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Anyone else concerned about ethanol?

wdcook

Well-known member
Heard a very disturbing analysis on Market to Market last nite. Click on Market Analysis and Market Plus to hear it at this site; http://www.iptv.org/mtom/

I think we better slow this ethanol train down b4 there is a wreck.
 

IL Rancher

Well-known member
Well, they keep talking about the magic number for resistance in Ethanol production is 4.05 a bushel for corn.. That is their breakeven right now. If they dropped the subsidy they are getting per gallon it would drop it even more. What disturbs me most about Ethanol is I still see it as a stop gap solution, at least corn based ethanol... There are simply not enough acres of ground out there to provide enough ethanol for this country to replace on any large percentage the amount of gasoline we use with E-85 or even a 25% blend.... I know they are working a lot with biomass conversion to ethanol (crop residue, garden/yard waste) but I still think that if you are going to stick with the internal combustion engine they should just sink all the money that is being spent on Ethanol (Federal money that is) and instead funnel it into coal gassification or, heck, go away from that and do Hydogen.. Either or is longer term better than 1) importing oil from other countries 2) Ethanol because in the end with Ethanol you are going to sacrifice the cheap food we have right now to try to cut fuel costs. The average American is not going to like seeing their grocery bills go up 15-20% (Random numbers).. We have pursued a cheap food policy in this country for a generation basically and that will have to change if instead if the ethanol industry pushes all of the grains to the break even price for ethanol produciton.
 

jigs

Well-known member
as a corn grower, I love ethanol...$4 corn is a VERY profitable option.
but as a cattle man, buying corn or DDG is gonna get expensive. and what about the guys feeding steers?

we were trying to figure out the price swing yesterday. if you bought an 600 pound steer to finish him out, and the price of corn jumped like it has, say $1.50 a bushel in the past 6 months. how much extra cost per head is that in a steer to finish him??

then add the drop in cattle prices. we guessed it near $100 per head.

of course we were rounding figures, and guessing at feed/ pound conversions....
 
A

Anonymous

Guest
Price of Corn

Corn price per bushel

396.50 cents per bushel

Daily change of 20.000 ( 05.31% )

Corn Quote Updated Jan-13-07 12:19 AM
 

Mike

Well-known member
I guess we would all be surprised to know that ADM is one of the biggest players in ethanol. :???:

They have a knack for getting more from the guvment in the form of subsidies than anyone else.

Large corporations at play again here boys.

It's called "Corporate Welfare".
 

DaleK

Well-known member
I like ethanol as a corn grower. I won't be buying any land or equipment based on supplying corn for ethanol, and I don't have a cent invested in an ethanol plant and never will. I know too many corn growers who've taken out a second mortgage to invest in a plant. Think a whole lot of them are going to be finding other careers in a few years.
 

Ben H

Well-known member
What is it that a Rumen is for? The bacteria breaks down the cell wall of forages so that Ruminants can eat things that we can't and get nutritional value out of them. Our country decided to start feeding cattle corn after the Korean war when fuel was cheap and machinery allowed us to do more. It was decided that grain would be fed to cattle and that is what has turned the American cattle industry into what it is today, except for the rebellion of farmers like myself who are going back to the way it was meant to be and allowing their animals to eat an all forage diet. Funny thing is that it turns out the meat produced the way nature intended is much healthier (fighting things like heart disease and cancer). I have a BS in Animal Science and never thought I would be saying things along these lines after being taught how to manage things like forage to concentrate ratio, rBST, ionophores and so on to keep cattle in a concentrated environment healthy and productive. How many thousands of years have cattle developed into what they are today? And we think changing everything in a few decades is good for them, or us?

