Ethanol...

that the American government would spend so much of our money on something so worthless, and be so wrong (or is that dishonest?) about the truth goes to show how much trouble this country is in.

I believe thats what prohibition was about.

It is not worthless as it make the mid-west farmers very happy.

not to mention 30 million drunks each weekend

possibly, but the downside has been extreme volatility of corn prices, and volatility is never a good thing for free markets. Also, the high corn prices have worked to drive up the value of the land, so farmers give back a lot in taxes, and it makes it very difficult for the remaining family farmers to pass along the land to the next generation as they run into tax problems with the estates being so large dollar wise.

I suspect that farmers are net in favor of ethanol, but prob not to the degree that you expect.

The production of illegal alcohol in the 20s and 30s to my knowledge never caused food prices to double or people to go hungry on account of it elsewhere in the world.

Double? Somehow that does not smell right.

check for yourself
http://futures.tradingcharts.com/historical/CN/2005/0/continuous.html

before ethanol corn was running just north of $2, now it is north of $4 and has been well above $5

wheat was hardly ever above $4 and most of the time less than $3.50, now it is above $5.
http://futures.tradingcharts.com/historical/CW/2009/0/continuous.html

soybean was around $6-7 and is now north of $10

What happens is the farmers convert land to corn to supply the ethanol industry, thus less of everything else is produced, thus driving up the cost of everything. Good old supply and demand at work.

How much energy does ethanol produce? does it drive your dollar further?

I did check for myself and here it is from a farmers directed newspaper and Ethanol seem not to be a major driving factor on corn prices either up and down. Mother nature seem to be in the driver seat not bio-fuel demands see 2008 as an example of this. Second a whole string of other factors with bio-fuel demands just being one of them. Looking at corn prices and then claiming that any increase is fully the fault or even mainly the fault of bio-fuel is simple minded.

Take special note of the below statement and then read the whole article.
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Prices started 2008 at about $3 per bushel. Early in the year, they climbed to $5-$5.50 per bushel. About midsummer prices were touching $8 per bushel before closing in December back in the $3 per bushel range.
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http://www.timesrepublican.com/page/content.detail/id/514643.html?nav=5002

Central Iowa
> News
2009 a wild year for corn prices
By MIRA CASH-DAVIS, Mount Pleasant News POSTED: February 15, 2009 Save | Print | Email | Read comments | Post a comment
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MOUNT PLEASANT - Watching the price of corn over the last year was like watching a car on a rollercoaster.

"Prices were record high and the volatility in the corn market was record high. We have never seen a range in corn prices from season high to season low as was the case in 2008," said Dave Miller, director of research and commodity services at the Iowa Farm Bureau headquarters in West Des Moines.

Miller recapped and analyzed the ups, downs, ins and outs of the volatile market, predicting "a stressful year" for corn farmers.

Prices started 2008 at about $3 per bushel. Early in the year, they climbed to $5-$5.50 per bushel. About midsummer prices were touching $8 per bushel before closing in December back in the $3 per bushel range.

"There was probably top to bottom a $4.50 to $5 change in prices," Miller said. Contrast that with normal fluctuation of the corn price over a year, which he estimated at 75 cents to $1.50.

Weather a factor

"Weather was very instrumental as a part of that fluctuation," Miller said. Wet, dry and cool spells all hit different parts of the Corn Belt, which stretches from western Ohio to eastern Nebraska and northeastern Kansas, throughout the 2008 growing season.

"The Iowa floods were a very instrumental piece of that equation because we had a lot of uncertainty as to how many acres would be planted, what the yield would be on the acres that were planted, and whether or not the flooded acres could or would be replanted once the flood waters receded. So you had a lot of volatility in that April, May, June time frame due to excessive rain," Miller said.

"Weather-wise, [2008] was a great challenge," agreed Virgil Schmitt, an Iowa State Extension field agronomist in Muscatine. "The constant rain made it extremely difficult to get the crops planted in a timely fashion in good soil conditions. So most crops were planted late and in less-than-ideal soil conditions (too wet). Wet soils tend to compact, which restricts root growth.

"Our salvation was that it continued to rain, allowing the roots to work through the compacted soils. Had the weather turned hot and dry, the crops in many fields would have been in real trouble because of poor root function."

"As we approached July and August, it was getting dry," Miller said. "Not necessarily in Iowa, but in other parts of the Corn Belt, we had pockets of dryness. Southern Michigan was very dry, northern Indiana."

"So there were parts of the Corn Belt that in April, May, June were concerned with getting too much rain, with flooding, but by July and August other parts of the corn production areas in the U.S. were concerned about very dry periods. So weather was a factor throughout the year," Miller said.

"The additional weather factor was, 2008 in general was a cool year," Miller said, "and so there was concern about lack of growing rate. Accumulated heat units were lacking. It takes so many heat units to raise a corn crop to maturity."

