# Ethanol Revisited



## DaveR (Jun 23, 2007)

Back to the ethanol discussion.  Here is some alternative information on the Pimentel perspective.

http://www.ncga.com/ethanol/debunking/index.asp



> The Truth About Ethanol – Addressing the Myths of the Pimentel/Patzek Study
> 
> Recent media reports about a dubious study on the net energy balance of ethanol have garnered considerable national attention. The study, conducted by David Pimentel of Cornell University and Tad Patzek of the University of California-Berkeley, alleges ethanol production requires more fossil energy than the resulting ethanol fuel contains. Despite a wealth of research to the contrary, Pimentel has repeatedly made this same assertion in the past.



Additional studies and analysis can be found at the following link including studies looking at the effect of corn ethanol production on food prices.  I wonder if anyone has looked at the effect of corn plastic production on food prices?  Walmart is trying to use more plastic packaging derived from corn and other renewable sources for products.  This could could be a very dangerous precedent as these materials compete with food that they now also package.

http://www.ncga.com/ethanol/main/index.asp

By the way corn prices have dropped precipitously this past week along with the rains finally falling throughout the heart of the corn belt.  I wonder if all of those reporters writing stories about higher corn prices driving food prices higher will retract those reports if corn prices settle lower this Fall should we be blessed with an abundant harvest?  Personally, I doubt that food processors, wholesalers, and retailers will lower their prices as a result of lower corn prices because energy costs from higher electricity rates, oil prices, and natural gas prices are the real culprits behind higher food costs.  I also suspect some businesses selling products saw a convenient scapegoat to justify improving their own profit margins eroded by higher energy costs which don't seem to get much media attention beyond gasoline prices that some use in a sordid attempt to increase support for more Government Control of markets.

Here is a link to recent commodity price reports that makes for interesting reading.  Not only does it note a sharp drop off in corn prices, it also notes soybean prices falling and an unprecedented surplus in soybeans expected to remain at the end of the 2006/2007 marketing period.  Economics 101 at work in free markets to great benefit of free people, or at least freer markets and freer peoples.  Now if only we could get to work on changing Government Policy relative to reducing taxes, tariffs, subsidies, and monopoly power in strategic markets that frustrate more efficient free market allocation of these resources to benefit the greater good of the American public.  

http://ncga.ncgapremium.com/index.aspx?ascxID=dowJones&category=1&djid=20078 

Keep praying for timely rains and good growing conditions.  Abundant harvests have been known to work wonders on market prices.


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## begreen (Jun 23, 2007)

It's to be expected that the quoted National Corn Growers Assn. is going to be biased toward corn. The argument is still ongoing from both sides. This is a good thing, especially with regard to influencing national policy. Ultimately, I think they are going to have to have a process that is not fertilizer intensive, can be grown year round, needs minimal machinery for planting, harvesting and processing, and has minimal environmental impact. So far, corn doesn't fit the bill. 

http://environment.newscientist.com/article/mg19125701.200
http://feinstein.senate.gov/05speeches/ethanol-oped.htm
http://www.physorg.com/news90166168.html

Seems the Senate has a bit of a concern as well. Global food prices are jumping. And the secondary effects of corn increases are just starting to be noticed.:

http://www.earth-policy.org/Transcripts/SenateEPW07.htm
http://www.ft.com/cms/s/175eda2e-1b24-11dc-bc55-000b5df10621.html


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## DaveR (Jun 23, 2007)

BeGreen said:
			
		

> It's to be expected that the quoted National Corn Growers Assn. is going to be biased toward corn. The argument is still ongoing from both sides. This is a good thing, especially with regard to influencing national policy. Ultimately, I think they are going to have to have a process that is not fertilizer intensive, can be grown year round, needs minimal machinery for planting, harvesting and processing, and has minimal environmental impact. So far, corn doesn't fit the bill.
> 
> http://environment.newscientist.com/article/mg19125701.200
> http://feinstein.senate.gov/05speeches/ethanol-oped.htm
> ...



Keep in mind the last link only reports the Dow Jones News Service's daily commodity reports.  Fact, grain prices moved sharply lower as commodity speculators bailed out of markets with improved growing conditions benefitting from recent rains.  The Financial Times article you linked is already dated by the sharp selloff in commodity markets.  I hope you at least read the materials before passing judgement on them being biased.  I am well aware of the growing interest in cellulosic ethanol and do agree cellulosic ethanol offers potential for better energy returns but capital investment in plant and machinery for harvesting, processing, and transport of switchgrass, miscanthus, or other feedstock is not minimal.  The infrastructure investment to launch this effort is substantial, not to mention that static feedstock prices based upon local hay markets are not likely to be representative of market prices for these resources with exponential increases in resource demand favoring producers in early market prices until the market reaches equilibrium.  That is one reason this industry is focused on first tapping more readily available wood wastes as feedstock for cellulosic ethanol plants now in start-up.  Many corn based ethanol plants are also looking at capital investment required to readily convert facilities over to cellulosic ethanol production. 

We can agree that robust debate and objective analysis of the technology, economics, and return on investment are critical to better policy outcomes.  Lets hope Americans are looking for real long term solutions rather than the typical reactionary posturing in policy.


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## begreen (Jun 23, 2007)

The FT report is just a snapshot of global effect of rising grain prices. True, it is last week's report, but a sharp drop in US commodity prices can be followed by a sharp uptick tomorrow or next month following a drought or Katrina like event. My point is the interconnectedness of food markets long-term and how they are being affected by ethanol policies. I think this will become an increasing global concern as petroleum resources become more dear. 

As to your closing sentiments, I wholeheartedly agree. Well put.


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## Sandor (Jun 23, 2007)

AG,

Seems like you are certainly on the Ethanol bandwagon.

Lets see some EROEI figures in your threads.

I know cellulose will "solve the problem", but its not here yet.

For an unbiased opinion, I read Robert Rapier's energy blog regarding ethanol. His credentials are impeccable. Search for the "r squared energy blog" and read away.


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## begreen (Jun 24, 2007)

As far as I can see, ethanol is political smoke. It is costing us a fortune in subsidies (1995-2005 = 51.2Billion). It will never make the pie in the sky goals set by the administration. It is decreasing real fleet mileage because by producing gas guzzlers that are flex fuel vehicles, car companies get energy credits towards their fleet mileage. And NOx emissions are much higher with ethanol. It's going to be interesting how lobbyists confront the EPAs new rulings that target NOx specifically. So while ethanol is political elixir for getting critical mid-west - read Iowa - primary votes, it is not necessarily good policy. 
http://www.slate.com/id/2122961/
http://oregonstate.edu/dept/ncs/newsarch/2007/Jan07/biofuels.html

From Consumers Reports:
* The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.
http://www.consumerreports.org/cro/cars/new-cars/ethanol-10-06/overview/1006_ethanol_ov1_1.htm
and http://www.energytribune.com/articles.cfm?aid=481

As to whether current ethanol policies are neutral and working, this is an interesting report. They bring up the question, why is ethanol subsidized, but biobutanol - a fuel closer to gasoline made from biomass, isn't? :
http://www.card.iastate.edu/iowa_ag_review/spring_07/article1.aspx


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## webbie (Jun 24, 2007)

The tack taken with alternative fuels should be "guilty until proven innocent" as opposed to "sounds good and the farmers like it, so let's subsidize it". Unfortunately, as you know, there is a group that benefits financially whenever ANY policy decisions is made, and as John Mellencamp, Willie Nelson and other have found out, the "poor American Farmer" who is disappearing is always a good political image - never mind if it is Archer Daniels or Monsanto or the refining company making the real dough, if the farmer can get even a small piece and show up in a couple TV commercials praising the fuel, that is all most voters need to see.

Do you think the average american has any idea what a BTU is? Or has any idea about input vs. output? Of understands the formulas of how much fossil fuel must be used to create a gallon of ethanol? I could venture to say that most legislators don't even understand this stuff.

If that is true (and I suspect it is) that GM is making money from building all those "yellow" cars that will probably never use a drop of corn fuel....well, that is sickening and just more of the same. What a farce!


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## jjbaer (Jun 24, 2007)

you folks miss the point...let's assume for arguments sake that the net energy is negative.....doesn't matter for now (cellulotic production will solve this)...what's important is that we do whatever it takes to get off foreign oil.....


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## webbie (Jun 24, 2007)

castiron said:
			
		

> you folks miss the point...let's assume for arguments sake that the net energy is negative.....doesn't matter for now (cellulotic production will solve this)...what's important is that we do whatever it takes to get off foreign oil.....



