Posted on 04/29/2008 11:34:17 AM PDT by JZelle
They don't have enough to eat. Five people are dead in Port-au-Prince, Haiti, after a week of food riots. Unions in Burkina Faso have called a general strike to protest the high cost of grain.
Food riots have rocked Egypt, Cameroon, Indonesia, Ethiopia and other nations. In Manila, police with M-16s have supervised the sale and distribution of subsidized grain. Hoarders have been threatened with life imprisonment. In Thailand and Pakistan, troops are guarding fields and warehouses. In Egypt, the army has been called out to bake bread. Even in the United States, a run on rice caused big-box retailers Sam's Club and Costco to limit how much consumers can purchase per visit (though the cap is extremely generous — each customer can buy four 20 pound bags of rice per day at Costco).
The inflation in food prices worldwide — prices have soared 83 percent in the last three years, according to the World Bank — has a number of causes. Certainly increased demand from India and China — nations that until quite recently maintained hundreds of millions of people at subsistence levels — is part of the explanation. The Chinese and Indians are eating better, but that puts additional pressure on supply.
And our good friends at the Organization of Petroleum Exporting Countries can take a bow. The oil sheiks and that great tribune of the poor, Venezuela's Hugo Chavez, are doing their part to plunge millions of poor people around the globe into starvation by artificially boosting the price of oil (which is required to grow and transport food).
We in the United States and the European Union are not blameless. Not by a long shot. In our search for cleaner energy we jumped aboard the "biofuels" bandwagon.
(Excerpt) Read more at washingtontimes.com ...
“..We in the United States and the European Union are not blameless. Not by a long shot. In our search for cleaner energy we jumped aboard the “biofuels” bandwagon...”
We need to back off ethanol made from food grains.
A perfect storm generated in part by Congress’ inability to shake off it’s blinders regarding energy. We’re doing exactly the wrong thing, suppressing energy production in the oil fields, the coal fields and in nuclear power and at the same time promoting “green” solutions which promote market distortions in the agriculture industry.
Thanks Congress. /s/
Way to go, Nancy! Way to go, Harry!
If we were directed from Washington when to sow and when to reap, we would soon want for bread." -Thomas Jefferson
But hey, we’ve got a global warming CRISIS!!! So what if a few people starve? We’re SAVING THE PLANET!! (Sarcasm off.)
regards - red
Who’da thought!
Envirowackos caused this. Example of how liberal laws fail.
Does anyone truly think the cause of food riots in the Third World is that these poor peasants don’t get enough corn starch in their diets?
Hey liberals, I’ve got the answer... LET US DRILL FOR DOMESTIC OIL AND BUILD NEW REFINERIES!!
Ignore, for a moment, the value of grain against the dollar.
Is the price of corn or rice up against copper? Gold? Oil? Nickel? Lead? Cement? Timber?
Does anybody remember a little piece of history known as the “Whiskey Rebellion”? The Whiskey Rebellion, which came to a head in 1794 in Pennsylvania, was a revolt by the farmers on what was then the American west. Corn was a plentiful crop, grown on the newly opened farmlands, but there was a little difficulty - getting the agricultural product to market. So the decision was made to make whiskey out of the corn, good old “white lightning”, and ship the much more valuable product to eastern markets. This ran into a direct conflict with the powers that wanted to collect a tax on the product, partly for revenue, and partly to slow down the huge influx of cheap liquor, which was creating its own set of social problems. There were a lot of abrasive encounters, before this issue was put somewhat under control. But the custom of a long-term scoffing at the law was established, with the “Revenooers” coming in and busting up the illegal product, and the moonshiners taking the backroads route to the markets while evading the authorities.
And now the government is subsidizing the production.
“We need to back off ethanol made from food grains.”
It’s kinda late to come up with this suggestion. I don’t think the farmers will go for your idea.
“Envirowackos caused this.”
http://www.spiegel.de/international/europe/0,1518,547609,00.html
The same envirowackos are coming to their senses before we do.
We could stop making ethanol today and it’s not going to do all that much to drop food prices.
Yea, who's dumb enough to believe that restoring the 1/3 of the corn crop (now going to ethanol) back to use as food would have any effect on prices. It's not as if the price of food is greatly determined by the supply of food or anything. And it's ridiculous to think that without massive subsidies on corn for ethanol, farmers would revert to growing all the other grains now in short supply.
