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Frequent Contributor

Re: From the floor October 11

Think you nailed it jec22, if they (congress) screw with the RFS you need to buy RBOB with both hands.  Just as well be well hedged when the insane act accordingly.

 

Per the WSJ story comment, wasn't Duane Andreas not only friends with Reagan, but Carter?.................hmmm.

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Re: From the floor October 11

 Right now there is plenty of crude and plenty of refinery capacity.

 

And BTW, if you have $85 dollar oil, $6 corn and no blenders credit, pretty quickly people are going to yelling about the fact that gas is .10 higher because of ethanol.

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Re: From the floor October 11

Hi ag678,

 

Precisely.

 

When MTBE blew out the crop community had a generational windfall dropped in its lap.

 

All they had to do was shut up and 9-10 billion gallons of demand were there and virtually untouchable. Which was huge.

 

Instead, the politicos and lobbyists had to get greedy to justify their existence.

 

Now we have a situation that really can't be justified if push comes to shove- which doesn't mean that everyone won't be squealing like a shoat stuck in a fence to try to justify it.

 

fwiw, h

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Senior Contributor

Re: From the floor October 11

I've always had a gut feeling that Bush's mandates for ethanol would eventually be compared to Carter's grain embargo.  At the end of the day, it becomes quite clear.  While most think they need fuel for survival, it is not a basic necessity for life.  However, food is a basic need for survival.  My guess is when push comes to shove food wins out in the debate of food vs. fuel.  I've read a couple of articles this week that stated with the recent USDA Crop Report it basically guaranteed there would be no herd expansions in the livestock industry for at least three to four years. 

 

I really don't have a good feeling with regards to ethanol.  If we do see a massive turnover in Congress, one can assume it will be full of deficit hawks.  This spells trouble not only for ethanol but also for most farm subsidies.  Even if we don't see a massive turnover, the first thing yanked from many bills this past year was the soydiesel credits.  I also can see a lot of political pressure coming from other countries with regards to our ethanol policies.  I don't believe the World can afford any type of food crisis given the fragile state of the World economy.

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Senior Contributor

Re: From the floor October 11

I think the idea that it is all or nothing in terms of political decisions regarding ag/fuel policy is way over done. History basically demonstrates the opposite.

 

The Carter embargo isn't a representative example in light of the Cold War code  we were under at the time. That was a geopolitical tactic when we had few handles on Russia except grain. The invasion of Afghanistan cried out for a response. There weren't may other options and Carter was a hardcore geopolitical player.

 

Any change in ethanol policy will be measured and will be an attempt to respond to the large investments and necessary food policy - a balancing act. The idea that it is all or nothing is simply buying in to the irresponsible and extreme political game playing going on.

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