Was on the news today, existing use of corn for ethanol increased the price from $1.50 to almost $9.00 a bushel, so even at $4.00 gallon for gas, these companies say they will lose money. Comments were also made that the demand for corn also increased the price of corn food products such as milk and beef anywhere from 100-500%. The price of a gallon of milk sure as doubled in the diary state, cheese and beef, forget it.
What they didn't say is what will happen to the existing plants if the price of gasoline keeps on dropping, in supply and demand economics, if these plants go bankrupt, that would cause a huge surplus of corn. And if that happens, we could again afford to eat. Or a better use would to make corn squeezeings.
Can only wonder what genius thought the price of corn would stay the same, but even the skeptics didn't expect a 600% price increase.
What else wasn't reported is exactly how much per gallon of ethanol is being subsidized by the government. Our governor is pushing to make all gasoline sold in the state 10% ethanol. Was speculated if Obama wins if our governor would get some key position in Washington, one expert said, I don't think so. Many vehicles on the road were not even designed to run on ethanol, yet another problem.
For most people, they work for a fixed wage, you don't like it, go someplace else only to be offered the same or even a lower paycheck. For a guy in business running a service shop, has fixed cost (determined by the banks and the government) plus tacks on a couple of bucks per hour for his labor. If he has a competitor, has to lower his rates to stay in business.
A family farmer could not start this corn thing and get rich, matter of fact, most have been put out of business by extraordinary high property taxes. But somehow the corporations were able to buy this farm land at low or foreclosure prices, hire a couple of illegals and make a goal out of it. Our state has a policy where if a business that has three or less illegals, state won't bother them. But even at that, these corporations could not add ethanol to gas unless they got EPA approval, somehow they bypassed many of the vehicle manufacturers much like the EPA has approved of many refrigerants based on how safe they consider this refrigerant to be. But not on if it's any good for your vehicle or not.
Price of corn never had anything to do with how much it cost to produce it with a fair profit attached, was always a supply and demand commodity. Some government control was introduced if the supply became to great, to pay farmers not to produce, but that was intended to set a minimum price. No controls were introduced to establish a maximum price, if a family farmer had a bad year due to floods or drought, had to buy corn at skyrocket rates to feed his stock, this also broke many a farmer.
Another government thing that bothered me has these farms now are immune to the EPA and DNR, they can do anything they want, they are also avoiding the long standing crop rotation rule. The corn roll is history with cultivation for weed control is also history, just dumping a wade of chemicals on the fields, wonder how long that will last? Those that tried in in the past using ammonia hydroxide ending up with fields harder than concrete. Course that ammonia in the air wasn't too good for your lungs, but what the heck, illegals are in the thick of it.
This may lead one to believe that our representatives are not representing the major of the people, but only the few, not only in corn but in other energy sources and one can only assume that they are getting a nice piece of the pie.
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