The Issue of Ethanol

[August1991]

Making a dumb business decision, for the sake of getting an agreement, wouldn't matter which party was in power. This wasn't about "leftists", as much as it is about the weakness and lack of backbone Canadian Governments have. The current one included.

The US lost its appeal. They Lost in their own court and violated their own laws.

The Decision by the current government shows weakness and a lack of resolve.

Law? You can't force a customer to buy your product. If the Americans don't want our lumber, what law requires them to buy it?

Madmax, you would probably be one of those people who would be enraged if the US wanted to buy our water. Yet, you are also angry that it refuses to buy our lumber.

It is ironic that Canada's Left (Maude Barlow et al) derided the Free Trade agreement and Canada's Left now is angry that we don't have free trade in lumber. I'm even more astonished that Canada's Left hasn't taken up the US argument that we are selling our lumber below cost. That is, the Americans accuse us of selling our lumber cheap. The Canadian Left has often argued that we're exploited hewers of wood and drawers of water.

As I say, there is no logic here except the logic that the US is always bad, whatever it does. It's the mindless, partisan anti-Americanism of English-Canada's left that I'm taking issue with.

I do blame ethanol for starving Mexicans though. Without government intervention and the subsidization of ethanol technology, Mexicans would have cheaper tortillas. This isn't the market, this is leftist intervention that is creating the problem in Mexico.

In a reasonable market, there would be no ethanol.

My understanding is that the Mexican market for corn is regulated and there are price controls. This explains the shortages of corn meal.

[B. Max]

Also good in that it takes X amt. of barrells of oil out of production which prolongs the oil supply, not a bad strategy and when the oil runs out, chances are we'd be going this route anyways.

Boy this biofuel thing looks better and better all the time.

It will likely require more oil, because ethanol lowers fuel mileage. If the oil companies were caught secretly putting something in the gas that lowered fuel mileage there would be all hell to pay. This way they can laugh all the way to the bank.

[jdobbin]

This is also good in that with biofuels taking up the market glut. It gives the poorer countries a chance to establish their agriculture industry without countries with massive subsidies (U.S., E.U.) flooding their countries with taxpayer subsidized food putting their farmers out of business.

Also good in that it takes X amt. of barrells of oil out of production which prolongs the oil supply, not a bad strategy and when the oil runs out, chances are we'd be going this route anyways.

As far as cattle goes, this throws a wrench into the big boys that own about 3/4 of the national herd, they'll have to pay more for feed barley, upping the price of beef on the shelf. This gives the small guys a chance as they can "finish" the cattle themselves by using the grain they already grow making the industry that more efficient.

Boy this biofuel thing looks better and better all the time.

Should farmers lands be protected from being bought by big business? If food for energy is big business, why shouldn't big business buy the land?

[jbg]

As far as the mexicans go, that's poor government policy concerning their food supply, the fact that mexican farmers are vastly more inefficient than us. A country like that should be under supply management to incur a steady food supply.

It's a known fact that Spanish-speaking countries are far better governed than English-speaking ones. Compare Mexico, Venezuela and Cuba to the US, Canada and Australia. The former countries are poor only because of American imperialism, colonialism and oppression of the working class for the benefit of the bourgeious. Israel's Zionistic, racist and xenophobic policies play a role as well.

[blueblood]

This is also good in that with biofuels taking up the market glut. It gives the poorer countries a chance to establish their agriculture industry without countries with massive subsidies (U.S., E.U.) flooding their countries with taxpayer subsidized food putting their farmers out of business.

Also good in that it takes X amt. of barrells of oil out of production which prolongs the oil supply, not a bad strategy and when the oil runs out, chances are we'd be going this route anyways.

As far as cattle goes, this throws a wrench into the big boys that own about 3/4 of the national herd, they'll have to pay more for feed barley, upping the price of beef on the shelf. This gives the small guys a chance as they can "finish" the cattle themselves by using the grain they already grow making the industry that more efficient.

Boy this biofuel thing looks better and better all the time.

Should farmers lands be protected from being bought by big business? If food for energy is big business, why shouldn't big business by the land?

Big business won't buy the land because it's very expensive to start up and run a farm, plus the risk involved is too great. It works out to be cheaper for the businesses to just buy the grain and do none of the work/risks. 10 2000 acre farmers are much more efficient than 1 20 000 acre outfit. Those small guys are cutting costs like crazy that would be unacceptable for a big outfit to cut, therefore the little guys still do lots of it. If it were worthwhile for the big boys to get in the grain industry, they would have done it already.

