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Should the Ethanol Bubble Burst? Locked

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Posted by inch53 on Tuesday, April 1, 2008 11:59 AM

Domestic oil production is on the rise. In this area low profit fields and leases that had been shut down, are being opened again and brought back on line, thanks to higher prices. Plan for a new well and you'll be on a waiting list for a drill rig and crew.

Marathon has even gotten into the act now of opening wells back up, after they started a program of shutting down and capping their own leases, several years ago. The wells they owned were being plugged. They had even closed down their pipeline dumps in the area, but one [here in Martinsville].

The reason, little profit and their refineries could no-longer process it, so they didn't want it their pipelines or tanks [or so I was told].

inch

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Posted by rrnut282 on Tuesday, April 1, 2008 7:35 PM
 Dakguy201 wrote:

USDA's corn planting intention data came out yesterday.   In short, they estimate 8% FEWER corn acres than previous years.  That should be a reasonably hard number as it is getting very late for farmers to do much shifting of crops on their acres.

 

Indiana released a projection of 12% fewer acres in corn this year.  There are something like 12 ethanol plants already announced or under construction in the state.

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Posted by RRKen on Wednesday, April 2, 2008 10:28 AM
 inch53 wrote:

Domestic oil production is on the rise. In this area low profit fields and leases that had been shut down, are being opened again and brought back on line, thanks to higher prices. Plan for a new well and you'll be on a waiting list for a drill rig and crew.

Marathon has even gotten into the act now of opening wells back up, after they started a program of shutting down and capping their own leases, several years ago. The wells they owned were being plugged. They had even closed down their pipeline dumps in the area, but one [here in Martinsville].

The reason, little profit and their refineries could no-longer process it, so they didn't want it their pipelines or tanks [or so I was told].

Standard is in the process of expanding their  refinery in Hammond (Whitting), IN to allow for use of Petro from the Canadian Oil Sands project.   The stuff from S. IL should be of the same quality.   This is good news for those wells capped in that area.  Thanks for the report.

 The excess CO² from ethanol plants can be pumped down into the wells to improve extraction productivity.

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Posted by cordon on Wednesday, April 2, 2008 11:16 PM

Smile [:)]

The things going on today are stopgap measures.  No one expects ethanol derived from corn kernels to be a long term solution, and people are working hard on how to produce ethanol from the stalks and leaves of corn, as well as from other plants.  When these new approaches come on line, the costs and prices of corn will adjust.

The long-term solution will have to be renewable energy applied to our transportation without carbon dioxide emissions.  Time will tell if that is to be all electric, or if we will continue to use a liquid or gas to temporarily store the energy.

A hundred years ago our best automotive minds were split among steam, electric, diesel, gas (the gaseous kind), and gasoline.  They settled on gasoline for cars and airplanes, diesel for larger automotive engines, and coal for just about everything else.  All we are doing today is continuing that evolution, and ethanol may play a significant part, at least in the short term.

Smile [:)]  Smile [:)]

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Posted by solzrules on Thursday, April 3, 2008 7:55 PM
 cordon wrote:

Smile [:)]

The things going on today are stopgap measures.  No one expects ethanol derived from corn kernels to be a long term solution, and people are working hard on how to produce ethanol from the stalks and leaves of corn, as well as from other plants.  When these new approaches come on line, the costs and prices of corn will adjust.

The above is a perfect example of the current attitude that is messing with our economy and putting people at risk of being out of work (including myself).  "Oh, well, we know that these are just temporary solutions on the way to permanently banning gasoline so you'll have time to adjust......." blah blah blah.  "Oh, and don't worry, we're working on a solution to the current problems that ethanol has introduced into the economy by.......creating more ethanol sources".  Nowhere in this attitude are free market principles present.  This is a government mandate brought on by people who subscribe to junk Al Gore science that feel it is their mission to save the world.  I am increasingly frustrated with these people who figure that I can be out of work if it means that I am producing a little less carbon.  I don't need to worry about what earth my children will inherit, if I don't work then my family doesn't eat.  I can't believe this country is so stupid that we are forcing ourselves into third world status over a scientific theory that can't be proven.  We might as well force all houses that are constructed from now on to be asteroid proof on the theory that someday an asteroid might hit the earth.  We are turning into a country of misfits and malcontents who whine about the ozone layer while those of us who have to work for a living suffer at the hands of pompus self-aggrandizing morons.  I'd like to vote our current crop of politicians out of office, including the entire spectrum of presidential candidates, and elect people who know what it means to work for a living.  I've yet to hear one that has.      

