Producers Panic as Ethanol Mandate Loses Support

[NC Liz 2]

Producers Panic as Ethanol Mandate Loses Support
Jan. 4, 2014

Ethanol producers are panicking amid speculation that the ethanol mandate could be drastically reduced or scrapped entirely this year as the biofuel loses its allure and bipartisan allies and former friends team up against it.
December saw California Democrat Dianne Feinstein—a renewable fuel champion--coordinate efforts with Oklahoma Republican Tom Coburn to come up with a Senate bill to get rid of ethanol from the Renewable Fuel Standard (RFS), citing fears that corn-based fuel production mandates will harm livestock producers.

:banana:
http://www.fool.com/investing/general/2 ... smiETYo6M8

 

[ibetyamissedme]

Liz how many fed cattle do you own?

 

[NC Liz 2]

Right now I try to stay around 50. I use to run 100 but with the high cost of the 3 Fs (feed, fuel and fertilizer ) I found it more economical for me to run 50.
Liz

 

[ibetyamissedme]

Right now I try to stay around 50. I use to run 100 but with the high cost of the 3 Fs (feed, fuel and fertilizer ) I found it more economical for me to run 50.
Liz

1 or 1000 the cost of gain remains the same, what is really holding you back?

 

[NC Liz 2]

About:
"1 or 1000 the cost of gain remains the same,"

You will have to explain that one to me.
At what weight and what profit margin are you imagining on 1 calf? :???:
Liz

 

[jedstivers]

If ethanol is so bad for cattle producers then why are feeders still buying DDG at a lot higher price than corn? I'll let you answer that one Liz.
When corn was selling for under c.o.p. I didn't see and livestock owners complaining about ldp's keeping corn farmers in business so they could keep selling corn to feed for less than c.o.p.

 

[NC Liz 2]

More bad news for DDG feeds.
But good news for cattleman.
Liz

Distillers grain prices slump as China rejections clog pipeline
http://uk.reuters.com/article/2014/01/0 ... 7O20140103

 

[ibetyamissedme]

I'll ask again Liz the cost of gain per pound is the same for 1 or 1000 head so what's holding you back at 50? No money? No facilities? No time? Limited knowledge of fed cattle? No knowledge of fed cattle?

 

[jedstivers]

I'll ask again Liz the cost of gain per pound is the same for 1 or 1000 head so what's holding you back at 50? No money? No facilities? No time? Limited knowledge of fed cattle? No knowledge of fed cattle?

I'd sure like to hear some answers.

 

[TexasBred]

Right now I try to stay around 50. I use to run 100 but with the high cost of the 3 Fs (feed, fuel and fertilizer ) I found it more economical for me to run 50.
Liz

I"m guessing closer to 5 or 6.

 

[NC Liz 2]

OK, but you probably won't understand my answer.

It's called "shared cost".
At 50 head my profit margin is higher then with 100 head with the 3 Fs at present cost levels.
At 50 head my shared cost is right around 35% of production, where as at 100 head my shared cost is around 55% of production.
Therefore it is more economical to stay around 50 head and using less feed stuff (hay etc )less fuel, and less fertilizer.

What I am contemplating for this year is to wean my calves later (600 + lbs ) and hold them as feeders and maybe even buying some feeders and running them in my hay fields and buying my hay.
That will cuts down on my fuel and fertilizer costs, while production goes up.
Running feeders on my hay field will also add some cost free fertilizer to them for next year.

IMO that should move my shared cost down to a more acceptable level. Around 47%.
Now I am working on getting my feed costs down ( not including hay ).
Best price I have so far is pelleted 14% protein @ $.14 per lb in bulk.
Any suggestions?
Liz

 

[TennesseeTuxedo]

Liz, I don't recall what part of world it is that you call home. Are you in North Carolina?

 

[Bigfoot]

Been a good many years since I goy my education. I thought shared cost for example was like when you use the same tractor to feed hay with, that you scratch tobacco. Both enterprises share some portion of the depreciation/expense etc. I reality each additional unit of production should make your fixed lower per animal. I would encourage you to greatly expand your imaginary operation.

 

[NC Liz 2]

About:

why are feeders still buying DDG at a lot higher price than corn? I'll let you answer that one Liz.

OK,
I don't know where you are getting your numbers from but the price sheet I have in front of me has:
pelleted DDG @ $205 per ton
ground corn @ $326 per ton.
2013 price list. :???:
Sounds to me like they are buying it based on the low price!
Liz

 

[ibetyamissedme]

Liz corn is $146 per ton, ddgs are $192 per ton. My guess is those ddgs are higher priced than corn because of the over supply brought on by the ethanol mandate.

 

[NC Liz 2]

FYI:
Definition of shared costs: Expenses that can be allocated to two or more departments or products on the basis of shared benefits.
Also see break even point
http://accountingexplained.com/manageri ... ion-method

About:

Liz corn is $146 per ton, ddgs are $192 per ton.

If that is true then they are fools!
Where are you getting you numbers?
Liz

 

[jedstivers]

4 dollar corn is 142.85 a ton. If its processed that will add some to it. Last I heard ddg was 230 but you didn't answer all the question. Ddg has more to it than corn, that's why the big feeders are still buying it. Some are cutting back on it some and taking longer to finish.
As far as cost the more head you run the lower the per head cost in fixed assets.

 

[jedstivers]

Liz corn is $146 per ton, ddgs are $192 per ton. My guess is those ddgs are higher priced than corn because of the over supply brought on by the ethanol mandate.

Over supply works the other way, the more there is of something the cheaper it becomes. Ddg is still high because someone will pay that price for it.

 

[ibetyamissedme]

Liz corn is $146 per ton, ddgs are $192 per ton. My guess is those ddgs are higher priced than corn because of the over supply brought on by the ethanol mandate.

Over supply works the other way, the more there is of something the cheaper it becomes. Ddg is still high because someone will pay that price for it.

Sarcasim jed but I am poor at.

 

[ibetyamissedme]

Liz

http://www.ams.usda.gov/mnreports/ms_gr852.txt