So much for corn saving the country from the high cost of oil... - Sportbike Forum: Sportbike Motorcycle Forums
Reply
 
LinkBack Thread Tools Display Modes
post #1 of 15 (permalink) Old 04-03-2008, 04:07 PM Thread Starter
Registered User
 
Duner's Avatar
 
Join Date: Jun 2005
Location: Almont mi usa 48003
Posts: 3,288
So much for corn saving the country from the high cost of oil...

http://news.yahoo.com/s/ap/20080403/...K_JQGazLms0NUE





"NEW YORK - Corn prices jumped to a record $6 a bushel Thursday, driven up by an expected supply shortfall that will only add to Americans' growing grocery bill and further squeeze struggling ethanol producers.

ADVERTISEMENT

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol. Prices are poised to go even higher after the U.S. government this week predicted that American farmers — the world's biggest corn producers — will plant sharply less of the crop in 2008 compared to last year.

"It's a demand-driven market and we may not be planting enough acres to supply demand, so that adds to the bullishness of corn," said Elaine Kub, a grains analyst with DTN in Omaha, Neb.

Corn for the most actively traded May contract rose 4.25 cents to settle at $6 a bushel on the Chicago Board of Trade, after earlier rising to $6.025 a bushel — a new all-time high.

Worldwide demand for corn to feed livestock and to make biofuel is putting enormous pressure on global supply. And with the U.S. expected to plant less corn, the supply shortage will only worsen. The U.S. Department of Agriculture projected that farmers will plant 86 million acres of corn in 2008, an 8 percent drop from last year.

Moreover, cold, wet weather in parts of the U.S. corn belt may force farmers to delay spring planting, potentially sending prices even higher.

While corn growers are reaping record profits, U.S. consumers can expect even higher grocery bills — especially for meat and pork — as livestock producers are forced to pass on higher animal feed costs and thin their herd size.

"Higher corn prices is going to affect meat prices. If you're feeding with $6 corn, you'll definitely have some (cost) pressure," Kub said.

In addition, corn and corn syrup are used in an array of products, meaning the price of everything from candy to soft drinks will eventually go up, analysts say. It's the latest dose of bad news for U.S. consumers, who are already struggling with higher food costs from record increases in the price of wheat, soybeans and other agriculture products.

Another loser in higher corn costs is ethanol producers, who are struggling to squeeze out gains as corn's record-setting run outpaces the price of ethanol, currently at around $2.50 a gallon.

"For years, corn was cheap and fermentation processes for ethanol production came to completely dominate the biofuel industry in North America," Michael Jackson, president and chairman of Vancouver-based ethanol maker Syntec Biofuel, said this week. "Now, with corn prices well over $5 a bushel, corn ethanol economics have gone out the window."

The nation's 147 ethanol plants now have the capacity to produce 8.5 billion gallons of fuel a year, according to the Renewable Fuels Association. Corn is the basic feedstock for most of the plants and about 20 percent of last year's 13 billion bushel corn crop was consumed by ethanol production. That percentage is expected to increase to 30 percent for the next crop year, which ends Aug. 31, 2009, according to Terry Francl, a senior economist for the American Farm Bureau Federation.

There are still plans to build or expand another 61 plants, which will add about 5.1 billion gallons of capacity. However, as corn prices have climbed over the past year or so, construction of several plants has been halted or delayed, shaving about 500 million gallons worth of capacity off the original figure, according to Broadpoint Capital analyst Ron Oster.

At least one facility, the Alchem plant in Grafton, N.D., shut down late last year because of high prices.

A new plant hasn't broken ground over the past couple of quarters, Oster said, and while producers can have positive gross margins with ethanol at $2.50 a gallon and corn at $6 a bushel, that doesn't mean companies are profitable.

"Bottom line earnings are near break-even or modestly below break-even," he said.

Looking ahead, only the strongest ethanol producers will survive in an era of ever-rising corn prices, said Soleil Securities analyst Ian Horowitz.