One thing is for certain, since I now have to fill my truck up with ethanol laced gasoline I get even worse mileage and pay more money for it.  I heard one idiot on the news today postulating that if the price of gas goes up to 4 dollars a gallon maybe then Americans will drive less.  I STILL HAVE TO GO TO WORK!  That's the thing.  Some of these people are so far out of reality they don't understand that driving is part of life - we drive to work and we drive home.  If we stop driving, we don't work.  It's a remarkably simple equation.  Am I supposed to tell my boss that due to global warming he needs to move the construction site CLOSER to my house?  You wanna laugh really hard?  These are the same people telling me that I have to drive less.  They can kiss my ***.

 

There has been discussion of forcing the issue by switching to E20 gas.  I can't imagine the ramifications of that assinine idea.  We might as well just start selling gas tanks with a 4" hole in the bottom of them.  I think the mileage would be about the same. 

Hope you enjoyed the rant as much as I did, I've got to do something more constructive than think about ethanol.

You think this is bad? Just wait until inflation kicks in.....
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Posted by solzrules on Thursday, April 3, 2008 8:03 PM

Our new communist take on corn and collapse that is on the horizon.  I'm calling it: 2 years from now ethanol will be akin to saying a four letter word in church:

 

http://biz.yahoo.com/ap/080403/corn_at_6.html?.v=6

You think this is bad? Just wait until inflation kicks in.....
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Posted by Convicted One on Monday, April 7, 2008 6:08 PM

 solzrules wrote:
   I'm calling it: 2 years from now ethanol will be akin to saying a four letter word in church:

 

OK, and then what becomes of all the ethanol infastructure that has been thrown up over the past 5 years?  If we can get the Chinese hooked on "Genuine USA Moonshine" all of our troubles might be over

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Posted by SALfan on Monday, April 14, 2008 11:33 AM

 chicagorails wrote:
if everyone became vegetarians and ate no meat there would be no high corn price problems. simple...and peoples health would improve  muchooAngel [angel]

If you would like to give up beef and pork, be my guest.  I'll eat at least part of your share.

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Posted by Anonymous on Monday, April 14, 2008 12:27 PM
 Murphy Siding wrote:
 RRKen wrote:

   No one is substituting food for fuel.   Corn goes in, gets hammered, becomes mash, is distilled, the solids come out, are dried, and sold as Animal feed (The water is recycled back through the process hundreds of times)(Ethanol is anhydrous, no water). That animal feed replaces corn, and allows better weight gain on cattle.   Cheaper than Corn.  

There is a boom of contruction of dairy barns in eastern S.D., due to the abundance of animal feed from ethanol plants, which is more cost effective than feeding cows corn.

Are we all in agreement that food prices are rising faster than the average rate of inflation for other goods and services?  I have heard a thousand times on news reports that it is due to ethanol production that is driving up the price of corn, which is in turn is broadly driving up food prices because corn is a wide basis of food production.

But are you two saying that ethanol production is actually working to drive down the cost of food production because it creates animal feed that is more cost effective than corn?  I am not saying you are wrong, but it is the first time I have heard it.  It sure flies the face of popular wisdom.

If it is not ethanol production that is raising food prices via raising corn prices, what is the cause of the food price increase?  I can think of two other factors besides ethanol:

1)  The rising price of fuel.

2)  The accelerating development in China, India, and other third world countries. 

But, in any case, if we can establish that ethanol is not playing a part in rising food prices, that ought to be a banner headline.

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Posted by Murphy Siding on Monday, April 14, 2008 12:50 PM

     It's hard to agree on anything concerning ethanol, as it's a hot potato, and this is an election year.Evil [}:)]

     The view from farm country:  The corn used to be fed to the cow for feed.  The cow ate the feed for food, and a fair amount of gas went out the tailpipe.  Now, the corn is used to make ethanol, that goes out a different tailpipe, and Bessie eats what's left over.