That seems like a myopic view. Getting off foreign oil is a bit of an oversimplification. There are many countries on the earth that will be glad to sell us oil for the next 5 decades or more. What we need is to have alternatives to this oil for many of the things it is not needed for, which then frees up the supply and lowers the price. Of course, it goes without saying that we should buy it on the open international market rather than fight wars for it.

So, I think we agree we need to:
1. Conserve
2. Develop additional sources of energy
3. Increase efficiency of current appliances, vehicles and processes that use energy.

Although the argument to "replace one devil with another" just to solve a "problem" (and I put that in quotes because the problem is not foreign oil but all fossil fuels whether imported or produced here.) might sound tempting, it would only be wise to apply it IF we had no other alternative! In other words, as a last ditch effort.

But we have LOTS of other alternatives......which are quickening as we speak, and would happen much faster if the GOP didn't just block the oil tax....which was slated for R&D. 

We can have plug-in hybrids and get 50-100 MPG - that will go a long way. We can use wind, wave, tidal, solar and biomass energy to power the plug in part. Why waste fossil fuel making renewable fuel if the conversion is not very good? It seems silly from any viewpoint except PR. If we took the hundreds of billions of dollars which are being directed to chancy fuels - and put it into more solar PV R&D, we would quickly build up an incredible amount of factories with advanced technology to produce lower and lower cost cells. 

Again, I'm not say that liquid biofuels could not be a part of the landscape, but even if the conversion factor was 1 to 2 (1 gallon of fossil equiv used to make two gallons of ethanol, that means you end up burning 150% more fuel than just the 1 gallon of oil out of the ground. More CO, more other possible pollution.

I know we all have varying opinions on these matters, but "getting off foreign oil" is about as realistic of a goal as "getting off foreign financing of our debt" or any such thing. I have no problem at all with buying oil from Chavez, Russia, Libya, etc. as long as we buy it at fair market prices and do not use aircraft carriers (very costly) to secure it. There is no need to secure anything when you have a willing seller and a willing buyer.

The real issues, in my mind, are:

1. Treating it as the valuable commodity that it is - use it for what we need to use it for, and use other stuff for the rest.
2. Mitigate the pollution aspect to the highest possible degree
3. Leave some for later until we are 100% certain we have replacements.
and
4. Don't make it a political and pork barrel football, throwing money around in a way that obviously buys votes.


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## DaveR (Jun 24, 2007)

Sandor said:
			
		

> AG,
> 
> Seems like you are certainly on the Ethanol bandwagon.
> 
> ...



Let's back up for one moment since everyone wanting to argue about ethanol are suddenly concerned about the price of corn.  What do you believe is the "right" price for corn?  What facts or assumptions do you use in arriving at this "right" price for corn?  Would you use this same logic to set prices for all other commodities, goods, and services traded in American markets? 

I believe you will find the information you are asking for in the studies I have offered links to.  I have also read and thought about in some depth both pro and con positions regarding ethanol.  I am fully satisified with the position I have staked out which includes reducing Government intervention in the market allocation of these resources in the form of taxes, tariffs, and subsidies.  I have also suggested that corn based ethanol is most likely a transitional fuel source that I believe is worth sustaining in the short term rather than waiting for the perfect renewable energy solution to be created by the all wise and all knowing central planners aching to wrest away complete control of the levers of government and markets.

I believe in the superiority of free markets and free peoples pursuing technological innovation to overcome the challenges presented in an uncertain world.  I believe in evolutionary free market progress that is in harmony with the natural laws guiding all of creation and ordained by humanity's creator.  If natural selection and random probability is capable of yielding the diversity and complexity of life found on planet earth, it must certainly be more than capable of yielding better market solutions and outcomes than reactionary command and control policies designed to force market change thought best by a small cadre of technocrats upon all the rest of society.  Price is the best and most rational mechanism for allocating resources in the absence of public or private monopoly power when process and information is jealously guarded for individuals to make informed decisions.

You might be surprised to learn that the prospect of higher corn prices has thrown cold water on many planned corn-based ethanol facilities.  The Wall Street Journal just ran an article this past week discussing the real possibility of a consolidation in the ethanol industry resulting from current market trends in corn prices, ethanol prices, and energy markets.  Cellulosic ethanol may well become a reality sooner rather than later out of economic necessity caused by current market realities introduced as a result of higher corn prices.  Government policy in the form of taxes, subsidies, and tariffs interject bias into this process of natural selection in free markets and often frustrates rapid adaptation of products and services to changes in the market environment.  Remove tariffs/subsidies and domestic industry must become more competitive to survive provided we also remain vigilant to unfair competition and manipulation of prices in competing products coming from trading partners.

I am on the bandwagon to leverage excess American agricultural product and capacity for renewable energy initiatives that offer potential to break the pricing power of foreign energy cartels and nations hostile to American interests.  I am on the bandwagon to utilize these renewable resources to the greater good of Americans, first meeting the nation's need for food and second keeping American tax and energy dollars invested in American communities and the American people.  I am on the bandwagon of aggressive unapologetic domestic energy development complimented by aggressive unapologetic energy conservation encouraged through generous tax credits for individuals and business.

But lets dispense with the idea of new energy taxes which only add insult to injury to average American citizens already suffering from higher energy costs.


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## begreen (Jun 24, 2007)

ADM would be proud of you AG, but how does natural selection get mixed up with free market actions? Ordained by God? I just read an article entitled -"Ethanol is the Agricultural Equivalent of Holy Water." At first I thought the title was a stretch, but maybe not. 

Ethanol isn't going to break any cartel's back in my lifetime, but it might break the country's economic back if we are not careful about diverting funds from real solutions. It may be a small part of the answer, but not while it's giving car companies an excuse for further excess. And it isn't going to put a dent in the 3.2 billion gallons of aviation fuel/yr. currently used by the Air Force (half of all govt fuel usage). 

If you're advocating for dropping of subsidies for ethanol, I'm with you brother. Let ethanol rise to its real cost and let's see if the free market is still interested. Roughly $9.4 billion subsidized making of 5 billion gallons of ethanol in 2006 so add about $1.90 to the price.  

Still unanswered, why subsidize ethanol and yet no subsidies for biobutanol? And why isn't 9.4 billion being put towards conservation if breaking the cartel's back is our goal? Reason is, that is not our goal at all. Remember the govt. is a Major customer and the administration needs fuel to run its empire. 

On butanol, according to Wikipedia:
"Butanol better tolerates water contamination and is less corrosive than ethanol and more suitable for distribution through existing pipelines for gasoline.[3] In blends with diesel or gasoline, butanol is less likely to separate from this fuel than ethanol if the fuel is contaminated with water. [4] There is also a vapor pressure co-blend synergy with butanol and gasoline containing ethanol, which facilitates ethanol blending. This facilitates storage and distribution of blended fuels."


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## jjbaer (Jun 24, 2007)

Webmaster said:
			
		

> I have no problem at all with buying oil from Chavez, Russia, Libya, etc. as long as we buy it at fair market prices and do not use aircraft carriers (very costly) to secure it. There is no need to secure anything when you have a willing seller and a willing buyer.




Craig,

yes there is.....if the seller decides (for whatever reason) to stop selling, then he has us (no pun intended) "over a barrel"........and when that happens, the only thing you and I get to decide is if we want to "be the husband or the wife".......and neither choice is one anyone would want to contemplate.....so...for the short term I say "do whatever it takes" to be independent, even if in the short term that means the cost rises a bit............technology will eventually reduce that cost but if our country wants to decide our own destiny, then we need to be energy independent.......and now....


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## keyman512us (Jun 24, 2007)

AG....
First off, Let me just say that I believe that farming is "Probably the most honest living" ....but in this day and age ADM, Monsanto, and all the other big players have ruined it "for the little guy." No other aspect of the "American way of life" has suffered more at the hands of "big business and the politicians that serve it". Having said that, in a "perfect world" I would look favorably towards ethanol...but unfortunately...we don't live in a perfect world. The American people might be "addicted to oil" and it's probably an addiction we will never collectively get over. The only addict that is worse than a "crack head" or a "heroin junkie", the kind that will knife or shoot you for your pocket change....is a smiling politician looking for their next fix from their dealer...big business. 
...Until those addicts are "taken care of" ethanol, and how it is viewed by the American public at large...doesn't stand a chance.


