AgPoll: Ethanol mandate

[John_Walter]

A wire story here (full story) reports that some one hundred House members today are calling on EPA to reduce the production mandate for corn-based ethanol.  The letter from the House members, Democrats and Republicans, follows a petition to EPA from the livestock industry asking for a halt to the ethanol mandate for a year. EPA, the story notes, does have the authority to temporarily halt or reduce the ethanol mandate. What's your vote? Thoughts?

[too close for comfort]

Shouldn't they wait for the USDA to say we are going to have a short crop first? It seems a bit premature at this point. Cutting the mandate is not going to improve the pasture and forage problems.

[jrsiajdranch]

I voted to keep it. I figure stupid should always be rewarded!

[westnefarmer]

As a long time corn farmer it wasn't that many years ago that we saw sub $2.00 corn and yet the livestock industry at the same time had record high prices. Sure we got our pathetic LDP on corn that bumped us up $.30 cents or so to keep us barely at break even levels while the livestock boys smiled and had year after year of record profits. They didn't offer to change anything to help the grain farmer so he could profit some and maybe buy a new piece of equipment. So what I am saying is the farmer didn't get subsidized but in reality the livestock industry got the subsidy to make the record profits. Mother nature created this mess and I feel that it is a free enterprise system, so what if the farmer has $10.00  corn, that is just how supply and demand works...My question is when we see $4.00 corn in the future will the livestock producer offer to for go his windfall to help the grain farmer out? I bet the answer is NO!

[BA Deere]

I really don`t know, but I can tell you if we "get rid of it for one year"  it will be like pulling teeth to get it back, no matter how they promise, because it isn`t about fuel it`s that some folks are addicted to cheap corn.  I favor making consumers pay a little more that the grocery store, obesity is problem in this country, food is the cheapest in the world here.  If we do things that keep food cheap we are just chasing our tail.  Here`s a few questions for the anti-ethanolers: what will you say if the mandate is done away with and gas goes up $1 a gallon?   What will you say if the mandate is gone and they still make pretty much the same amount of ethanol?  If ethanol didn`t exist and corn was $8 who or what would you blame then?

[Nebrfarmr]

Talked to a conspiracy theorist friend of mine who says that they will hem and haw about the ethanol mandate, and then eliminate it just in time to drop the corn price, so the harvest guarantee is $1 or $2 lower than it otherwise would be.  Keep in mind, this is a guy, who just got his dryland corn yield appraised at 'zero'.

[GoredHusker]

Hmm, let me see if I get this straight.  Corn is a free enterprise now?  How is a gov't mandated use of what could be half of the crop a free enterprise?  In a free enterprise, the ethanol mandate would be removed.  Then, all endusers would draw the same length straw and let the bidding begin on the short supply.  As it is now, it's anything but free enterprise.  

I'd compare the situation now to going to a land auction where two siblings forced their third sibling to sell the ground when the parents died.  The one who wanted to keep it then only has to pay 2/3 of the bidding price while everyone else there has to pay the full price.  This is essentially how the corn market exists today.  

I'm not exactly sure where this notion of record profits in livestock comes from.  To the west of me there's one of the largest feedlots in the U.S. currently owned by JBS.  In the past 15 years, it has changed hands 3 times.  I'm sure it had to be those record profits causing it to change hands.  Vertical integration that has consumed the poultry and swine industries must have also occurred due to record profits of the smaller producers.  

[sw363535]

The EPA, holding the earths fate, will consider the small, voter appeasing, pleas of a few congressmen and the special interest groups mentioned--------------then move on, ignoring the minor interruption.

[westnefarmer]

Every feedlot that has changed hands several times in the last 15 years in my area sold for millions more than the times before, At husker harvest days one kansas feedlot purchased 30 new feed trucks with tier 3 engines, 15 to use and 15 to park until the first bunch was wore out, I think a business that can do that has made some money. When I delivered $1.87 corn to my local feedlot in one weeks time I watched then purchase 2 transport loads of new powerstroke ford pickups for the help to use, 12 new 8000 series Deere tractors, 2 new Deere self propelled choppers, 2 swathers, numerous balers, rakes and planters as well as new loaders and manure trucks... as well as having a local business man tell me they spent 100k on landscaping a yard for a wedding and that the owners spent $ 27,000 on TV's and sound systems for their houses, I am positive that there was a lot of money being made on cattle for them to do that. Not to mention that they bought the whole feedot for less than a million and just sold the place for 27 million....I sure don't know any farmers that can spend a 100k to landscape a yard for their daughters wedding!

[GoredHusker]

It's nice to get a few details.  First, they obviously were farming as well.  I'm not sure why they'd need new planters if they just had a feedlot.  Same with choppers and such.  This tells me they were able to make a pretty penny producing the same $1.87 corn that you were selling them.  More than likely they were making it the same was as everyone else back then by direct payments, ldp, etc. They were producing a lot of their own feed apparently to need swathers, balers, etc.  

There were also a lot of IA farmers making a lot of money in those years as well as they basically owned the sale at Ogallala more than just a few times buying calves.  It was a value added venture.  It wasn't necessarily record livetock prices making the money as it was a way they were enhancing their corn price.  

If farmers could figure out a way to write off the 100k landscaping for a wedding, I know several that could and would do it.  I know this because I've seen several go out and buy 85k pivots to replace pivots less than ten years old just to save some on taxes.  In the past five years, irrigated ground has quadrupled.  We have quarters bringing a million or more now.  I thought 425 was pretty rich for cash rents for this year.  I'm hearing of guys offering rents starting with a 5 for next year.