Hmmm, let’s see, at the end of 2005 corn was $2 a bushel. We used around 14% of that for ethanol. The crop that year was 11.1 million bushels. Now corn is $6, we now use 25% of the corn crop, and the corn crop was 13.1 bushels in 2007.
We use 10% more corn for ethanol than we did in 2005. The corn crop was about 18% better than in 2005. Yet corn has tripled? How exactly?
Because the main driver is exports to the countries that are industrializing, like China and India. You could stop making ethanol today and I guarantee you corn is not going to drop back to $2.
Ta-da.
People just want to be deliberately ignorant of the price spike in ag inputs and the collapsing value of the US dollar. Instead, they want to point to ethanol and blame it for the rising price of wheat (despite abundant US harvests), rice (again, a good harvest and abundant carry-out last year), malting barley (most of which is grown under contract, not a free-for-all) and hops.
There’s no end to the deliberate stupidity on the part of people about ethanol. Sure, go ahead and ban biofuels now. It won’t feed the third world or bring prices back down to 2004/2005 levels and more than oil is going back to $35/bbl.
They also want to ignore the antics of hedge funds and other sources of non-tradition “hot money” chasing ag commodity prices in the futures markets.
Ag commodity prices could come down a bit - if the Fed indicates that the agenda of cutting the funds rate is over. If the Fed comes out tomorrow and do not cut rates, you’re going to see a rally in the US dollar and a rapid correction in ag commodity prices - possibly until the planting progress reports or the August crop status reports. Look at the price action in AG, DE, POT, MOS, et al today. Big profit taking. If the Fed freezes rates tomorrow, you’re going to see more down action.
If the Fed gets hawkish in their statement (ie, the indicate that now they’re worried, really worried, about inflation), then commodity prices in general are going to get kicked in the head for 10% really quickly.
1) Farmers aren't subsidized to grow corn, and
2) the only "nutrient" removed from corn by its use as an ethanol feedstock is starch.
So, in order to get ethanol production in the US from corn, the US by law of Congress:
1) Mandates use;
2) Subsidizes blenders;
3) Applies tariffs to keep out lower cost imports.
The largest recipient of the ethanol blending credit is BP, a foreign oil company which owns no farmland and raises no corn.
The spent corn corn makes a more efficient livestock feed than the whole corn did originally.
1) Farmers aren't subsidized to grow corn
Then what's this guy talking about?
A 51 cent a gallon federal subsidy to corn based ethanol doesn't subsidize farmers' corn growing activities?
2) the only "nutrient" removed from corn by its use as an ethanol feedstock is starch.
Which happens to be the food part. And isn't that wort mighty tasty after they distill the alcohol away, real low calorie too, since all the energy (starch) has been removed? And don't forget that stalks and silk make wonderful Halloween decorations.
No, the price of food is not, in the majority, determined by the supply of food.
It is determined in the commodities trading pits in Chicago.
You might want to mosey on over to the CBOT’s web site and nose around in there and learn something.
Here’s the rough rice Jul ‘08 contract:
Now, what caused the price to rocket up this spring? Fundamentals? Nope. Not at all. Rice crop from last year was already in.
Planting intentions report of 3/31? No, because the price started going up in a big way before 3/31.
So what happened in the planting intentions report on 3/31?
Let’s see:
http://www.usda.gov/nass/PUBS/TODAYRPT/pspl0308.pdf
Scroll down to page 11. Lookie there.... 100% total intentions compared to last year.
So how much rice have we had on hand from March of 2007 to March of 2008, ie, during this time of absurdly rapid rice price inflation?
Here’s the answer:
http://usda.mannlib.cornell.edu/usda/current/RiceStoc/RiceStoc-03-31-2008.txt
Summary: There’s about as much rice in storage (on farm and off-farm) as this time last year.
So why the huge price increases?
The futures markets, driven by export restrictions in many countries that are traditionally big exporters of rice (and same situation in wheat), coupled with the declining dollar, and the huge influx of of hedge fund money into the commodities futures markets, have driven US ag commodity prices rapidly upwards since last September.
