High Demand Causes Surge in Corn Prices (ethanol/energy-related)

Las Vegas Sun ^ | 12 Jan 07 | Libby Quaid

[xzins]

High Demand Causes Surge in Corn Prices By LIBBY QUAID ASSOCIATED PRESS

WASHINGTON (AP) - Ethanol plants and foreign buyers are gobbling the nation's corn supplies, pushing prices as high as $3.40 a bushel, the Agriculture Department said Friday.

Farmers haven't seen prices this high for more than a decade. The monthly crop report forecast even better prices than in December, raising the estimate 10 cents to $3 to $3.40 a bushel.

Robust prices have made corn more expensive for livestock feed and as food for people. But a drop-off in those uses was more than offset by growing demand from foreign markets. Exports are forecast to claim 2.25 billion bushels of corn from last year's crop, up from last month's forecast of 2.2 billion bushels.

Overall, the corn crop came in at 10.5 billion bushels, slightly under last month's forecast of 10.7 billion bushels. Anticipated yields were 2.1 bushels lower per acre, and the area planted and harvested was slightly smaller than expected.

The amount of corn used for ethanol, forecast at 2.15 billion bushels, was unchanged from last month.

Nationwide, supplies of corn are expected to drop to 752 million bushels, a drop from last month's forecast of 935 million bushels and a steep decline from last year's supply of 1.967 billion bushels.

[quack]

Not only that,but it needs water.The corn crop in Alabama was a disaster last year as most of it burned up from the drought.Farmers just cut it for hay.

[Calpernia]

I agree. And I support that. What I'm trying to emphasize here is that the new Premise Registration also has legislature requiring plants to be registered also. The big ag companies are trying to control the food. We aren't going to be able to use heritage seeds unless this is stopped.

[nascarnation]

We're in a pretty rural area and appropriately prepared for defense.
Given the location though I don't expect much action.
The closest WalMart is 5 miles away, that would be the target objective of any food looters I think.
Cleaning the shelves of "Sam's Choice" cookies, etc.

[xzins]

I don't understand.

How could they stop my planting something that I own and that pre-dates them by the age of plants on the earth?

[Calpernia]

The farm bill has over 10,000 documents and pet projects. We purchased 1000s of pages through the FOIA. We are going to be hit with new regulations on planting seeds. It is already being introduced in the European countries.

Once everyones 'premise' is registered, that comes with onsite inspections.

In order to plant, you will have to be licensed and only plant registered seeds.

I'm calling my friend now. I will get into our database and pull the docs. Give me a few.

[Uncle Ike]

" We're in a pretty rural area and appropriately prepared for defense. "

Sorry -- didn't mean to sound like I was making fun of you, personally....

This is the "nightmare scenario" that keeps me awake nights -- very few people have thought things through to realize how close we are to the edge, civilizational-collapse-wise.

And the scary thing is that this collapse can be triggered by any number of things which could upset a pretty precariously balanced equilibrium...

[q_an_a]

In addition, this sell off of corn is helping reduce the HUGE stocks from the previous years.

[Balding_Eagle]

They are the ones that our grandparents and great-grandparents used to use....natural seeds for natural plants.

We didn't grow that stuff even when I was a kid in the 60's. Those seeds only yielded 50 to maybe, at most, 100 bushles per acre.

Today, on the very same ground, with similar inputs of fertilizer, and less inputs of fuel and herbicides, they now grow 150 to 250 busheles per acre.

This isn't to denigrate heritage seeds, but the idea that they were some kind of magical seed is silly.

[GVnana]

Beet sugar is a LOT easier to grow.

[Calpernia]

This is the pilot program being tested in Europe for Seed registration:

http://www.fas.usda.gov/gainfiles/200611/146249591.pdf

Here is the "Growers' District Authorization Act" being introduced state by state and seed by seed.

 
 

STATE NATIONAL HARMONIZATION PROGRAM TEMPLATE

FOR

SEED {INSERT TYPE}

November 30, 2006 

MEMORANDUM OF UNDERSTANDING ({INSERT NAME OF STATE OR OTHER ENTITY})

BETWEEN THE

{INSERT NAME OF STATE OR OTHER ENTITY} (COOPERATOR)

AND THE

UNITED STATES DEPARTMENT OF AGRICULTURE (USDA)

ANIMAL AND PLANT HEALTH INSPECTION SERVICE (APHIS)

PLANT PROTECTION AND QUARANTINE (PPQ) 
 

ARTICLE 1 – PURPOSE 

This {INSERT NAME OF STATE OR OTHER ENTITY} provides for the cooperative participation between the parties to hereby establish, as a part of a State National Harmonization Program (SNHP) for seed {INSERT TYPE}, (1) minimum standards set by state authority for certification of seed {INSERT TYPE} in order to facilitate interstate shipment and export and (2) cooperation in pest management. 