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Posted by edblysard on Monday, April 14, 2008 1:28 PM

Ya know,

I really want to be there when the last cow fart tips us over the limit....Big Smile [:D]

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Posted by Anonymous on Monday, April 14, 2008 1:37 PM
 Murphy Siding wrote:

     It's hard to agree on anything concerning ethanol, as it's a hot potato, and this is an election year.Evil [}:)]

     The view from farm country:  The corn used to be fed to the cow for feed.  The cow ate the feed for food, and a fair amount of gas went out the tailpipe.  Now, the corn is used to make ethanol, that goes out a different tailpipe, and Bessie eats what's left over.

Yes, but does what's left over provide higher feed nutrition per unit cost than the corn that went into it?  I understand your point about election year subterfuge, but this nutrition question should have an objective, food engineering answer.

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Posted by jeffhergert on Monday, April 14, 2008 4:07 PM
 Bucyrus wrote:
 Murphy Siding wrote:
 RRKen wrote:

   No one is substituting food for fuel.   Corn goes in, gets hammered, becomes mash, is distilled, the solids come out, are dried, and sold as Animal feed (The water is recycled back through the process hundreds of times)(Ethanol is anhydrous, no water). That animal feed replaces corn, and allows better weight gain on cattle.   Cheaper than Corn.  

There is a boom of contruction of dairy barns in eastern S.D., due to the abundance of animal feed from ethanol plants, which is more cost effective than feeding cows corn.

Are we all in agreement that food prices are rising faster than the average rate of inflation for other goods and services?  I have heard a thousand times on news reports that it is due to ethanol production that is driving up the price of corn, which is in turn is broadly driving up food prices because corn is a wide basis of food production.

But are you two saying that ethanol production is actually working to drive down the cost of food production because it creates animal feed that is more cost effective than corn?  I am not saying you are wrong, but it is the first time I have heard it.  It sure flies the face of popular wisdom.

If it is not ethanol production that is raising food prices via raising corn prices, what is the cause of the food price increase?  I can think of two other factors besides ethanol:

1)  The rising price of fuel.

2)  The accelerating development in China, India, and other third world countries. 

But, in any case, if we can establish that ethanol is not playing a part in rising food prices, that ought to be a banner headline.

The Omaha World Herald had an article recently, not sure exact date, about a study done by the University of Nebraska about ethanol and rising food prices.   It said something along the lines that ethanol has caused some rise in food prices, but not as "broadly" as is put out.  At least in the United States.  There are other factors that have driven up prices, but ethanol gets all the blame.

Jeff

 

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Posted by jeffhergert on Monday, April 14, 2008 4:11 PM
 edblysard wrote:

Ya know,

I really want to be there when the last cow fart tips us over the limit....Big Smile [:D]

Just be careful about which end of the cow you're at when it happens.Big Smile [:D] 

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Posted by Murphy Siding on Monday, April 14, 2008 5:19 PM
 Bucyrus wrote:
 Murphy Siding wrote:

     It's hard to agree on anything concerning ethanol, as it's a hot potato, and this is an election year.Evil [}:)]

     The view from farm country:  The corn used to be fed to the cow for feed.  The cow ate the feed for food, and a fair amount of gas went out the tailpipe.  Now, the corn is used to make ethanol, that goes out a different tailpipe, and Bessie eats what's left over.

Yes, but does what's left over provide higher feed nutrition per unit cost than the corn that went into it?  I understand your point about election year subterfuge, but this nutrition question should have an objective, food engineering answer.

I don't know if there's a clear answer to that, as dairy cows seem to be fed a lot of special feeds, in addition to the corn or corn mash.  As I understand it, from a dairy farmer in the expansion mode big time:  the cost to feed a dairy cow now (mash+suplements) is a lot more cost effective than before the ethanol boom (corn+supplements).

     My take on the whole situation:  ethanol is not causing food prices to surge.  Skyrocketing energy costs are causing food prices, and just about everything else, to surge.

