Ethanol production plummeted last week to 821,000 barrels a day, a decline of 4.2 percent in the United States. That the lowest ethanol production level since July 2010, according to an Energy Department report.
With corn prices surging towards $8 a bushel, over the next couple of months we could see ethanol demand plunge even more.
Because there is little hope of rain coming soon, the drought will continue to devastate the corn in the Midwest, with a drop of a little over 1 percent daily as to the quality rating of the crop.
On the Chicago Board of Trade denatured ethanol for August delivery fell 2.8 cents, or 1.1 percent, to $2.44 a gallon
For the cash market, U.S. Gulf ethanol was down to $2.47 a gallon in Chicago, a loss of 5.5 cents, or 2.2 percent. In Chicago it fell 5 cent to $2.41, a decline of 2 percent.
New York ethanol was down to $2.53, falling 5 cents or 1.9 percent. On the West Coast it fell to $2.63, down 4 cents or 1.5 percent.
Corn took a breather, with December delivery in Chicago declining to $7.0475 a bushel, sliding 12.75 cents, or 1.8 percent.
Showing posts with label Corn Prices. Show all posts
Showing posts with label Corn Prices. Show all posts
Thursday, July 12, 2012
Wednesday, March 7, 2012
Mississippi Wastes $75 Million on Ethanol Scam
I wonder if the politicians in Mississippi know how to read or listen, as the news of the hundreds of millions wasted on so-called renewable energy by the Obama administration doesn't seemed to have reached the deep south, with Mississippi throwing around $75 million in low interest loans for the building of cellulosic biofuels plant in the state.
They also have offered up $155 million in tax incentives to get the boondoggle going. What a criminal waste of the taxpayer's money. And yes it is taxpayers money because they're the ones that will have to pay for it when it crashes and burns.
The company confisgating the state loan is named Virdia, which just changed its name from HCL Cleantech. They take natural matter such as woodchips and other plant matter and convert it into sugar, which is then converted into ethanol.
Virdia CEO Philippe Lavielle admits the amount of money offered by the state, along with $10 million in venture debt and another $20 million in venture capital equity isn't enough to build a viable plant that can successfully operate at a commercial level and compete against corn-based ethanol. He confessed concerning the money that "it takes more than that. It takes a chemical firm that will want to build it to have access to sugars for their own conversion processes."
According to Lavielle, the costs of building a commerical plant which would produce about 500,000 tons of sugar on an annual basis is $380 million. That could supply a 25-million-gallon ethanol plant, according to the CEO.
Another negative factor and complication to the success of such a plant would be the need for it to be located close to a chemical plant or a paper mill so it could be able to tap into the power infrastructure serving those businesses, and in the case of the paper mill, to be able to use the existing equipment for handling wood. Lavielle says it'll take up to three years for a plant like that to be built.
Historically capital requirements and projections are almost without exception much higher and take a lot longer to reach the expected goals.
To be able to compete with the scammy and damaging corn-based ethanol, Lavielle says corn would have to remain at a price of over $4 a bushel. While corn prices in the United States are higher now because of droughts in Argentina and Brazil which are expected to generate more exports for U.S. corn, that's a temporary situation, and corn could easily plummet below the $4 mark very rapidly.
Add to this the cost factors associated with cellulosic, which includes the requirement of having a wood production facility very close or the cost of shipping wood and plant matter to the facility soars.
Looking at the overall picture, ethanol, no matter what the form, is a waste of valuable time and money.
New discoveries of oil and gas shale, along with the technology to extract it from the rock, has changed the entire energy game in the United States, which now has enough energy to last possibly for centuries.
The known reserves already are estimated to last for well over a century in the United States, and there are many areas where it is unknown as to how much there actually is in America, let alone across the world. That's the future of American energy independence, not these idiotic and irresponsible projects that are truly nothing more than a scam. Ethanol, whether produced by corn, wood chips or plant material, is nothing more than that.
The people of Mississippi should be outraged over this travesty, but they're surely drinking the kool aide of jobs being created, even though not too long afterwards when the company declares bankruptcy, they'll all be lost.
They also have offered up $155 million in tax incentives to get the boondoggle going. What a criminal waste of the taxpayer's money. And yes it is taxpayers money because they're the ones that will have to pay for it when it crashes and burns.
The company confisgating the state loan is named Virdia, which just changed its name from HCL Cleantech. They take natural matter such as woodchips and other plant matter and convert it into sugar, which is then converted into ethanol.
Virdia CEO Philippe Lavielle admits the amount of money offered by the state, along with $10 million in venture debt and another $20 million in venture capital equity isn't enough to build a viable plant that can successfully operate at a commercial level and compete against corn-based ethanol. He confessed concerning the money that "it takes more than that. It takes a chemical firm that will want to build it to have access to sugars for their own conversion processes."