"There are going to be some particular companies that definitely have the balance sheet and efficiencies that will be able to eke out a positive return in this kind of environment," Horowitz said. "And then there will be others that will suffer at the hands of $6 corn."



Redline Superbike Member


AKA Duneripper :)
Ladies Love Cool D.

"I would have been your daddy, But that dog beat me over the fence."
Duner is offline  
Sponsored Links
Advertisement
 
post #2 of 15 (permalink) Old 04-04-2008, 03:54 AM
Moderator
 
DocThee's Avatar
 
Join Date: Oct 2002
Location: Madison Heights, MI 48071
Posts: 4,824
Send a message via AIM to DocThee Send a message via Yahoo to DocThee
Right...so now our $5 pizza becomes $8 and our $1.29 loaf of bread becomes $3. So what is the whole point of ethanol? To burn better and less pollution? Arguably, it takes just as much fossil fuel to produce ethanol as it does gas. So now we pay just as much in high fuel costs, pay more for food, but we burn cleaner emissions?


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


Keep the ride on...

AIM and Yahoo! - DocThee

"Anything can be a medicine or a poison."

Virtus Junxit Mors Non Seperabit
DocThee is offline  
post #3 of 15 (permalink) Old 04-04-2008, 05:03 AM Thread Starter
Registered User
 
Duner's Avatar
 
Join Date: Jun 2005
Location: Almont mi usa 48003
Posts: 3,288
Quote:
Originally Posted by DocThee View Post
Right...so now our $5 pizza becomes $8 and our $1.29 loaf of bread becomes $3. So what is the whole point of ethanol? To burn better and less pollution? Arguably, it takes just as much fossil fuel to produce ethanol as it does gas. So now we pay just as much in high fuel costs, pay more for food, but we burn cleaner emissions?
Ethanol was supposed to be our savior to free country of high import oil prices and dependence, reduce pump prices, first...less pollution second.

Unrelated or related, depending on how you view the issue, the prices of wheat have also trippled...affecting inflation of consumer staples/food.

Redline Superbike Member


AKA Duneripper :)
Ladies Love Cool D.

"I would have been your daddy, But that dog beat me over the fence."
Duner is offline  
 
post #4 of 15 (permalink) Old 04-04-2008, 05:07 AM
Lifetime Premium
 
snakesht's Avatar
 
Join Date: Aug 2004
Location: Springfield, OH
Posts: 3,449
Send a message via AIM to snakesht
I always saw it as more of a stepping stone. Not necessarily something to free us from foreign oil, but reduce our dependence while we developed more efficient power sources.

Obviously there wasn't a lot of thought given to the effect on food prices/supply, and I can't help but wonder how many of the farmers who are sitting back collecting subsidies actually have the land available to assist in increasing our supply of corn.

"The only difference between death and taxes is that death doesn't get worse every time Congress meets."
-Will Rogers
snakesht is offline  
post #5 of 15 (permalink) Old 04-04-2008, 06:04 AM
Registered User
 
Vash's Avatar
 
Join Date: Mar 2004
Location: Sweetwater, TX, 79556
Posts: 8,798
I'm not the least bit supprised that corn prices are going up (higher demand, higher price) but why in the world would farmers plant less corn? That makes no sense what so ever. It costs the same to plant and raise and harvest corn as it did before, but you get to sell it for more money, making the whole process more profitable. Wouldnt farmers be jumping on the deal? I've read elsewere that they are.




