Get Rid of Ethanol, To Consume 36 Percent of US Crop in 2011

Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.

USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.

Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.

Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.





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Ethanol Will Raise Food Prices, Harm Environment

Ethanol

As usual, the U.S. government is turning a blind eye to the truth and facts, and continues down the disastrous path of subsidizing ethanol, which will continue to cause huge problems in the near and distant future.

The U.S. government's plan to increase its ethanol mandate will mean higher food prices and more harm to the environment, according to an impact study conducted for two groups that oppose the increase.

"We continue to believe the government's excessive support of the mature corn-based ethanol industry is simply wrong, since it means burning food for fuel," spokesman Gary Mickelson of Tyson Foods Inc. of Springdale said in a statement after Bill Lapp, an agricultural analyst, released his study.

"This policy has contributed to higher corn prices, which have led to increased input costs for food makers — including independent livestock producers — and higher food prices for consumers," Mickelson said.

Corn is a major expense to poultry and beef producers, who want to reduce costs. Ethanol is a fuel additive distilled from plants. That distilling is a major market for corn that corn growers want to increase.

The federal government has a mandate that 10 percent of the fuel coming out of commercial gasoline pumps must be ethanol blended into the gasoline. The Environmental Protection Agency is considering a rule to increase that mandate to 15 percent. The government also maintains a tariff of 54 cents a gallon on imported ethanol.

A recent study from the Food and Agriculture Policy Research Institute at the University of Missouri determined approval of 15-percent ethanol blends would increase corn prices by just $0.04 per bushel, ethanol advocates said in response to Lapp's study.

Increasing the ethanol mandate to 15 percent would require planting as much as 111 million acres of corn, according to Lapp's study. Ethanol would use almost half of the corn crop harvested by 2015. The Grocery Manufacturers Association commissioned the study. The U.S. corn acreage in 2008 was about 85 million acres, U.S. Department of Agriculture figures show.

"Corn and soybean meal are major production costs in the poultry industry, representing 47% of the cost of growing a chicken in 2008," Mickelson said. "Tyson's annual corn and soybean meal expenditures almost doubled from fiscal 2006 to fiscal 2008 and ethanol was a significant reason for the increase."

These arguments have been heard before, the pro-ethanol Renewable Fuels Association replied.

"Time and again, American farmers have answered the need for food, feed and renewable fuel," said association President Bob Dinneen in a statement. "Yet, time and again well-heeled groups seeking to derail the expansion of ethanol are trying to pull the wool over our eyes.

"Many will recall last summer's effort to finger ethanol as skyrocketing oil prices, a weak dollar, speculation, droughts, and global demand drove grain and food prices higher," Dinneen's statement said. "At the time, the U.S. Department of Agriculture, Texas A&M University , and scores of other reputable analysts found such claims to be biased, overblown and outrageous. Even the Congressional Budget Office has looked at the issue and found that energy prices had 3 times the impact on the rising price of food than was the increased use of ethanol. Despite being thoroughly refuted last summer and lacking credibility on the issue, these groups are back at it again."

The ethanol industry is struggling even at its current 10 percent mandate. The fall in fuel prices from last year's record highs has severely hurt ethanol interests, industry figures show.

Ethanol's chief use in the United States is for a fuel additive. Ethanol in gasoline reduces carbon emissions and the price of gasoline, advocates say. However, ethanol plants are hard-pressed to make a profit when fuel prices are as low as they are now, according to industry figures -- even though gasoline prices remain higher than $2.50 a gallon at the pump.

At least 10 ethanol companies have sought Chapter 11 bankruptcy protection in the past year, Bloomberg Business News reports. Valero Energy Corp., the nation's largest independent oil refiner, became an ethanol plant owner in April by buying up seven Midwestern ethanol plants for pennies on the dollar compared to the original investment, Associated Press reports.