Schmitt echoed Miller about the coolness factor.

"With the combination of late planting and slow plant growth and maturity, there were concerns about the crops not being mature before frost, but we [in Iowa] did not get an early frost and most crops matured," Schmitt said.

"Some areas of Minnesota and the Dakotas did see corn that did not fully mature before a killing frost," Miller added.

Economics

"Probably the biggest factor (affecting the market right now) is (the) worldwide economic condition. It's probably the number one factor," Miller said, citing uncertainty about demand as a large factor.

"Demand from an economic perspective is a combination of price and quantity," Miller added. "Between domestic consumption and exports, we will use about 12 billion bushels of U.S. corn products this year. The price level of that 12 billion bushels is down compared to what it would have been if we had the economic conditions of a year ago.

"When the dollar is stronger, dollar-denominated commodities tend to be at lower prices. As the dollar strengthens, oil and ethanol and other things tend to get cheaper. A year ago, the dollar was very weak, so these things traded at higher prices."

In response to the world economic crisis, Miller said that the dollar has strengthened. "This has contributed to the recent declines in commodity prices, including corn," he said.

"So you have the impact of the strength of the dollar, or the value of the dollar, affecting things," Miller said. "You may have, just the demand for food on the worldwide basis, the ability of some of the exporting countries to pay for food reduced, and so they consume less or they don't bid as much anymore.

"Fuel consumption is down compared to a year ago, so you have energy market impacts. At this time a year ago, gasoline was $2.50 a gallon. Now it's $1.20 to $1.50 a gallon at the wholesale level; retail, it's $1.80 to $1.90 a gallon. But it's 40 percent cheaper now than it was a year ago," Miller said.

The low cost of fuel lowers the value of ethanol in the market, he said.

"As oil and gas prices have declined, ethanol prices have declined. The ability of an ethanol mill to get value" from the corn that goes into ethanol "has declined. The value of the corn to that mill becomes a function of its value as ethanol, of the price of ethanol," he said.

"So for ethanol plants, corn is not as valuable to them as it was a year ago."

Hog prices are down too, dropping the value of the commodity to hog and cattle farmers, he said.

"So all of those factors are part of why corn prices today are less than they were a year ago."

At this time last year, corn was about $5.50 per bushel. It is now $3.75 per bushel.

"2009 is starting out as looking like a tough year (for farmers) from an economic standpoint. Input prices are still high: nitrogen fertilizer, potash, phosphorus, seed, chemicals, all are higher priced than they were a year ago. So input prices have gone up.

"A number of farmers' cash rent values and other prices they would pay, repair prices are up, so almost every input the farmer has relative to producing an acre of corn is higher this year than last year," he said. "The (output) price is lower than last year. It is likely that 2009 will be a very stressful year for a lot of farmers."

Little help

"The government program has three parts to it," Miller said. "One is a direct payment that doesn't change based on market prices, kind of a historical direct payment. So that is the same as it was last year. It hasn't changed."

He added that most government subsidies won't kick in with the current price of corn.

"There is the safety net part of the farm program, which is the LDP or the loan program. This part of the farm program kicks in at about $1.90 (per bushel). So we're way above that level-they are ineffective at this time. They have no impact on the farmer right now.

"The other part is a counter-cyclical program, which is price-sensitive. This part of the government program only kicks in if corn prices are below $2.35 a bushel, so at current prices it is irrelevant to what is going on.

"So the government programs-to a large degree-are irrelevant in terms of (providing risk-management during) the current economic conditions, to farmers."

"There is a new government program that is just [being implemented]-We don't even have all the rules for it yet. It was part of the farm bill. It's called the ACRE program, Average Crop Revenue Election program. That one could be helpful to farmers this year, but we won't know until after the end of the year whether it will actually help them or not because it has about three different trigger components that need to occur before a farmer would actually get a payment.

"It's got a state-level trigger revenue. Statewide crop revenue has to be below a certain level for the state trigger to kick in. The state revenue trigger is a function of historical statewide yield levels and national average prices from the most recent two years. The actual revenue levels that will be used to trigger payments will not be known until October 2010.

"There is a farm-level trigger that must be met for the ACRE program before a farmer would get a payment. This trigger is based on historical farm yields and the national average prices from the two most recent years. Both the state-level trigger and the farm level trigger must be met for the farmer to receive a payment from the ACRE program So it takes a while to know whether or not that program provides much assistance for them.

Will they break even?

"I think there's a lot of corn farmers who will not break even in 2009," Miller said.

"A lot of that will depend on whether they own their land, or whether they rent their land. There will be corn farmers who make money this year because if (they) own (their) farm, (their) land payments may not have changed, but (if they rent land, their) rent may be higher than last year because a lot of the rents were set when corn prices were a dollar or more higher than they are now.