The purpose of this {INSERT NAME OF STATE OR OTHER ENTITY} is to establish, as part of the SNHP for seed {INSERT TYPE}, harmonized standards to control the spread of disease through state certification programs for seed {INSERT TYPE}.  This SNHP for seed {INSERT TYPE} allows for uniform minimum phytosanitary standards that may enhance uniformity and quality in seed {INSERT TYPE} shipped between states; may lead to the enhanced marketing of high quality commercial {INSERT TYPE} grown in the United States; and may enhance international marketing of quality seed {INSERT TYPE} exported from the United States. 
 

ARTICLE 2 – AUTHORITY 

APHIS is authorized by the Plant Protection Act, Pub. L. No. 106-224, § 431, 114 Stat. 438, 451, (2002) to cooperate with other Federal agencies, the governments of foreign countries, international organizations or associations, states or their political subdivisions, farmer’s associations, and other persons to detect, eradicate, suppress, control, and prevent or retard the spread of plant pests or noxious weeds. 
 

{Insert State Authority, if so desired} 
 
 
 

ARTICLE 3 – DEFINITIONS 

      1. Seed {INSERT TYPE}:  potato plantlets, plants, stem cuttings, microtubers, minitubers, tubercles or tubers intended for planting. 

      2.  Line selected hill units:  tubers that have been taken from an identifiable production field and that have been developed through a series of plant selections, grow-outs, and reselections based on plant or tuber characteristics. 

      3. Limited generation system:  a scheme wherein eligible planting stock for each seed class is limited by compliance with established pest tolerances and a specified number of increases in the field. 

      4. Regulated pest: any pest that is controlled under the seed certification system of the cooperator. 

      5. Free of regulated pests:  regulated pests are not present in numbers that can be detected using appropriate sampling,  inspection, and testing procedures.   

      6.  Post harvest test:  winter grow-out or laboratory testing of harvested {INSERT TYPE} to verify that regulated pests meet applicable tolerances.

7. Certifying entity:  is the seed certification entity in each state.  This is the

exclusively recognized seed {INSERT TYPE} certifying entity for each state, as listed below: 

(INSERT STATE SEED CERTIFICATION ENTITY AND DEFINE STRUCTURE AND STATUTORY AUTHORITY) 
 

ARTICLE 4 – UNIFORM REQUIREMENTS FOR SEED {INSERT TYPE} CERTIFICATION 

The cooperating parties agree that seed {INSERT TYPE} may be certified by the cooperator or its designee, under the SNHP if: 

      1.  They are produced from a) tissue culture {INSERT TYPE} that are free of regulated pests or b) from other entry level materials such as line selected hill units or parent plants used in stem cuttings that are free of regulated pests; 

      2.  They are produced under a limited generation system; 

      3.  They have undergone at least two field inspections to ensure compliance with tolerances set forth in Annex 2 of this {INSERT NAME OF STATE OR OTHER ENTITY}; 

      4.  They are subjected to post-harvest testing for recertification; 

      5.  They are produced and stored in a cooperating state under the SNHP; and 

      6.  Interstate shipments and exports departing from the state are inspected by the Cooperator’s designated officials at the shipping point to verify lot identity and ensure compliance with all applicable phytosanitary requirements. 
 

ARTICLE 5 – COOPERATOR RESPONSIBILITIES 

A. The cooperating state with a commercial seed production industry agrees to: 

      1.  Designate Mr./Ms./Dr.—Insert full name as its authorized representative who shall be responsible for collaboratively administering the activities conducted under this {INSERT NAME OF STATE OR OTHER ENTITY}; 

      2.   Recognize seed certification entities for each state participating in the SNHP; 

      3.  Ensure that certification practices in their state conform fully to the requirements listed in Article 4 of this {INSERT NAME OF STATE OR OTHER ENTITY}; 

      4.   Require that the designated seed certifying entity maintains adequate records relating to all aspects of the certification regime, including records to enable trace-back of the certified seed to its field generation and parent material and to ensure lot identification;  