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Posted by Anonymous on Monday, April 14, 2008 5:32 PM

The question of whether or not ethanol production is driving up food prices is intriguing because there are interests on both sides who would want to fudge the answer in their favor.  If the premise that ethanol is driving up food prices is being overstated, I am surprised that the popular news media would participate because I perceive them to be highly biased in favor of ethanol as well as all of the other planks of the green movement. 

I do hear them often mention the exploding world demand as at least part of the cause.  Oddly enough, I hear very little linkage to the fuel prices as being a cause for food price increases.  Considering the media's love of renewables and hatred of big oil, I would think blaming the whole thing on fuel cost would be a slam-dunk for them. 

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Posted by jeffhergert on Monday, April 14, 2008 7:23 PM
 Bucyrus wrote:

The question of whether or not ethanol production is driving up food prices is intriguing because there are interests on both sides who would want to fudge the answer in their favor.  If the premise that ethanol is driving up food prices is being overstated, I am surprised that the popular news media would participate because I perceive them to be highly biased in favor of ethanol as well as all of the other planks of the green movement. 

I do hear them often mention the exploding world demand as at least part of the cause.  Oddly enough, I hear very little linkage to the fuel prices as being a cause for food price increases.  Considering the media's love of renewables and hatred of big oil, I would think blaming the whole thing on fuel cost would be a slam-dunk for them. 

The "green" movement is starting to pull away from ethanol, as some others have pointed out.  Since the extreme environmentalists are becoming hostile to it, I would expect the media to follow suit. 

I have a feeling that nothing short of de-industrialization and everyone living in caves, except them of course, will satisfy them.  Any alternative fuel or power source is all right when it is just a concept or used in small amounts.  When that alternative matures and becomes viable on a large scale, allowing the masses to keep on living their modern lifestyle without any changes or suffering, that alternative will no longer be suitable.  Just wait until a substantial percentage of power comes from wind, then we'll hear about all the poor birds that are being slaughtered and that the wind turbines will just have to go. 

Jeff

  

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Posted by RRKen on Monday, April 14, 2008 7:29 PM
 Bucyrus wrote:
    

Yes, but does what's left over provide higher feed nutrition per unit cost than the corn that went into it?  I understand your point about election year subterfuge, but this nutrition question should have an objective, food engineering answer.

DDGs values can change from plant to plant.   How long it was in the drier, percentage of wet stillage or syrup that went in per ton, and storage. 

Some of the values are as follows, DDGs First, corn second:

  • Average crude Protein content:  30%  - 9.5%
  • Crude fiber:   10% - 2.9%
  • Fat:     9% - 4.1%
  • Phosphorus:     1% - .31%
  • Sulfur:     .6% - .12%

The difference however in this comparison is the digestibility and availability.  In DDGs, the digestibility is over 90% in all values, with 100% availability.  Whole grain corn does not have that.    There is variation between animal species.    The biggest difference in swine, is that the starch having been removed, the digestibility is lower.  

 On the plus side, recent projects such as is on-going in Mason Cityº, will allow oil to be extracted¹ from DDGs bringing about a  positive change to the nutritional values of DDGs.  I believe product flow, long a problem with shipping DDGs in covered hoppers, may also be improved.  

 Typically DDGs can be added to a diet of as high as 20% for beef and dairy, 10% for swine, and 5% for poultry.  For beef and dairy, higher percentages up to 45% can be wetcake.²

 The variability of quality from plant to plant is being overcome as livestock producers begin to find different results, and a wider choice of plants to choose from.  This has created competition, and forced the issue on the ethanol producer.³  

º Golden Grain Energy LLC.  "This also has the potential to reduce VOC emissions, thereby reducing fuel consumption in the process, an added cost savings."

¹ The extracted oil will add another revenue stream to ethanol production.  The more revenue streams you have, the more profitable the entire process becomes.

² Purdue University study, 2006.

³ Iowa State University, 2007.

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Posted by Anonymous on Monday, April 14, 2008 8:20 PM
 RRKen wrote:
 Bucyrus wrote:
    

Yes, but does what's left over provide higher feed nutrition per unit cost than the corn that went into it?  I understand your point about election year subterfuge, but this nutrition question should have an objective, food engineering answer.

DDGs values can change from plant to plant.   How long it was in the drier, percentage of wet stillage or syrup that went in per ton, and storage. 