[jdobbin]

Big business won't buy the land because it's very expensive to start up and run a farm, plus the risk involved is too great. It works out to be cheaper for the businesses to just buy the grain and do none of the work/risks. 10 2000 acre farmers are much more efficient than 1 20 000 acre outfit. Those small guys are cutting costs like crazy that would be unacceptable for a big outfit to cut, therefore the little guys still do lots of it. If it were worthwhile for the big boys to get in the grain industry, they would have done it already.

Does it? Why are there rules against big business buying farm land then? If it made sense to own all the cattle, why not grains?

[blueblood]

Big business won't buy the land because it's very expensive to start up and run a farm, plus the risk involved is too great. It works out to be cheaper for the businesses to just buy the grain and do none of the work/risks. 10 2000 acre farmers are much more efficient than 1 20 000 acre outfit. Those small guys are cutting costs like crazy that would be unacceptable for a big outfit to cut, therefore the little guys still do lots of it. If it were worthwhile for the big boys to get in the grain industry, they would have done it already.

Does it? Why are there rules against big business buying farm land then? If it made sense to own all the cattle, why not grains?

Cattle are a very liquid asset and don't require a lot of input. A pile of physical work, but as far as dollars go, very little goes into it compared to grain. They are also a much lower risk to have than grains. The smaller guys are already more efficient than the bigger guys. Any individual can buy land and have a company bankroll his farm to get around that.

[jdobbin]

Cattle are a very liquid asset and don't require a lot of input. A pile of physical work, but as far as dollars go, very little goes into it compared to grain. They are also a much lower risk to have than grains. The smaller guys are already more efficient than the bigger guys. Any individual can buy land and have a company bankroll his farm to get around that.

If that is true, why are grain farmers so intent on buying even more land that used to be farmed by other farmers? Some farmers by their very purchases are making themselves big business.

[blueblood]

Cattle are a very liquid asset and don't require a lot of input. A pile of physical work, but as far as dollars go, very little goes into it compared to grain. They are also a much lower risk to have than grains. The smaller guys are already more efficient than the bigger guys. Any individual can buy land and have a company bankroll his farm to get around that.

If that is true, why are grain farmers so intent on buying even more land that used to be farmed by other farmers? Some farmers by their very purchases are making themselves big business.

That depends on your definition of big. These farmers are growing at a decent rate. Remember in the auction sales catalogues there are also a lot of big boys going out of business. If you get too big and can't properly manage it, it will blow up in your face. Some big farmers can run an efficient outfit by running it like a small farm (minimizing costs) others blow their money on ridiculous things and end up going belly up to pay it all off. Farmers just want to make money like everybody else.

[jdobbin]

That depends on your definition of big. These farmers are growing at a decent rate. Remember in the auction sales catalogues there are also a lot of big boys going out of business. If you get too big and can't properly manage it, it will blow up in your face. Some big farmers can run an efficient outfit by running it like a small farm (minimizing costs) others blow their money on ridiculous things and end up going belly up to pay it all off. Farmers just want to make money like everybody else.

I agree that farmers should be allowed to make money just like everyone else. Guess I'm worried that the bio-fuel market is too many eggs in one basket.

Worse, is that I am suspicious that it will actually do anything to reduce emissions and may end up burning farmers instead somehow.

[blueblood]

That depends on your definition of big. These farmers are growing at a decent rate. Remember in the auction sales catalogues there are also a lot of big boys going out of business. If you get too big and can't properly manage it, it will blow up in your face. Some big farmers can run an efficient outfit by running it like a small farm (minimizing costs) others blow their money on ridiculous things and end up going belly up to pay it all off. Farmers just want to make money like everybody else.

I agree that farmers should be allowed to make money just like everyone else. Guess I'm worried that the bio-fuel market is too many eggs in one basket.

Worse, is that I am suspicious that it will actually do anything to reduce emissions and may end up burning farmers instead somehow.

I still grow wheat for human consumption, I also grow CPS for the biofuel. It's more of a second basket for the eggs. It'll reduce emissions in time, farmers want biodiesel to go and would gladly put it in their machines, it doesn't affect performance too too much.

The only thing we're going to get burned on is input costs, 50 bucks an acre every year to grow round up ready canola is bloody ridiculous, that's robbery. If they want to play the copyright card I can justify 5 bucks an acre for it and being able to keep your seed, but 50 bucks an acre --> why we're in financial trouble. We finally got around the whole own use issue with glyphosates which gets us cheap roundup knock offs.

When the price/bushell goes up, so does inputs. Big problem.

[dlkenny]

I want to add a little detail that's been overlooked on this topic. The truth is that bio-fuels do release carbon dioxide the same way petro-fuels do. The difference is that the CO2 that is released is that which the plantlife absorbed from the atmosphere and the net effect is a recycling of the CO2 back into the atmosphere. It would have the same effect as if the plant were to simply die and decay as it would release CO2 and methane into the atmosphere. Bio-fuels therefore wouldn't amount to a decrease in CO2 in the atmosphere but a near eradication of man-made CO2 being added.