      5.   Require that any testing is performed using generally recognized diagnostic methods and protocols; 

      6.  Provide to APHIS a quality manual describing seed certification procedures, pest tolerances, and testing methodologies, together with mechanisms for ensuring compliance.  The quality manual shall consist of the most current certified seed {INSERT TYPE} standards for each certifying entity and a brief handbook outlining the various standards and protocols for disease testing; 

      7.   Implement {INSERT TYPE} pest management plans and quarantine programs consistent with those listed in Annex 1 of this {INSERT NAME OF STATE OR OTHER ENTITY}; and 

      8.   Require that certified seed produced within the state and offered for interstate and export sale meets the requirements of Article 4 of this {INSERT NAME OF STATE OR OTHER ENTITY}. 

B. The Cooperator agrees to require that in-state growers who purchase seed from outside the state provide or maintain adequate records verifying that such seed meets the requirements of Article 4 of this {INSERT NAME OF STATE OR OTHER ENTITY}.   
 
 

ARTICLE 6 – APHIS RESPONSIBILITIES 

APHIS agrees to: 

      1.  Designate Mr./Ms./Dr.—Insert full name as its authorized representative who shall be responsible for collaboratively administering the activities conducted under this {INSERT NAME OF STATE OR OTHER ENTITY}. 

      2.   Recognize the seed certification entity that is recognized by the Cooperator to certify seed {INSERT TYPE} under the SNHP if the state meets the requirements set forth in Articles 4 and 5 of this {INSERT NAME OF STATE OR OTHER ENTITY};    

      3.   Oversee the implementation of the federal pest management plans listed in Annex 1 of this {INSERT NAME OF STATE OR OTHER ENTITY}; 

      4.  Oversee the SNHP by reviewing records and audits performed by the Cooperator of certification facilities, procedures, and personnel to ensure conformance with the terms of this {INSERT NAME OF STATE OR OTHER ENTITY}. 

      5.  Provide additional declaration for international export by attaching such additional declaration to the federal phytosanitary certificate for seed {INSERT TYPE} from the Cooperator state stating that those seed {INSERT TYPE} meet the minimum standards established through the SNHP.     

ARTICLE 7 – STATEMENT OF NO FINANCIAL OBLIGATION 

Signature on this {INSERT NAME OF STATE OR OTHER ENTITY} does not constitute a financial obligation on the part of APHIS or the Cooperator.  Each signatory party is to use and manage its own funds in carrying out the purpose of this {INSERT NAME OF STATE OR OTHER ENTITY}.  Transfer of funds or items of value is not authorized under this {INSERT NAME OF STATE OR OTHER ENTITY}. 

ARTICLE 8 – SECURITY GUIDELINES 

When connected to the USDA, APHIS network, comply with the security guidelines as outlined in the USDA Cyber Security Manual Series 3500; including USDA Departmental Manual (DM) 3515,  “Privacy Requirements”, and USDA DM 3525, “USDA Internet Use and E-Mail Security”.  The Cooperator will not download any material (i.e., pictures, movies, or music files) bearing a copyright nor access any material defined as inappropriate in these regulations and directives. 
 

ARTICLE 9 - LIMITATIONS OF COMMITMENT 

This {INSERT NAME OF STATE OR OTHER ENTITY} and any continuation thereof shall be contingent upon the availability of funds appropriated by the Congress of the United States.  It is understood and agreed that any monies allocated for purposes covered by this {INSERT NAME OF STATE OR OTHER ENTITY} shall be expended in accordance with its terms and the manner prescribed by the fiscal regulations and/or administrative policies of the party making the funds available.  If fiscal resources are to transfer, a separate agreement must be developed by the parties. 

ARTICLE 10 – CONGRESSIONAL RESTRICTION 

Under 41 USC 22, no member of, or delegate to, Congress shall be admitted to any share or part of this {INSERT NAME OF STATE OR OTHER ENTITY} or to any benefit to arise therefrom. 

ARTICLE 11 – REVIEW AND AMENDMENT 

The terms of this {INSERT NAME OF STATE OR OTHER ENTITY}, in particular the seed certification requirements in Article 4, the pest management plans in Annex 1, and the pest tolerances in Annex 2, shall be subject to periodic review and amendment.  This {INSERT NAME OF STATE OR OTHER ENTITY}, including annexes, may be amended by mutual agreement of the cooperating parties in writing. 