It's time to get the grain out of the equation.
 

jodywy

Well-known member
Always thought grain was just grass seed, corn, oats, barley, wheat were all grasses last time I had an agronomy class
 

IL Rancher

Well-known member
Ben, in theory I kind of agree with you but unless the acres that are in corn are taken out of corn and put into pasture you aren't going to be able to raise near the feed to feed out all the animals on a grass diet. I could take Pearl Millet and say Annual Rye grass and grow enough tonnage per acre to make up for what the corn acreage brings in (Not energy mind you but this is just rough speak) but if I get 4 bucks a bushel to sell corn to the ethanol plant than why the heck would I grass finish anything on 200 bushel corn ground? As long as acreage is being demanded by corn the ground isn't out there to grass finish the beef herd in this country... We do sell grass fed beef, although lamb does a much better job converting pasture to meat (Just a function of when lambs are processed), we have to figure that if are going to grass fed a steer out that means one less cow or for every 3 steers we grass we have to drop 2 cows.. The ratio is still being worked on right now....Basicaly, Ethanol eqates to 4 dollar corn which in turn makes the process of converting crop ground to pasture for grassfinishing/ haylage less profitable unless beef prices go up and so on...

I think the Ethanol plants that get on line in 2007 and 8 will be fine because the subsidy will be in affect long enough to pay for them and than some. I think, with the way the loans and such are structured with the government that the plants pay for themselves within a year (I'm going by memory of someone who is a business man and involved in one told me. And no, he wasn't trying to sell me anything, just talking about that investment vs biodiesel plants).

Of course, maybe the subsidy for Ethanol will be renewed.. I guess they figure they can spend the money ethanol which keeps corn prices up or pay LDP's and CCP's when the corn market is in the craper without Ethanol.
 

jigs

Well-known member
Ben H said:
What is it that a Rumen is for? The bacteria breaks down the cell wall of forages so that Ruminants can eat things that we can't and get nutritional value out of them. Our country decided to start feeding cattle corn after the Korean war when fuel was cheap and machinery allowed us to do more. It was decided that grain would be fed to cattle and that is what has turned the American cattle industry into what it is today, except for the rebellion of farmers like myself who are going back to the way it was meant to be and allowing their animals to eat an all forage diet. Funny thing is that it turns out the meat produced the way nature intended is much healthier (fighting things like heart disease and cancer). I have a BS in Animal Science and never thought I would be saying things along these lines after being taught how to manage things like forage to concentrate ratio, rBST, ionophores and so on to keep cattle in a concentrated environment healthy and productive. How many thousands of years have cattle developed into what they are today? And we think changing everything in a few decades is good for them, or us?

It's time to get the grain out of the equation.
to each his own, but I prefer a corn fed steer to a grass finished steer. last time I ate a steak from a grass finished critter I was ashamed to be in the beef business. very stringy, and tough.
that being said, I do like to buy bulls from guys who are not big grain feeders, like to get a true picture of what I am buying.
 

IL Rancher

Well-known member
Jigs, probably the animal more than it being grassed finished...But that is the problem, margin of error is a bit more narrow with grassfinished because the forage chain is harder to manage than the more concentrated grain fed version. I like them both when it comes to beef but I just basically like beef.

You can grassfinish an animal off the corn plant as long as you don't let it go to ear and certian other annual grasses are really good for putting on the flesh on a steer.. Gotta get them gaining x amount of pounds a day and they always have to be gaining from day 1 to harvest and the product will be good... not beef but I would take grass fed lamb over grain fed anyday of the week...
 

Ben H

Well-known member
IL Rancher said:
Ben, in theory I kind of agree with you but unless the acres that are in corn are taken out of corn and put into pasture you aren't going to be able to raise near the feed to feed out all the animals on a grass diet. I could take Pearl Millet and say Annual Rye grass and grow enough tonnage per acre to make up for what the corn acreage brings in (Not energy mind you but this is just rough speak) but if I get 4 bucks a bushel to sell corn to the ethanol plant than why the heck would I grass finish anything on 200 bushel corn ground? As long as acreage is being demanded by corn the ground isn't out there to grass finish the beef herd in this country...