According to Lavielle, the costs of building a commerical plant which would produce about 500,000 tons of sugar on an annual basis is $380 million. That could supply a 25-million-gallon ethanol plant, according to the CEO.
Another negative factor and complication to the success of such a plant would be the need for it to be located close to a chemical plant or a paper mill so it could be able to tap into the power infrastructure serving those businesses, and in the case of the paper mill, to be able to use the existing equipment for handling wood. Lavielle says it'll take up to three years for a plant like that to be built.
Historically capital requirements and projections are almost without exception much higher and take a lot longer to reach the expected goals.
To be able to compete with the scammy and damaging corn-based ethanol, Lavielle says corn would have to remain at a price of over $4 a bushel. While corn prices in the United States are higher now because of droughts in Argentina and Brazil which are expected to generate more exports for U.S. corn, that's a temporary situation, and corn could easily plummet below the $4 mark very rapidly.
Add to this the cost factors associated with cellulosic, which includes the requirement of having a wood production facility very close or the cost of shipping wood and plant matter to the facility soars.
Looking at the overall picture, ethanol, no matter what the form, is a waste of valuable time and money.
New discoveries of oil and gas shale, along with the technology to extract it from the rock, has changed the entire energy game in the United States, which now has enough energy to last possibly for centuries.
The known reserves already are estimated to last for well over a century in the United States, and there are many areas where it is unknown as to how much there actually is in America, let alone across the world. That's the future of American energy independence, not these idiotic and irresponsible projects that are truly nothing more than a scam. Ethanol, whether produced by corn, wood chips or plant material, is nothing more than that.
The people of Mississippi should be outraged over this travesty, but they're surely drinking the kool aide of jobs being created, even though not too long afterwards when the company declares bankruptcy, they'll all be lost.
Thursday, February 24, 2011
Get Rid of Ethanol, To Consume 36 Percent of US Crop in 2011
Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
Friday, October 8, 2010
Low Corn Yields Drive Ethanol Futures to Highest Levels in Five Years
Ethanol futures soared the most in over than five years in Chicago after a government report estimated corn supplies will be lower than a prior forecast, signaling higher costs for plants that produce the biofuel.
Futures increased after the U.S. Agriculture Department estimated the domestic corn crop will drop 3.4 percent from last year, the second reduction to its projection in as many months.
Denatured ethanol for November delivery added 19.6 cents, or 9.9 percent, to settle at $2.184 a gallon on the Chicago Board of Trade, the highest price since Sept. 30, 2008. The percentage gain was the largest gain for one day since September 2005.
Corn production will total close to 12.664 billion bushels, lower than the 13.16 billion estimated a month ago and less than 2009’s record 13.11 billion, the U.S. Agriculture Department said.
Corn for December delivery reached the exchange limit 30 cents, or 6 percent, to $5.2825 a bushel in Chicago.
Advice is with ethanol at these prices, producers should acquire corn right away to lock in margins and hedge against corn prices soaring higher over the next few days.
Unpredictable corn prices and poor bets on the grain added to the bankruptcy of at least a dozen ethanol producers over a period of a year and a half, starting in October 2008.
Other major ethanol producers are Poet LLC, the largest U.S. ethanol maker, Archer Daniels Midland (NYSE:ADM) and Valero Energy Corp. (NYSE:VLO).
Futures increased after the U.S. Agriculture Department estimated the domestic corn crop will drop 3.4 percent from last year, the second reduction to its projection in as many months.
Denatured ethanol for November delivery added 19.6 cents, or 9.9 percent, to settle at $2.184 a gallon on the Chicago Board of Trade, the highest price since Sept. 30, 2008. The percentage gain was the largest gain for one day since September 2005.
Corn production will total close to 12.664 billion bushels, lower than the 13.16 billion estimated a month ago and less than 2009’s record 13.11 billion, the U.S. Agriculture Department said.
Corn for December delivery reached the exchange limit 30 cents, or 6 percent, to $5.2825 a bushel in Chicago.
Advice is with ethanol at these prices, producers should acquire corn right away to lock in margins and hedge against corn prices soaring higher over the next few days.
Unpredictable corn prices and poor bets on the grain added to the bankruptcy of at least a dozen ethanol producers over a period of a year and a half, starting in October 2008.
Other major ethanol producers are Poet LLC, the largest U.S. ethanol maker, Archer Daniels Midland (NYSE:ADM) and Valero Energy Corp. (NYSE:VLO).
Sunday, June 21, 2009
Ethanol Will Raise Food Prices, Harm Environment
Ethanol
As usual, the U.S. government is turning a blind eye to the truth and facts, and continues down the disastrous path of subsidizing ethanol, which will continue to cause huge problems in the near and distant future.
The U.S. government's plan to increase its ethanol mandate will mean higher food prices and more harm to the environment, according to an impact study conducted for two groups that oppose the increase.