-- Thats Just The Way I Roll

"Do what you can, with what you have, where you are".
-—Theodore Roosevelt

"In war there is no substitute for victory."
---Douglas MacArthur, General

"Beware of those in whom the urge to punish is strong".
---Johann Wolfgang Goethe


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
|
To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
|
To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
Vash is offline  
post #6 of 15 (permalink) Old 04-04-2008, 06:15 AM
Lifetime Premium
 
snakesht's Avatar
 
Join Date: Aug 2004
Location: Springfield, OH
Posts: 3,449
Send a message via AIM to snakesht
Quote:
Originally Posted by Vash View Post
I'm not the least bit supprised that corn prices are going up (higher demand, higher price) but why in the world would farmers plant less corn? That makes no sense what so ever. It costs the same to plant and raise and harvest corn as it did before, but you get to sell it for more money, making the whole process more profitable. Wouldnt farmers be jumping on the deal? I've read elsewere that they are.
Usually in order to get the most out of your soil, you have to alternate what you plant every year. It's called "crop rotation." Around my area, most farmers alternate corn and soybeans. I'd say a lot of farmers used new fields to plant corn anticipating the heavy demand, but after a couple of years the nutrients needed for a strong crop have been depleted, and now they have to plant different crops to revive the soil.

"The only difference between death and taxes is that death doesn't get worse every time Congress meets."
-Will Rogers
snakesht is offline  
post #7 of 15 (permalink) Old 04-04-2008, 06:43 AM
Registered User
 
LuckyStrike's Avatar
 
Join Date: Jan 2003
Location: I live right here
Posts: 4,998
Send a message via AIM to LuckyStrike Send a message via Yahoo to LuckyStrike
Quote:
Originally Posted by snakesht View Post

Obviously there wasn't a lot of thought given.
, I sure hope this doesn't come as a huge shock.


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


"Better to remain silent and be thought a fool than to speak out and remove all doubt." Abraham Lincoln

I refuse to tiptoe through life, only to arrive safely at death!

Video Games do not kill people, people kill people. Me,
LuckyStrike is offline  
post #8 of 15 (permalink) Old 04-04-2008, 06:47 AM Thread Starter
Registered User
 
Duner's Avatar
 
Join Date: Jun 2005
Location: Almont mi usa 48003
Posts: 3,288
Quote:
Originally Posted by snakesht View Post
Usually in order to get the most out of your soil, you have to alternate what you plant every year. It's called "crop rotation." Around my area, most farmers alternate corn and soybeans. I'd say a lot of farmers used new fields to plant corn anticipating the heavy demand, but after a couple of years the nutrients needed for a strong crop have been depleted, and now they have to plant different crops to revive the soil.

That, and they can boost trading prices by reducing crops, just like big oil does.
There ARE corn and wheat futures trading.

Redline Superbike Member


AKA Duneripper :)
Ladies Love Cool D.

"I would have been your daddy, But that dog beat me over the fence."
Duner is offline  
post #9 of 15 (permalink) Old 04-04-2008, 06:49 AM Thread Starter
Registered User
 
Duner's Avatar
 
Join Date: Jun 2005
Location: Almont mi usa 48003
Posts: 3,288
Quote:
Originally Posted by LuckyStrike View Post
, I sure hope this doesn't come as a huge shock.
I dunno.
I thought me and Vash discussed it in an earlier thread.
Some of washingtons peeps said it was possible..
Just not enough

Redline Superbike Member


AKA Duneripper :)
Ladies Love Cool D.

"I would have been your daddy, But that dog beat me over the fence."

Last edited by Duner; 04-04-2008 at 07:30 AM.
Duner is offline  
post #10 of 15 (permalink) Old 04-04-2008, 07:40 AM Thread Starter
Registered User
 
Duner's Avatar
 
Join Date: Jun 2005
Location: Almont mi usa 48003
Posts: 3,288
Honestly,
I wouldnt be suprised if trading in lithium ore puts hybrid cars and e-cars in a bind soon too, making them unfeasible.

Redline Superbike Member


AKA Duneripper :)
Ladies Love Cool D.

"I would have been your daddy, But that dog beat me over the fence."
Duner is offline  
Sponsored Links
Advertisement
 
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the Sportbike Forum: Sportbike Motorcycle Forums forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in










Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome