Posted on 02/11/2011 9:43:02 AM PST by jazusamo
Washington (CNSNews.com) – Ag Secretary Tom Vilsack says he welcomes the extension of the energy policy requiring the extension of tax credits and protective tariffs of corn ethanol and is not worried in the long term about the U.S. economy’s capacity to produce corn for food, fuel, feed, and exports because of it.
“I’m certainly not worried in the long term about our capacity to produce enough corn to meet our food and feed needs as well as our fuel needs,” Secretary Vilsack said Wednesday in a news conference with Interior Secretary Ken Salazar and Energy Secretary Steven Chu held in the Department of the Interior building.
Vilsack said he is not worried about the inflationary effect that the ethanol subsidy might have on food prices.
“Here in these Unied States, we’re expecting food prices to rise somewhere between 2 and 3 percent, which is relatively moderate,” Vilsack said.
VIDEO 1:55 minutes
However, the latest Consumer Price Index report shows that fruits and vegetables rose 1.8 percent in December after a previous decline in November. A two to three percent increase would be nearly double the percentage increase of December prices, according to the latest CPI report.
Vilsack attributed the rise in food prices not to ethanol subsidies but to advertising, marketing, refrigeration, transportation, and other expenses that happen in the food chain. He said he was confident that U.S. corn ethanol policies are raising the price of corn only slightly, according to USDA studies, and that the policy will not damage exports.
The agriculture secretary attributed international price increases to weather conditions and export controls.
“I think there is going to be enough corn for food, feed, fuel, and for export opportunities,” he added.
Vilsack noted that after the biofuel tax credit was allowed to lapse, there was nearly a 50 percent decline in production and there were 12,000 jobs lost.
According to USDA and the National Corn Growers Association, the average U.S. farm price for corn increased steadily throughout 2010, going from $3.40 in May to $3.75 in July to $4.40 in September to $5.20 in December to $5.40 currently (Feb. 2011).
The Agriculture Department says that U.S. corn stocks for 2010/11 are projected 70 million bushels lower this month because of "higher-than-expected food, seed, and industrial use" – including ethanol production.
The USDA’s latest commodities report says “corn used for ethanol is projected 50 million bushels higher than the November final ethanol production estimate and weekly ethanol data indicate record output for December and January.”
In December, President Obama signed a bill extending a credit of 45 cents for every gallon of pure ethanol blended into gasoline, as well as protective tariffs for 54 cents per gallon, costing nearly $1 total.
The corn used in ethanol is only about 5 percent of all production, according to Vilsack.
“WHAT... ME WORRY”?
Alfred E. Newman
LLS
I agree it is a huge scam on all Americans except etanol producers, corn farmers and speculators. But that unfortunately is the way the US system now works, for the benefit of the few at the expense of the many.
corn is presently around $7.00 and beans around $14.00.
expected to go to $9 and $19 later this year.
Farm ground just sold near here for over $8000/acre.
We’ve had several bumper crops in the past few years. I reckon all that global warming CO2 could be good for crop production.
And the farmers are spending money like crazy! New buildings, semis, equipment, pick-ups. You couldn’t even find any drain tile for sale a couple months ago, cause the producers couldn’t keep up with demand.
Point is...mosts farms would do just fine without that extra help from Uncle Sugar.
Vilsack just blows me away standing up there saying our study indicates no cause for worry, we'll only have a moderate (2-3%) increase in food prices. I don't believe that for a second.
I just found it bit disingenuous that the article claims the American Corn Growers put the current price of corn at $5.40, when a simple click on their own website shows it to be a fuzz over $7.00 today.
“National” Corn Growers Association, that is.
upper right corner.....Currently $7.03/bu
Of course he won’t because they are going to raise food prices skyhigh to recoup and continue their scam.
Those os us on Social Security don’t get any COL increases which include food or fuel or heating costs.
Therefore- our basic costs keep going up & we cannot meet those bills.
Yesterday, it was announced that the USA is 15% short on corn & this jackass is the sec of Ag & doesn’t have a clue.
How about thinking beyond the ethanol subsidy Tom and start thinking how we can get more products out of corn and better use?
And our politicians go along with this? Even though ethanol-laced gasoline gives us lower performance and higher pollution than regular gasoline? And puts the price of food up for everyone? What’s the end game here?
Yep, and that’s not a small error.
Agreed, that’s why this whole ethanol thing is a huge scam.
OK - perhaps a bunch of us can perform an experiment:
Drive for one month using only ethanol adulterated gasoline.
Keep record of mileage and conditions (hwy, city, mix)
Do the same for one month with 100% gasoline.
Compare.
Report back. Report to your congress person as well.
Realizing that my own experiment has flaws - not all trips were equal, some highway weeks more than others, and there are variations due to things like distance from last oil change and tuning. I seemed to get near to four mpg better - or around 20% - with straight gas. Less of a difference on road trips, iirc.
Perhaps an aggregate of many people doing this can get a more accurate picture.
I read my data to mean that I must burn about 1.09g of gas plus about .11 gal of corn to drive the same distance. Yet I heard someone on the radio the other day say that corn was stretching our gasoline supply.
If I must use more gasoline to travel the same distance, how can it follow that I am putting less pollution in the air? I don’t think that there is a chemical reaction between ethanol and gasoline that makes it clean.
If I need more to go the same distance, am I not increasing demand, and prices, and dependence on foreign resources? How are any of these things good?
Then there is this business of 5% of the corn crop. This does not translate into making corn only 5% higher (if the figures are even correct as of this moment). Corn is food. Other crops not grown in favor of corn are food.
seriously - I would love to get a lot of data on this, or better yet, help some more statistically minded person do this.
“In December, President Obama signed a bill extending a credit of 45 cents for every gallon of pure ethanol blended into gasoline, as well as protective tariffs for 54 cents per gallon, costing nearly $1 total”
OK - so if my state and local taxes (in existence prior to this subsidy) on a gallon of gasoline are roughly 39¢, where is the money coming from?
Ahh - nevermind.
Ethanol subsidies are unethical and embody all that is wrong with government interference with the marketplace, but folks get a little carried away when they claim that “corn is food”. #2 yellow dent corn is not food grade.
...a credit of 45 cents for every gallon... Who is getting the 45 cents?
It’s not food grade for cattle and other livestock that we raise for our food?
Of course he's not worried. He's a damned mentally diseased liberal. He wouldn't know something bad for our country if it bit him in the butt.
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