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## DaveR (Jun 24, 2007)

BeGreen said:
			
		

> ADM would be proud of you AG ...
> 
> ... If you're advocating for dropping of subsidies for ethanol, I'm with you brother. Let ethanol rise to its real cost and let's see if the free market is still interested. Roughly $9.4 billion subsidized making of 5 billion gallons of ethanol in 2006 so add about $1.90 to the price.
> 
> ...



I don't necessarily think so.  Go back and read some other posts.  I am no supporter of corporate welfare for profitable industries.  Government policy in the form of taxes, tariffs, and subsidies that benefit a few at great expense to the many should be eliminated.  However, to believe that agricultural commodity prices should remain fixed in light of sharply higher production and transportation costs caused overwhelmingly by higher energy costs does not seem to me to be a reasonable expectation.

Just for the heck of it, take a look at the following link showing a graph of corn prices going back several decades.  You might also want to make note of yields while you are looking at the information which are an indication of growth in productivity and efficiency resulting from  technological innovation.

http://www.ncga.com/WorldOfCorn/main/production2.asp

Notice anything interesting about these prices.   Now just for the heck of it, take a look at the following link discussing the economic costs for growing corn in 2006.

http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_05/fefo07_05.html 

Economic costs for growing corn in Illinois for 2006 was shown to be $2.74 to $3.11/Bushel.  Does the price for corn seem to be generating excessive profit at $3.20/Bushel?  Does the previous years price of $2.00/Bushel seem to be generating excessive losses?  Was anyone currently complaining about higher corn prices concerned about the economic consequences of extremely low corn prices in 2005?  Just average the commodity price for corn over the last five years and then tell me what the "right" price for corn should be relative to the costs of producing corn, or soybeans, wheat, etc. Correlate the price of corn to the price of oil, natural gas, or electricity and let me know what you think.  Agricultural production costs are greatly influenced by energy costs. 

How many individuals and businesses would like to operate in an environment where prices for goods and services have changed little from 1976? How many individuals and businesses would like to operate in an environment where prices for goods and services do not cover the cost of those good and services?  The only thing that has kept American agriculture in the game is unprecedented growth in operational efficiencies through the application of technology to increase yields and dramatically reduce input costs along with government subsidies to close glaring gaps with that cost being shared by all Americans in the form of taxes.  However, remember government subsidies to agricultural producers fall as market prices rise.  If only we would initiate similar mechanisms in subsidies for oil, natural gas, and coal.  

If it does not make economic sense and cannot compete on its own merits in the marketplace without tariffs and subsidies, I too am reluctant to deplete the public treasury for benefit of a few at great expense to the many.  Change Government policy in the form of tariffs, subsidies, and mandates for ethanol and the price of corn would never exceed its free market value based upon its energy content relative to oil and other alternative energy sources including Brazilian ethanol and butanol which I have also read about.


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## begreen (Jun 24, 2007)

Agreed Corn -> fuel is very expensive. Ethanol currently has a poor EROEI. Iowa state has reached the same conclusion as you have pointed out:
http://www.insidegreentech.com/node/1292
Here's an interesting summary on the history, politics and players in the debate:
http://american.com/archive/2007/may-june-magazine-contents/biofuels-or-bio-fools

Maybe in 10 years bio-technology will provide some more cost effective answers, but currently, the only practical, rapid return on investment is to mandate conservation, starting at the top with the US govt., the biggest addict of them all.

Seattle and several other cities are taking the first steps in spite of the lack of Federal action. We need a lot more of this nationwide:
http://www.cityofseattle.net/environment/clean_air.htm


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## jpl1nh (Jun 30, 2007)

Webmaster said:
			
		

> castiron said:
> 
> 
> 
> ...


 Craig, very well said, I agree 100%!


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## DaveR (Jun 30, 2007)

Has anyone seen any retractions from papers or other media outlets blaming corn prices for inflationary pressures on food and energy prices?  With corn prices falling faster than recent rains offering improved growing conditions throughout the corn belt, I would expect all those food processors and retailers blaming corn for causing them to increase prices to consumers for food and energy to begin lowering those prices substantially now that corn prices have dropped dramatically.  Climate change has chased most speculators out of corn markets for the moment with improved prospects for an abundant harvest shifting focus away from the demand side of the equation to the improving supply side.  Prospects for higher corn prices has also begun to set the stage for weeding out less efficient and financially stable ethanol producers.  Economics 101 at work again without market suffocating command and control government intervention.  If corn is the cost driver for all of those products previously mentioned, the sharp drop in corn prices must surely now lead to lower prices for those same goods.  Let's see what really happens through the end of this year. 

http://www.ncga.com/ethanol/main/index.asp

Anyone interested in rereading the ethanol studies and food vs. fuel studies available from agricultural community?  At least it allows for a more balanced perspective on which to base conclusions.

Some might also like to read recent unbiased fact based analysis of agricutural commodity markets available from the NCGA at the link below.

http://ncga.ncgapremium.com/index.a...1&qfguid=dfe85440-36e9-411a-a4e2-20ad85462e4d



> Corn futures closed lower on the day. The bears were in full force this morning after receiving larger than expected numbers from USDA.



Or keep up with news on renewable energy initiatives beyond just corn like the article found at the following link regarding cellulosic ethanol and butanol. 

http://www.checkbiotech.org/green_News_Biofuels.aspx?infoId=14993



> U.S. is creating 3 centers for research on biofuels
> By Matthew L. Wald
> 
> WASHINGTON - The Energy Department is creating three bioenergy research centers to find new ways to turn plants into fuel.
> ...



While corn-based ethanol is not likely to be the final destination in America's journey toward renewable energy sources and reduced dependence on foreign oil, it seems to be a reasonable step along the way which keeps American energy dollars at home for benefit of American communities and American citizens.

Relative to American Energy Policy here is an interesting link from the Heritage Foundation for additional consideration.  I believe it makes some important points relative to Energy Policy structured around free markets principles for the greater good of free people. 

http://www.heritage.org/Research/EnergyandEnvironment/bg2046.cfm



> June 26, 2007
> Twelve Principles to Guide U.S. Energy Policy
> by Stuart M. Butler, Ph.D. and Kim R. Holmes, Ph.D.
> Backgrounder #2046


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## begreen (Jun 30, 2007)

As noted earlier, I think a more balanced perspective comes from outside of the corn growers assn. The impact of pricing is not instant, particularly for manufactured foods and for grain we sell overseas. Let's hope it's a mellow summer and -globally- a good year for crops. That should help bring prices on food down, but we'll see. I think the references given earlier in this thread speak for themself WRT food vs fuel. Have you spent some time reading on : http://i-r-squared.blogspot.com/  ? A link was provided to Iowa state's assesment of ethanol from corn feasibility. Have you read that report?

As to the last reference, I visited it and read the doctrine. Take look at the source and reread it. It's exactly this kind of thinking that has gotten us into this mess to start with. They are loathe to mention conservation and all for letting free enterprise have free reign at the planet. There is no acknowledgement of corporate irresponsibility and it's costs or consequences. There is no mention that the past ten years has seen the development of an enormous corproate welfare system fueled in the past 5 years by a massive build up (and incredible consumption of resources) of the military industrial complex. There is no mention of the increasing blowback from these misinformed policies.

Think the government is on track? Follow the votes:
http://www.insidegreentech.com/node/1369


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## DaveR (Jul 7, 2007)

BeGreen said:
			
		

> As noted earlier, I think a more balanced perspective comes from outside of the corn growers assn. The impact of pricing is not instant, particularly for manufactured foods and for grain we sell overseas. Let's hope it's a mellow summer and -globally- a good year for crops. That should help bring prices on food down, but we'll see. I think the references given earlier in this thread speak for themself WRT food vs fuel. Have you spent some time reading on : http://i-r-squared.blogspot.com/  ? A link was provided to Iowa state's assesment of ethanol from corn feasibility. Have you read that report?
> 
> As to the last reference, I visited it and read the doctrine. Take look at the source and reread it. It's exactly this kind of thinking that has gotten us into this mess to start with. They are loathe to mention conservation and all for letting free enterprise have free reign at the planet. There is no acknowledgement of corporate irresponsibility and it's costs or consequences. There is no mention that the past ten years has seen the development of an enormous corproate welfare system fueled in the past 5 years by a massive build up (and incredible consumption of resources) of the military industrial complex. There is no mention of the increasing blowback from these misinformed policies.
> 
> ...



