now they began to complain that the higher corn price cut sharply into their profits. A meat-producer trade group called the American Meat Institute took a stand against federal support for biofuels last December, joined soon after by the National Turkey Federation and the National Cattlemen's Beef Association.
Opponents of ethanol also have hammered on an Agriculture Department projection that by 2010, less than 8% of the U.S. gasoline supply will come from corn-based ethanol -- and 30% of the corn crop will be used to make it. That suggests to some that the tradeoff between food and fuel is unbalanced.
Mr. Dinneen says arguments about ethanol driving up food costs are overblown, in part because corn farmers will produce so much grain that corn prices will ease. But even though U.S. farmers this year planted their biggest crop since World War II, prices have stayed well above $3 a bushel, thanks to rising demand in developing countries and poor weather in some grain-growing nations. The price is expected to stay well above $3 next year as farmers shift some land from corn to two other crops whose prices have risen sharply, wheat and soybeans.
Last month, an outside expert advising the United Nations on the "right to food" labeled the use of food crops to make biofuels "a crime against humanity," although the U.N. Food and Agriculture Organization later disowned the remark as "regrettable."
The fortunes of many U.S. farmers, farm towns and ethanol companies are tied to corn-based ethanol, of which America is the largest producer.
Ethanol's problems have much to do with its past success. As profits and production soared in 2005 and 2006, so did the price of corn, gradually angering livestock farmers who need it for feed. They allied with food companies also stung by higher grain prices, and with oil companies that have long loathed subsidies for ethanol production.
In the past, livestock farmers supported ethanol because it was good for the overall farm economy. But now they began to complain that the higher corn price cut sharply into their profits. A meat-producer trade group called the American Meat Institute took a stand against federal support for biofuels last December, joined soon after by the National Turkey Federation and the National Cattlemen's Beef Association.
Opponents of ethanol also have hammered on an Agriculture Department projection that by 2010, less than 8% of the U.S. gasoline supply will come from corn-based ethanol -- and 30% of the corn crop will be used to make it. That suggests to some that the tradeoff between food and fuel is unbalanced.
Mr. Dinneen says arguments about ethanol driving up food costs are overblown, in part because corn farmers will produce so much grain that corn prices will ease. But even though U.S. farmers this year planted their biggest crop since World War II, prices have stayed well above $3 a bushel, thanks to rising demand in developing countries and poor weather in some grain-growing nations. The price is expected to stay well above $3 next year as farmers shift some land from corn to two other crops whose prices have risen sharply, wheat and soybeans.
Legacy38464
Well-known member
THis article brings out some of the downsides for sure, but in this market it will work itself out, with increased production of corn bringing prices in line or cattle prices will have to increase more to compensate for the highr grain prices. The trick is going to be who can weather the storm until it settles.... :shock:
Running Arrow Bill
Well-known member
Will be interesting to see where the Ethanol "fad", "trend," or whatever evolves to.
Wile back I saw a special on TV discussing Ethanol production. Basically it is 200 proof moonshine...lol. They also said that Henry Ford used "Ethanol" (corn likker?) in some of their vehicles... :shock:
The "answer" to power generation is Solar and Wind Energy. Unlimited ? source FREE. Of course, have to pay for the equipment. Technology is there, and has been. Just hasn't been "profitable" for the mega-fuel corporations to captalize on it.
Wile back I saw a special on TV discussing Ethanol production. Basically it is 200 proof moonshine...lol. They also said that Henry Ford used "Ethanol" (corn likker?) in some of their vehicles... :shock:
The "answer" to power generation is Solar and Wind Energy. Unlimited ? source FREE. Of course, have to pay for the equipment. Technology is there, and has been. Just hasn't been "profitable" for the mega-fuel corporations to captalize on it.
john250
Well-known member
I don't know where to start.
WSJ always has insightful articles, best written and researched newspaper in the US.
For farmers, this reminds me of the 70's. Then, the communist Soviets couldn't feed themselves and we agreed to sell wheat. Demand doubled overnight and the ag economy got wild. Land, machinery and all the inputs soared. Money got thrown at all kinds of wild schemes. That didn't last, and ethanol won't generate this much heat for long.
It sounds like investors in ethanol should be nervous. I'm sorry for them, but every investment has its risk.
Ethanol isn't an answer by itself. But, and this is a big BUT, if we can get a little closer to getting out of IRAQ then it could be worth it. You have to add the defense budget to the price of oil, and no one seems to do that.
The "right to food" debate at the UN is just another UN scheme to steal from the rich and give to the poor (and rake off a percentage of the deal). There is no starvation where farmers are encouraged to produce food in an open and free market. China starved under Mao. Now China exports food in good years. Profit motive and the freedom to import better seeds and technology.
The spin I keep hearing is that we are starving people so we can continue to drive SUV's. SUV seems to be the anti-Christ to a lot of dizzy folks.
Better sources of energy will come. The human being is incredibly inventive. We cannot live on oil forever. And the WSJ has always been a friend of oil.
Or, we can put it all in white oak barrels for several years and enjoy the results while we starve in the dark.
WSJ always has insightful articles, best written and researched newspaper in the US.
For farmers, this reminds me of the 70's. Then, the communist Soviets couldn't feed themselves and we agreed to sell wheat. Demand doubled overnight and the ag economy got wild. Land, machinery and all the inputs soared. Money got thrown at all kinds of wild schemes. That didn't last, and ethanol won't generate this much heat for long.
It sounds like investors in ethanol should be nervous. I'm sorry for them, but every investment has its risk.
Ethanol isn't an answer by itself. But, and this is a big BUT, if we can get a little closer to getting out of IRAQ then it could be worth it. You have to add the defense budget to the price of oil, and no one seems to do that.
The "right to food" debate at the UN is just another UN scheme to steal from the rich and give to the poor (and rake off a percentage of the deal). There is no starvation where farmers are encouraged to produce food in an open and free market. China starved under Mao. Now China exports food in good years. Profit motive and the freedom to import better seeds and technology.
The spin I keep hearing is that we are starving people so we can continue to drive SUV's. SUV seems to be the anti-Christ to a lot of dizzy folks.
Better sources of energy will come. The human being is incredibly inventive. We cannot live on oil forever. And the WSJ has always been a friend of oil.
Or, we can put it all in white oak barrels for several years and enjoy the results while we starve in the dark.
