It is not the mandate of ethanol production that is fueling the problem, it is the government subsidies running up the price of corn, causing land normally used for other grains to be used for corn, and in turn the loser supply of THOSE grains caused the price of THEM to increase in turn.
Not quite right. The price of corn as risen way past a level where subsidies would kick in, and in fact, corn farmers are not being directly subsidized. What is driving up the price corn is demand from the ethanol producers.
True, that demand is artifically driven by government mandates. But the point is that corn itself is NOT being directly subsidized these days, and hasn't been for a while now.
There are several remarkable things about this entire episode. First...the Brazilians...who are the “kings” of this biofuel stuff...years ago discovered that sugar beets were the best product to produce the fuel. After planting the beets...there is little to do but wait until harvest season, and the process to get fuel out of the sugar beets is a more productive process...than using corn.
Second...for farmers have sat there complaining about the profit margin of agriculture in America. So now...this year...with everyone demanding corn...the price has soared. It will be a record turn-out and farmers will take home vast sums of money...to spend on their mortgage, their new farm equipment, and fixing up the house for mama.
Third...alot of guys who used to take the government money not to grow anything...aren’t taking this year. They probably won’t take it next year, and I’m betting that this entire game has come to an end. If you can make twice as much on growing corn...why wouldn’t you do it?
Fourth....every country on the face of the earth...with the exception of North Korea....has the ability to grow enough corn and food to feed their population. Sadly....a bunch of fools have rendered their agriculture program null and void....Zimbabwe comes to mind when I mention that. The idea that America is the bread-basket to the world....is a farce. Only because of mass incompetence in the world....are we selling all of these products and making profit off of them.
Finally...at the end of the day....we still have a fuel issue and ethanol is the eventual end-answer. We can’t avoid it. With oil at $117 a barrel...the idea of using our agriculture program isn’t that stupid. And when oil hits $150 a barrel, which it will....this simply makes more sense.