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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4454)	7/16/2006 9:09:52 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24210

I think the fact that world grain production is shrinking and that the grain in storage is expected to run out in the 2007-2008 year (Illinois Farm Bureau - warning cattle producers to expect grain prices to rise to where cattle producers will be operating at a loss for 1 to 2 years until cattle prices catch up to grain prices) will bring corn and soybean prices way up above Government price supports. When the price of corn is above price supports there will be no subsidies going to the farmers. When there are global shortages of grain and the prices skyrocket I suspect there will be great pressure to reserve grains for food consumption which is going to bankrupt many of the ethanol producers (and many of their investors with them). That's only 12 to 24 months until grain prices should clime drastically and 1 or 2 years after that meat prices will go through the roof. Go enjoy steak or hamburger while you can afford it ! On another angle, the Experimental Aircraft Association is fighting the mandates that ALL gasoline in states require 10%+ ethynol. Many aircraft have STC's that let them operate on Auto Gasoline instead of high priced avgas, but only if the auto fuel has NO ethanol in it. Go to the EAA web site and type ethanol into the search engine and you will get a lot of information on why they do not permit even a drop of ethanol going into an aircraft fuel tank. They even sell test kits to determine if the gasoline has any alcohol in it. Jon Kutz on Saturday July 15, 2006 at 7:57 PM EST ''''''''''''' We like corn-based ethanol. No doubt. You have a situation where the rest of the country is subsidizing the fuel for your vehicles. That's a pretty sweet deal for you, but not so good for the rest of us. Of course if you stripped the subsidies out to get the real cost, you can see just what a deal you are getting. The closing price of ethanol yesterday on the CBT was $3.01. For gasoline, it was $2.32. So, the true cost is well above that of gasoline, for a fraction of the BTUs. Price today in metro Twin Cities area: E-85 $2.51 per gallon where 87 octane regular is $2.91 per gallon. That is a price that includes corn subsidies that work out to $0.18/gal of ethanol, a federal ethanol subsidy of $0.51/gal, and a Minnesota state subsidy of $0.20/gal. The mandate also increases the price of corn; great for the farmers, bad for the rest of us who eat. I have stated before that there are a handful of Midwestern states, including Minnesota, where ethanol economics are the best. But that is for ethanol made from local corn, and sold locally. Just as soon as you start shipping it out of the Midwest, the EROI goes below 1 and the price shoots up. Cheers, Robert Rapier on Saturday July 15, 2006 at 10:39 PM EST theoildrum.com