In the midst of this really bad economy, at least corn prices have backed off their record highs, though how much that's reflected in the price of a bag of feed at your local feed store is quite variable. Once a higher price point is reached, it takes a while for the retail products to see a matching decline, if ever. While I don't feed corn to my cattle, I'm very aware of how the rising price of corn and other grains used in ethanol production has negatively impacted the value of livestock in the USA.
One possible hint of relief from the disastrous impact of increasing corn ethanol production is the growing research and ingenuity in designing electric cars, and getting our vehicles and machinery out of the lead acid battery dark ages (Lead-acid batteries were invented in 1859 by French physicist Gaston Planté.) Also a possible source of relief from dependence on ethanol and fossil fuels is solar energy.
These collective alternative energy areas received much play in the days of the last presidential campaign. Theoretically, we now have an administration and Congress that has provided for the subsidy of these expensive new technologies (In most of Europe, the government has subsidized alternative energy growth with great success.) However, of the mere $6 Billion or so that was designated for alternative energy in the Trillion Dollar Stimulus Bill, Congress now proposes to riddle the original concept with red tape and wrinkles, and even worse they propose to take ~$2 Billion dollars of the $6 Billion, and divert those monies to the Cash for Clunkers money pit (IMO). Where is the logic there? I've not even noticed this focused on in the news!
Alternative energy companies are a natural to put folks back to work in places like Michigan where solar companies are already positioned and there is a ready labor force for production of solar panels and batteries, etc... Yet, this piddling bit of $6 Billion dollars for alternative energy has not only been NOT disbursed, it is now in danger of being given away to a program that pulls money out of your pocket and straight into the pocket of the automotive industry. In no way does this help the USA get off the ethanol track and put our corn back to use as Food for ourselves and our livestock.
August 10th Credit Suisse Alternative Energy Report:
Solar US market: Developments in the last week diminish the positive impact of the DOE's loan guarantee program for commercially viable solar PV technologies. There is a possibility that only ~$750mm is available to cover credit subsidy costs for commercially proven technologies (versus $6bb we thought 3 months ago). $2bb from the $6bb allocated for DOE loan guarantee program could be diverted to "cash for clunkers.”
Ethanol crush spreads have strengthened over the past few months, driven by lower natural gas and corn prices plus stable ethanol prices. Ethanol production volumes have been kept in check, helping to support ethanol pricing. Cash margins for ethanol producers have again turned positive.
Follow this link for the full Credit Suisse comments and analysis regarding the Cash for Clunkers ripping off the Alternative Energy sector.
Showing posts with label corn ethanol subsidies. Show all posts
Showing posts with label corn ethanol subsidies. Show all posts
Tuesday, August 11, 2009
Saturday, August 08, 2009
Pending Legislation That Will Impact the Family Farm and Rural Landowners
The Texas and Southwestern Cattle Raisers Association (TSCRA) email update yesterday included a call to members to contact their Congressman during this August recess to express their Support and Opposition to critical legislation that will have a huge impact on our economic lives as cattle raisers. I've included links where I could find them, to the actual text of the bills at issue. Perusing the actual text of the bills is enlightening, and something I think we all should do more often in these days of minimal debate and rapid passage of bills which will effect our lives in both Texas and the USA. 
In 2008, I blogged on the devastation that I percieve has been and will continue to occur in the USA as a result of the government's blind and dumb subsidy of corn ethanol. Not only is it forever changing the landscape and air quality of states such as Nebraska and Minnesota, it is forever changing the economics of our food supply. In particular to cattle raisers, it has increased the input cost of feedlots to a point of zero profitability at times, and thus the value of our feeder calf crops at market is reduced.
The Family Farm Preservation and Conservation Estate Tax Act(couldn't find a direct link to this bill) ". . .would exempt working farm and ranch land from the death tax, as long as the land is kept in production agriculture. The bill also provides estate tax relief for land under qualified conservation easements." I could find no link to the text of this bill, instead I found references to it being from the 2007/2008 legislative sessions. TSCRA's summation of it's benefits to the continuation of family farms, rather than their liquidation due to death, makes it clear this is a bill we should all want passed.
The American Clean Energy and Security Act (the Cap & Trade Bill) ". . .will drastically increase the costs of fuel, electricity, feed, fertilizer, equipment and other production costs necessary to run a successful ranching business. The costs to ranchers far outweigh any benefits this legislation offers."
I absolutely need to read and try to understand for myself the impact of this bill. It is somehow still shrouded in mystery to me despite my obsession with the news. One has the sense that it is the ultimate boogey-man of bills, without even understanding the actual mechanics of its impact on our economy today and in the future. One thing that is abundantly clear, is major corporations such as General Electric stand to benefit hugely from the passage of this bill.
SUPPORTThe Affordable Food and Fuel for America Act ". . .would phase out government subsidies for corn-based ethanol over five years and promote the commercial development of second generation biofuels. This legislation would force corn-based ethanol to become commercially viable without the assistance of government dollars and eliminate competition with other commodities that use corn"
In 2008, I blogged on the devastation that I percieve has been and will continue to occur in the USA as a result of the government's blind and dumb subsidy of corn ethanol. Not only is it forever changing the landscape and air quality of states such as Nebraska and Minnesota, it is forever changing the economics of our food supply. In particular to cattle raisers, it has increased the input cost of feedlots to a point of zero profitability at times, and thus the value of our feeder calf crops at market is reduced.
The Family Farm Preservation and Conservation Estate Tax Act(couldn't find a direct link to this bill) ". . .would exempt working farm and ranch land from the death tax, as long as the land is kept in production agriculture. The bill also provides estate tax relief for land under qualified conservation easements." I could find no link to the text of this bill, instead I found references to it being from the 2007/2008 legislative sessions. TSCRA's summation of it's benefits to the continuation of family farms, rather than their liquidation due to death, makes it clear this is a bill we should all want passed.
OPPOSEThe Clean Water Restoration Act ". . .would expand federal control over all wet areas within Texas including stock tanks, drainage ditches, ponds, small and intermittent streams, creek beds, playa lakes and mud holes." The impact of this legislation on every day life in rural America is boundless, and would mire the average family farm, the average hunter or fisherman, in red tape and legalities that will forever change our historical and current concept of private land ownership and freedom to live as we wish on our land.
The American Clean Energy and Security Act (the Cap & Trade Bill) ". . .will drastically increase the costs of fuel, electricity, feed, fertilizer, equipment and other production costs necessary to run a successful ranching business. The costs to ranchers far outweigh any benefits this legislation offers."
I absolutely need to read and try to understand for myself the impact of this bill. It is somehow still shrouded in mystery to me despite my obsession with the news. One has the sense that it is the ultimate boogey-man of bills, without even understanding the actual mechanics of its impact on our economy today and in the future. One thing that is abundantly clear, is major corporations such as General Electric stand to benefit hugely from the passage of this bill.
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