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Senior Advisor

Re: Two things

As far as i know the EPA has no power to mandate ethanol usage. That would be Congress. The EPA can evaluate the environmental effects and act on that basis. But the ruling on the use of oxygenated fuels can't be easily reversed w/o new findings. That would take time and hearings.

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Veteran Advisor

Re: Two things

Ray, you post has me thinking. If, Cargill, in the last decade found a customer that greatly helped it's bottom line, would you want the government to put that customer on 'idle'.?   Ethanol has been the one customer for the grain farmer that hasn't pushed corn prices to the sub 4 level.   Not just because of the mandate, but because they could still make money.   I think Cargill would want to take care of all its customers, cutting them all a percent---NO, come to think of it, they would sell to who paid the mostSmiley Happy

 

If ethanol shutting down caused the price of gasoline to rise a buck, that will raise the price of food regardless.  It will kill the consumers wallet for buying much of anything.  The biggest cost of food is often not the price of corn.  Food prices have went up a lot in the last few months,  when new crop corn was under 5 bucks.

 

There is no intervention that won't have negative affects along with it.  You made a great post of the dangers of embargoes.

 

I just hope this is a one year problem, and we aren't looking a double barrel blast next year.  No reserves it going to make the people mighty angry at government.  They will cry for ethanol to end, and then scream at the price of fuel. Of course if we do the depression thing, fuel prices will crash too--but that is a worse set of problems.

 

Pray for rain, cooler weather, now and in the next few weeks.  Or we are all going to get an education. 

 

It is not anywhere near a crisis yet, I haven't had one call yet for my old crop corn and beans.  We are in a just in time, the crap won't hit the fan until October/Nov.  Denial is the word of the day.  It always rains just in time.  Farmers always complain and then at harvest say it is so much better than expected.   OR NOT.

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Veteran Advisor

Re: Two things

I guess it boils down to this...

 

there is really only one demand segment that has the ability to cut production in the next 12 months and then almost immediately resume 100% production.......

 

how long do you think it will take for 750 myn bushels of corn demand for livestock to be re-created after livestock are liquidated??

 

do you want the maximum amount of corn demand capacity to be available on October 1, 2013 or something else??

 

we can get back to $4 corn amazingly fast if we don't handle the next 12-15 months with some sense....

 

 

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Senior Contributor

Re: Two things

BA you bring up a good point about DDG's.

It points out how everything is inter connected.

Change one paramater and it skews another.

I have just spent the last 2 days helping a neighbour gather up 1300 large round bales of straw.

He does not have as much haylage after 2 cuts this year as he had after one last year.

Heifers and dry cows are getting much of their diet as straw and DDG's.

Hay is for the milking cows.

Fortunately had some haylage left from last years bumper crop.

He usually grows all his own corn needs and sells a little in a good year.

May be buying corn this year.

We missed the rains that we could hear going by, lots of thunder not sure how much rain.

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Veteran Advisor

Re: Two things

Ray, the demand destruction will probably occur.

 

But when the USDA came out with 166 and 96 M on corn, they gave every end user a gift.  Any farmer that sold on that forecast is AOL.  I see that 166 time as crop insurance for the enduser.  Sub 5 dollar corn for the taking.

Advisor

Re: Two things

He L willbe e selling his stock then
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Honored Advisor

Re: Two things

Hey Canuck, we are officially in uncharted territory in my 30 years of farming on my own, it`s worse than `88.  Unless accuweather is totally wrong and there`s at least  a 2 1/2 centimeter rain in the next couple days ..there is going to be little "orginal recipe" left in NCIA but a whole lotta crispy and extra-crispy.  In just a couple days I watched a field fry at a hill base and expand.  It just plum petered out.  It`s done very well, but there just comes a point...  

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