If there is someone to blame for increased rice & wheat prices, it is in majority someone or something other than the US farmer and “ethanol.” In corn and soybeans, perhaps as much as 20% of the price of these commodities are driven by biofuels, but the majority is still export restrictions by producer countries (not the US), the futures markets, a lot of “hot” money flooding into the futures markets and the declining dollar.
Just as you will never see $35/bbl oil until you see a MUCH stronger US dollar, you’re not about to see $2/bu corn.
Matter of fact, I can go out on a limb here and make a prediction: I don’t think you’ll see $2/bu corn again unless you see $35/bbl oil again. Modern ag lives and dies on the price of diesel fuel. Diesel fuel (off-road, dyed #2) was less than $1.00/gallon in 2000.
Today, it is $3.50/gallon and screaming higher.
Fertilizer (11-52-0) used to be $230/ton in 2000.
Today, it is $1100/ton and going higher every week.
Neither one of those input prices is being driven by ethanol. They’re being driven by China, period.
And what direction do you suppose wheat, soy beans, and just about every non-corn crop has gone? Wonder where the land to grow all that corn came from. Demand for exports is up? Great! Why don't we sell to these eager consumers and buy oil? Maybe even drill for it.
Food crops are a lousy source of fuel no matter how you slice it. And only shills for the scam could claim that 25% of a supply is insignificant, then follow it up with the non non sequitur that just because a very low price is dead and gone, we shouldn't stop a massively stupid and wasteful practice.
1. No, that isn’t a subsidy to farmers.
That’s a subsidy to ethanol refiners who sell their product to gasoline refiners, or the gasoline refiners who blend the fuel.
That money, which is a tax credit, goes into the pockets of ethanol “refiners” or the blenders.
2. You’re obviously unaware of the real facts of what the result of corn after fermentation is. Let’s start with basic food science:
There are proteins, sugars, starches (which can be broken into sugars), fats and indigestible (ie, fiber) components in foods.
The fermentation doesn’t do anything but take out the starches. All the other components are still there.
The resulting mash after ethanol fermentation is known as distiller’s grains. They are sold as either “WDG” or “DDG” (wet distiller’s grains or dry distiller’s grains) to feedlots, dairies, etc, where they are fed to cattle.
They’re lower in carbs, but higher in protein and fats (per kg or lb) than corn, cracked corn or steamed/flaked/rolled corn.
So what is the feeding result? Quite good, in fact:
http://www.extension.iastate.edu/Publications/IBC19.pdf
In fact, distiller’s grains remove a problem in feeding corn to cattle, called ‘acidosis.’ You can Google cattle” (or “ruminant”) and “acidosis” and see what I’m talking about, if you’re at all curious.
Grain exports from the United States is up, we are exporting more corn and wheat than ever before and while soybean exports is less than the year before they are up from what they was two or more years ago.
Nobody is starving because of America.
The land for the increased corn crop came predominately from rotation delay to soybeans. There were also acres pulled out of cotton in some southern states.
You can look this up in the NASS for field crops, under acreages.
While people have little trouble digesting starch, ruminants have a terrible time with it (and corn is, after all, a livestock feed). Overfeeding of corn can cause acidosis leading to maladies such as ulcers, bloat, liver abscesses and the like. Removal of the starch allows a ruminant to digest the other nutrients (the main ones being protein) much more efficiently.
http://www.nass.usda.gov/Charts_and_Maps/Field_Crops/riceprod.asp
Soybean production dropped only 15% from 2005 to 2007 while the price has nearly tripled. Competition for land doesn’t explain that nor does biodiesel production either.
Take the subsidy and credits away from ethanol. If it’s still profitable to make ethanol and sell it after that, well unfortunately that’s the free market.
Ethanol is a good oxygenate, and if mixed in the right proportions does increase mileage. Any way to stretch our fuel supply is a good thing.
Thanks for the input guys.
I’ll add that the farmers hate the fat too. What they really want is protein. The future of biofuel is separation of the oil protein, and starch/sugar. The oil goes to food or biodiesel, the pure protein to livestock, the vital steroids to pharmaceutical industry, specialty starches to the food industry, and the rest to ethanol, butanol, ester fuel, or some other chemical.
Things are going to change radically the next decade or so in biofuel production.
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