Some of the values are as follows, DDGs First, corn second:

  • Average crude Protein content:  30%  - 9.5%
  • Crude fiber:   10% - 2.9%
  • Fat:     9% - 4.1%
  • Phosphorus:     1% - .31%
  • Sulfur:     .6% - .12%

The difference however in this comparison is the digestibility and availability.  In DDGs, the digestibility is over 90% in all values, with 100% availability.  Whole grain corn does not have that.    There is variation between animal species.    The biggest difference in swine, is that the starch having been removed, the digestibility is lower.  

 On the plus side, recent projects such as is on-going in Mason Cityº, will allow oil to be extracted¹ from DDGs bringing about a  positive change to the nutritional values of DDGs.  I believe product flow, long a problem with shipping DDGs in covered hoppers, may also be improved.  

 Typically DDGs can be added to a diet of as high as 20% for beef and dairy, 10% for swine, and 5% for poultry.  For beef and dairy, higher percentages up to 45% can be wetcake.²

 The variability of quality from plant to plant is being overcome as livestock producers begin to find different results, and a wider choice of plants to choose from.  This has created competition, and forced the issue on the ethanol producer.³  

º Golden Grain Energy LLC.  "This also has the potential to reduce VOC emissions, thereby reducing fuel consumption in the process, an added cost savings."

¹ The extracted oil will add another revenue stream to ethanol production.  The more revenue streams you have, the more profitable the entire process becomes.

² Purdue University study, 2006.

³ Iowa State University, 2007.

Thanks for that information RRKen.  That does seem like an objective, food engineering answer to my question, and it seems like the answer is yes; there is more nutritional content in the ethanol DDG byproduct that there is in an equal quantity of corn.  But I think my question needs to be better focused in order to get closer to the cause and effect of rising food prices.  There is a cost to this DDG byproduct, but I guess that can be set aside as it pertains to the question about food prices.  I suppose the DDGs may be essentially free if ethanol is being produced.  There are arguments about the viability of ethanol, but that issue can be set aside too.

This is how I would better frame my question:  When you turn corn into ethanol and create a byproduct that has a higher value as feed than corn, how much corn is consumed in the process to yield a ton of byproduct?  I assume that the corn input is greater than the yield of byproduct.  So the question is, when you produce a ton of byproduct is there more or less food value in that ton than there was in the quantity of corn that produced it?

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Posted by Murphy Siding on Monday, April 14, 2008 9:19 PM
 Bucyrus wrote:

......................... If the premise that ethanol is driving up food prices is being overstated............I do hear them often mention the exploding world demand as at least part of the cause.

Well, I doubt that all that corn that is being exported is for ethanol......Mischief [:-,]

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Posted by alphas on Monday, April 14, 2008 11:29 PM

jeffhergert,

That day is already here.   They are trying to build some large wind farms in our nearby mountains where the wind never stops blowing.  The environmentalists are going to court to stop them because they claim some birds could be affected.

Several of the prior posters are correct--the real energy problem in the US has been caused by virtually all today's Democrats, with the help of a few Republicans from costal states, blocking  attemps for over 10 years to open up drilling for oil and natural gas as more and more new sites are discovered in or offshore of the USA.   Even after the elections of 2004, they couldn't quite get the 60 votes in the Senate needed to stop their filibuster.   Now this country is paying for it big-time.    Part of it is due to the influence of the Greens' lobby on the Dems, part of it is due to good PR for the Dems to blame everything on the oil companies and Bush.   The US news media also helps by feeding the impression that the country is running out of oil and gas to drill.  

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Posted by RRKen on Tuesday, April 15, 2008 5:12 AM
 Bucyrus wrote:

 There is a cost to this DDG byproduct, but I guess that can be set aside as it pertains to the question about food prices.  I suppose the DDGs may be essentially free if ethanol is being produced.  There are arguments about the viability of ethanol, but that issue can be set aside too.

