I have family with money invested in Ethanol plants. I have neighbors who I respect and know I can count on that also do. It is not a matter of the corn farmer or grain farmer making a profit with me. Heck, I am in a situation here that if we really wanted to we could start growing corn on 50% of the land we currently use for cattle. NOt great corn ground but we could get over 150 bushels on it as long as we have moisture.. Might happen.. Or we could go whole hog and farm the whole place that is being rented out for crops and have the machinery, yes it does cost money...Not even against the government subsidy for it because I basically see it as an energy subsidy vs a food subsidy. Would like to see free markets rule but their really is no such thing as a free market today with all the regulations.
4 dollar corn is good for the rural economy, at least around here... 4 dollar corn means profit for the farmer. Profit for the farmer means that combine that he is using that was made in the mid 80's can be replaced. That means jobs down at the John Deere Plant in Moline or Ottumwa or whatever you are buying to replace. No problems with it.. Probably means the end of direct payments, CCP's and LDP's as we know it when the next Farm Bill comes along which will save millions, if not billions of dollars a year. (15 cent LDP alone would be 1.5 billion bucks on last years crop the local LDP got as hgh as 30 cents in 2005. ..
That being said, what if this does drive up food costs and Mr and Mrs. Jones start wondering why they are paying 12% of their income towards food instead of 9%.. Mike posted an article about the Beef Boycott of 73..
The reason I call it a stop gap is because there is not enough ground to grow the corn needed to make enough so we can have a large percentage of cars running on straight Ethanol... I think it is fine for now but 15 years from now I wonder... I know some plants going up around here are talking about being set up to run on Molases as well as corn....
Feed lots won't loose money so much as the cow calf operator. Feed lot guy will say, hey, my feed costs just went up 150 bucks per calf so I have to bid .30 less cents a pound on a 500 pound calf... Neighbor told me that some paper out of Wisconsin is calling for calvesborn this year to be worth less than fats on a per pound basis due to the increase in feed costs... It will be interesting, I guess I better watch the classifieds for some good plow and drill and planter deals..