"We continue to believe the government's excessive support of the mature corn-based ethanol industry is simply wrong, since it means burning food for fuel," spokesman Gary Mickelson of Tyson Foods Inc. of Springdale said in a statement after Bill Lapp, an agricultural analyst, released his study.
"This policy has contributed to higher corn prices, which have led to increased input costs for food makers — including independent livestock producers — and higher food prices for consumers," Mickelson said.
Corn is a major expense to poultry and beef producers, who want to reduce costs. Ethanol is a fuel additive distilled from plants. That distilling is a major market for corn that corn growers want to increase.
The federal government has a mandate that 10 percent of the fuel coming out of commercial gasoline pumps must be ethanol blended into the gasoline. The Environmental Protection Agency is considering a rule to increase that mandate to 15 percent. The government also maintains a tariff of 54 cents a gallon on imported ethanol.
A recent study from the Food and Agriculture Policy Research Institute at the University of Missouri determined approval of 15-percent ethanol blends would increase corn prices by just $0.04 per bushel, ethanol advocates said in response to Lapp's study.
Increasing the ethanol mandate to 15 percent would require planting as much as 111 million acres of corn, according to Lapp's study. Ethanol would use almost half of the corn crop harvested by 2015. The Grocery Manufacturers Association commissioned the study. The U.S. corn acreage in 2008 was about 85 million acres, U.S. Department of Agriculture figures show.
"Corn and soybean meal are major production costs in the poultry industry, representing 47% of the cost of growing a chicken in 2008," Mickelson said. "Tyson's annual corn and soybean meal expenditures almost doubled from fiscal 2006 to fiscal 2008 and ethanol was a significant reason for the increase."
These arguments have been heard before, the pro-ethanol Renewable Fuels Association replied.
"Time and again, American farmers have answered the need for food, feed and renewable fuel," said association President Bob Dinneen in a statement. "Yet, time and again well-heeled groups seeking to derail the expansion of ethanol are trying to pull the wool over our eyes.
"Many will recall last summer's effort to finger ethanol as skyrocketing oil prices, a weak dollar, speculation, droughts, and global demand drove grain and food prices higher," Dinneen's statement said. "At the time, the U.S. Department of Agriculture, Texas A&M University , and scores of other reputable analysts found such claims to be biased, overblown and outrageous. Even the Congressional Budget Office has looked at the issue and found that energy prices had 3 times the impact on the rising price of food than was the increased use of ethanol. Despite being thoroughly refuted last summer and lacking credibility on the issue, these groups are back at it again."
The ethanol industry is struggling even at its current 10 percent mandate. The fall in fuel prices from last year's record highs has severely hurt ethanol interests, industry figures show.
Ethanol's chief use in the United States is for a fuel additive. Ethanol in gasoline reduces carbon emissions and the price of gasoline, advocates say. However, ethanol plants are hard-pressed to make a profit when fuel prices are as low as they are now, according to industry figures -- even though gasoline prices remain higher than $2.50 a gallon at the pump.
At least 10 ethanol companies have sought Chapter 11 bankruptcy protection in the past year, Bloomberg Business News reports. Valero Energy Corp., the nation's largest independent oil refiner, became an ethanol plant owner in April by buying up seven Midwestern ethanol plants for pennies on the dollar compared to the original investment, Associated Press reports.
"You are going to see this become a trend ... especially with the government wanting to go green," Daniel Flynn, an analyst who follows the renewable fuels industry for Chicago-based Alaron Trading, told Associated Press about the Valero buy. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."
The U.S. Energy Department reported last week that gasoline supplies climbed 3.39 million barrels to 205 million in the week ended June 12, the largest increase since Jan. 16, Bloomberg reported.
"If you're not eating that much hamburger, you're not using as much Hamburger Helper," Peyton Feltus, president of Randolph Risk Management in Dallas, told Bloomberg. "Until demand shows a sustainable increase, we can't hold these prices up" for ethanol, he said.
Ethanol advocates received another setback earlier this month when a U.S. House panel allowed the federal Environmental Protection Agency to take a wider look at the commodity's environmental impact.
The House Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels, Reuters news service reported.
The United States is the world's major supplier of corn. Critics of ethanol claim that the environment is damaged as other nations have to put more land into farming to produce food as more U.S. corn goes to ethanol. The legislation would allow the EPA to study the question and determine if this increase in farm acreage worldwide offsets or at least mitigates ethanol's environmental benefit.
"There is a huge negative effect here," said Rep. Jo Ann Emerson, R-Missouri, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."
Scale of Consumption
Corn can produce about 200 gallons of ethanol per acre. If all the corn acreage in the United States were converted to fuel production with corn ethanol, the nation could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The U.S. consumed about 20 million barrels of crude per day in 2007.
Ethanol
As usual, the U.S. government is turning a blind eye to the truth and facts, and continues down the disastrous path of subsidizing ethanol, which will continue to cause huge problems in the near and distant future.
