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Dimwit Energy Policies, Record Corn Prices

 
 
Reply Sat 11 Aug, 2012 08:09 am
http://finance.townhall.com/columnists/mikeshedlock/2012/08/11/dimwit_energy_policies_record_corn_prices

Quote:

The price of corn is at all all-time high because of extreme drought conditions in the US coupled with the hottest July temperatures since records began 117 years ago.

Inane Policies

US policy mandates production of ethanol for blending in gasoline. That ethanol comes mostly from corn.

Diverting corn crops to inefficient ethanol production has members of the Group of 20 leading economies – including France, India and China – concerned about the US ethanol policy.

The US is poised to divert around 40 per cent of its corn into ethanol because of the Congress-enacted mandate despite “huge damage” to the crop because of the worst drought in at least half a century, José Graziano da Silva, director-general of the UN’s Food and Agriculture Organisation, warned.

“An immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channelled towards food and feed uses,” he wrote in an opinion piece in the Financial Times.

Tom Vilsack, US agriculture secretary, raised doubts about the impact of waiving the ethanol mandate, arguing that the US biofuel industry had reduced petrol prices and created jobs.

Economic Dimwit or Shill?

The question at hand is whether the US agriculture secretary is an economic dimwit, a shill for the Obama administration, a shill for corn producers, or some combination thereof......
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Type: Discussion • Score: 0 • Views: 1,068 • Replies: 5
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parados
 
  1  
Reply Sat 11 Aug, 2012 08:20 am
@gungasnake,
Ethanol makes up 10% of the gasoline the US uses. If you eliminate it, you will increase the demand by 11%.

What happens to gas prices when you increase demand by that much?
RABEL222
 
  1  
Reply Sat 11 Aug, 2012 10:06 am
@parados,
They go down just like decreasing taxes on the 1% makes more jobs.
0 Replies
 
gungasnake
 
  1  
Reply Sat 11 Aug, 2012 10:07 am
Given a choice between eating and cruising, most people will choose eating. Sooner or later at least...
parados
 
  0  
Reply Sat 11 Aug, 2012 10:30 am
@gungasnake,
Corn prices make up a very small part of any foods you buy. That $4 box of cereal has about 30 cents of corn in it. The increase in corn prices has added less than 5 cents to a box. The increase in gas prices would add almost as much.
parados
 
  0  
Reply Sat 11 Aug, 2012 10:32 am
@parados,
http://useconomy.about.com/od/inflationfaq/f/Why-Are-Food-Prices-So-High.htm
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