Originally Posted By: chuck1955
Tiredtrucker I know your pretty good at massaging numbers, I work mainly on numbers posted in articles on the internet. You also multiple times have stated you don't believe in a mandate. Your attitude tells me that's not really true. The corn lobby should do their work in front of the consumer. Do away with the mandate and allow the consumer to have their choice. Since this program began food prices have risen by over $2000 per year for a family of four. Flex vehicles on average cost around 20% more to use E85 verses gasoline. That easily explains why less than 4% of flex owners chose to use it. It also tells us ethanol cost more to use overall. Others have stated there is money given to blenders to mix ethanol. Corn prices might be low now, but when it was high recently it forced the livestock industry to reduce its size to less than 1952 levels and the consumer is paying for it now. The amount of idle land that has gone back into production tells the story and the environmental impact is large. In this administrations 2015 budget they have 200 million subsidizing the alternative fuel industry. Is that to make ethanol appear cheaper?
Many assume it is the "corn lobby", whatever that means, that is behind mandates. Every time I have seen mandates on ethanol, MTBE, or whatever the oxygenate du jour is, it always seems to be EPA or local inspired. LA or even CARB for that matter is hardly swayed by any lobby in what they do, let alone a bunch of hay seeds from Iowa trying to convince them to do something. This is why fuel vary so much in price across the country. You have a myriad of local and state mandates on fuel makeup, usually inspired by EPA air quality regulations, and that is the primary motivation to these mandates. Whenever I read anything put out by the renewable fuels people in my area, it seems to be centered around regulatory issues on them and not on everyone else, and promoting some blenders tax credit or something. I have never read in 30 years any "corn lobby" internal publication that goes around stating that they are promoting a mandate on consumers. It may benefit them to have a mandate, obviously, but that has not been their prime focus. Just trying to make a profit without drowning in regulatory nonsense seems to be their prime concern.
There is NO SUBSIDIES to the ethanol industry and hasn't been for at least 2 years!!!! The "corn lobby" was behind the removal of ethanol subsidies. Mainly because of the abuse by external sources of ethanol coming into the country. A subsidy is a direct payout to an entity. Now, there may be some tax credits, but that is not a subsidy. If you think tax credits are bad, then give up your mortgage interest deduction, you child and dependent care tax credit, etc, etc, etc. Many want to throw a fit over a business getting a tax break, but God forbid they give up their own. And there is not a single business in America that doesn't benefit from some form of tax credit or tax avoidance. It is the way the code is set up. I was able to avoid the 12% Federal Excise Tax on new equipment (saving roughly $15,000) by taking advantage of both EPA and IRS regulations. I purchased a 2013 Freightliner Semi truck, without a engine, and dropped in a rebuilt engine and rebuilt transmission. By doing that, I avoided the EPA smog junk on the engine, by using two major rebuilt components, I avoided the Federal Excise Tax on new equipment. OMG! How terrible! A business got to a tax break! Yeah, you bet! And I drove away smiling like a mule eating burrs.
And many blame food prices going up on the corn ethanol gig. Do any of you actually take the time see how the U.S. corn crop is divided up or how the value of the dollar has tanked in the last decade? Of the entire U.S. Number 2 Field Corn crop in the U.S. each year, roughly 20% goes to any kind of human consumption. Of the 80% left, only 40% of that goes toward ethanol production and most of the that corn is also developed into high protein livestock feed supplements and other products AFTER the ethanol cycle. The value of the dollar has dropped roughly 28% in the last 10 years. That actually equates on a 1 for 1 basis with average food price rises. Meats? There is a substantially lower herd level in both beef and pork in the U.S., so the market price has gone up substantially. Cannot be because of corn ethanol, because the corn price today is almost the same as it was 20 years ago. And true, the meat industry cut back herds due to input costs. Hey, what business doesn't? And now the market is such that they are now increasing the herds again. It is called a business cycle. It is called minimizing liabilities and increasing profits. No one forced the livestock folks to decrease the herds. And demand is what drives up the price. You have a larger world wide demand for meats, especially coming from China. Did you forget that aspect to your analysis?
And any mandates for ethanol in fuels is not going to change one thing on corn ethanol. That source of ethanol is capped at 14 billion gallons per year. Last year, 13.7 billion gallons were produced here. That essentially means that they are at the peak they can make corn ethanol. Mandates by government may increase, but the ethanol will have to be made from other sources like biomass, cellulosic, or NG. But, hey, lets all blame the "corn lobby". They make a convenient fall guy. After all, no one in local, state, or federal government is to blame, right?