The balanced perspective is found by reading all sides and understanding the context from which all sides approach the issue.  Principles, priorities, self-interest guide all of us and determine our approach to many issues.  Many who are criticial of utilizing excess American agricutlural produce and capacity for renewable energy initiatives are big oil and big business interests who benefit from the status quo and deflect attention from their own self-interests blaming agriculture instead of admitting their own opportunism.  I believe in free markets and free people where the integrity of information and process are jealosuly guarded by accountable government of the people, by the people, and for the people.  I have seen the failures, brutality, and inequities of command and control socialist and communist systems and want no part of a growing nanny state with its fallacious promises of cradle to grave security.  Give me life enriching liberty not life suffocating bureaucratic security.  The seminal principles of American Liberty and Exceptionalism promised to all generations of Americans in the Declaration of Indpendence and embodied in the original intent of the Constitution are not easily dismissed by Liberty's critics.  These principles are still worth defending and dying for. 

I have read the information you have posted and agree conservation is important.  I choose to conserve and to be energy efficient within the limits of my own personal financial abilities.  I do it out of a sense of personal responsibility, stewardship, and frugality.  I live in a modest  well insulated home with a high efficiency natural gas furnace and central air.  My energy costs and carbon footprint  are far less than many who have made other choices and are quick to lecture everyone else about conservation while personally choosing to waste exponentially  far more energy than average American citizens from whom they would demand new sacrifice.

I believe government policy in the form of taxes, tariffs, and subsidies that introduce waste and inequities in free markets should be reduced and eliminated.  I believe government policy it is far too reactionary and susceptible to influence from small but well financed and organized special interest groups that do not represent the interests of the broad majority of average American citizens.  I suspect we would differ in our perspective on which of these special interest groups are worthy of government's fickle benevolence.    

Here is another article on the fuel vs. food debate from the agricultural community's perspective.

http://www.acga.org/News/2007/062607c.html



> Blame It on Industry Greed, Not Corn Farmers
> An Editorial Comment on the Corn, Ethanol and Food Prices
> By Larry Mitchell, Chief Executive
> American Corn Growers Association
> ...



When adjusted for inflation the current price for corn relative to its economic costs of production, do not seem unreasonable.  That is the basic position of the agricultural community.  Here is another analysis of food prices relative to grain prices. 

http://www.acga.org/programs/foodvrsfarm/default.htm

Just something else to think about as you consider your regular sources of information with their own inherent bias.


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## begreen (Jul 7, 2007)

AG, you and all who are already taking on the personal responsibility of conservation are to be lauded. Congratulations and thanks. But this needs to be a national effort. It is the single most effective step we can take. And it has the potential to be much more effective than ethanol. Certainly it is more cost effective. 

As to the corn-> ethanol issue, were it just the US affected, then the impact might not be untolerably severe. But this is affecting the world. When the cost of your prime staple food goes up 60% in one year, as it has now in Mexico, it is anything but trival. It is the stuff revolutions are born out of.


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## BrotherBart (Jul 7, 2007)

The heck with tortillas. Corn is a major beer ingredient. Now THAT is a call to arms!


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## DaveR (Jul 8, 2007)

BeGreen said:
			
		

> AG, you and all who are already taking on the personal responsibility of conservation are to be lauded. Congratulations and thanks. But this needs to be a national effort. It is the single most effective step we can take. And it has the potential to be much more effective than ethanol. Certainly it is more cost effective.
> 
> As to the corn-> ethanol issue, were it just the US affected, then the impact might not be untolerably severe. But this is affecting the world. When the cost of your prime staple food goes up 60% in one year, as it has now in Mexico, it is anything but trival. It is the stuff revolutions are born out of.



Some in this country who find a reason to complain about anything and everything cannot have it both ways.  You can find many of these same folks whining about the devastating effects of higher corn prices on global markets complaining a few months ago about the devastating effects of low corn prices resulting from U.S. policy on global markets.  You don't have to go back very far to find these same empty talking heads complaining about low corn prices affecting Mexican Farmers.  Here is a sampling of some of these articles from 2005 and 2006.

http://www.bilaterals.org/article.php3?id_article=3009



> Low prices force Mexicans from fields
> 
> By Bill Lambrecht
> 
> ...



http://gristmill.grist.org/story/2006/8/23/134320/085



> Mexican corn farming, under pressure from cheap U.S. corn, withers. Small holders continue to be forced from the land. The S.F. Chronicle piece claims that Mexico has 2 million corn farmers, "two-thirds of whom subsist on 12 acres or fewer and 90 percent of whom lack irrigation." Note that their competitors in the U.S. Midwest are highly consolidated and lavishly capitalized. It doesn't seem far-fetched that 1 million or more Mexican corn farmers -- and their families -- will be knocked off the land over the next several years.



And here is a recent article that suggests higher corn prices are likely to have some positive impact on Mexican farmers and the Mexican economy as they plant more corn to meet domestic demand.  It may even help remove some of the motivation for many of these displaced agricultural workers to sneak into the U.S. seeking better incomes.  There is a downside for tequila drinkers since corn is displacing Agave in Mexican fields.  For those concerned about higher tequila and beer prices affecting their lifestyles, I guess you can complain.   

http://www.truthabouttrade.org/article.asp?id=7025



> ... Higher Mexican corn prices will improve incomes for Mexican farmers, both commercial and limited resource farmers, and stimulate increased production. Whether these higher prices will cause a change in Mexican farm support programs is uncertain. The strong demand for corn in the U.S. for ethanol plants will lessen the potential for U.S. farmers to increase white corn production to compete with Mexican white corn. The downside is that the Mexican government will need a long-term plan to help low income people pay for corn based products.
> 
> Political groups in Mexico that were urging renegotiation of NAFTA because of concerns that Mexican farmers would be put out of business by cheap U.S. corn are now pushing renegotiation because the U.S. is causing high food prices in Mexico. With or without NAFTA Mexico cannot wall itself off from the effects of market forces outside the country. The economic evidence of the past 50 years shows that economic and trade policies need to be flexible enough to adjust to outside market forces. ...



I have pointed out before that U.S. Farm policy has been repeatedly criticized around the world for flooding global markets with low priced agricultural commodities keeping domestic farmers in other nations from being competitive in meeting domestic demand.  I guess you did not bother to read this information.  Utilizing excess American agricultural produce and capacity to fuel renewable energy initiatives gives Mexico and other countries critical of U.S. Farm subsidies the opportunity to develop their own domestic agricultural industry and to return to more self-sufficiency providing higher incomes to their own citizens dependent upon agriculture.  This is not a bad thing.  Market prices that better cover economic productioncosts for corn and other grains thereby reducing government spending on farm subsidies paid to American farmers is not a bad thing.  Keeping U.S. energy dollars at home and invested in American communities and American citizens is not a bad thing.

Criticism is easy.  Taking time to understand global markets and look beyond simplistic reactionary rhetoric that is little more than shallow propoganda takes some effort and research beyond popular media and anticapitalistic blogs.  By the way you did notice that I do read Gristmill.  I do not always find exception with their perspective.  Few of us are entirely wrong in the perspectives we choose to champion.


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## begreen (Jul 8, 2007)

Very good points AG. Markets can be very fickle and I am not criticizing the use of excess capacity, but pointing out the global and local ramifications of weak policy. I'm all for us working towards energy independence. But without conservation at the forefront, any policy is doomed. There are questions for using corn, but I am not totally against ethanol as a temporary, partial solution. The farmers are not the problem. The smaller farmers have my utmost sympathy. If they benefit, that's great. But policies of corporate welfare and boneheaded solutions written by self-serving lobbyists are an issue. I am certainly not anticapitalistic, nor is Robert Rapier in the referred to link. I think that shifting our economy towards energy independence can be a great economic stimulation with a focused effort on the level of the space race. But this is not our current policy. That is the center of my concern. Switching to ethanol (or any current solution) so that we can keep up our current rate of consumption is unsustainable folly. 

As to the crops,  are we at excess capacity to start with or is this a result of subsidies as farmers switch to corn or other biofuel? Should these fields be growing corn when the sugar beet contains so much more potential ethanol and is easier to grow in a cooler climate? Can our aquifers support the expansion necessary to satisfy even 10% of the fuel demand? Is ethanol the right direction to go when it requires so much infrastructure retooling and is much lower in energy than alternatives? These are subjects of intense debate right now and that's good. But framing the debate should be long term benefits to the next generation and the responsibility for all of us to tighten the belt a bit and shoulder them. I am not hearing that from Washington yet, but keeping an open ear.