In most studies, there is a cost of DDGs because of the energy of drying and elimination of VOC emissions due to that drying.   One such study was from the Netherlands, and assessed the value of DDGs including it's costs to the actual cost of ethanol.  Short answer was DDGs sales offset the cost of ethanol production.  (55¢ per gallon credit)

 Bucyrus wrote:
This is how I would better frame my question:  When you turn corn into ethanol and create a byproduct that has a higher value as feed than corn, how much corn is consumed in the process to yield a ton of byproduct?  I assume that the corn input is greater than the yield of byproduct.  So the question is, when you produce a ton of byproduct is there more or less food value in that ton than there was in the quantity of corn that produced it?

Per ton, yes.   In the production process, starches are extracted from the corn.  So the byproduct naturally will be less in volume from a single ton of corn.   One bushel of corn (56 pounds) will produce 2.75 gallons of corn, and 17.5 pounds of byproduct.     Based on the values I posted earlier, the content of DDGs is higher as a feed than whole grain corn. 

 

Now for the math.  With corn around $5 per bushel (56 pounds)  per ton = 35.5 bushels @ $5 = $177.50.    Current bids on DDGs is about $170.00 per ton.    Now let us look at the volume.  As was mentioned before, the usage of DDGs differs greatly between various animal species.  I really don't know the relationship between corn in feed rations and DDGs.  However as an example, when DDGs is used  with cattle and dairy, the costs are lower because of the concentration of nutrients in DDGs versus corn.    In animal feed, corn is crushed, and mixed with other protiens and nutrients.  So you increase your cost using corn because of the additives (including labor).   DDGs on the other hand, does not need processing nor additives,so it can and is being used directly with the same results.   The maximum amount of DDGs in rations is limited to 20% in cattle.   

Before I close, I mentioned previous the use of Wetcake in cattle feed.   Wetcake is a byproduct which has not been dried, thus eliminating the expense of drying (energy).   Again it is fed directly to  cattle, and to a lesser degree swine.   The impact however with cattle is you can use a higher percentage of Wetcake in the overall rations (up to 45%).  With Wetcake being much cheaper than DDGs, there is a lot more value per ton than corn as a feed.    

Does this meet what you were looking for?

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Odds and ends.
Posted by RRKen on Tuesday, April 15, 2008 5:49 AM
•The corn export market is booming. These are record numbers, 2.5 billion bushels. Driving the export market is a weak dollar, and a tight world supply. Notably corn in China and Brazil are effected since U.S. corn is currently cheaper. Leading the rise are exports to Mexico, which have increased this year. Drought in Australia, increased imports to India and China have also impacted world grain supplies. This is what traders in corn look at when they consider supply and demand on prices.


•The ethanol blenders credit of $0.51 per gallon cost taxpayers about $3 billion last year, but it reduced crop price supports by about $6 billion and our oil import bill by another $15 billion. This adjustment in corn subsidies has acted as a cost-savings, rather than an additional expenditure by our federal government.

•Getting grain from producer to market, or export terminal is impacted by diesel costs. The cost of transport to a local ethanol plant requires far less energy, thereby becoming the market of choice for growers. I am not saying they will not make money on the export market, just that there is an energy impact to consider.

•USDA predicts in 2008 there will be far less carry over in corn, and reduced corn acres. You bet that got the attention of the Traders at the CBOT.
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Posted by Anonymous on Tuesday, April 15, 2008 7:28 AM
 Murphy Siding wrote:
 Bucyrus wrote:

......................... If the premise that ethanol is driving up food prices is being overstated............I do hear them often mention the exploding world demand as at least part of the cause.

Well, I doubt that all that corn that is being exported is for ethanol......Mischief [:-,]

Sorry I was not clear.  I meant world demand for corn to be used for food, not for corn to be used for ethanol.  I am just saying that I have heard that explanation for part of the rising food prices, and it does offset the suggestion that ethanol is exclusively causing the food price rise.

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Posted by SALfan on Tuesday, April 15, 2008 10:39 AM
 Bucyrus wrote:

The question of whether or not ethanol production is driving up food prices is intriguing because there are interests on both sides who would want to fudge the answer in their favor.  If the premise that ethanol is driving up food prices is being overstated, I am surprised that the popular news media would participate because I perceive them to be highly biased in favor of ethanol as well as all of the other planks of the green movement. 