The U.S. government's plan to increase its ethanol mandate will mean higher food prices and more harm to the environment, according to an impact study conducted for two groups that oppose the increase.
"We continue to believe the government's excessive support of the mature corn-based ethanol industry is simply wrong, since it means burning food for fuel," spokesman Gary Mickelson of Tyson Foods Inc. of Springdale said in a statement after Bill Lapp, an agricultural analyst, released his study.
"This policy has contributed to higher corn prices, which have led to increased input costs for food makers — including independent livestock producers — and higher food prices for consumers," Mickelson said.
Corn is a major expense to poultry and beef producers, who want to reduce costs. Ethanol is a fuel additive distilled from plants. That distilling is a major market for corn that corn growers want to increase.
The federal government has a mandate that 10 percent of the fuel coming out of commercial gasoline pumps must be ethanol blended into the gasoline. The Environmental Protection Agency is considering a rule to increase that mandate to 15 percent. The government also maintains a tariff of 54 cents a gallon on imported ethanol.
A recent study from the Food and Agriculture Policy Research Institute at the University of Missouri determined approval of 15-percent ethanol blends would increase corn prices by just $0.04 per bushel, ethanol advocates said in response to Lapp's study.
Increasing the ethanol mandate to 15 percent would require planting as much as 111 million acres of corn, according to Lapp's study. Ethanol would use almost half of the corn crop harvested by 2015. The Grocery Manufacturers Association commissioned the study. The U.S. corn acreage in 2008 was about 85 million acres, U.S. Department of Agriculture figures show.
"Corn and soybean meal are major production costs in the poultry industry, representing 47% of the cost of growing a chicken in 2008," Mickelson said. "Tyson's annual corn and soybean meal expenditures almost doubled from fiscal 2006 to fiscal 2008 and ethanol was a significant reason for the increase."
These arguments have been heard before, the pro-ethanol Renewable Fuels Association replied.
"Time and again, American farmers have answered the need for food, feed and renewable fuel," said association President Bob Dinneen in a statement. "Yet, time and again well-heeled groups seeking to derail the expansion of ethanol are trying to pull the wool over our eyes.
"Many will recall last summer's effort to finger ethanol as skyrocketing oil prices, a weak dollar, speculation, droughts, and global demand drove grain and food prices higher," Dinneen's statement said. "At the time, the U.S. Department of Agriculture, Texas A&M University , and scores of other reputable analysts found such claims to be biased, overblown and outrageous. Even the Congressional Budget Office has looked at the issue and found that energy prices had 3 times the impact on the rising price of food than was the increased use of ethanol. Despite being thoroughly refuted last summer and lacking credibility on the issue, these groups are back at it again."
The ethanol industry is struggling even at its current 10 percent mandate. The fall in fuel prices from last year's record highs has severely hurt ethanol interests, industry figures show.
Ethanol's chief use in the United States is for a fuel additive. Ethanol in gasoline reduces carbon emissions and the price of gasoline, advocates say. However, ethanol plants are hard-pressed to make a profit when fuel prices are as low as they are now, according to industry figures -- even though gasoline prices remain higher than $2.50 a gallon at the pump.
At least 10 ethanol companies have sought Chapter 11 bankruptcy protection in the past year, Bloomberg Business News reports. Valero Energy Corp., the nation's largest independent oil refiner, became an ethanol plant owner in April by buying up seven Midwestern ethanol plants for pennies on the dollar compared to the original investment, Associated Press reports.
"You are going to see this become a trend ... especially with the government wanting to go green," Daniel Flynn, an analyst who follows the renewable fuels industry for Chicago-based Alaron Trading, told Associated Press about the Valero buy. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."
The U.S. Energy Department reported last week that gasoline supplies climbed 3.39 million barrels to 205 million in the week ended June 12, the largest increase since Jan. 16, Bloomberg reported.
"If you're not eating that much hamburger, you're not using as much Hamburger Helper," Peyton Feltus, president of Randolph Risk Management in Dallas, told Bloomberg. "Until demand shows a sustainable increase, we can't hold these prices up" for ethanol, he said.
Ethanol advocates received another setback earlier this month when a U.S. House panel allowed the federal Environmental Protection Agency to take a wider look at the commodity's environmental impact.
The House Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels, Reuters news service reported.
The United States is the world's major supplier of corn. Critics of ethanol claim that the environment is damaged as other nations have to put more land into farming to produce food as more U.S. corn goes to ethanol. The legislation would allow the EPA to study the question and determine if this increase in farm acreage worldwide offsets or at least mitigates ethanol's environmental benefit.
"There is a huge negative effect here," said Rep. Jo Ann Emerson, R-Missouri, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."
Scale of Consumption
Corn can produce about 200 gallons of ethanol per acre. If all the corn acreage in the United States were converted to fuel production with corn ethanol, the nation could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The U.S. consumed about 20 million barrels of crude per day in 2007.