I couldn't agree with you more, even without ethanol I don't think we have enough land to grass finish the amount of beef the US consumes. I almost added something about that on my first post, then erased it. I knew someone would bring it up. What is going to happen, are we going to be forced to raise are cattle like Artentina, Brazil, Australia and New Zealand due to high corn? Are we going to finish more on grass? Are we going to inflate our price of our product to cover the cost like the dair industry does....oops, I'm sorry, they're barely getting paid more then what they got 20 years ago. I don't know what the answer is, for me the decision to stay in the beef business or not was decided by the potential of the markets around me (>200,000 people within 30-45 minutes) and more people willling to pay more for a grass fed product, plus more land becoming available because the younger generation is moving out of state, making more land (what hasn't been developed) available. It will be interesting in the least to see what happens. Ethanol is not a fix, it's a bandaid for a bigger problem.
 

jigs

Well-known member
your "band aid" is generating $2000 more, every trip to town for me thanit did at harvest last fall !! that is on good band aid .... plus, I think $4 corn will push beans to near $10 so FINALLY I can see a little blue ink.
 

aplusmnt

Well-known member
Ethanol seems to be a good deal for the Corn growers, but not so sure it is a good thing for The General Public. When you factor in Tax dollars going to ethanol plants, higher meat products due to higher corn cost and then that fact that ethanol is not much cheaper or any at the pumps and you get less gas mileage when using it.

Most people using E10 will not notice the 1 or 2 mpg difference but if they ever use E85 they will for sure see the 20-40% decrease in MPG.
 

Ben H

Well-known member
jigs said:
your "band aid" is generating $2000 more, every trip to town for me thanit did at harvest last fall !! that is on good band aid .... plus, I think $4 corn will push beans to near $10 so FINALLY I can see a little blue ink.
I'm very happy to hear you're making some money, that's great. By band aid I'm saying that ethanol is not a long term solution to the huge, and increasing, energy demands of this country.
 

katrina

Well-known member
It always rubs me the wrong way when the farmers and ranchers start seeing a little profit and someone starts bellyaching about it...... It takes alot of money to grow crops and cattle. Machinery is not cheap and everything else it takes...... Charity starts at home, so instead of giving our dollars to the ragheads...let's support our own... We really are good people......
 

aplusmnt

Well-known member
katrina said:
It always rubs me the wrong way when the farmers and ranchers start seeing a little profit and someone starts bellyaching about it...... It takes alot of money to grow crops and cattle. Machinery is not cheap and everything else it takes...... Charity starts at home, so instead of giving our dollars to the ragheads...let's support our own... We really are good people......

I like to see everyone make a profit! But the citation is that the Government is making decisions that should be decided through a free market. Ethanol might not be the answer to our problem with foreign oil, maybe it will be more efficient batteries and battery powered cars with solar panels as roofs. If the free market is allowed to decide these problems it will all work out.

But with the Government deciding which road of technology is best versus the free market we are headed down a no win road. Most people do not realize that a Chevy pickup that gets say 19 miles to the gallon of gas on regular gas would get more like 12 miles to the gallon on E85 so even if they could make Ethanol cheaper (which they can not) it would be more costly in the end.

Ethanol is a emotional decision that Washington is making much like pulling out of Iraq. They are playing on peoples emotions and lack of true knowledge.

Plus I think the ragheads will always play with the supply and demand and pricing to keep ethanol a loosing economic venture. In my opinion ethanol will only be viable as long as tax dollars keep it so with the 40 cents tax break that they get now on it.

I think we are throwing good money against a economic looser. Even if Corn producers gain more money and maybe we import less oil (which is not likely) do we end up importing more meat products because we can not raise it as cheap as in other countries? As ethanol plants make money do feed lots loose money?

Anything that needs Government legislation to make it is probably a bad idea. Somewhere most likely we as Americans are going to loose.
 

katrina

Well-known member
a+, I have to disagree with ya on this one...... That dog won't hunt... Untill we get everyone on the same page we will have problems... It can be done........ Brazil does it.........
 

IL Rancher

Well-known member
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..
 
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