I do hear them often mention the exploding world demand as at least part of the cause.  Oddly enough, I hear very little linkage to the fuel prices as being a cause for food price increases.  Considering the media's love of renewables and hatred of big oil, I would think blaming the whole thing on fuel cost would be a slam-dunk for them. 

Don't forget that processors and distributors on every level are quick to raise their prices when the price of the raw commodity goes up (for whatever reason) and they never decrease their prices.  I worked in a grocery store as a teenager, and three or four days after a mention on the evening news that production of some commodity was down, I'd be pulling the stuff off the shelves marking new, higher prices on it.  Same thing happens with gasoline -  every time something breaks loose somewhere in the world that might raise the price of crude oil, the next day the filling stations raise the price of gasoline THAT'S ALREADY IN THEIR TANKS.  It's complete and total BULL****.

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Posted by Anonymous on Tuesday, April 15, 2008 6:34 PM
I am not questioning the economics of the production of ethanol or the resultant DDG.  What I want to know is whether ethanol production is reducing the supply of animal feed and thus driving up the price of animal food products as is widely reported.  Corn that would have been used for feed is diverted in to a process that produces ethanol and a byproduct that is used for animal feed.  In this process overall, is there a net increase or net decrease in the corn based animal food supply in terms of total nutritional content?  I always hear that it is the latter.
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Posted by solzrules on Tuesday, April 15, 2008 7:49 PM
 RRKen wrote:
 Bucyrus wrote:

 There is a cost to this DDG byproduct, but I guess that can be set aside as it pertains to the question about food prices.  I suppose the DDGs may be essentially free if ethanol is being produced.  There are arguments about the viability of ethanol, but that issue can be set aside too.

In most studies, there is a cost of DDGs because of the energy of drying and elimination of VOC emissions due to that drying.   One such study was from the Netherlands, and assessed the value of DDGs including it's costs to the actual cost of ethanol.  Short answer was DDGs sales offset the cost of ethanol production.  (55¢ per gallon credit)

 Bucyrus wrote:
This is how I would better frame my question:  When you turn corn into ethanol and create a byproduct that has a higher value as feed than corn, how much corn is consumed in the process to yield a ton of byproduct?  I assume that the corn input is greater than the yield of byproduct.  So the question is, when you produce a ton of byproduct is there more or less food value in that ton than there was in the quantity of corn that produced it?

Per ton, yes.   In the production process, starches are extracted from the corn.  So the byproduct naturally will be less in volume from a single ton of corn.   One bushel of corn (56 pounds) will produce 2.75 gallons of corn, and 17.5 pounds of byproduct.     Based on the values I posted earlier, the content of DDGs is higher as a feed than whole grain corn. 

 

Now for the math.  With corn around $5 per bushel (56 pounds)  per ton = 35.5 bushels @ $5 = $177.50.    Current bids on DDGs is about $170.00 per ton.    Now let us look at the volume.  As was mentioned before, the usage of DDGs differs greatly between various animal species.  I really don't know the relationship between corn in feed rations and DDGs.  However as an example, when DDGs is used  with cattle and dairy, the costs are lower because of the concentration of nutrients in DDGs versus corn.    In animal feed, corn is crushed, and mixed with other protiens and nutrients.  So you increase your cost using corn because of the additives (including labor).   DDGs on the other hand, does not need processing nor additives,so it can and is being used directly with the same results.   The maximum amount of DDGs in rations is limited to 20% in cattle.   

Before I close, I mentioned previous the use of Wetcake in cattle feed.   Wetcake is a byproduct which has not been dried, thus eliminating the expense of drying (energy).   Again it is fed directly to  cattle, and to a lesser degree swine.   The impact however with cattle is you can use a higher percentage of Wetcake in the overall rations (up to 45%).  With Wetcake being much cheaper than DDGs, there is a lot more value per ton than corn as a feed.    

Does this meet what you were looking for?

Nothing changes the fact that this is still a government mandated industry.  Take the mandate away, and there goes the industry.  There would be no ethanol if it wasn't required to be in gasoline. 

This is quite possibly the biggest handout since FDR's New Deal.  That took WWII to get rid of, what will it take to get rid of this?

You think this is bad? Just wait until inflation kicks in.....
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Posted by Andrew Falconer on Tuesday, April 15, 2008 10:03 PM

Yes.