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## begreen (Jul 8, 2007)

BrotherBart said:
			
		

> The heck with tortillas. Corn is a major beer ingredient. Now THAT is a call to arms!



Now that's getting serious! The EU wants to force less than perfect vineyards destroyed and their wine converted to ethanol. Take away the $1/litre wine from the French and you will have a revolution.


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## DaveR (Jul 8, 2007)

BeGreen said:
			
		

> BrotherBart said:
> 
> 
> 
> ...



Energy costs are more likely to cause a revolution when American citizens realize wrongheaded Government Policy has restricted development of Energy resources necessary to sustain the economy and are now the cost driver behind present inflationary pressures across a broad range of products and services.  Individuals and businesses are already adjusting energy use in response to higher energy costs.  Smaller more fuel effecient cars are being purchased with recent articles highlighting the increased sales of vehicles with 4-cylinder engines and foreign brands.  Conservation is occurring as a rational response to higher energy costs.  Individuals are conserving and evidence can be found to support this from market data.  Businesses are also conserving to preserve profits critical to present and future viability.  Innovation is being introduced in markets to provide more alternatives with those offering the greatest savings being purchased and sustained.

What Government policy should be initiated to force conservation on the American people?  Maybe government should restrict energy use for all American households to that level used by median American households.  Maybe government should restrict the size of American homes to that of the median size of home constructed in the 1970's.  Maybe government should restrict the number of homes owned per household to just one.  Maybe government should restrict the number of cars owned per household to just one.  Or maybe government should initiate carbon taxes or carbon tax and trade schemes to drive up energy costs to consume ever more disposable income of Average American citizens and those on fixed incomes so that only the truly wealthy can afford to waste energy resources at great expense to everyone else.  Now there is an idea to save the planet and force Americans to conserve energy resources that only central planners could love.

Free markets and free people will work through resource allocation as well or better than any command and control central planning initiative can offer and often embrace previously unknown innovations and technologies overlooked by dominant technologies and market leaders.  History has proven this fact out many times over.  One size and one choice to fit all is a terrible strategy in meeting humanity's changing needs.  Adaptive free market evolution of new technologies will consistently yield better results.

Even if corn ethanol is not the final destination in America's journey toward renewable energy alternatives to oil, it is not the problem some critics would make it out to be because free markets will adapt to price changes in resources and raw materials.  Here is one more link to consider relative to corn prices and their effect on food prices.

http://www.bio.org/ind/biofuel/20070620facts.asp



> Fact: Current fluctuations in food prices from increased demand for corn for ethanol do not represent a permanent competition between fuel demand and food security.
> 
> Food prices increased 3.7 percent in the United States from April 2006 to April 2007 due not only to increased corn prices, but also increased costs of oil, worldwide weather-related disruptions of food (droughts and freezes), and contamination scares. The costs of all goods, excluding energy and food, rose 2.2 percent in the same period, according to the U.S. Department of Labor Bureau of Labor Statistics, which compiles the Consumer Price Index (May 2007 CPI Release PDF).
> 
> According to Iowa State University's Center for Agricultural and Rural Development (CARD), traders have anticipated higher prices and have built them into futures contracts. Most of the anticipated price changes have already shown up in market prices (CARD Publication: Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets). Further, higher corn and crop prices increase income for farmers throughout the world. Farmers in many other countries historically have been priced out of the world market by inexpensive U.S. corn. Higher corn prices could change that situation.



Removing the tariffs on Brazilian ethanol and Foreign sugar alone would go a long way in moderating corn ethanol's effects on market prices for agricultural commodities.  Here is an interesting link to information for consideration of the unintended consequences of Government Policy in the guise of taxes, tariffs, and subsidies on American citizens relative to food costs.  Government policy is the primary cause of the problems noted in this article because it frustrates free market allocation of resources and natural free market adaptation. 

http://www.reason.com/news/show/36207.html

I believe in free markets and free people.  Government policy is too often a reactionary response originating in political opportunism without consideration of long-term consequences and is always resistant to change long past its relevant need once enacted.  Heaven forbid Government attempt to force energy conservation beyond its already restrictive policies toward agressive domestic energy development.  Higher energy costs are already spurring conservation among American families and businesses as they adapt to ever rising energy prices.


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## Jags (Jul 9, 2007)

1 bushel of corn = 56 pounds
1 pound of corn = 3 cups
1 bushel of corn = 168 cups of dry cornmeal
1/4 of a cup = 1 tortilla
168 cups of corn = 672 tortillas
1 bushel of corn = $4.00
1 tortilla = $.006 (rounded up)

if corn was at $3.00 per bushel
1 tortilla = .0045 (rounded up)

If corn was at $2.00 per bushel
1 tortilla = $.003 (rounded up)

put another way.

at $2.00 corn you can buy 333 tortillas for a BUCK
at $3.00 corn you can buy 222 tortillas for a BUCK
at $4.00 corn you can buy 166 tortillas for a BUCK

Oh, I realize that this isn't taking into account transportation, middle men, etc.  But the "starving lower class of Mexico is complaining about tortilla prices" - give me a break.

I am not going to take sides, but I live in the midwest.  My yard connects to fields in every direction.  I am not a farmer, but I will pose one question.  

WHAT SHOULD THE PRICE OF CORN BE?

I can tell you, it aint $2.00, I can tell you it aint $3.00.  $4.00 is probably getting close.  Drop the subsidies and let the free market rule.  If its worth more as food than fuel - then eat it.  If its worth more as fuel - then burn it.  If it aint worth $4.00 a bushel - grow pot.

Basically $4.00 corn is just about getting to the GMROI for a farmer that most companies would consider as "reasonable" if making a product.

USA - what a great country - even our poor people are fat.


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## restorer (Jul 10, 2007)

Jags said:
			
		

> 1 bushel of corn = 56 pounds
> 1 pound of corn = 3 cups
> 1 bushel of corn = 168 cups of dry cornmeal
> 1/4 of a cup = 1 tortilla
> ...



Hmmmm, maybe Englander should but Corie on the project to design and bring to market the first Tortilla Burning Stove. How about it Mike, you  willing to take the challenge on? What a concept.

Oh, BTW, the reason the Tortilla is such an issue in Mexico is it is a tightly controlled industry in the hands of a few individual. They are also a staple, meaning several eaten per day by each person. Think of France and having that daily baggette made by the monoply and deciding th raise the price to the point you can't afford it. I guess the nearest equivalent in America that comes to mind would be eggs. If we had a monopoly organization putting the price of eggs at $6. per dozen, it would force millions to radically alter their breakfast.


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## Jags (Jul 10, 2007)

oh UR- that was just kind of a light hearted attempt to show how corn prices minutely affect the price of a tortilla.  What it really comes down to in my mind, is that corn SHOULD be at $4.00 a bushel in the real world of business.  For people to claim that this is the root evil to the skyrocketing costs of everything under the sun, and that the rest of the world is gonna starve because were turning corn into fuel is hog wash.  When corn prices were low, we (USA) were getting attacked because we were ruining the market for the little farmers in the poor countries, when its high, the poor people cant afford it (or the meat that it feeds).  Cant win I guess.  Several have spouted that we should have $6.00 a gallon gas so that it would advance the renew-ables scene, but I know that will hit my pocket harder than $4.00 corn will.  For one thing, if that happens, corn will go to 5 or 6 bucks because of the fuel to raise and transport the crop. 

Oh wait a minute, did I just make a connection of fuel price to corn price.......I think I did. :bug:


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## DaveR (Jul 14, 2007)

Jags said:
			
		

> oh UR- that was just kind of a light hearted attempt to show how corn prices minutely affect the price of a tortilla.  What it really comes down to in my mind, is that corn SHOULD be at $4.00 a bushel in the real world of business.  For people to claim that this is the root evil to the skyrocketing costs of everything under the sun, and that the rest of the world is gonna starve because were turning corn into fuel is hog wash.  When corn prices were low, we (USA) were getting attacked because we were ruining the market for the little farmers in the poor countries, when its high, the poor people cant afford it (or the meat that it feeds).  Cant win I guess.  Several have spouted that we should have $6.00 a gallon gas so that it would advance the renew-ables scene, but I know that will hit my pocket harder than $4.00 corn will.  For one thing, if that happens, corn will go to 5 or 6 bucks because of the fuel to raise and transport the crop.
> 
> Oh wait a minute, did I just make a connection of fuel price to corn price.......I think I did. :bug:



Jags,

Thanks for joining the discussion.  I guess it just takes some good Midwestern common sense from what the coasties call fly over country to understand the connection between rising energy costs and rising food costs.

