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Veteran Advisor

I say let ethol ride!

You know I am not ethols cheerleader, but I have kinda changed my tune recently.   With the demand from ethol driving up corn costs and really driving out the livestock industry I really was very upset at the stupid policy. We have all made adjustments. I do not think USDA has really gotten thier minds wrapped around the changes in demand that livestock has made to feeding corn. I certainly do believ that livestock numbers will drop again for at least one more year and possibly two.

Here is an article from Agrimoney concerning pressure by other Gov. to change ethol policy.

08:13 UK, 11th February 2011, by Agrimoney.com
Ethanol plants the 'villains' behind corn's rally

Ethanol plants, not speculators, are behind the surge in corn prices, Commerzbank said, urging authorities seeking to calm markets to examine the state-subsidised biofuels industry.

Speculators, whose net long position in Chicago corn has risen to its highest in more than two years, have had a role to play in the doubling of futures in the grain since late June.

"Financial investors are leaping on the bandwagon and fuelling the price increase," Commerzbank said.

"But they are not the main reason for the rally. The state-supported increase of the ethanol blend in the US is a major reason for the rise of corn prices in our view.

"Those who believe the remedy for rising food prices lies in stronger regulation should also consider the role of biofuels in this regard," the bank added.

Regulatory backlash

The comments come as France as, in its term as president of the G20 group of leading economic nations, is pushing regulations to curb the speculators it blames for fuelling the crop price rally.

Without enhanced oversight, "we run the risk of food riots in the poorest countries and a very unfavourable effect on global economic growth", Nicolas Sarkozy, the French president, warned two weeks ago.

And they follow the cut on Wednesday by the US Department of Agriculture to its estimate for domestic corn inventories at the end of 2010-11 to a 15-year low of 675m bushels, reflecting in the main a higher estimate for corn use in making ethanol.

Biofuel plants are now expected to consume a record 4.95bn bushels of corn, equivalent to 40% of the American crop, 350m bushels more than the USDA initially expected.

'Ethanol binge'

And many analysts believe the consumption upgrade will not be the last, with Damien Courvalin at Goldman Sachs forecasting a final figure of 5.05bn bushels.

Rabobank analysts, highlighting an "ethanol binge" on the grain, said that current rates of the production of the biofuel, at 900,000 barrels a day, "implies corn use in excess of 5bn bushels" for the crop year.

Analysts at US-based broker US Commodities added that, in seeking to curb consumption of corn in the face of tight stocks, "the logical place to cut use is the ethanol industry".

"We cannot afford to liquidate any more of the breeding herd," they added. US livestock farmers still consume, narrowly, more corn than ethanol producers.

'A good number' 

Chicago's March corn contract hit a fresh two-year high, for a spot lot, of $7.04 ¼ a bushel on Thursday before weakening in late deals to finish 1.5 cents below $7 a bushel, sapped by a stronger dollar and weakness in other crops.

The grain gain extra support from data on Thursday showing weekly US corn export sales at more than 1.2m tonnes, including deliveries for the 2011-12 season, well ahead of market forecasts of at best 950,000 tonnes.

"That's a good number," Mike Mawdsley, at Market 1, said, adding that it had helped push the grain back on track to meet US Department of Agriculture forecasts for the current crop year, which finishes at the end of August.

Export sales had met 61.3% of USDA expectations for the season, compared with an average of 61.8%.

"On its own, that's good. But where things get really interesting is if someone unexpected turns up to buy, like China," which many analysts believe will require significant imports this year.

"That's the wild card. If China wants 2m-3m tonnes, what's that going to do to the balance sheet?"

 

BUt I say let it alone You made your bed now sleep in it!  I think that having a bad idea and implementing it will have consequenses. I think the world should be made to face up to the reality that it is a dumb idea to burn your food for fuel. So I say let the mandate and the blenders credit ride! Letrs just keep increasing blending rates lets throw more speculative money at it lets just keep this up. If a few more tin horn dictators get replaced becasue of rising food prices maybe it is a good thing. I know from here on out having livestock will be very profitable. Thats my rant for the morning Have a good day! JR

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49 Replies
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Contributor

Corn is just not food

It's good fuel too.  I think we can burn corn and provide plenty of food.  Did you farm with $2 corn?  The same price my dad got when I was born?  Using a crop for only one use is unethical to me in democratic society.  The market should determine where it goes and it is doing that.