There are other ways to locally produce and storel energy and electricity.

Examples:

Compact Wind Turbines

Solar Water Heating

Photovoltaics

Batteries

Fuel Cells

Flywheels

 

Ethanol is a racket. It is getting in the way of implementing better technology.

Andrew

Andrew

Watch my videos on-line at https://www.youtube.com/user/AndrewNeilFalconer

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Posted by chicagorails on Tuesday, April 15, 2008 11:14 PM

KING OIL HIT CLOSE TO 115 A BARREL TODAY...

ETHANOL IS A BANDAID FIX. WE GET 15 MILLION BARRELS OIL DAILY. WHEN ALL 150 ETHANOL PLANTS ARE RUNNING THE OUTPUT WILL BE LESS THAN 10 PERCENT INCREASE IN GASOLINE STOCKS. THAT AINT MUCH.SAY 500,OOO BARRELS A DAY?

MEANWHILE ONLY ONE STATE IS GETTING ITS S**T TOGETHER,CALIFORNIA. HYDROGEN AUTOS MADE BY HONDA AND TOYOTA (WHERE IS GM FORD) ARE BEING AVAILABLE FOR ONLY CALIF.

WE ARE LIKE A CRACK ADDICT ADDICTED TO CRACK. THE ONLY WAY TO GET OFF IS TO QUIT. CALIFORNIA HAS ITS S**T TOGETHER AND IS TRYING TO DO THAT.

YOU DONT HAVE TO BE A ROCKET SCIENTIST  TO FIGURE THAT. WHY DOESNT WASHINGTON PASS A BILL TO MAKE IT HAPPEN IN OTHER STATES.  WE ARE KILLING OURSELVES WHEN THERE IS A SOLUTION. HYDROGEN USES NO OIL AND DOESNT POLLUTE.SIMPLE SIMON

PROBLEM SOLVED....NEXT?? 

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Posted by carnej1 on Wednesday, April 16, 2008 11:50 AM
 chicagorails wrote:

KING OIL HIT CLOSE TO 115 A BARREL TODAY...

ETHANOL IS A BANDAID FIX. WE GET 15 MILLION BARRELS OIL DAILY. WHEN ALL 150 ETHANOL PLANTS ARE RUNNING THE OUTPUT WILL BE LESS THAN 10 PERCENT INCREASE IN GASOLINE STOCKS. THAT AINT MUCH.SAY 500,OOO BARRELS A DAY?

MEANWHILE ONLY ONE STATE IS GETTING ITS S**T TOGETHER,CALIFORNIA. HYDROGEN AUTOS MADE BY HONDA AND TOYOTA (WHERE IS GM FORD) ARE BEING AVAILABLE FOR ONLY CALIF.

WE ARE LIKE A CRACK ADDICT ADDICTED TO CRACK. THE ONLY WAY TO GET OFF IS TO QUIT. CALIFORNIA HAS ITS S**T TOGETHER AND IS TRYING TO DO THAT.

YOU DONT HAVE TO BE A ROCKET SCIENTIST  TO FIGURE THAT. WHY DOESNT WASHINGTON PASS A BILL TO MAKE IT HAPPEN IN OTHER STATES.  WE ARE KILLING OURSELVES WHEN THERE IS A SOLUTION. HYDROGEN USES NO OIL AND DOESNT POLLUTE.SIMPLE SIMON

PROBLEM SOLVED....NEXT?? 

 Hydrogen cannot be produced in quantity without using huge amounts of energy (hydrolysis) i.e you can't mine or drill for hydrogen, you have to split the H2 from the O in water.

 If you use fossil fuel to generate the electricity to make the hydrogen you are just shifting the pollutants from the vehicle's tail pipe to the power plant smokestack.

 At the moment the only country that may be able to solve this problem in the near term is Iceland, which has bountiful geothermal and hydroelectric capacity.

 There is also the problem that the only type of fuel cell currently practical for motor vehicle use requires Platinum as a catalyst and thus is far more expensive to produce than conventional engines.

 However the same shifting of emissions occurs with Ethanol production so I agree it is not a solution to the woes of the oil economy at least in the near term.  

"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock

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