It is easy for those far removed from agriculture to assume that the food in supermarkets just grows on trees with little cost beyond low paid migrant workers to have it ready at their command.  Heaven forbid the quality is not up to their standards or the price increases to cover rising economic costs of production and transportation fueled by rising energy costs.  Heaven forbid the price of their adult beverages are going to increase.  Let farmers and agricultural families put in 12, 18, 24, hour days to work the land and produce abundant harvests to feed millions while the urbanites enjoy their own sheltered lifestyle far removed from the land and people who feed them.  If they would visit fly over country during Spring planting or Fall harvest and witness first hand the time, work, and cost involved in feeding American families maybe they would have a better perspective on the true cost drivers of food.  Economic costs for growing Illinois corn in 2006 was estimated by the University of Illinois to average from $2.74-$3.11/Bushel depending upon the productive capacity of the land and the economic costs for 2005, 2004, and beyond were not any better.  Really $3.50-$4.00/Bushel corn does not seem unreasonable to this Midwesterner and has been too late in coming for many Farming families.  

Rising energy costs will mean rising food costs with or without corn based ethanol.


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## restorer (Jul 15, 2007)

AG-E,
Don't want to start a feud, but I don't think the farmer is the big winner in this deal. ADM and a few others are striking gold and the farmers are taking the hit. Would you say they are the top or bottom of the pecking order? Do they get any subsidy for growing corn for ethanol, or does that go to the processors? What kind of mitigation is in place for depleting their lands? What are their long term obligations to the ethanol industry?

I think there are alternatives to corn as an energy crop. I'm not a farmer, although it has been around me all my life, my Grandfather made sure none of his children or grandchildren went into farming, ranching, or anything related. Closest was a cousin who was a brand inspector. I have heard sorgum, soybean, rapseed, and canola are better crops for converting to fluid energy without the huge capital investments and can be more easily transported.

I really think switch grass for marginal farmland and land banked farms is a very real option for home heating. I heat with pellets and could mix corn, but not at $8 per 40 lb bag. What's that a bushel, just over $10. Corn grown out here is for feed and most all is under contract. I don't live closed enough to a friendly farmer to buy bulk, so I don't have that option. If they could afigure out a way to compress alfalfa into a truly heat producing pellet I could be in like great shape. 

I just do not see the economy of ethanol. It is too expensive. When you consider nitrogen depleters like corn and nitrogen builders that could be grown. It cuts the fertilizer producers out of the loop and saves our natural gas. May hurt the Wyoming PotAsh business, but two hundred can produce tens of thousands of tons per year, so it impacts a few, we can retrain them and get them safer jobs, that would only hurt the resource thieves bottom lines.

Honestly I'm a big fan of bio-diesel and think that is a better direction for us to go.

So, not to cut the farmer out, they should get a fair price for their crops, but I want to cut big business out of the gouge to us the consumers.


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## colsmith (Jul 15, 2007)

Brotherbart, I respect your opinion on wood stoves a great deal, but corn in beer?  NOT!  "I'm from Milwaukee, and I oughta know"  (If you're old enough, you will remember that son from a Pabst beer commercial.)

According to the Reinheitsgebot (German Purity Law) adopted in 1516 and still the law in Germany, the only ingredients used for the brewing of beer must be Barley, Hops and Water.  And certainly Germany is the expert country on beer.  I know that there is rice in Budweiser (it says grain, but I hear it is mostly rice) but I don't consider that actually beer, nor would I drink it except in desperation.  Anybody who puts corn in their beer is not really making beer, in my opinion and the opinion of many others.  In the U.S. it flies because we make a lot of crappy beer, but real beer doesn't have corn in it.


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## littlesmokey (Jul 15, 2007)

Some Like It Hot said:
			
		

> Brotherbart, I respect your opinion on wood stoves a great deal, but corn in beer?  NOT!  "I'm from Milwaukee, and I oughta know"  (If you're old enough, you will remember that son from a Pabst beer commercial.)
> 
> According to the Reinheitsgebot (German Purity Law) adopted in 1516 and still the law in Germany, the only ingredients used for the brewing of beer must be Barley, Hops and Water.  And certainly Germany is the expert country on beer.  I know that there is rice in Budweiser (it says grain, but I hear it is mostly rice) but I don't consider that actually beer, nor would I drink it except in desperation.  Anybody who puts corn in their beer is not really making beer, in my opinion and the opinion of many others.  In the U.S. it flies because we make a lot of crappy beer, but real beer doesn't have corn in it.



Marcia:
What's in Milwaukee's Best? Them Germans don't rule here, why there's more beers in America used for radiator flush than all the one brewed in Germany. Think there are more than a few brewed by forum members. We have no taste, but we know our beers, right, felowimnewer whs. Sorry drooled on te keyboard :-S


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## DaveR (Jul 15, 2007)

Some Like It Hot said:
			
		

> Brotherbart, I respect your opinion on wood stoves a great deal, but corn in beer?  NOT!  "I'm from Milwaukee, and I oughta know"  (If you're old enough, you will remember that son from a Pabst beer commercial.)
> 
> According to the Reinheitsgebot (German Purity Law) adopted in 1516 and still the law in Germany, the only ingredients used for the brewing of beer must be Barley, Hops and Water.  And certainly Germany is the expert country on beer.  I know that there is rice in Budweiser (it says grain, but I hear it is mostly rice) but I don't consider that actually beer, nor would I drink it except in desperation.  Anybody who puts corn in their beer is not really making beer, in my opinion and the opinion of many others.  In the U.S. it flies because we make a lot of crappy beer, but real beer doesn't have corn in it.



The folks complaining about corn prices affecting the consumer price on a broad range of food get there by suggesting that corn is displacing other crops being grown because of its higher commodity price.  This just does not reflect economic reality.  Crops are grown in certain geographic areas because of optimal environmental factors with some overlap affected by commodity prices and market expectations relative to supply and demand fundamentals for each commodity.  Economics 101 will allocate land resources based upon return expected from various land uses.  For many areas the environmental factors and risk outweigh higher corn prices.  Some have suggested that we would be better off using sugar beets for ethanol production without understanding the economics of agricultural production, storage, processing, and transportation.  One study funded by the USDA suggests that ethanol from sugar beets would likely be more costly than corn based ethanol because of many factors beyond the energy content of sugar beets.

Farmers do benefit from ethanol, biodiesel, and other renewable energy initiatives utilizing excess agricultural produce and capacity in these domestic markets rather than shipping surplus into low value global markets.  Midwestern and rural communities do benefit from new capital investment, jobs, and growth following decades of stagnation and decline.  Domestic markets which increase prices for agricultural commodities above the increasing economic cost of production is a reasonable, rational, and good outcome for American Farmers and rural communities.  It is a good thing for all American taxpayers because it reduces government subsidies paid to agriculture to close glaring gaps between market price and cost while maintaining security of the domestic food supply.  Utilizing American resources for benefit of American citizens and keeping U.S. energy dollars invested in America and American communities to benefit the greater good of American citizens is not a bad thing.  This does not in anyway argue against the need for greater energy efficiency in sustaining a growing American economy.

Here are a couple of interesting links for those interested in better understanding of agricultural perspectives beyond some of the misinformation found in popular media and anticapitalistic blogs.

The first link shows dominant producing areas for various grain crops.  For you beer drinkers notice the large distance seperating dominant corn producing regions from barley producing regions.  Limited competition from corn relative to barley.  Since corn is used for some whiskey, these adult beverages may be affected by corn prices and tequila may well be affected by corn prices as MExican farmers plant more corn for their own domestic consumption.  Sugar beets would not be well suited for growing in most of the corn belt which is ideally suited to corn production and soybean production.  Some winter wheat is grown in these areas but corn and soybeans have dominated.  

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sis5219?opendocument

The second link discusses the economics of ethanol from corn versus sugar beets.  Interesting analysis for those interested.

http://www.rurdev.usda.gov/rbs/pub/sep06/ethanol.htm



> Plant location & capital costs
> For new facilities, capital costs are estimated to be higher for those using sugarcane or sugar beets than for cornbased ethanol plants. Also, the economics of plant location is largely dictated by proximity to feedstocks for ethanol.
> 
> Most ethanol plants are located in the Midwest near corn supplies. Sugarcane and sugar beets cannot be shipped very far for processing into any product, be it sugar or ethanol. However, building an ethanol plant onto an existing sugarcane or sugar beet factory would have a much lower capital expenditure cost and may make it more comparable to corn-based facilities.
> ...