Ethanol
Monday, November 10, 2008
Pacific Ethanol Performance Underscores Ethanol Debacle
The performance of Pacific Ethanol (PEIX) in the third quarter underscores the debacle that the ethanol industry is in the United States.
Losses for the company widened by an extraordinary amount, surging to $54.9 million, or 98 cents a share, in contrast to the same quarter last year where losses were at $4.8 million.
This happened while revenue increased to $184 million, up from $118.1 million last year. Analysts were looking for revenue to reach $218.6 million. The 98 cents a share was also far higher than the 16 cents a share analysts expected.
It's time to end government subsidies and end the ethanol fiasco in the U.S. Even with subsidies the industry isn't viable, and saying cellulosic ethanol is the answer is wrong as well, as it costs far more to produce than the corn-based ethanol we're now producing.
Losses for the company widened by an extraordinary amount, surging to $54.9 million, or 98 cents a share, in contrast to the same quarter last year where losses were at $4.8 million.
This happened while revenue increased to $184 million, up from $118.1 million last year. Analysts were looking for revenue to reach $218.6 million. The 98 cents a share was also far higher than the 16 cents a share analysts expected.
It's time to end government subsidies and end the ethanol fiasco in the U.S. Even with subsidies the industry isn't viable, and saying cellulosic ethanol is the answer is wrong as well, as it costs far more to produce than the corn-based ethanol we're now producing.
Wednesday, August 20, 2008
U.S. Ethanol Subsidies to Keep Food Prices High Everywhere
The outrageous subsidy for corn-based ethanol in the U.S. continues to batter consumers across the world, as even though other commodities have been dropping, food prices are expected to stay the same, and in a number of cases - rise.
For retail food prices in the U.S., they have been growing at a 6 percent rate this year, in contrast to the regular inflation rate at about 2 percent.
With irresponsible politicians and ongoing ignoring of stories like this by the mainstream media, the cost of food items related to corn price increases like chicken, beef and pork are projected to continue rising for the immediate future. The majority of that related to the misguided and terrible idea of subsidizing big corporate corn farmers so it can look like the government is doing something related to energy.
The disaster will continue until the story is continually reported on and the reality of the consequences understood by the public.
The next meat to be affected will be chicken, which so far producers haven't passed on the higher feed costs to consumers, but Bill Roenigk, senior vice president of the National Chicken Council said that's all about to change.
"From a consumer standpoint, more and more of these feed costs are going to be passed on and that means higher prices at the supermarket," said Roenigk.
All this because of the usual pressure from special interest groups with an agenda, as well as a government that continues to pass themselves off as the big daddy of the universe. Until this attitude is reined in, Americans and people around the world will continue to suffer from the continual rise in food prices.
Just like we need to drill for the billions of barrels of oil on American soil or it's coastlines, so we need to stop this outrageous subsidy that is helping no one but the huge corporate corn farmers in America, as well as some landowners cashing in on rising farmland prices.
For retail food prices in the U.S., they have been growing at a 6 percent rate this year, in contrast to the regular inflation rate at about 2 percent.
With irresponsible politicians and ongoing ignoring of stories like this by the mainstream media, the cost of food items related to corn price increases like chicken, beef and pork are projected to continue rising for the immediate future. The majority of that related to the misguided and terrible idea of subsidizing big corporate corn farmers so it can look like the government is doing something related to energy.
The disaster will continue until the story is continually reported on and the reality of the consequences understood by the public.
The next meat to be affected will be chicken, which so far producers haven't passed on the higher feed costs to consumers, but Bill Roenigk, senior vice president of the National Chicken Council said that's all about to change.
"From a consumer standpoint, more and more of these feed costs are going to be passed on and that means higher prices at the supermarket," said Roenigk.
All this because of the usual pressure from special interest groups with an agenda, as well as a government that continues to pass themselves off as the big daddy of the universe. Until this attitude is reined in, Americans and people around the world will continue to suffer from the continual rise in food prices.
Just like we need to drill for the billions of barrels of oil on American soil or it's coastlines, so we need to stop this outrageous subsidy that is helping no one but the huge corporate corn farmers in America, as well as some landowners cashing in on rising farmland prices.
Tuesday, August 5, 2008
Archer Daniels Midland Co. Acknowledges Slowdown in Agricultural Products, Especially Ethanol-related
Archer Daniels Midland (ADM) is the third-largest ethanol producer in the U.S., and the slowing demand for corn-based ethanol has had a significant impact on the company's performance for the quarter. A number of producers have stopped or closed expansion plans in response to the falling demand. Corn prices have also responded accordingly, falling to four-month low of $5.3625 a bushel today.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
Sunday, July 20, 2008
Ethanol no more than Heavily Subsidized Cash Crop Supported by Powerful Lobby
So said one writer recently, and I think he's right.
