Re: Ethanol too expensive, new processing plants on hold


"Hachiroku ????" <Trueno@xxxxxxxx> wrote in message
news:zSKxj.8794$JU3.5393@xxxxxxxxxxx
The price of corn has risen so sharply due to the demand to produce
ethanol

If you adjust corn prices for inflation, they are still at depression era
levels. And actually the recent rise in the price of farm commodities has
more to do with the falling value of the dollar than with corn diverted to
ethanol. Crops that have never been used to make ethanol have seen even more
spectacular rises in prices. My contract price for peanuts increased by over
30% this year (but still only marginally profitable). Unadjusted soybeans
prices are at historic highs (although when you adjust them for inflation,
they are still well below the highs of 35 years ago). I've never seen wheat
higher (again unadjusted for inflation). Even cotton prices are looking
better for next year, after several years of decline. Around my area people
are moving away from corn in droves. Corn acreage will probably be down 30%
or more this year (in my area). The grain dealer I do business with has been
trying to lock up by pitifully few acres for weeks. The fact is, when you
adjust corn prices for inflation, we are still below depression era prices.
On the other hand - the cost of input has risen even more spectacularly than
the price of the crops. Fertilizer is up astronomically. Diesel fuel is at
an all time high (even adjusted for inflation). If we have another year like
last year (drought problems) more than a few local farmers are likely to go
under. Americans have gotten used to low food prices. And even now food is a
bargain. How much do you think the wheat in a loaf of bread actually costs?
Maybe $0.30....even at today's very high prices for wheat.

Ed


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