An interesting point that I was made aware of recently is that fossil fuels come from plantlife from millions of years ago and the CO2 that we release by burning these fuels is actually the same as the CO2 that was absorbed by the plantlife millions of years ago. Carbon is never lost or gained but is always recycled in the earths ecosystems. That said, one could argue that changing to bio-fuels would have a deeper impact than simply on greenhouse gas emissions; also on airborne aerosols and soot, in fact bio-diesel emissions contain more aerosols than the emissions from petro-diesel.

I work in the horticulture profession and it's a fact that one tree can absorb as much carbon in one year as is emitted by a car driven 26000 miles. Therefore one logical solution to greenhouse gases is to plant one tree for every car on the road...why not? Just an idea.

[jdobbin]

USA Today reported over the weekend about how America's grasslands are disappearing because of rising food prices. Much of it has to do with the subsidized ethanol industry. Land that has not been used for centuries in some cases is being cultivated for use.

http://www.truthabouttrade.org/content/view/11402/54/

Leaving at least some land idle amid the increasingly industrialized business of farming is essential for a variety of reasons. It provides a cleansing buffer for the water that runs off chemically treated fields. Protection of fragile wetlands cuts soil erosion while providing wildlife habitat that, in South Dakota, is the basis of a multimillion-dollar hunting and tourism industry. Native grasslands sustain biological diversity that can't be replicated. Further, plowing untouched prairie releases carbon dioxide into the air, contributing to climate change.

Long-term benefits are being overtaken by short-term incentives, however. Farmers chasing near-record prices are coaxing higher yields from current acres and putting more land into crops.

Kevin Baloun, a farmer-rancher near Highmore, S.D., is among them. He's plowed up several pieces of virgin prairie in recent years to plant crops. Land values in his area have tripled in the past five years, which makes it harder for farmers to expand production by buying more cropland.

"The bottom line is what makes you go that direction," Baloun says of his conversion of prairie to cropland. "Wheat was $4 or $5 a bushel a couple of years ago, and now it's up to $10 or $12 a bushel."

Conservationists warn that the current commodity and ethanol frenzy could undo years of hard work and undercut the investment of taxpayer money that has bankrolled federal land- and water-protection programs.

"A generation of conservation accomplishments could be rolled back" if commodity prices remain near historic highs, warns Ken Cook, head of the non-profit Environmental Working Group.

Similar things are bound to happen in Canada as well.

[Zachary Young]

Ethanol is a fraud and a scam and compelling proof that only the free market can accurately determine the most efficient energy sources. Government is too stupid to be put in charge of our energy needs.

[jbg]

Ethanol is a fraud and a scam and compelling proof that only the free market can accurately determine the most efficient energy sources. Government is too stupid to be put in charge of our energy needs.

Or in some cases to do much of anything.

[Wild Bill]

Ethanol is a fraud and a scam and compelling proof that only the free market can accurately determine the most efficient energy sources. Government is too stupid to be put in charge of our energy needs.

We are very close to having enzyme technologies on the market that will make ethanol directly from scrap bio-waste. There'll be no need to use corn or sugar cane. Just process the stalks that are left over.

Now what will that do to corn pricing?

[Wilber]

We are very close to having enzyme technologies on the market that will make ethanol directly from scrap bio-waste. There'll be no need to use corn or sugar cane. Just process the stalks that are left over.

Now what will that do to corn pricing?

That is where this industry needs to be heading. Growing food for the sole purpose of making fuel can only end badly.

[jdobbin]

Growing food for the sole purpose of making fuel can only end badly.

Unfortunately, we have heard from at least one farmer on this forum who supports it and says it is good for the economy. I've said there are ominous clouds coming in regards to ethanol policy. We have no brave political parties yet who have backed away from this stupid policy. The first that does might lose the farm vote but it is the right policy for the environment and the economy.

http://www.msnbc.msn.com/id/24227498/

Farm economists question whether the federal backing for ethanol will continue in the face of complaints that soaring corn prices are increasing food costs. Corn is used in most animal feed and is a key ingredient in myriad other products.

"U.S. energy policy has been friendly to ethanol in the last couple of decades. The question is, will it continue to be. It's running up food prices and that's causing pressure on Congress to limit mandates for ethanol usage," said Neil Harl, an emeritus professor of economics at Iowa State University.

The farm bill appears mired in Congress as lawmakers bicker with the Bush administration, which has threatened a veto if any increases in spending are not offset by reductions elsewhere. Congress on Thursday passed a short-term extension to the 2002 farm bill that keeps programs funded through April 25.

