Just some more anti ethanol stuff

[jrsiajdranch]

I have a lot of respect for this organization.  WUD is and has been a voice that stands up for a reasoned and well thought out dairy policy over the years.  Having said that I didn't think they would enter into the fray like this.  I think the livestock groups smell blood in the water and it looks like you just might lose it all. 

And ole' john McCain is sticking it to Iowa for not voting for him in the caucus.

Feinstein and colleagues say no to ethanol subsidy Nov. 30, 2010 - - U.S. Senator Dianne Feinstein is asking her fellow senators to end federal subsidies for ethanol. In a letter to Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), Feinstein and her colleagues note that they do not support an extension of either the 54-cent-per-gallon tariff on ethanol imports or the 45-cent-per-gallon subsidy for blending ethanol into gasoline. The senators note that these existing “provisions are fiscally irresponsible and environmentally unwise and make our country more dependent on foreign oil.”

The senators also cite a 2010 study by the Congressional Budget Office that determined the ethanol tax credits cost $1.78 for each gallon of gasoline consumption reduced. The letter cites an estimate from Iowa State University that states “a one-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion, or roughly $14 million of taxpayer money per job.”

Western United Dairymen has a long history of working with the California congressional delegation on responsible federal conservation and renewable energy policy. In this case, Western United worked with Senator Feinstein’s staff to circulate the letter to other dairy groups along with a cover letter for them to use to ask their Senators to sign on.

Western United Dairymen CEO Michael Marsh stated, “We are very appreciative of Senator Feinstein’s leadership in trying to cure this flawed policy and we are thankful that Senator Boxer has joined in calling for this much needed change. Massively subsidizing the conversion of food to fuel with corn based ethanol subsidies has harmed California dairy families immensely by making us less competitive in an ever more global dairy marketplace. We thank Senator Feinstein for her efforts to effect positive change to an ethanol policy that has eroded the international competitiveness of California's dairy families."

In only a few days, sixteen senators joined Feinstein in a bi-partisan call for the ethanol provisions to lapse. Joining California’s senior senator are: Barbara Boxer (D-CA), Jon Kyl (R-AZ), Richard Burr (R-NC), Jack Reed (D-RI), Mike Enzi (R-WY), Bob Bennett (R-UT), Ben Cardin (D-MD), Jim Webb (D-VA), John McCain (R-AZ), Sheldon Whitehouse (D-RI), Tom Coburn (R-OK), Susan Collins (R-ME), Bob Corker (R-TN), Jeanne Shaheen (D-NH), Mark Warner (D-VA), and Chris Coons (D-DE).

“These subsidies must stop immediately”, noted Marsh. “Turning feed grains into fuel will do nothing to reduce hunger in developing nations and only exacerbate the problem here at home. These subsidies have driven up the cost of all feed grains and, due to inefficiencies in the process will not move the U.S. along the road to energy independence. It is time to move on before this government policy wreaks additional irreparable damage to the U.S. animal agricultural sector.”

WUD is a voluntary membership organization representing more than 60% of the milk produced in California. Membership benefits include resources in labor law, environmental regulations and pricing issues. Members decide the direction of state and federal legislative efforts affecting the dairy industry.

[Mark, ncIA]

JR,

Politics makes for some strange bedfellows? esp. in CA!  Wowsa, has WUD always had close friendships with the ecological left?  Dairy farmers have my sympathy, everywhere.  Used to really feel sorry for CA dairymen, for all the enviro-waco & urban encroachment problems they deal with daily, let alone milk prices.  Guess my feelings now might not be too far from happy cows (CA) can eat Chinese missiles?  Same feelings I have for NCBA, even though at least a small few midwestern delegations there are pro-ethanol.

As per your trade war response below in 425Cat's etoh post, I don't think we want to go there.............yet, anyway.  Sorry for lack of follow-up there.

WUD got the sweet 16 on board early, with a few more likely to follow.  Notice non-cornbelt dairy, cow-calf & oil interests, along with a couple greenies?  Good grief:  “These subsidies must stop immediately”, noted Marsh. “Turning feed grains into fuel will do nothing to reduce hunger in developing nations and only exacerbate the problem here at home."  Does Mike think I grow my corn only in regards to world hunger?  Are Americans growing hungry due to ethanol, maybe ethanol's to blame for obesity in the US?  That's a bunch of popycock, like me saying milk or beef is a waste of precious resources, as that acre of feed could produce tons of veggies, oils, & bread to feed the masses.  Theoretically true; but, it won't.

While I'll never say ethanol is THE answer to peak oil, it is one of the answers, & one of the only ones we have at this time that works in the mitigation thereof.    I really thought the corn market had digested the presumed fact that VEETC was DOA way back in June, maybe not by today's talking points.  Was surprised this AM by Schott's interview yesterday:  http://www.hoosieragtoday.com/wire/enews/01079_schottveetc_194538.php

Some still have hope in the etoh world?

Someday we're going to have to meet JR, as we only live ~15 miles apart; but, know you dairy guys are pretty busy,

Mark

[jrsiajdranch]

Hey Mark,  Maybe will have to have a BS get together up in the center of the universe this winter?  Anywho,  The WUD guys aren't particuallary fond of the greenies in fact on a lot of stuff they are opposites, But this is one of those the enemy of my enemy is my friend things. 

The worst part of this is when I see these alliances I figure somebody gave up something and that isn't good cause it is usually us that gave up!

Man is it cold outside this morning better get at it. JR

[patriot3031376]

Why doesn't your industry try to recitfy it's real problem....the over supply of milk? Instead it attacks a random opponent that looks weak. The NCGA always tries to support dairy and livestock in general but you guys need to try to help yourself sometimes too. Quit blaming me for your problems!

[infire]

So according to Marsh & the rest of those idiot's we should just float corn to those developing countries to fight hunger even though they can't pay for it because we are just good people, maybe they should stop reproducing so fast, give me a break!

I think I'll go cut down a tree just to spite that bunch of jackwagon's!

[jrsiajdranch]

Wow Nellie! 

I am not trying to say this is a good thing at all I am just pointing out that this is going on. 

Patriot I don't know what I did to you but chill out.  Go down to cattle talk and see some issues that I pointed to in a thread there as to how we could alleviate the production problems we do have.  I am not saying that these folks approach is right just reporting on some things that are going on.

Infire cut one down for me!  clear some more ground and plant more corn! And I am all for you guys making a profit especially if it is from some one over seas.

A little analysis about the California dairy industry.  It was built on two things that have been completely turned upside down. 

1. Real estate turn overs.  With the housing bubble burst and the declining real estate market dairies can no longer use those inflated values to finance the dairy operation.  The balance sheets of those dairies are so upside down that if you sell out the whole farm you will not pay off the mortgages that the land values used to allow.  This isn't a dairy price problem this was and is a bank problem.

2. The industry was built on cheap corn.  We can not deny that we profited greatly from a cheap food policy.  We as an industry were able to move our production to an area of the nation that allowed for very large farms with low labor requirements and cheap fuel also was a very important contributing factory.  These farms have now fought very hard for their existence and the way of the life they have been accustomed to this.  They are going the way of the buggy whip.  

3. I have been farming long enough to know that there are cycles we are about to enter into dairies up in this cycle. JR 

[jec22]

JR, JR, JR, answer me one question.  With such a great concern for world wide hunger, which should in turn mean a great demand for all foods, why aren't milk prices thru the roof?    Dried milk would be a great daily addition to all diets in those areas of hunger.  You want change to get grain prices down...you don't think they can not turn the tables on meat and milk production with the same argument?  Mark is right...that would lead to no livestock.  Soyburgers and the like.  The White House is already trying to police what the kids eat at school,  don't think ice cream will make the 'preferred' food list.  Tell me, how much subsidy does milk get in the school lunch program...do you want to lose that chunk of change?

Grassley was quoted in the Des Moines Sunday Reg. saying that ethanol subsidies should be cut in equal amounts that subsidies for oil and gasoline are cut.  Hard to argue that one.  Oil and gasoline industries have done a much better job of hiding their subsidies from the public(tax breaks and exclusions that don't have to be renewed).

Did you catch any of wikileaks?  Do you understand that there is few that believe Iran is our friend?  Do you think if oil prices go even higher, they will become friendlier?  What about Chavez?  Do those senators think our trade deficit needs to widen even more, because I think higher oil prices and lower grain prices would widen that quite a bit.    Cut subsidies to oil and gasoline and ethanol needs no subsidies.   I could care less if grain prices go down 20%, might be a healthy thing in the long run.  JR, the money is made being tied to oil, that is the lesson learned from ethanol.  And big oil doesn't want to share their profits with the grain farmer and John Deere and Monsanto and all the others.  They have been king too long.  Those senators you listed are siding with big oil, not world hunger.

And while I am on my soap box, I am so tired of hearing those talk about cuts to government spending that don't matter because it is only  a fraction of a percent of the total spending.  Well, my taxes are only a nana fraction of the government spending, so do they not matter and I don't need to bother sending the check to Uncle Same this year?  Am I not willing to do my part to help the deficit?  I want an end to all direct farm payments for grain farmers, I want less subsidies for crop insurance and high premiums for farmers that collect above average payouts year after year.   I am willing for them to raise the retirement age effective tomorrow for collecting SS, no reason to only punish my children.  I love this country, so you ask me to give, I will give,,,but I am sick of government wasting money by the dollars, the hundreds of dollars, the thousands of dollars, the millions of dollars, the billions of dollars and the trillions of dollars. 

[Canuck_2]

Just got this link from a Canadian source so it is making news here too.

There is certainly a feeling in livestock producers here that ethanol has contributed to their financial problems.

Pork producers especially talk of COOL too though.

http://voices.washingtonpost.com/plum-line/Letter%20to%20Reid%20%26%20McConnell%20re%20ethanol.pdf

[jrsiajdranch]

Well guys all I am saying is that ethol is here to stay and that the subsidy will get cut.  I am a rerealist we won't have 2 dollar corn or 150 ton bean meal.  We will see price swings and we will have to put up with them.  The only thing I regrett is that we have split ag.  We will not have a unified voice going forward and we will lose clout in DC. AS to the reasons why milk isn't higher well I will try to address that in the future.  ANd again I don't want anybody losing money in ag. I have done it for to long and I don't want any company on this side of the ledger. JR

[hardnox604008]

Hi JR,

Interesting point of the day- some confirmation of my long held suspicion that the California dairy game had to be to some degree an offshoot of the multi-decade California real estate bubble.

As to a much more subtle but related issue- thus far the people who were doing 1031s like crazy on midwest land in the 90s and early 00s look great at the moment. But my guess is that premium leaks out over time, as well. Markets work in the long run, in the short run it is all driven by politics and policy.

The national strategy of the 90s was to cover up the fact of low/slow growth by making money cheap and mortagage standards non-exisitent and paving over hell's half acre. A couple of decades needed to absorb that malinvestment.

Best, h