Originally Posted By: SHOZ
The corn is planted anyway. But converting it to ethanol is more of a guarantee for the corn market or another form of price support. It has driven up land prices and except for the current bumper crops, driven up the corn price too.
It really is a glorified jobs program and industry maker. Not good for cars nor the environment in the end.
What has driven up land prices is the weak dollar. When the dollar is falling against other currencies, folks that have a bunch of it will stick it in solid commodities and land. Been that way for thousands of years. It is a way for, especially rich folks on the coasts, to stash their weak dollars into hard assets to protect their wealth. A large portion of the land being bought up is going to hedge funds and investment groups. Then it is cash rented out to anyone who wants to farm it, big or small. Many of the super mega farms do not actually own most of the land they are using. They lease it from these investors. You ought to check the records at any county office in Iowa and see who owns what. Living on the farm, I get a free Platt book sent to me each year, that shows a break down on sections throughout the state on who owns what. Little 10 acre chunks all the way up to the multi thousand acre owners. I see first hand who is buying the land up.
Ethanol is just one product. Actually, corn syrup is the big cash money out of corn. You want to see some serious lobbying going on in D.C? Check out the lobbies for Sugar and Corn syrup interests. Makes ethanol pale in comparison. It is in so many processed foods and soft drinks. There is a laundry list of products that are processed out of a kernel of corn, and ethanol is just one of them. Go ask for a tour at a ethanol plant, and they will let you know what they are processing out of the corn. Take a look at the line up of trucks hauling these products out of the plants. Ask them where it is going. Those in Illinois can easily see all of this from I-80 near Anawan, IL. Containers lined up to load up with Dried Distillers grain products that are high protein feed supplements going to the coasts and much of it overseas.
Yet, in all of this, corn prices are not going anywhere. I have posted the average prices for the last 20 years. Sure it has highs and lows, but always centers around the current $4.50 a bushel. Corn just isn't going anywhere on both the futures and spot markets. Like hitching your wagon to a tree stump. Anyone investing in land just to cash in on corn, would be the laughing stock of the county.
Ethanol may have been touted as reducing our oil needs, but never to replace it in any major way. And it has had some reduction. Simple math. You replace 10% of most of the gallons of gas used, and that is a reduction of gas consumed. And no, the 10% does not lead to a 10% decrease in mpg so it is a wash. Maybe on the older vehicles, but vehicles of, at least, the last 10 years are programmed for E10 and maybe lose on average 2% economy.
But I do agree, they need not get aggressive with the ethanol mandates and start the E15 in ernest. I am all for blender pumps, where the consumer can choose what they want.... E0, E10, E15, E20, E30, E85 all from the same pump based on selection.