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Msg  62792 of 134743  at  1/23/2011 10:13:22 AM  by

Plato


Almost 40% of US corn goes to ethanol production

A post from another board.  

Sully, remember when, a few months ago, we had a disagreement on how much of the US corn crop went to ethanol fuel?   You contended it was around 37%, I thought the figure closer to 34%.  You advanced enough support for your position that I acceded the point, and admitted you were right.  I did bring to the fore the roughly 10% annual increases in the amount of corn that went to ethanol over the last decade, but did not think it then reached 37%.  Now, it appears that almost 40% of the US crop is converted to ethanol. 
 
Of course, subsidizing corn ethanol is misguided, simply a farm welfare program, and correlate, prohibitive tariffs on ethanol more efficiently produced from sugarcane in Latin America hypocritical, but the game is what it is. With the number of senators from corn producing states, don't expect a change in policy anytime soon, despite the teabaggers, who will demur to challenge the egregious hand-outs and punishing tariffs that benefit some states in which they hope to curry favor. Thus, misguided policy benefiting corn ethanol will unfortunately be with us for some time.  Too long, but for some time.  (And it does benefit me, despite this j'accuse.) 

Here is a recent Wall Street Journal article that claims that nearly 40% of US corn crop now goes to produce ethanol.  ~~Plato
 

Amber Waves of Ethanol

22 January 2011  <link>
 

 
Four of every 10 rows of U.S. corn now go for fuel, not food.
 
The global economy is getting back on its feet, but so too is an old enemy: food inflation. The United Nations benchmark index hit a record high last month, raising fears of shortages and higher prices that will hit poor countries hardest. So why is the United States, one of the world's biggest agricultural exporters, devoting more and more of its corn crop to . . . ethanol?
 
The nearby chart, based on data from the Department of Agriculture, shows the remarkable trend over a decade. In 2001, only 7% of U.S. corn went for ethanol, or about 707 million bushels. By 2010, the ethanol share was 39.4%, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels. Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.

1corn


This trend is the deliberate result of policies designed to subsidize ethanol. Note the surge in the middle of the last decade when Congress began to legislate renewable fuel mandates and many states banned MTBE, which had competed with ethanol but ran afoul of the green and corn lobbies. 
 
This carve out of nearly half of the U.S. corn corp to fuel is increasing even as global food supply is struggling to meet rising demand. U.S. farmers account for about 39% of global corn production and about 16% of that crop is exported, so U.S. corn stocks can influence the world price. Chicago Board of Trade corn March futures recently hit 30-month highs of $6.67 a bushel, up from $4 a bushel a year ago.
 
Demand from developing nations like China is also playing a role in rising prices, and in our view so is the loose monetary policy of the U.S. Federal Reserve that has increased the price of nearly all commodities traded in dollars.
 
But reduced corn food supply undoubtedly matters. About 40% of U.S. corn production is used to produce feed for animals. As corn prices rise, beef, poultry and other prices rise, too. The price squeeze has already contributed to the bankruptcy of companies like Texas-based Pilgrim's Pride Corp. and Delaware-based poultry maker Townsends Inc. over the past few years.
 
This damage coincides with a growing consensus that ethanol achieves none of its alleged policy goals. Ethanol supporters claim the biofuel reduces U.S. dependence on foreign oil and provides a cleaner source of energy. But Cornell University scientist David Pimentel calculates that if the entire U.S. corn crop were devoted to ethanol production, it would satisfy only 4% of U.S. oil consumption. 

The Environmental Protection Agency has found that ethanol production has a minimal to negative impact on the environment. Even Al Gore, once an ethanol evangelist, now says his support had more to do with Presidential politics in Iowa and admits the fuel provides little or no environmental gain.
 
Not that this has changed the politics of ethanol. When consumers didn't buy enough gas last year to meet previous ethanol mandates, the Obama Administration lifted the cap on how much ethanol may be mixed into gasoline to 15% from 10%. Presto! More ethanol "demand." On Friday the EPA greatly expanded the number of cars approved to use the 15% blend. Last month, Congressmen whose constituents benefit from this largesse tucked into the tax bill an extension of the $5 billion tax credit for blending ethanol into gasoline.  
 
At a time when the world will need more corn and grains, it makes no sense to devote scarce farmland to make a fuel that exists only because of taxpayer subsidies and mandates. If food supplies tighten and prices keep rising, such a policy will soon become immoral.   
 _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _
 Note that ``if the entire U.S. corn crop were devoted to ethanol production, it would satisfy only 4% of U.S. oil consumption."  Probably closer to 5%, but the point is made.  An absurd waste of resources.  ~~Plato
 


 
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Msg # Subject Author Recs Date Posted
62795 Re: Almost 40% of US corn goes to ethanol production; agr. 'wellfare' & Bush/Chaney "globalism". glaciernine 3 1/23/2011 11:00:18 AM


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