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Member Comments

I am not for the bio-fuel program if it involved such crops as corn and the energy to produce the fuel and then ship it to the demand centers is a best a break even event. Second it does raised corn prices and overall food prices to some degree.

You can not ship it by any current pipe lines as it is far to corrosion so the energy cost of trucks and even trains to move it reduce it overall benefits.

Oh it is less energy dense then gasoline so you need more gallons to move cars and truck the same distant.

When and if we get the technology to used other sources for bio-fuel such a great plain grass lands we are in the money but not until then.

The one real hope amongst all such ideas as I read it is the oil from algae idea. That doesn't require any farmland at all, the best place for it being a desert.

Prices of corn at this moment is down ten percent over the price last year at this time and the crop of corn is the largest ever produce.



http://online.wsj.com/article/BT-CO-20100129-711170.html?mod=WSJ_World_MIDDLEHeadlinesAsia


But with the latest USDA production and usage report, "that story has evaporated," the report said. "We ... look for a year of deteriorating corn prices with only strong energy prices to help stabilize this market at reasonable levels."

Year-to-date, corn has posted the weakest returns among the major commodities, with returns of -10.3% as of Jan. 22, according to Deutsche Bank.

Corn futures prices have dropped from a $4.50-a-bushel high in June 2009 to trade recently at $3.60 on the Chicago Board of Trade.

With the lower prices for corn, "ethanol industry fundamentals have improved significantly over the last six months," said Neil Koehler, president and chief executive of Pacific Ethanol Inc. (PEIX), a producer and marketer of low-carbon ethanol.

Fourth-quarter crush margins, the relationship between corn and ethanol, were "better than the average over the last two years," he said. "Supply and demand are in relative balance" and in 2008, the industry saw the largest increase in capacity it has ever experienced, prompting an excess of supply over demand.

With the current corn crops estimated to be the largest in history, "the corn outlook for ethanol producers looks good over the next year," he added. "There is more than enough corn grown in the U.S. and globally to comfortably meet all of the end uses of corn and support increased ethanol production this year and the years ahead."

-By Myra P. Saefong; 415-439-6400; [email protected]

Since ethanol has been added to my local gas purveyors, my mileage has decreased appreciably. I am really curious if in a few years, people might find that their engines have not stood up as well as in the past.

Count on it. Aside from everything else the damned stuff is corrosive and hard on fuel systems.

The energy density of Ethanol is only 72 percent of gasoline so a 10/90 mix mean that your MPH should go down by three percent if my math is correct compare to 100 percent gasoline.

Is three percents an appreciably decrease?

Where did you find that bit of information?

We are using an 80/20 mix in Pa and its been a real disaster.I try to find a purveyor of conventional gas for my hybrid (The hybrid is very sensitive to the energy density issue of ethanol) On conventional gas I get about 31 mpg, and on ethanol 80/20 i get about 27. The state of PA is taking a stronger (more enlightened) look at approving ethanol sites. There had been one scheduled to be permitted near Columbia on the Susquehanna. The county and the STate DEP have been trying to kill it.

ALGAE formed diesel is much more achievable because it doesnt interfere with anything in the food chain and is easily accomplishable with present technology. Im more inclined to grow algae farms in sub tropical seas ahere the ocean itself can provide a 3-D structure for the algae .ALso, theyve recently found several strains of algae that thrive in cooler seas.

As far as prohibition, the "outlawing" of ethanol led to one of the greatest criminal ages that has only been recently been equaled by our present drug problems.

LOL I do not have a clue where gungasnake got his information but here where I got mine.

http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA107136

Abstract : Research into the effects of alcohol on engine lubrication and wear has investigated four alcohol-containing fuels; pure methanol, pure ethanol, methanol in unleaded gasoline, and ethanol, in unleaded gasoline. This research work has indicated that during low-temperature engine operations such as winter commuter service and warmup, use of pure methanol may result in increased engine wear. This increased wear appears to be primarily a low-temperature problem. With the engine warmed to normal operating temperatures, this increased wear has not been observed. To this point, the research with ethanol-containing fuels has not detected any wear increases. This may be due to the short duration engine tests being conducted, but nevertheless indicates that increased wear should be of less concern with this fuel. Wear mechanism studies have indicated that corrosive attack within the piston ring and cylinder area by alcohol combustion byproducts is partially responsible for the increased wear. Investigation of alcohol and lubricant compatibility and physical removal of the lubricant films by liquid alcohol have provided additional insights into these wear phenomena. (Author)
Descriptors : *AUTOMOTIVE COMPONENTS, *GASOLINE, *ALCOHOLS, *ETHANOLS, *SPARK IGNITION ENGINES, *CARBINOLS, LOW TEMPERATURE, CORROSION, ENGINE