No feud intended, I am just hoping to broaden the perspective of some by sharing some of the agricultural community's perspective on these issues.


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## littlesmokey (Jul 15, 2007)

No disrespect intended, but what do you do for a living? Are your posts related to your occupation? I asked about alternative crops and didn't get an answer. If you are in the ethanol business, let us know, then we can ask you some real burning questions.

Most industry members disclose their affiliations without any problems, care to share?


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## keyman512us (Jul 15, 2007)

littlesmokey said:
			
		

> No disrespect intended, but what do you do for a living? Are your posts related to your occupation? I asked about alternative crops and didn't get an answer. If you are in the ethanol business, let us know, then we can ask you some real burning questions.
> 
> Most industry members disclose their affiliations without any problems, care to share?



Yeah...What he said...


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## DaveR (Jul 15, 2007)

littlesmokey said:
			
		

> No disrespect intended, but what do you do for a living? Are your posts related to your occupation? I asked about alternative crops and didn't get an answer. If you are in the ethanol business, let us know, then we can ask you some real burning questions.
> 
> Most industry members disclose their affiliations without any problems, care to share?



I have no past or present involvement with the ethanol industry or biodiesel industry.  I have no investments in the ethanol or biodiesel industry either, can't afford the gamble after just getting children through college without them relying on government grants or loans.  If you want to pick a fight with ethanol industry insiders, you will have to look elsewhere.  I have deep roots and sympathies with the agricultural community.  My grandparents were tenant farmers, my great-grandparents were farmers, and many family and friends continue to earn their livings from agriculture.  I am two generations removed from the farm.  I am little more than a concerned citizen with a background in economics and business and a growing interest in the potential of renewable energy to reduce America's dependence on foreign oil and improve rural economies.   I have done some part-time market research for an independent farm owned venture seeking to better understand opportunities for agriculture relative to direct combustion appliances and as a result have spent some time researching the energy content of various agricultural commodities and by-products.  Frankly, lower corn prices would have made corn in direct combustion applications a much more competitive proposition with other fuel alternatives.  However, as a result of my research, I have also spent some extensive time reading the ongoing debate over ethanol and biodiesel before reaching my own conclusions in support of the initiatives.  Personally, I work fulltime in manufacturing management and have seen this industry sector negatively affected by the flood of imports coming out of China with rural economies struggling to survive as good paying manufacturing jobs are lost and replaced with lower paying service, retail, and distribution jobs.  I have also spent several years in the plastics industry and am familiar with the effect of rising energy costs on plastics and the growing interests in corn and other agricultural commodities potential as feedstock for this industry.

In my area the largest community and county seat has seen a 25% decline in population since the early eighties resulting from the loss of manufacturing jobs and continues to see unemployment rates stuck around 5-6%.  I believe renewable energy markets do offer new opportunities for the agricultural community which is still an important industry sector throughout much of the Midwest.  I have family and friends employed by agricultural processors with startups for ethanol and biodiesel growing around us.  Throughout the Midwest, there is a need for good paying jobs and renewable energy initiatives are an important opportunity for many rural communities. Higher grain prices are only recently beginning to cover the rising economic costs of production resulting from higher energy costs which is welcome relief to many in the farming community.

The criticism of rising corn prices causing widespread inflationary pressures on food costs does not seem to me to be reasonable when rising energy costs appear to be the real cost driver.  Just one Midwestern American's perspective to balance the many others I have seen voiced on this subject.


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## keyman512us (Jul 16, 2007)

[quote author="AGENERGY" date="1183192181"]

While corn-based ethanol is not likely to be the final destination in America's journey toward renewable energy sources and reduced dependence on foreign oil, it seems to be a reasonable step along the way which keeps American energy dollars at home for benefit of American communities and American citizens.



> Very bold statement...and one we would all like to feel "warm and fuzzy about". But to the average Joe like (ME) or the roofer down the street just trying to make another $ to give to the oil companies...which as of today are bleeding this nation dry IMHO. Here is how that translates:
> 
> The lobbyists for (the interests of) ethanol and the politician (in big oils pocket) start talking "Hey you subsidize us...So What if it won't make a difference...we make money...you get to say you are doing SOMETHING (even if they are in reality doing nothing) and big oil isn't going to cry because in all actuality we are sucking away the money and running 'interference' for them".
> 
> ...


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## Sandor (Jul 16, 2007)

AGENERGY said:
			
		

> littlesmokey said:
> 
> 
> 
> ...


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## keyman512us (Jul 16, 2007)

Bottom line is we need "real alternatives" not just stop gap measures. America needs to re vamp its' attitude towards energy.


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## littlesmokey (Jul 16, 2007)

Nice edit, but I didn't say that. The quote is mis attributed.



			
				Sandor said:
			
		

> AGENERGY said:
> 
> 
> 
> ...


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## BrotherBart (Jul 16, 2007)

Some Like It Hot said:
			
		

> Brotherbart, I respect your opinion on wood stoves a great deal, but corn in beer?  NOT!  "I'm from Milwaukee, and I oughta know"  (If you're old enough, you will remember that son from a Pabst beer commercial.)
> 
> According to the Reinheitsgebot (German Purity Law) adopted in 1516 and still the law in Germany, the only ingredients used for the brewing of beer must be Barley, Hops and Water.  And certainly Germany is the expert country on beer.  I know that there is rice in Budweiser (it says grain, but I hear it is mostly rice) but I don't consider that actually beer, nor would I drink it except in desperation.  Anybody who puts corn in their beer is not really making beer, in my opinion and the opinion of many others.  In the U.S. it flies because we make a lot of crappy beer, but real beer doesn't have corn in it.



According to many sources, but I will just quote Wikipedia here:

"American-style lager beer is a common variety of beer, a type of pale lager, traditionally made and drunk in North America, but also popular in much of the rest of the world. It derives ultimately from the Czech Pilsner, but is characterized by a much lighter color and body and the frequent use of rice or corn as adjuncts."

Rice is actually number two with corn being number one. Some prefer rice because it contains less oil than corn but it slimes up the brewing equipment something fierce.

And as to considering Budweiser beer, I leave that to the people that drink Bud. The largest selling beer on planet Earth.


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## webbie (Jul 16, 2007)

Well, here are some of the first casualties of the rush toward fueling our SUV's with corn:

http://tinyurl.com/3crg4s

While I am glad the American Farmer can make more $$$, it doesn't seem fair that the price rises will hurt the poorest among us. I'd rather pay more for fuel, get higher MPG, stop paying $.50 a gallon to the distillers, and let these people eat.


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## restorer (Jul 16, 2007)

BrotherBart said:
			
		

> Some Like It Hot said:
> 
> 
> 
> ...





BeG:
I agree. In college we tried to drink Coors, as the real beer. Three cans and before the real party started I had all the symptoms of a hang over. Found out the processing of the "rice" in Coors was causing a mild allergic reaction, so I switched to Millers. BTW, what's brewing in Tumwater? I used to follow brewery ownership, but when it got to be three, I stopped. Frankly, I liked it when you could get fresh Strohs on the West Coast. Oh, and Hank's in Portland is still my favorite. Calemarie or crab and a Henry's Dark is as close to heaven as......... Wait what was the topic?

I want to chime in here. AG-Ethanol, if you have researched so much about agricultural alternatives, tell us your twist on bio-diesel, straight veggie burners and other alternatives. We are placing a lot of marginal farm land in corn production that is depleting the soil, what crops are soil building and can be used as fuel courses? I'm a city kid, family history were homesteaders, first to bust the soil kind of folk, even have a famous ancestor that built the San Bernardino Ranch Irrigation system. I read a lot from creditable Agricultural experts that disagree with our current direction. Admittedly I am not a fan of ADM, Simplot and a few other fertilizer/seed and "farm management companies". Personally I'd enjoy talking about the future of soybeans, or sugarbeats, near and dear to the farmers in my area. Often thought about converting the "residue" from beat processing into pellets like they do with distillers grain. But can't get past the smell.  There are lots of farms out hear that grow dry Winter wheat, it's not irrigated, and frankly is seeded and left to mature, but there is profit if you have enough land. We grow a lot of hay, well did until the fires. It feeds beef and dairy cattle. There's rye grass and even alfalfa. The big fertilizer companies go broke in Utah, no business.