ARTICLE 12 - TERMINATION 

This {INSERT NAME OF STATE OR OTHER ENTITY} may be terminated by either party upon 30 days written notice to the other party. 

ARTICLE 13 - EFFECTIVE DATE AND DURATION 

This {INSERT NAME OF STATE OR OTHER ENTITY} will be in effect upon date of final signature and will continue for five years from the date of signature. 
 

IF DEROGATION FOR THIS COOPERATOR IS APPLICABLE, INSERT THE FOLLOWING ARTICLE, OR SIMILAR LANGUAGE:

ARTICLE 14 

ARTICLE 14 – TEMPORARY DEROGATION 

Notwithstanding the requirements of ARTICLE 4.3 of this {INSERT NAME OF STATE OR OTHER ENTITY}, the tolerance for variety mix in {INSERT NAME OF STATE} will be [xxx].  This derogation will be in effect for a period of {INSERT NUMBER OF YEARS} years following the date of signature. 
 

ARTICLE 14 – TEMPORARY DEROGATION 

The requirements of ARTICLE 4.6 will not apply to {INSERT NAME OF STATE} for a period of {INSERT NUMBER OF YEARS} years following the date of signature. 
 
 
 

INSERT {NAME OF COOPERATOR} 
 

__________________________________________________

Insert {Name of Signatory}                        Date

Insert {Title of Signatory} 
 

UNITED STATES DEPARTMENT OF AGRICULTURE

ANIMAL AND PLANT HEALTH INSPECTION SERVICE

PLANT PROTECTION AND QUARANTINE 

__________________________________________________

Insert {Name of Signatory}         Date

Insert {Title of Signatory} 
 
 

ANNEX 1 

Federal Pest Management Plans 
 

1) Golden Nematode Management Plan 

2) Necrotic Virus Management Plan 
 
 

ANNEX 2 

Maximum Tolerances, Final Field Test 
 

Leafroll	Mosiac	Total Virus	BRR	Variety Mix
1%	2%	3%	0	0.5%

[Calpernia]

ping

[CottShop]

LOl LOL LOL- we'll be seeing reports such as "Corn traders see upcomming cold snap as a danger to product- Corn prices to rise above $3.00 per pound" or "Saudi corn growers forsee corn shortage 'sometime in the future' and decide to raise prices' or "Storm off the coast 'may' hit inland, corn prices soar"

The following link does not relate to this thread http://sacredscoop.com

[xzins]

You've got to help me here. Where is the offensive section(s)?

Thanks

[TKDietz]

They use sugar beets in France, but only produce a tiny amount of ethanol. They've done studies on using beets here and found that it would be much more costly than using corn in this country. Per acre ethanol yields can actually be higher than with sugarcane, but high per acre yields don't help much when it costs more to produce each gallon of fuel. Sugar beets are a picky plant that are really only commercially viable in a few areas of this country. Almost all sugar beets grown now are used for table sugar and other sweeteners. They're labor intensive to grow compared to corn and hard to harvest. Harvesting them can also be very destructive to the soil as they are big fat massive roots with really long tap roots.

I lot of people seem to think that the reason our ethanol producers use corn for ethanol instead of some other crop is because of some big conspiracy. That isn't it. If ethanol producers could find a better feedstock they'd jump right on it and American farmers would be more than happy to supply it. When they take costs into consideration, our climate and so on, corn is the actually the best thing we have for ethanol production at present. Bushels per acre corn yields have gotten really high, on up to better than 150 bushels per acre compared to only 40 or so a few decades ago, and the yields keep going up. Corn is chock full of starch and sugars. Ethanol producers are now averaging about 2.7 gallons of ethanol per bushel of corn with the more efficient plants getting 2.8 gallons per bushel. Brazilians are averaging something like 650 gallon of ethanol per acre, compared to only around 400 gallons of ethanol per acre of corn from the U.S., but of course we aren't on the equator and don't have millions and millions of acres where sugarcane grows well year around. We have less good land for sugarcane than we do for sugar beets and the climate in our sugarcane regions is not as ideal for sugarcane growing as the climate in the cane growing regions of Brazil. We're just limited in how much cane and beets we can produce and what little we do produce is already selling for a high price.