While the usual proliferation of polls - that can no longer be trusted - have been recently thrown out as evidence the American people are behind the corn-based ethanol fiasco, it's only because of the way the poll is worded, as well as marketing campaigns from the dubious, but powerful corn lobby.
The rise in food prices directly related to the overgrowing and overuse of corn, has resulted in less acreage for other crops, and higher costs of seed as well. Some places in the world have dramatic food shortages as a result of this politically motivated, misguided policy.
Another less-than-honest reality is the performance of ethanol, which is far less productive than regular gasoline, and takes much more to make up the lower mileage difference ethanol gets.
As Bob Sommer, writing for Midwest Voices said, "... as long as every politician, Republican or Democrat, who sets foot in Iowa or Nebraska or any corn-producing state thinks the way to solve the energy and climate crises—and get elected in the bargain—is to drink the ethanol Kool-Aid, our future will look dim indeed."
Many of the polls I've seen in support of ethanol have come from ethanol-backed coalitions that have financial stakes in the continued tax-payer subsidy of the alternative fuel. Here's one as an example.
Thursday, May 1, 2008
Corn Farmers in Denial over Taking Responsibility for High Cost of Food
In an extremely pathetic assertion, the president of the National Corn Growers Association, Rick Tolman, said this about rising food prices: "bottom line, there's been a very clever marketing disinformation campaign directed at bio fuels for those with deep pockets."
Here's this organization representing huge, corporate farmers, who are subsidized by taxpayer dollars saying other companies with a lot of money are spreading disinformation.
All these big corporate farmers are fighting is losing the tax dollars they're getting to grow corn that is causing a lot of pain in the pocketbook of consumers who don't only pay for it with their taxes, but worse, through higher food prices.
Corn-based ethanol is a debacle that needs to be stopped now. The assertion that cellulosic ethanol is going to be the answer is also smoke in the wind. Not only is it years away in coming, if it ever does, but it's also far more expensive than corn-based ethanol is.
What was thought to be a slam dunk by politicians, subsidy-loving corporate farmers and environmentalists, is now becoming a destructive power against human beings. It simply needs to be stopped and dropped right now!
Here's this organization representing huge, corporate farmers, who are subsidized by taxpayer dollars saying other companies with a lot of money are spreading disinformation.
All these big corporate farmers are fighting is losing the tax dollars they're getting to grow corn that is causing a lot of pain in the pocketbook of consumers who don't only pay for it with their taxes, but worse, through higher food prices.
Corn-based ethanol is a debacle that needs to be stopped now. The assertion that cellulosic ethanol is going to be the answer is also smoke in the wind. Not only is it years away in coming, if it ever does, but it's also far more expensive than corn-based ethanol is.
What was thought to be a slam dunk by politicians, subsidy-loving corporate farmers and environmentalists, is now becoming a destructive power against human beings. It simply needs to be stopped and dropped right now!
Friday, April 25, 2008
Texas Governor Rick Perry Seeks U.S. Ethanol Cutback Waiver
Calling the ethanol mandate of the federal government "misguided," Texas Governor Rick Perry solicited the government for a waiver on the renewable fuel standard. He's asking for it to be cut in half for Texas.
"We're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," Perry said.
He added: "The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on our state's otherwise strong economy while driving up food prices around the world."
This is what almost always happens when the government enters into the marketplace. Think of the term "good intentions," and then add "unintended consequences."
These are already destroying lives of people across the world, and riots are ensuing and the government of Haiti has already fallen in response to the fallout.
"We're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," Perry said.
He added: "The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on our state's otherwise strong economy while driving up food prices around the world."
This is what almost always happens when the government enters into the marketplace. Think of the term "good intentions," and then add "unintended consequences."
These are already destroying lives of people across the world, and riots are ensuing and the government of Haiti has already fallen in response to the fallout.
Wednesday, April 16, 2008
Tensions Continue Building as Ethanol Continues to Cause Increase in Corn, Food Prices
The misguided policy of artificially creating a legal level of ethanol biofuel use is reeking havoc across the world as food and meat prices continue to soar in response to the unintended consequences.
That's always the problem when fear and torment are used as tools to push through policies built upon personal agendas.
As Paul Haugens, vice-president for Newedge Trading said, "The food-versus-fuel battle is going to get bigger and it's a political year in the United States so I don't see anyone making any changes (to ethanol policy)."
Listening to the irresponsible comments by U.S. Agriculture Secretary Ed Schafer Tuesday confirms Haugens is right, as schafer said, "energy is the big issue as we look at those food prices."
No it's not! The subsidizing of growing corn for the pet ethanol project is by far the major reason for the increase in food prices across the world.
The impact of this policy is being called "a crime against humanity" by Jean Ziegler, UN Special Rapporteur for the Right to Food; basing his assertion on the huge increase in food prices across the world.
