Lincolnite

By the nature of the business, agriculture, in a lot of ways, has to be about short-term gains. Don’t know if it’s going to rain this year. Don’t know if there will be an early freeze. Don’t know if some politician will impose a grain embargo or play some other political game with global markets. It’s sort of a mindset that you have to get what you can get when you can get it.

As for chasing ethanol being a short-term deal, many, many farmers and their commodity organizations have invested millions and millions from their own pockets over many years to help develop ethanol through R&D;, and then through financing the ethanol plants. I certainly don’t begrudge them for wanting to get the best return possible from all their investment.

If there is one thing that a presidential candidate can talk about that will get my attention its fuel prices.  You want my vote?  Fix em.  Health care is good and all, foreign policy is fine and dandy but if there’s something that effects ME right here, right now, its fuel prices.

Right now, farmers are getting rich.  I mean filthy rich because they can’t grow the stuff fast enough.  IMO, its what’s keeping a majority of farmers in business.

If ethanol isn’t the answer then what is?

If you don’t like the gas prices, don’t buy it!  This might be a shock to some (and I know in reality, I’m a bit naive in saying this) but gas isn’t a life necessity.  It doesn’t rank up there with food, water, shelter, etc.  Why should the government, whom most Republicans around here want less of, intrude on this?  It should be on the radar, but not priority one.

Gas isn’t a life necessity?

You’re serious?

Except for the fact that a lot of farmers this year are going to plant LESS corn even though there’s way MORE demand, just to drive prices up further. I know it’s sacriledge in a state like Nebraska to criticize the farmers, but they will end up paying in the end for this get-rich quick things.

Let’s say Ethanol could improve your mileage by 10% (it doesn’t for anyone that I’ve talked to). To make it financially viable, the price needs to be at least 10% less. It’s not. It’s not helped gas prices come down one bit, and - hello - while we’re taking it in the shorts at the gas pumps, have you paid attention to the price of groceries? We’re getting hit hard with a one-two punch due to corn, and it’s doing virtually nothing to help the gas problem.

We need to act as though we are going to drill in Anwar or North Dakota or wherever for more oil in North America. If we show all the signs of moving forward, even if we never turn an ounce of earth with a shovel, OPEC has to take notice and stop holding their oil hostage. If they think we can get it elsewhere, prices will come down. It’s simple economics.

Moreover, we need to build some actual refineries somewhere. There haven’t been new ones for decades. Look what happened when many went down via hurricanes. There’s actually plenty of oil, but you need refineries to turn it into gasoline. We’re at or beyond capacity and none are being built.

There are many things we could due to curb our demand by even a few percentage points, and more things that politicians and gov’t officials could do to get more domestic oil, build refineries, harness more wind and solar power, etc. All should be taken into consideration and acted on. Let’s get some more fuel efficiency in our cars. I just don’t think corn is the answer, even though we’re a farm state. Please, someone build a flux capacitor!

Listen, I really don’t care where it comes from.  As long as the prices go down.  I don’t care if its oil, corn, 1.21 jigowatts of energy, or freakin everyday garbage.  Just as long as the prices go down.  You want my vote, come up with a plan to drive the price of gasoline down or speed up this process of “alternative fuels”.  Make it affordable for john and jane q public to buy a hybrid car.  Give incentives to the automakers to quickly come up with a car that is dependent on something other than oil.  Invent the “Model T” of non-gasoline automobiles.  Do something!

But what I do know is that Nebraska is getting rich right now on this ethanol boom.  We’re 2nd in the nation, right behind Illinois in ethanol plant production.

How can that be a bad thing?

Explain to me how I get to Omaha for a doctor’s visit today without gas?  I agree with D.M.B. that it’s a necessity. 

I’d much rather take a commuter train to work or even to Omaha but I doubt that’ll ever happen in Nebraska.

I hear a lot of people saying that we need to build refineries but the regulators are tying their hands. I hear a lot of that coming from the Republican party especially. I wonder why from 2000 to 2006 when they held the majority in both houses of Congress and the White House why we didn’t get a ton of refineries built. If regulations are stopping you, pass laws and change them.

Regarding the use of ethanol…so what good would it do for the price of gas to come down if the prices for groceries (another necessity in my mind) and other items go up? We’re still screwed.

Biofuels may hold an answer, but corn doesn’t. It takes away corn production for our food, and makes corn more expensive (as in feeding livestock). Ethanol doesn’t increase gas mileage, so even if you save a few pennies at the pump you lose it while driving. We also face the issue of how chemically intensive corn production is, thus damaging our environment, and incurring other costs down the road.

I agree with Fletch - I’m not sold on corn as the answer, and I think Nebraska will eventually regret jumping on the bandwagon.

Farmers are doing well. It’s about time. Getting filthy rich? Not hardly. Input costs are through the roof (check the price of diesel fuel lately? fertilizer is petroleum-reliant too). Farmers did the legwork and invested their own money to help develop the ethanol industry. Now they’re reaping the rewards. In most any other industry they would be lauded as entrepreneurs. But it’s a lot more than ethanol. These times really are a perfect storm—ethanol, drought in other parts of the world, devalued dollar, China emerging as a huge market, etc.

“Except for the fact that a lot of farmers this year are going to plant LESS corn even though there

I guess indoor plumbing isn’t a necessity too?

Welcome to life on the range…

Oh give me a home, where the buffalo roam…

Don’t get me wrong - I’m all for farmers doing well. I’m also okay with them planting and going where the money is. I do fear for them going “all in” on the Ethanol gravy train as I think, in the end, they will be burned and financially hit harder than those that are just paying at the gas pumps.

Ethanol could be relevant, but in the long term won’t in the least imho.  First the way we subsidize it and grow it is just a way to placate the nation’s farmers.  Corn is one of the most inefficient ways to produce ethanol ... sugar cane and beets are much more efficient.  There’s going to be an ethanol bubble down the road b/c so many plants are getting in so late.  Ethanol will be forced on it by any means possible though b/c the lobbyists will ensure it.

I hate to admit it.  I agree with Mr. McCain.  Let the market do it’s job. 

The biggest subsidy being given is to the blender of the ethanol (read that as George W.‘s oil buddies).  The farmer is also getting good prices but he is not reaping nearly the profit that it appears.  Land cost, fertilizer, diesel, seed, agronomy products have all skyrocketed.

Corn prices have risen dramatically because of other factors, it is not all ethanol.  Oil prices drag the price of soybean oil being used as bio diesel blend.  That starts the competition for acres between soybeans and corn. 

Then this past year the world was very short of wheat.  This caused record high wheat prices.  Wheat prices were at new records.  Not new records by a little bit but by more than double the previous highs.  This set up even more competition for planting acres.

When you put government interference into this kind of market you get explosive results. 

So, the farmer is making enough money to plant again this year.  For the first time in a long time he is making enough to put a little away.  Good for him. When the bubble bursts, he will need it. We ask him to borrow money and throw it in the ground every year and hope it rains.  His risk at these new price levels is huge.

In our little corner of SE Nebraska we have seen the Mead ethanol plant and the grain elevators at Alvo and Ashland file bankruptcy this past six months.  The risk the grain handlers and processors are taking are also huge.  Can you imagine how much money is at risk everyday in Lincoln Nebraska.  There is more than 20 million bushels of grains storage capacity at the big ugly concrete silos in Lincoln.  With $10 wheat, $13 soybeans, and $6 corn figure it out.

So…...enough of that for a Friday afternoon.  I think it is Miller time.