Corn is not a perfect fuel feedstock by any means. Our farmers and ethanol producers have improved yields and will no doubt continue to improve yields, but currently it takes almost two acres of land to supply one average American driver for a year. We're going to have to get to where we can supply several drivers per acre before any of these fuels that come from crops can make up a really big part of our liquid fuel supply. We'll soon have 20 million acres of corn devoted to ethanol production, and that will be enough top supply something like 11 or 12 million average drivers if they were running their vehicles on pure ethanol. That's a lot of land, but not that much in the grand scheme of things. We farm over 450 million acres and could be farming more. Before 20 million acres would supply a 100 million drivers, we'd have to see per acre ethanol yields increase such that an acre would supply 5 drivers. We'd have to go from a little better than 400 gallons of ethanol per acre to almost 4000 gallons per acre. We won't get anywhere close to that with corn, or sugar beets or sugar cane. We might get close to it with cellulosic ethanol.

Since you can go close to twice as many miles in a vehicle burning biodiesel as you can in an alcohol powered version of the same vehicle it might be easier to get to where we can produce enough biodiesel per acre for several drivers, but that will never happen with our main biodiesel feedstock, soybeans. They only average something like 40 or 50 gallons of biodesel per acre of soybeans. It takes several acres to produce enough soy oil biodiesel to equal the energy content of ethanol they're producing now from a single acre of corn. Biodiesel is a much better fuel in terms of energy content but we can't produce enough of it per acre with any of the feedstocks currently in use for commercial production of biodiesel to equal the energy content from the 400+ gallons of ethanol we get from the average acre of corn. For biodiesel or ethanol to really take off and supply us a major portion of our transportation fuels, we'll have to come up with new feedstocks. We may very well see that happen in the coming years, but until then these will remain rather small niche industries.

[Calpernia]

Did you look at the Seed Registration Pilot program?

Our national registration program for seeds started establishing in 2002, under the Federal Seed Act (FSA). You aren't going to be able to grow plants without applying for a license and using registered seeds.

[TKDietz]

"I hope you can maintain your humor when your neighbors who can no longer afford to buy food come looking for yours....

Don't think food-riots and looting are possible here? Think post-Katrina New Orleans on a national scale....."

We are nowhere close to that. Food is dirt cheap in America. The percentage of our incomes Americans spend on food is much, much lower than it used to be and much lower than in many parts of the world. We produce a lot more food than we need, and that's why the price of a bushel of corn has remained relatively flat for so long. Our corn growers have overproduced and driven prices down, and then our government has come in and bailed them out by paying subsidies on every bushel of corn to bring their earnings up to what our government decides they need to earn on every bushel to stay in business. This has only encouraged further overproduction.

The big problem last year was drought. America's corn crop was not as good as expected. Ethanol production drove the prices up some, but other than lower than expected yields mainly what has driven prices higher is speculation. We still export more corn than we use for ethanol, and the problem in the past has been that we flood the market with dirt cheap corn and drive foreign farmers out of business. The Mexicans especially have complained about this because they say we've been dumping our subsidized corn on their markets cheaper than their farmers can produce it, and it's driven a lot of corn growers out of business down there. Now they complain because prices are going up and they aren't geared up to produce a lot more corn and are afraid to do it anyway because no one knows what will happen to corn prices in the coming months. Their corn growers aren't subsidized and protected from price fluctuations like our farmers.

The truth of the matter is that we could actually grow a lot more corn. Several decades ago we had many million more acres of corn under cultivation than we do now, and we could easily grow that many acres of corn again or even go higher. We are not short on farmland. Eventually though it could very well get to the point where ethanol production starts using up so much of our farmland that we start having real food supply problems, but we aren't even anywhere close to that point now. My bet is corn prices go back down later this year because farmers in this country and others will plant a lot more of it this spring. That will be good for consumers to a degree, but of course the lower corn prices go the more subsidies our government will pay out, so it's not all good when agricultural product prices drop. We pay more for all this cheap food than we realize.

[cogitator]

Ethanol as an alternative to gas is a pipe dream.

Cellulosic ethanol will be a more viable solution that corn ethanol to partially supply vehicular fuel needs.

[cogitator]

very few people have thought things through to realize how close we are to the edge, civilizational-collapse-wise.

I'm probably one of those few. I also read "Collapse" by Jared Diamond.

[2harddrive]

Why not just make ethanol out of ethane from Natural Gas, and water? Has no one ever thought of this - am I a genious? LOL.

[mmyers]

It is against the law to keep your crop and replant it. The seed companies will sue you. My neighbor just had to pay $80,000 after losing.