 

I see all your points and have thought about them all my life but for example if Egypt shut down our fuel system and  you had to turn your grain into more fuel to produce more grain, wouldn't you do it?

 

Your thought is just too socialistic for mey way of thinking.  I would like to see more production of non corn items and not revolving all of our food from just one grain.  There are so many to choose from!

 

I want to burn corn, feed corn, eat corn but get most of my diet from other foods.  Wouldn't that be better for all of us?

 

Some of the best new jobs we have in this country comes from the ethanol industry at a time we really need good paying jobs.

 

So, I see your point but I would rather see open trade and utiilization of our King Crop.  Thank you Native Americans.

 

Thanks for making your post and I do see many of your points but I think we  have to think much bigger for the good of all of us and all people.

 

Ed Winkle

Martinsville, Ohio

 

 

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Veteran Advisor

Re: Corn is just not food

Ed yes I did farm with $2 dollar corn played the LDP game to the hilt!  I think ethol as a fuel substitute is realyu dumb as an oxygenate probably the best out there. To my way of thinking ethol is socialism on steroids. Mandated use along with taxpayer incentives at local state and federal levels. That is socialism!  Or maybe more correctly fascism. 

If you want to have more food grains grown how are you changing your crop mix to get there?  Or are you just producing corn and beans so as to gain the markets favor? 

All I am saying is that there were lotsof folks pointing to the climactic battle that is now ensuing and now the Corn groups are thinking we should maybe change a few things also gov. is getting ready to pull the plug on these different programs.  I say leave it alone we got to this point now that other commodities are finally getting caught up to the grain guys huge profits of the last 4 years a change in grain policy will be very detrimental to the future profits of the livestock guy in particular I fear. So yes it is all about me!

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Advisor

Re: Corn is just not food

But, Ed, it is NOT the market, it is the blender's credit tha drives corn into ethanol...there woudl be no ethanol industry in the country, if not for that subsidy.  Do away with the blender's credit entirely, and then we can talk.... 

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Veteran Advisor

Re: Corn is just not food

Ya know Kay I used to think that to and then when I analyzed the soy diesel industry I realized the difference between ethol and bio-diesel is the mandate.

Guys on here who would take out their weapons to defend themselves against mandated health insurance ask to control peoples driving habits thru this mandate. 

Here is a scarry thought: Our Goverment has mandated that the first 3.5-4 billion bushels of corn this next year MUST be used for ethol!  If we have a corn shortage Ethol is first to the table before dairy,beef, hogs,poultry!  It is the LAW!

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Advisor

Re: Corn is just not food

Maize is a FEED grain, not a FOOD grain, for the most part.  (You can leave out Doritos and hush puppies for the sake of this discussion....) 

Humans consume mostly sweet corn, except for HFCS, which is being weeded out of a lot of foods for health reasons, or at least for health perception reasons.  The real impact of ethanol on human nutrition is the loss of protein in the diet, due to increased costs of livestock production. 

I actually think the subsidy to the ethanol industry was a payback given to ADM by the Clinton administration.  America could meet every bit of its energy needs for centuries by tapping geothermal energy alone. 

Throw in solar, wind, tidal and wave sources, and you can utilize the ideal, most logical energy source for each region of the nation, and end the greenhouse effect entirely.  This does not even touch waste-stream methane....

A friend told us over dinner last night that the Chinese are snapping up worldwide  sources of battery ingredients.  How stupid and short-sighted (or is it broke?) can we be to let that happen? 

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Veteran Advisor

Re: Corn is just not food

I thinkwe have been short sighted for about 25 years now! 

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Advisor

Re: Corn is just not food

And THAT is free enterprise?!?

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Veteran Advisor

Re: Corn is just not food

Only in the sick minds of NCGA and Farm Bureau!

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Senior Advisor

Re: Corn is just not food

Remeber gov. $$$$ has been spent on tons of stuff---grain storage---manure storage---equip -etc.  the list is endless---Just read EWG list before passing to much judgement ---even a few of the "ultra coservative newkids" loose a lot of their political clout when their names appear on this list with the $$$ amounts--always check one's bagage before ranting on one's political rantings----remember no political machine ever condones high priced grocories and wins elections ?  

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