Flinchbaugh and others said the agricultural economy bears a striking resemblance to that seen in the mid-1970s, when a seemingly insatiable demand for U.S. crops drove up land values and farmers took advantage of their soaring equity to increase debt. When federal policy changed and demand suddenly dropped, land values and farm income plunged, forcing thousands of farmers to sell out and leading to the failure of nearly 300 agricultural banks.

The situation is no better in Canada with rising prices in feed grain soaring and the cattle and hog industry circling the drain. Flour prices have jumped dramatically and we are now seeing food inflation across the board. A lot of it is tied to food for fuel.

Edited April 21, 2008 by jdobbin

[August1991]

I work in the horticulture profession and it's a fact that one tree can absorb as much carbon in one year as is emitted by a car driven 26000 miles. Therefore one logical solution to greenhouse gases is to plant one tree for every car on the road...why not? Just an idea.

That would have to be one new extra tree. On average, for every tree that grows and absorbs CO2, another tree dies and releases CO2. Trees are like a bank.

USA Today reported over the weekend about how America's grasslands are disappearing because of rising food prices. Much of it has to do with the subsidized ethanol industry. Land that has not been used for centuries in some cases is being cultivated for use.

Huh? What's the difference if land is planted in "grass" or if the land is planted in "corn".

Land has not been used for centuries? WTF?

[jdobbin]

Huh? What's the difference if land is planted in "grass" or if the land is planted in "corn".

Land has not been used for centuries? WTF?

The difference if you look at the article is the carbon that is released from cutting down trees or plowing under grasslands on unproductive land in favour of fuel for food.

[August1991]

The difference if you look at the article is the carbon that is released from cutting down trees or plowing under grasslands on unproductive land in favour of fuel for food.

Sorry, I didn't notice that. But it's still silly.

Native grasslands sustain biological diversity that can't be replicated. Further, plowing untouched prairie releases carbon dioxide into the air, contributing to climate change.

Native grasslands preserve diversity? Plowing untouched prairie and planting corn releases carbon dioxide? Is there any untouched prairie?

I reckon corn absorbs more CO2 than grassland, but what do I know.

----

Dobbin, you made me go back and look at this thread too:

Flinchbaugh and others said the agricultural economy bears a striking resemblance to that seen in the mid-1970s, when a seemingly insatiable demand for U.S. crops drove up land values and farmers took advantage of their soaring equity to increase debt.

...

Economists worry that farmers could be tempted to add debt due to the belief that high commodity prices would continue.

Those prices have been driven up by a strong demand for corn and soybeans from countries such as China and India, coupled with the needs of more than 50 corn-reliant ethanol plants built in the last few years.

If farmers are tempted to go into debt because of rising land values or commodity prices, then I can only say: makes sense to me. Oil prices are rising and oil companies are investing heavily in exploration and development. If what you sell rises in price, it makes sense to invest and try and produce more.

The quote also points to the real reason for rising food prices (and it's not ethanol): more people in China and India are better off and they can afford to buy more and better food. Sounds like a good deal to me. We send them good food and they send us better computer chips. We all win. It's almost surprising that no one thought of this before.

Edited April 21, 2008 by August1991

[Wilber]

Unfortunately, we have heard from at least one farmer on this forum who supports it and says it is good for the economy. I've said there are ominous clouds coming in regards to ethanol policy. We have no brave political parties yet who have backed away from this stupid policy. The first that does might lose the farm vote but it is the right policy for the environment and the economy.

I don't see bio fuels as bad for the economy but believe the industry has to evolve past the simple production of food for fuel. If in fact we will be able to produce bio fuels from leftover agricultural waste, that "waste" will have a value of its own. It will no longer be waste but give farmers a source of income from bio fuels without necessarily decreasing food production.

[pfezziwig]

Biofuels are still in their infancy, give them time to grow and achieve economies of scale before shooting down the idea.

Should we stop every new inovation that doesn't achieve massive success right out of the gate? Transforming the auto industry is a massive undertaking, it's taken us a 100 years to get where we are now.

Biofuels are still developing. Wait till they develope systems to convert plant waste material like wood chips into ethanol, no need to grow corn then and the main energy source will be waste products!

Staff, GreenCarsNow.com

[jdobbin]

Biofuels are still in their infancy, give them time to grow and achieve economies of scale before shooting down the idea.

Right now, it is causing food inflation since it is food for fuel.

[Fortunata]

Wait till they develope systems to convert plant waste material like wood chips into ethanol, no need to grow corn then and the main energy source will be waste products!

Staff, GreenCarsNow.com

Iirc, we used to have a research program to do exactly that. It makes more sense than by using edibles for burnables. Brazil uses a lot of sugar cane waste for their ethanol getting a double whammy from one plant.