Posted on 07/18/2008 5:43:35 AM PDT by TigerLikesRooster
As Price of Grain Rises, Catfish Farms Dry Up
By DAVID STREITFELD
LELAND, Miss. — Catfish farmers across the South, unable to cope with the soaring cost of corn and soybean feed, are draining their ponds.
“It’s a dead business,” said John Dillard, who pioneered the commercial farming of catfish in the late 1960s. Last year Dillard & Company raised 11 million fish. Next year it will raise none. People can eat imported fish, Mr. Dillard said, just as they use imported oil.
As for his 55 employees? “Those jobs are gone.”
Corn and soybeans have nearly tripled in price in the last two years, for many reasons: harvest shortfalls, increasing demand by the Asian middle class, government mandates for corn to produce ethanol and, most recently, the flooding in the Midwest.
(Excerpt) Read more at nytimes.com ...
So why not use the empty catfish ponds to grow that species of algae that yields 10,000 gallons of diesel fuel per acre?
LOL! I will never be able to order one again.
I heard of an experimental farm that had come up with a mutually productive process that was almost independent.
To start with, they raised pigs. The fermented pig manure was put in a closed pond where it both grew algae and catfish. The algae was harvested along with the catfish for use both as pig food and fertilizer for crops. At each stage, they got out of it much more than they put in, including methane gas for energy.
The end result was that they produced pork, catfish and produce for sale, their water stayed pretty fresh with no contaminant build up, and their external expenses were minimized.
Alcohol doesn't contain any octane.
Octane belongs to a class of compounds known as alkanes, or straight chain hydrocarbons, or aliphatic hydrocarbons. The oct in octane means it has 8 carbons. Methane has one carbon. Butane has 4 carbons. Decane has 10. Ethane has 2 carbons.
You use the same prefixes to name the various alcohols. Methyl alcohol or methanol has one carbon. Butyl alcohol or butanol has 4 carbons. Octyl alcohol or octanol has 8 carbons. Ethyl alcohol or ethanol has 2 carbons
Now if you make alcohol with grain or sugar, you get ethanol. Wood yields methanol. Switchgrass would yield butanol.
On a volume to volume basis, butanol has about the same BTU content as that hydrocarbon blend known as gasoline while ethanol has about half the BTU content of gasoline.
But, alcohol is an oxygenate and contains oxygen. That oxygen in the alcohol makes it burn hotter/cleaner.
But, when you burn alcohol, you get formaldehyde as a by-product.
That would work if he had the acreage. Auquaculture can be a small acreage operation though.
If investment funds (I am referring primarily to commodity index funds buying futures as an inflation hedge) demand to own more contracts the supply can only be increased by finding someone to sell them those contracts – generally at a higher price.
In 2003 commodity index funds had $13 billion invested in commodity futures markets. By the end of the first quarter of 2008 that amount had swelled to $206 billion dollars – a twenty fold increase in five years. Estimates are that in the first half of 2008 about $1 billion dollars a day of new investment dollars were flowing into commodity index funds.
The “buy and hold” strategy of commodity index funds amounts to a virtual hoarding of food and fuel using commodity futures markets. As prices move higher many smaller food exporting countries begin to limit exports of food and fertilizer, which adds to the spiral in food costs.
I am NOT an advocate of barring or limiting any participant to the marketplace as long as they are abiding by the rules. That is a dangerous slippery slope, and speculators do help provide liquidity. IMHO Congress needs to focus their resources on steps to improve basis convergence between cash and futures markets and to ease cash flow needs on the operating budgets of true hedgers in funding margin requirements to carry true futures hedge positions. While it is true that speculators rarely are involve in delivery, if their long futures positions are holding deferred futures at a big premium it will often distort nearby futures and cash relationships.
The day will come when commodity index funds take their lumps, just like dot.coms and ridiculously inflated residential real estate were bubbles that had to burst. Until then the funds will be a major force in high commodity prices and volatile market moves.
When the day of reckoning comes – and it will -- it will be hard for animal feeders to compete with heavily subsidized ethanol producers.
Risk management is not the same as risk aversion. When markets get completely out of kilter there is opportunity to take calculated risks. I opted to forward contract less than half of a normal production. Even if I had been hailed out we would have had no trouble buying the grain needed for harvest time delivery against our contract well below our contracted price. If we had no production and prices were higher than our contract we would have taken a hit – some of which hopefully would have been absorbed by our crop insurance. That is why we would never forward sell over half of a normal expected production.
I would concur that very little grain was sold at the highest prices. It never is. A lot would have been sold on the way up. That which wasn’t is probably still being held waiting (hoping) for prices to go back towards the highs.
Ain’t globalism grand. I’ll take my catfish with the adulterated heparin side dish.
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