Riots and protests are spreading globally, and the Haitian government was toppled last week because of when riots move senators in the country to fire the prime minister. It's going to get worse.
This foolish policy needs to be dropped now, as the growing number of oil discoveries show the hoax of Peak Oil is just that. There's no huge rush to get these things pushed through, as billions of barrels of oil have been discovered by Brazil, and new reserves in an area adjacent to the Canadian Sands could hold billions more. This doesn't include the billions awaiting to be taken out of the oil shales in the U.S.
Unfortunately, millions will suffer because of the newest government sponsorship of biofuels which are dubious at best, and deadly at worst.
Friday, April 11, 2008
Ethanol News Weekend Roundup
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Ethanol Being Blamed for Global Food Riots
New York Times columnist praised by Pulitzer board for 'clarity of vision' didn't foresee global food shortages that resulted from the realities of his vision.
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Article off the mark about ethanol
I haven't found one peer-reviewed scientific journal says that corn ethanol is a source of green energy. The only scientist I can imagine saying ethanol is just fine is the one who works for an ethanol company.
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'Closed-Loop' Ethanol Plant Plans On Hold
Plans for Dakota County, Nebraska's multi-million dollar "closed-loop" ethanol plant are "on hold".
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Germany cancels plans to add ethanol to petrol
Amid growing fears that biofuel farming is harming the environment and driving up world food prices, Germany cancelled on Friday plans to mix more ethanol made from plants with petrol.
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Ethanol is an environmental white elephant
I've read with interest the recent articles in the Times Union about ethanol. I was disappointed that you did not point out one fact that should raise much skepticism about the use of this product as a fuel: It produces about twice the carbon dioxide as simply burning the gasoline it replaces.
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Ethanol pollution in Gulf of Mexico
While the search for alternative fuels is in full swing in many countries in order to reduce dependency on pollution causing conventional fuels an ironic situation is emerging where the rush in the United States to produce corn-based ethanol as an alternative fuel will likely worsen pollution in the Gulf of Mexico and expand the annual ‘dead zone.’
=====
Ethanol Being Blamed for Global Food Riots
New York Times columnist praised by Pulitzer board for 'clarity of vision' didn't foresee global food shortages that resulted from the realities of his vision.
=====
Article off the mark about ethanol
I haven't found one peer-reviewed scientific journal says that corn ethanol is a source of green energy. The only scientist I can imagine saying ethanol is just fine is the one who works for an ethanol company.
=====
'Closed-Loop' Ethanol Plant Plans On Hold
Plans for Dakota County, Nebraska's multi-million dollar "closed-loop" ethanol plant are "on hold".
=====
Germany cancels plans to add ethanol to petrol
Amid growing fears that biofuel farming is harming the environment and driving up world food prices, Germany cancelled on Friday plans to mix more ethanol made from plants with petrol.
=====
Ethanol is an environmental white elephant
I've read with interest the recent articles in the Times Union about ethanol. I was disappointed that you did not point out one fact that should raise much skepticism about the use of this product as a fuel: It produces about twice the carbon dioxide as simply burning the gasoline it replaces.
=====
Ethanol pollution in Gulf of Mexico
While the search for alternative fuels is in full swing in many countries in order to reduce dependency on pollution causing conventional fuels an ironic situation is emerging where the rush in the United States to produce corn-based ethanol as an alternative fuel will likely worsen pollution in the Gulf of Mexico and expand the annual ‘dead zone.’
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Wednesday, April 2, 2008
The High Cost of Ethanol
Here's an excellent article on exposing the high cost of the government ethanol policy which may end up being one of the greatest mistakes in U.S. history.
As the writer says, "An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians" has been promoting the fuel as the answer to the alleged environmental problems which it will supposedly be the answer to.
The usual denial of the "unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment."
I've said it before on Ethanol Fix, that this is no longer related to science or environmental realities, rather it's being embraced as a religion that requires faith rather than objectivity.
Some of the huge problems related to ethanol:
Increased food prices
Subsidized Corn takes away acres from other crops, increasing those prices
Increased feed prices
Increased meat prices
Employee Layoffs
Plant Closings
Distribution Centers Closing
Pressure on water supply
Ethanol less productive than gasoline as fuel
Hurts environment
Hurts third world
Deforestation across the world
Destruction of wetlands
Destruction of grasslands
Destruction of species
Displacement of small farmers and indigienous peoples
Loss of habitats that store carbon
Razing of rain forests
Michael Grunwald, in the latest issue of Time magazine said it this way:
"Deforestation accounts for 20 percent of all current carbon emissions. So unless the world can eliminate emissions from all other sources — cars, power plants, factories, even flatulent cows — it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations — and it's only getting started."
The so-called environmentalists are in reality backing and promoting the destruction of not only the environment, but more importantly: human beings.
As the writer says, "An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians" has been promoting the fuel as the answer to the alleged environmental problems which it will supposedly be the answer to.
