 merrie says: To meet this political demand, VeraSun, Pacific Ethanol, Aventine Renewable Energy and others rushed to build ethanol mills. The industry produced just four billion gallons of ethanol in 2005, so it had to add a lot of capacity in a short period of time. Three years ago, ethanol producers made $2.30 per gallon. But with the global economic slowdown, along with a glut of ethanol on the market, by the end of 2008 ethanol producers were making a mere 25 cents per gallon. That drop forced Dyersville and other facilities to be shuttered. The industry cut more than 20% of its capacity in a few months last year. What's more, as ethanol producers sucked in a vast amount of corn, prices of milk, eggs and other foods soared. The price of corn shot up, as did the price of products from animals -- chickens and cows -- that eat feed corn. Texas Gov. Rick Perry reacted by standing with the cattlemen in his state to ask the Environmental Protection Agency last year to suspend part of of the ethanol mandates (which it has the power to do under the 2007 energy bill). The EPA turned him down flat. The Consumer Price Index later revealed that retail food prices in 2008 were up 10% over 2006. In Mexico, rising prices led to riots over the cost of tortillas in 2007. The United Nations Food and Agricultural Organization and other international organizations issued reports last year criticizing biofuels for a spike in food prices. Ethanol is also bad for the environment. Science magazine published an article last year by Timothy Searchinger of Princeto... Madness It was the latest government FAD fostered onto the American people. It was bad from the very beginning and now, consider the long term havoc it caused to our economy. I'm only commenting on the price of corn, not the validity of ethanol. Of the 40% increase in food prices, about 3% can be attributed to food crops being used in biofuels. At least 8% can be attributed to rising costs of fuel used to grow and transport the crops from farms to the grocer. But the big hunk comes in with increased demand worldwide for human consumption of meat and corn (corn is in many processed foods now, animals are corn fed). Fertilizer prices have skyrocketed because non organic supplies are made with petroleum. Weather and drought have also limited production. Let's lay the blame where it belongs...greedy commodity investors, meat production, and the rising price of oil. @ deb2012, please cite your sources for the above. This is yet another case proving that the government will always look for a political return over an economic return. The ethanol subsidies were nothing more than pandering to environmental lobbies such as the Sierra Club and payoffs to corn farmers. If a product or service needs to be subsidized by tax dollars or given any kind of market advantage to succeed then it is unworthy. Robert, thank you for saying please. I've just received about 5 emails within a few minutes where you commented on the various "left-wing"opinions of others with such disdain and disrespect that I'm happy to receive a modicum of politeness from you. All kinds of subsidies can be called pandering-I just don't find it useful to single ethanol out without proper context. So, unfortunately my attempt to link must not have worked and I did not save it. I found this though. "Overall planting expenses are up seventeen to eighteen percent, led by sharp price increases for fuel and fertilizer." More here, and I will look later for my exa... |
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