Time to eliminate ethanol mandates for the good of the country

[Phase2]

Stolen from the web:

Isn’t it time for the Ethanol standard to get re-evaluated, when worldwide famine is a real possibility?

Given that:
-We have a large surplus of petroleum energy right now that is crashing prices to the floor and will likely end up crippling America's (strategically important) energy production system.
-Face a world-wide food shortage this year due to the Wuhan coronavirus, locust plagues, pig and chicken epidemics and reduced stockpiles due to last years difficult growing season.

It only seems reasonable to eliminate (or at absolute minimum suspend) the ethanol mandate that is years beyond it's original reason for existing. Reducing government control of production will allow farming/industry to be more flexible in delivering product where it is needed and valued most.

 

[KLB]

Time is way overdue

 

[whiskey6gun]

Pardon my ignorance, but does the government mandate corn be grown, or do you mean that farmers would grow more “needed” crops because the price of corn would bottom out without the ethanol demand?


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[jndturner]

From what I am hearing many of the corn ethanol plants have shut down due to low gas prices. Many of these were built banking on $3.00 gas. Anything under that and they are not profitable. This has caused some challenges in livestock production, where the by product distillers grains are used as a protein source. These are used in swine, beef and dairy production. Since they have virtually disappeared, the cost of protein in rations has increased quite a bit. These sectors have become extremely unprofitable. Some of my former customers went from a projected profit of $200/head on fed Holstein steers to loosing about $500 per head. This is an example of how the livestock market works and the volatility that these guys endure. Most years if they make $25-50/ head they are doing good.
The ethanol mandate has skewed ag production and like most green energy initiatives requires incentives to be profitable.

 

[Phase2]

From what I am hearing many of the corn ethanol plants have shut down due to low gas prices. Many of these were built banking on $3.00 gas. Anything under that and they are not profitable. This has caused some challenges in livestock production, where the by product distillers grains are used as a protein source. These are used in swine, beef and dairy production. Since they have virtually disappeared, the cost of protein in rations has increased quite a bit. These sectors have become extremely unprofitable. Some of my former customers went from a projected profit of $200/head on fed Holstein steers to loosing about $500 per head. This is an example of how the livestock market works and the volatility that these guys endure. Most years if they make $25-50/ head they are doing good.
The ethanol mandate has skewed ag production and like most green energy initiatives requires incentives to be profitable.

The mandate was originally sold as an energy independence and national security issue because we were importing so much oil form the middle east and were vulnerable to pressure from them and having the tanker lines disrupted by others, but had "green" elements included as well. Interesting that some ethanol plants have shut down (pre or post-coronavirus?), but it makes sense.

It has absolutely skewed ag production, causing a lot of land to be planted, chemical fertilizers used, expansion of GMOs, and power usage that otherwise wasn't necessary or would have been more economically used in other ways. This is pretty much true of all market interference. There have been many federal and state laws further distorting the economy and funneling tax dollars to favored industries since that original mandate was put in place.

 

[jndturner]

The ones I have heard of shutting down have been since COVID-19 was first seen in the US. The value of crop land in many areas was artificially increased due to ethanol. I remember talking to two brothers that put a bid in on some land. They didn’t even come in the top half of the bottom third. They were lucky their father was involved enough to prevent them from buying land that would have bankrupted them.

 

[rosejm]

Well, we shouldn't be BURNING this priceless virus fighting chemical!

If I can't drink the ethanol being produced because it's needed for the defense of the country...

 

[indyjs]

Also causing a CO2 shortage