"You are going to see this become a trend ... especially with the government wanting to go green," Daniel Flynn, an analyst who follows the renewable fuels industry for Chicago-based Alaron Trading, told Associated Press about the Valero buy. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."

The U.S. Energy Department reported last week that gasoline supplies climbed 3.39 million barrels to 205 million in the week ended June 12, the largest increase since Jan. 16, Bloomberg reported.

"If you're not eating that much hamburger, you're not using as much Hamburger Helper," Peyton Feltus, president of Randolph Risk Management in Dallas, told Bloomberg. "Until demand shows a sustainable increase, we can't hold these prices up" for ethanol, he said.

Ethanol advocates received another setback earlier this month when a U.S. House panel allowed the federal Environmental Protection Agency to take a wider look at the commodity's environmental impact.

The House Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels, Reuters news service reported.

The United States is the world's major supplier of corn. Critics of ethanol claim that the environment is damaged as other nations have to put more land into farming to produce food as more U.S. corn goes to ethanol. The legislation would allow the EPA to study the question and determine if this increase in farm acreage worldwide offsets or at least mitigates ethanol's environmental benefit.

"There is a huge negative effect here," said Rep. Jo Ann Emerson, R-Missouri, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."

Scale of Consumption

Corn can produce about 200 gallons of ethanol per acre. If all the corn acreage in the United States were converted to fuel production with corn ethanol, the nation could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The U.S. consumed about 20 million barrels of crude per day in 2007.

Ethanol

Ethanol News | House for E-trading Agriculture and Ethanol Extended by CME

Ethanol News

CME Group Inc announced on Friday it would expand electronic trading of agricultural contracts by 75 minutes, effective July 1, in a move aimed at further boosting business on that platform.

"It allows customers based in Europe more time to trade during trading hours that are most convenient for them," said CME Group spokesperson Mary Haffenberg.

CME said it would extend electronic trading on July 1 by one hour and 15 minutes to 7:15 a.m. CDT (1215 GMT). Electronic trading currently begins at 6 p.m. (2300 GMT) and ends at 6 a.m. (1100 GMT).

The longer hours will be for contracts including corn, wheat, soybeans and ethanol.

"They're trying to capture more business. There are markets open that time of the day and they are meeting the competition," a trader said.

A number of traders said it was another step by the CME, the world's largest derivatives exchange, to eventually offer electronic trading 24 hours a day.

"The exchange thinks it will expand volume, and it might, but I don't think by a lot. But it's another step in their quest toward 24-hour trading," another trader said.

A CME trading floor source said the reason the CME will stop trading at 7:15 a.m. is because of the monthly release of sensitive U.S. Department of Agriculture crop information at 7:30 a.m. CDT.

Ethanol News

Ethonal: Ethanol Terrible Investment

Remember just a couple years ago when everyone was asking if ethanol was a risky investment? Well, we've got that answer in spades, as company after company falters and most companies with their primary focus on ethanol teetering on the brink of bankruptcy or already in it.

Even giant Archer Daniels Midland got clobbered with huge losses, even though they performed well in other areas to enjoy one of the few profitable quarters among that sector. That was in spite of their investment in ethanol and the ethanol industry, not because of it.

Anyone who has invested in ethanol stock is sorry they did it, along with ethanol companies created to benefit off the back of taxpayers funding. The flex fuel is a disaster, and whether someone worships at the altar of renewable fuels or not, they have to admit the future is not only grim, but impossible to successfully navigate if ethanol - whether it's corn based or cellulosic - is the source looked for in the renewable fuels sector.

Not only is ethanol have huge inputs that affect the environment, but as an alternative fuel is a disaster, with a number of studies showing it's going to cost far more per gallon than gasoline, than originally expected.

There really is no market for ethanol, and as far as small engine power equipment goes, it continues to damage them, even though those trying to force the ethanol industry on the rest of us aren't willing to admit it, even though manufacturers and small engine repair shops continue to say they're filled with snowmobiles, generators, chainsaws, and other small engine equipment using ethanol as part of their fuel.

When you also consider the mulit-millions used to build ethanol plants and artificially create ethanol producers, you see that taxpayer money could have been used for something much better than this misguided fiasco.

Add the current economic problems to the mix and it's even a great disaster. Ethanol plant construction is largely on hold; you can't send it through pipelines to get it cheaply to where it is needed; and in the name of the dubious idea of generating jobs build upon an illusion is worse than not doing it in the first place.

Producing ethanol as far as all costs concerned was vastly underrated, and the effect of using so much acreage to grow corn on the artificial prices that couldn't hold up, caused food prices to surge and riots around the world as people struggled to survive because of corn being used to feed the environmental nuts dream of nirvana rather than people.

So now most ethanol companies are a disaster; ethanol stocks have plummeted; ethanol as an investment is ridiculous; and it damages small engines and even some cars using e85 in their vehicles. And we're obsessed with ethenol why? Because people are trying to get the public eye off the billions of barrels of oil on American land and off its coastlines. They're pretending we've entered into a crisis period when in fact billions of barrels of oil are available for consumption.

No matter how the ethanol marketing campaign is arranged, you can't hide the horrid idea it has become, nor the huge, negative impact its having all around. Many original ethanol proponents have change their minds about its viability as a biofuel because of its challenges that aren't able to be solved.

Every aspect of it has failed, and yet because of the powerful farm lobby, which has nothing to do with small farmers but rather billion dollar companies getting tax breaks to pursue the stupid idea, we continue to waste huge amounts of money and time for something doomed to fail.

The ethanol industry is dead on arrival. Let's just admit it, start to open up our land and coastlines to the hundreds of billion of barrels of oil available, and then slowly look for real, viable alternatives.

The fear generated from marketing ethanol that we are somehow some type of dire need to find alternative fuels is an outright lie. The results of the debacle show that fear-induced initiatives never work, as it isn't thought through, but enacted for political expediency.

Ethanol is a poor and misguided investment of time and money. We need to move on, knowing we aren't in a hurry, and there's plenty of oil for decades to come we can access and produce instead of investing in the losing ethanol industry.

Ethanol: How to Make Ethanol

While ethanol is a disaster, it's interesting to see the many people that look at it as a viable alternative energy and fuel, and search into how they can make ethanol on their own.

Regular ethanol has been extremely destructive to numerous small engine power equipment, and during the winter time we notice many of the snowmobiles, chainsaws and generators at the small engine repair shops as the alleged biofuel continues to destroy the parts and engines of the products, even though some proponents continue to pretend it's completely safe to use, while the equipment of ethanol users is destroyed, and in some cases becomes dangerous to use because of the potential consequences of getting stranded; as in the case of snowmobiles or motor boats.

Some even continue to claim the very expensive fuel and poor mileage (as far as it relates to vehicles) is inexpensive. But some studies have shown the price of gasoline would have to reach about $2.33 a gallon to be the equivalent of the high cost of ethanol.

So it can be understood why people that like to experiment and try things out would want to make their own ethanol for the purpose of accomplishing the task, it's hard to know why other than that someone would want to put it in any type of equipment they use.

Making ethanol is of course nothing new, as people have known how to make ethanol for a long time, using fermentation and the distillation of sugar and starch crops. Some of the obvious crops still used today to make ethanol are corn, cornstalks and sugar cane (in Brazil). Other crops used are potatoes, wheat and peelings from fruit and vegetables. Grass and wood chips or sawdust can be used as well, among many others.

It takes a lot of this stuff to even make one gallon of ethanol, as it takes about 10gallons of crops or other material to make a gallon of the fuel additive. So picture wanting about 10 gallons of the stuff. You'd have to have access to about 100 gallons of raw materials in order to make that much. It would take a ton of work just to gather that much together, even if someone was willing to give it to you to work with.

So what's the process on How to Make Ethanol?

To turn raw materials into ethanol, it requires five steps:

Conversion
Fermentation
Distillation
Filtration
Dehydration


Whatever material you decide to use, it has to be converted by the sugars being broken down in the process. That's either done manually or by adding an enzyme.

In the fermentation part of the process, you're at the creation of alcohol stage, and so add yeast in a similar way you would if you were making wine.

The next stage in How to Make Ethanol is to use a still for the purpose of separation of the alcohol from the rest of the liquid. This is called Distillation.

For the next two steps you filtrate the liquid in order to remove the impurities in the liquid as well as the excess water remaining.


Materials needed to make ethanol:

A lidded plastic bucket or barrel
Yeast
Fruit
Hydrometer

Because the liquid will start to ferment once the fruit or raw material is broken down, you should only fill it to about one-third full, or you'll end up with a messy overflow of the ethanol.

When using yeast, don't think in terms of the type you'd use for making bread. Rather, to make ethanol, us the type you would acquire from a store with supplies to make wine. That type of yeast is tolerant to ethanol.

Once you add the yeast to the mixture, use the hydrometer to measure the sugar content. Once you have that figure, cover up the barrel.

Simply let it sit for several days while checking the sugar content once a day. What you're looking for is the sugar content in the mixture to gradually decrease until there's zero sugar left in the ethanol. That will usually take about 10 days.

When that part of the process is completed, the mixture should be immediately distilled, or you risk damaging whatever equipment you might put the fuel into.

This could be an enjoyable experiment to have fun with, but doing this allows you to see the number of things involved with making ethanol, the high amount of inputs, and how a lot can go wrong with it while it's being made, which could damage your equipment.

In the end, it can be fun learning how to make ethanol, but I sure wouldn't really want to use it other than in something old to learn the damage it can cause.

Ethanol: "Show Me Ethanol" Conflict of Interest

"Show Me Ethanol" in Missouri is in a battle over conflict of interest, as politicians in the state own shares in the company, potentially giving the ethanol plant it's operating for the purpose of making money for state legislaters.

State Treasurer Sarah Steelman has a policy in place to keep the taxpayer subsidized company from benefiting those in governmental power.

Some are trying to pressure Steelman to ease up on the policy, but she's right - there shouldn't be any politician anywhere that benefits from a government subsidy program, as it's really another form of insider trading, no matter how you look at it.

Show Me Ethanol is scheduled to open this spring, and had received an initial nod from Steelman that they had conditional approval to receive loans from banks at rates below the market rate.

That condition was that the ethanol plant had to comply with the conflict of interest policy, where no single investor in the company could have ties to statewide elected officials or anyone related to them.

In the case of Show Me Ethanol, that's not the case, as a number of Missouri politians or their family members have invested in the ethanol company, including John Quinn, his wife, Mary, Andy Blunt, and Lesley Graves.

Supposedly other ethanol companies have been reluctant to work under Sarah Steelman's strict policy, but that seems to be a condemnation rather than a pressure on Steelman. They don't understand that by rejecting the policy, they're admitting they are indeed looking for favors from politicians, and that those politicians would benefit from it.

This underscores the problem of the ethanol industry, which can't survive without being artificially propped up by taxpayer money and tax credits, or low interest loans.

Include with this the tremendous amount of damage it does to some cars and power equipment like snowmobiles, chainsaws and many others, we need to simply get this idea off the table, along with the thought that this is a viable alternative energy source.

Ethanol really isn't a business, it's a socialist program designed to placate those who are earth worshippers and hate the thought of digging for the billions of barrels of oil on American soil, which would allow fuel for decades ahead.

Ethanol supporters are in denial of this, and so push forward this disastrous program that costs people so much, let alone the damage it does to the environment.

As an investment - as the failed ethanol companies around the country show - ethanol sucks, the alternative gas mix is terrible, and it's far less effective than regular gasoline.

What it's becoming is a political, socialist business, not a free market business. That's why the biofuel is failing, along with the many ethanol companies.

While the government should be involved in any type of business, if they are going to be, at least it should be something that isn't destructive like ethanol is, and something that has a future.

Ethanol as a business and alternative fuel isn't one of them. The taxpayer money is being wasted as the powerful farm and corn growers lobbies think of only themselves at the expense of the rest of us.

End the low paying loans, taxpayer subsidies and tax credits to farmers. If the business is a legitimate one, it would be able to stand on its own. Ethanol businesses can't.

So much for change! Obama to follow same failed ethanol policy as Bush

We now see the first step in change Obama will perform in his new administration, he will keep the failed ethanol policy of President Bush in place. Wait! Change? What's this?

It's politics as usual in Washington, and things aren't going to change in spite of this being the most "important" election in decades.

Obama has already confirmed this through his announcement via his campaign senior energy adviser Heather Zichal, who recently said concerning Obama's policy for ethanol: "Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil. He's fully committed to it and sees tremendous value in the renewable fuels standard and continuing down this path."

Yawn. I guess the food riots will continue around the world, and feed prices rise as we continue along this disastrous path.

Even though the idea of cellulosic ethanol was offered up as the eventual future of the biofuel, the truth about it at this time is it costs about twice as much to produce as corn-based ethanol, and it's many years away from being ready for use, if it ever is.

When subsidies and tariffs can't even make an industry succeed, it's far past time to change directions and admit mistakes. To continue to pour billions down this rabbit hole is irresponsible at best.

One major reason for Obama is his home state of Illinois is the second-largest producer of ethanol, and he also was rewarded by Iowa on his presidential run. He wouldn't dare to the right thing by ending this travesty, as he would pay for it in four years.

Business as usual in Washington.

Monsanto Acquires Brazil's "Aly Participacoes" Eyeing Sugarcane for Ethanol

With demand for sugarcane starting to outstrip production, Monsanto (MON) has acquired Brazilian-based Aly Participacoes Ltda. in order to work on producing sugarcane seeds that will be much higher-yielding than present stocks.

Of course much of the demand for sugarcane has come about from the fixation of governments on using ethanol as a gas substitute, based on the non-factual idea of "peak oil." There's billions of barrels of oil available throughout the world, and even in the U.S. alone.

Most of this is ideologically driven, rather than based on facts.

While that's a misguided illusion, at the same time that illusion will stick around for some time until all that fails. So in that sense, this is a good investment for Monsanto, as the obsession with ethanol will continue based on unwarranted fears that are driving the fixation.

More Reasons to Free us from the Ethanol Devil

The growing number of reasons to drop ethanol and its government subsidies continues to reveal the utter stupidity of pursuing ethanol as a significant source of renewable fuel.

As people continue to deconstruct the arguments made in favor of ethanol, it's getting clearer and clearer it's an initiative pushed by special interest groups who created fear of foreign energy dependency at the cost of sanity.

While we obviously need to look at real alternatives in the years ahead, we are far from being in some type of serious trouble, as the billions of barrels of oil under American soil, as well as under its oceans attest to.

Environmentalists and opportunist have created this false problem by panicking people into believing we're on the cusp of a worldwide disaster, when in reality there's enough oil to last for decades ... if not longer.

Recent discoveries in Brazilian waters, along with the huge oil deposits in the Canadian oil sands are also proof of the need to slow down and take into account all the effects and unintended consequences that always accompany decisions that are motivated by fear and political expediency.

Archer Daniels Midland Co. Acknowledges Slowdown in Agricultural Products, Especially Ethanol-related

Archer Daniels Midland (ADM) is the third-largest ethanol producer in the U.S., and the slowing demand for corn-based ethanol has had a significant impact on the company's performance for the quarter. A number of producers have stopped or closed expansion plans in response to the falling demand. Corn prices have also responded accordingly, falling to four-month low of $5.3625 a bushel today.

John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.

But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.

Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.

If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.

As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.

Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.

Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.

Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.