The usual denial of the "unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment."
I've said it before on Ethanol Fix, that this is no longer related to science or environmental realities, rather it's being embraced as a religion that requires faith rather than objectivity.
Some of the huge problems related to ethanol:
Increased food prices
Subsidized Corn takes away acres from other crops, increasing those prices
Increased feed prices
Increased meat prices
Employee Layoffs
Plant Closings
Distribution Centers Closing
Pressure on water supply
Ethanol less productive than gasoline as fuel
Hurts environment
Hurts third world
Deforestation across the world
Destruction of wetlands
Destruction of grasslands
Destruction of species
Displacement of small farmers and indigienous peoples
Loss of habitats that store carbon
Razing of rain forests
Michael Grunwald, in the latest issue of Time magazine said it this way:
"Deforestation accounts for 20 percent of all current carbon emissions. So unless the world can eliminate emissions from all other sources — cars, power plants, factories, even flatulent cows — it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations — and it's only getting started."
The so-called environmentalists are in reality backing and promoting the destruction of not only the environment, but more importantly: human beings.
Wednesday, March 26, 2008
Is Ethanol Overrated? I think so!
Ethanol has two major factors to consider when looking at the overall industry.
One is to see it as a pure investment play, and no matter what you feel about how the industry has emerged, and some of the negative impacts it's already producing, it's still a legitimate business to you.
Second, is the way the industry has come about; whether it's really producing much benefit, is a true alternative fuel, and if in reality it can survive over the long haul.
To honestly study the industry, one must cut through a lot of misinformation and punditry to reach the facts; especially with proponents of the alternative fuel, who have close to a religious affiliation with it, to the point where to attack it is similar to attacking someone's true religious beliefs.
To me, we have to be willing to look at all aspects and sides of the industry to get a true picture of its long-term possibility as an investment, as well as if it has real possibilities in its present form to be both fuel and cost efficient.
The fact that it has to be subsidized with tax dollars to even be an industry, and mandated by law, shows the public in general doesn't care one way or the other if it is successful or used for fuel in the way proposed. It's obviously been used as a fuel additive for some time.
Now that it's causing major disruptions in the agriculture industry, and generating a lot of food inflation, people are already starting to question if it's worth the effort and cost; and rightly so.
It's the key source of inflation at the grocery store, and is having that impact all over the world. In other words, it's the poor people that will suffer again because of the unintended consequences that always come from government initiated programs like this.
Not only is there the artificial demand generated by the law to grow more corn to feed the ethanol beast, but it is causing wheat growers to move more corn into their fields, which is causing the price of wheat to rise because of a lower supply.
So, the idea is to look at these two sides of the issue as we go forward. Someone may invest in ethanol without necessarily believing it does any good - and even may cause more harm than any potential benefit - yet still make money because of the way the whole industry is set up.
At the same time, we can put it under the microscope and find out if it really is worth the time and effort to pursue. I personally think in the long term this is going to be another government program eventually dropped after billions of dollars are spent and lost because of someone bypassing the facts and turning it into a cause.
One is to see it as a pure investment play, and no matter what you feel about how the industry has emerged, and some of the negative impacts it's already producing, it's still a legitimate business to you.
Second, is the way the industry has come about; whether it's really producing much benefit, is a true alternative fuel, and if in reality it can survive over the long haul.
To honestly study the industry, one must cut through a lot of misinformation and punditry to reach the facts; especially with proponents of the alternative fuel, who have close to a religious affiliation with it, to the point where to attack it is similar to attacking someone's true religious beliefs.
To me, we have to be willing to look at all aspects and sides of the industry to get a true picture of its long-term possibility as an investment, as well as if it has real possibilities in its present form to be both fuel and cost efficient.
The fact that it has to be subsidized with tax dollars to even be an industry, and mandated by law, shows the public in general doesn't care one way or the other if it is successful or used for fuel in the way proposed. It's obviously been used as a fuel additive for some time.
Now that it's causing major disruptions in the agriculture industry, and generating a lot of food inflation, people are already starting to question if it's worth the effort and cost; and rightly so.
It's the key source of inflation at the grocery store, and is having that impact all over the world. In other words, it's the poor people that will suffer again because of the unintended consequences that always come from government initiated programs like this.
Not only is there the artificial demand generated by the law to grow more corn to feed the ethanol beast, but it is causing wheat growers to move more corn into their fields, which is causing the price of wheat to rise because of a lower supply.
So, the idea is to look at these two sides of the issue as we go forward. Someone may invest in ethanol without necessarily believing it does any good - and even may cause more harm than any potential benefit - yet still make money because of the way the whole industry is set up.
At the same time, we can put it under the microscope and find out if it really is worth the time and effort to pursue. I personally think in the long term this is going to be another government program eventually dropped after billions of dollars are spent and lost because of someone bypassing the facts and turning it into a cause.
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