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Advisor

Ethanol exemptions: Nice, I guess......

The comment period for the Supplemental Rule concerning ethanol volumes is now open but the EPA has conveniently left out any place to submit comments from it's notice.

  I guess they aren't interested in hearing what farmers have to say about it.

  I really like how they say 15 billion but when you look at the rule there's no mechanism to get to the 15 billion.  And certainly no mechanism to reallocate the 4 billion gallons lost.

  I guess you just can't put a bunch of petroleum and coal industry lobbyists in charge of the EPA and expect them to be honest about anything.

 So much for the "wonderful deal" you've been promised.

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Veteran Advisor

Re: Ethanol exemptions: Nice, I guess......

Here again, an answer would be advertising to "sell" the public on the benefits of ethanol, and create demand for it, convince them to want to buy it, instead of trying to force them to buy it.  I pay checkoff $$$ for the grain I sell, what is being done with them???

Advisor

Re: Ethanol exemptions: Nice, I guess......

They could not sell me on the idea of more ethanol use based on the fake CO2 ploy.

They could not sell me more ethanol use based on the alternative energy ploy because I already get 5 miles per gallon LESS when they change the blend due to RVP, so messing with it further is only gonna upset people more.

They COULD, however, sell me more ethanol use based on a "better for environment" (again, NOT the ridiculous "better for the climate" hogwash, but BETTER for the environment) approach.

=====:

Read this to the end...

"This year hasn't been kind to the U.S. agricultural sector.

Just ask John Deere, the world's largest manufacturer of farming machinery. The company reported a 15 percent plunge in profit for its fiscal third quarter compared with the previous quarter on Wednesday."

".... driving prices down significantly. Corn, wheat, and soybean prices have fallen by 35 percent, 12 percent, and 13 percent, respectively, this year, and are forecast to fall even further...."

MOST INTERESTING:  The year this article was written was 2014, entitled "The Downsides of Cheap Corn," and the conclusion of the article back then even is that farmers were/have been growing  too much corn.

https://www.washingtonpost.com/news/wonk/wp/2014/08/13/the-downsides-of-cheap-corn/

Honored Advisor

Re: Ethanol exemptions: Nice, I guess......

Freedom, this was a good entry..........

I am reminded of a discussion I had a few weeks ago with a farmer I advise.  It concerned corn production in general.  

I think that farming has to be viewed from two directions --- the investment direction and the producion direction.

The difference is highly defined in leased land production.... Profit for ownership and profit for producers.  I think the Owner/operator still needs to make the distinction because he is always needing to value his investment in land.  Both need to show a profit and comparing the two tells you whether it is a good arrangement or not.  On owned ground it answers the "Am I using my investment in land to hide my losses in farming?"  Or my favorite.  "Is survival considered profit or even a desirable outcome?"  Is farming at a loss ok as long as there is some rent income?

Corn, the last 6 years,  has seen continued inflation of expense costs as value(commodity price) has declined.  If you don't believe this, start using more than the big 5 expenses in your cash flow.  Property taxes in our part of kansas have doubled in the past three years alone.  If your not paying those direct, you are by rent.  Insurance, technology fees, and regulatory costs passed down through equipment costs have expanded extremely, just as congress planned they would. Don't forget to figure in health insurance.... Your employer, you,  has been targeted by congress, to pay the health insurance costs of your labor force and your share of the national unemployed and uninsured --- that cost has risen.  Tutoring your children past the 6th grade education the public schools offer is all on you and if you pay for their ACT scores to improve allow a few thousand per year more for penalties and court costs. (there is an attempt at humor there so smile)..... 

Point is when did your losses blead over into your  asset income...be it equipment, land, outside income...or investment profits.  And where should it stop?  When were cheaper alternative crops a profitable alternative even though you handle less cash flow or pay less rent?    Hopefully the answer was not two years ago.

 

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