Someone asked you earlier about the economics of corn, what does it cost to produce and what does it cost to make a gallon of ethanol. You have recently posted you have an economics background, can you give us a rundown of the actual cost of a bushel of corn, what it creates through processing in ethanol. So a farmer needs $4/bu to make a living, but others have pointed out there are no family farms, who's getting the four bucks? 

I have a friend who is a very well respected economist in social economics. Made quite a name for himself in the US and abroad. Several years ago he said to me, I know agricultural economics, but working at WSU has taught me something I never would have thought about. I know nothing about agricultural economics. He told me his knowledge really came when one of his grad students took him down to coffee in Pullman at a diner, across from the local brokerage company. They had a ticker running on the commodities markets and futures. All the window booths were full and all were obviously farmers. They would talk until the right markets came up and all talk stopped. To shorten the story, my friend got a front seat after awhile and got the farmers to open up. They new the market because they knew it from the beginning. Those good-old-boys were sitting on thousands of bushels of wheat waiting for the right time to sell. They made money, every year, some through insurance, but most through knowing their crops. Farmers I know and have talked to are not real happy with things right now. They say their costs are not stable, the most volutile are fuel, fertilizer, adn weed/pest control. When it looks like they are going to get ahead, the overhead goes up. Most are moving from contracted crops to free market crops. No beets, no corn, no seeds, lots of alfalfa, hay and rye grass. One guy I know will not contract his hay until December. He has eight trucks, with duals all rebuilt and sons or sons in law to drive and he's looking at customers in California. He delivers. He used to be a major player in sugarbeets until White Satin stopped buying in his area. 

Admittedly, all my information is anecdotal, but is real case. Would you share some of the same?

Oh, BTW, a friend who is in my business has a family farm in North Dakota. He's too old to farm, can only put in a 12 hour day, said he's going to take 2,500 acres next year, plus his land bank and seed it in switch grass. Seems SDSU wants to make pellets. Hmmmmmm


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## begreen (Jul 16, 2007)

UR, that was BB not me. Though I agree with you about Coors. My pee has a higher alcohol content then Coors. That ain't beer. 

I haven't been by the Oly brewery on the Tumwater in several years, but I do see some nice microbrews coming from there, so I assume it's still alive. 

Me, I'm into Mac n' Jack, and Maritime Night Watch lately. Though I do admit to drinking a few Fat Tires too.


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## restorer (Jul 16, 2007)

Sorry about the misattribution. Just too many B's here.


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## jjbaer (Jul 16, 2007)

Webmaster said:
			
		

> Well, here are some of the first casualties of the rush toward fueling our SUV's with corn:
> 
> http://tinyurl.com/3crg4s
> 
> While I am glad the American Farmer can make more $$$, it doesn't seem fair that the price rises will hurt the poorest among us. I'd rather pay more for fuel, get higher MPG, stop paying $.50 a gallon to the distillers, and let these people eat.



Craig,
Good article!  The point to be made here is that when you give someone the responsibility of feeding the world but give them NO control over the burgeoning population they must feed, the birth rate then overtakes the ability of the UN to feed them, and then starvation and death become the "great equalizers"........proves what we use to say in the military....that it's illegal to give responsibility for a broblem with also giving authority........


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## webbie (Jul 16, 2007)

Hey, but in the military they train you....like telling you to keep things in your pants!

Unfortunately, the current administration has done away with funding of international (and even internal US) programs which teach about birth control! 

You are correct about responsibility - but it is not quite that simple. Look at Katrina as an example. A disaster in the wealthiest country in the world.....yes, no one starved, but imagine a drought or similar disasters in a country with an average income of $100 or so per person/year.

The dollar figure in the article is TINY. They say you can only educate people once they have a full stomach. So feed 'em, then teach them. 

I have a contact in Africa involved in trying to "save the world".....and he does blame much of the problem on corrupt leaders and "males" of the species - that is to say lack of responsibility. The average life span in his country is 37. He says that they have the resources to do things (rivers, water), but that the leaders just don't do anything and build up their own bank accounts.

Complex. I would never argue against personal responsibility, but you do have to lead the horse to water before he can drink...

Also, letting these people die often has the opposite effect. They then have to have a lot MORE children, so there is someone to tend the fields or whatever else. History shows that, in general, folks will have smaller families as they become more educated and better fed. Of course there are those  who council against this trend.


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## jjbaer (Jul 16, 2007)

Webmaster said:
			
		

> You are correct about responsibility - but it is not quite that simple. Look at Katrina as an example. .



Here's the bigger picture:  if I'm on the hook (for whatever reason) to help another person feed his family, you better believe I also have an absolute right   to attach minimum requirements as pertains to that persons behaviour, such that we don't find ourselves in a never-ending "loop" of having to feed ever greater and greater populations that will eventually overwhelm the very system that's feeding them......

In this instance, I believe we have the right to tell these people: "hey, I'll help you but you must also do your part and stop having children you can't feed"......if they're not willing to do this, then I'm under no obligation of any kind to have to feed them........


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## DaveR (Jul 22, 2007)

Corn prices continue to fall as adequate rains bolster expectations for increased supply to meet demand.  Typical of price swings seen in corn markets year after year as traders try to position themselves to take advantage of fickle weather.  Any retractions yet on corn being a primary cost driver of food prices since corn prices are far below the $4.00/Bushel price everyone focused on just a few weeks back?  Corn prices have also introduced a healthy dose of market reality into the irrational exuberance of corn-based ethanol production causing many to pause and reconsider capital investment in the industry even with current government subsidies.  I continue to believe that agricultural based renewable energy intitiatives like ethanol, biodiesel, direct combustion of biomass and others have real potential to lessen American dependence on foreign oil without causing the problems imagined by some and believe that free market allocation of resources will deliver better outcomes with these initiatives.  

You may want to just read through the National Corn Growers Association website every time the talking heads in popular media and anticapitalistic blogs want to blame corn for the world's woes just to get the other side of the story for a more balanced perspective from which to draw your own conclusions.  For those who have asked for more information on cost for growing corn, my perspectives on ethanol, biodiesel, alternative energy crops, real farmers' perspectives on these issue I would refer you back to previous posts that have covered this information.  I would refer you to the National Corn Growers Association, Illinois Farm Bureau, American Corn Growers Association all of which I have shared links and represent the collective voice of Farmers across the nation.  You may also look for the American Soybean Association, American Dairy Association, and other farm associations.  The agricultural community is not one big monolithic community and you will find a diversity of opinion even within agriculture as each segment pursues that inherent human characteristic of self-interest.  With the web, there is no reason not to be reasonably informed on the issues and to better understand the various perspectives surrounding critical issues of the day.         

http://ncga.ncgapremium.com/index.aspx?ascxID=dowJones&category=1&djid=20718

http://www.ilfb.org/viewdocument.asp?did=13540
http://www.ilfb.org/viewdocument.asp?did=12458
http://www.ilfb.org/viewdocument.asp?did=8228

With lower corn prices, I guess the U.N. can also stop worrying about not being able to afford feeding the poor of the world dependent upon U.N. benevolence for their survival.  From my viewpoint, Bureaucracy with its inherent arrogance, waste, and corruption is no friend of the poor and oppressed.  Just consider the U.N.'s performance in the recent past with Darfur, Iraq, Somalia, and the recent Oil for Food scandal.  Or just ask American Indians confined to the poverty and forced dependency of the reservation administered by the great white Fathers of both parties in Washington for their welfare.  Bureaucracy is the great bulwark of elitism against humanity and the aspirations of common men.  Frankly, the poor, oppressed, and slaughtered of the world dependent upon the benevolence of the U.N. or Chavez, Castro, Kim, Putin, Hu should learn from the history of Stalin, Mao, and other great communists and socialists leaders that without means to throw off the chains of brutal tyranny the fallacious promise of bureaucratic security is little more than a trojan horse for those who would amass power and wealth unto themselves.  Here is a sobering website for those would elevate the likes of Castro and Chavez as champions of the poor and middle class to the pantheon of human reformers.  Maybe one should ask the millions murdered, imprisoned, tortured, impoverished, exciled, and disenfranchised by these great champions of the poor and statist reformers if the real costs of their reforms were worth the meager benefits.  

http://www.victimsofcommunism.org/


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## begreen (Jul 22, 2007)

This is becoming a one person political pulpit. Point has been discussed and finished. Take further to the ash can please, closing thread.


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