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Biodiesel producers rejoice at new mandate for 2013

The renewable energy industry is applauding President Obama and the U.S. Environmental Protection Agency after the EPA approved a 28% increase in the amount of biodiesel mandated for use in trucks on the nation's highways for 2013. Biodiesel is made in a process that uses soybeans, while the production of ethanol is based on corn.
 
The president of the Iowa Renewable Fuels Association, Brad Albin, said, "I want to thank President Obama and his staff for listening to our concerns and recognizing the value and potential of America’s Advanced Biofuel—biodiesel.”
 
The biodiesel industry is celebrating because unlike mandates for the use of ethanol in the nation's fuel set forth in the 2007 Renewable Fuels Act, biodiesel didn't have a mandate until last year. That mandates set a goal of 800 million gallons. The new mandate for 2013 has been expanded to 1 billion gallons, and fell short of the 1.28 billion gallons that biodiesel producers wanted.
 
“This was an incredibly important decision, and the Obama Administration got it right,” said Joe Jobe, CEO of the National Biodiesel Board, the industry trade association.
 
“It will allow biodiesel plants across the country to invest and expand, creating thousands of jobs. At the same time, it sends a strong signal that the U.S. is standing firm behind its commitment to producing clean, American-made energy to strengthen our energy security and break our dependence on petroleum.”
 
When the mandate was introduced in 2011 at 800 million gallons, it helped prevent the closure of several of the nation's biodiesel plants.

Ethanol production has come under fire for driving up prices on the food crop, however, there is no indication that the same will happen for soybeans. 

Source: Desmoines Register



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Ugh
By FITCamaro on 9/19/2012 9:02:06 AM , Rating: 5
I am all for bio-diesel.

I am not for mandates that ignore costs and demand. Nothing but another payoff for his green energy crowd.




RE: Ugh
By Spuke on 9/19/2012 9:57:54 AM , Rating: 3
Yeah, I have mixed feelings about this one. I'd much rather pay for this than ethanol but at the same time, I don't think this needs to be mandated.


RE: Ugh
By freedom4556 on 9/19/2012 10:18:16 AM , Rating: 3
I think this is pretty much equivalent to ethanol in terms of bad idea-ness. The only redeeming part really is that diesel engines tend to be more efficient than gasoline engines in the first place. But mandates are typically bad ideas, and laws hardly ever go away.


RE: Ugh
By kwrzesien on 9/19/2012 10:47:13 AM , Rating: 2
Yeah, but we have to look to the future where people need to start eating health food again instead of corn and soybeans. Then all the farmland that makes corn and soybeans can make fuel!


RE: Ugh
By quiksilvr on 9/19/2012 11:26:12 AM , Rating: 2
I don't know about soybean biodiesel but I do know corn based ethanol is less efficient and worse for the environment and more expensive.


RE: Ugh
By Argon18 on 9/19/2012 12:09:59 PM , Rating: 2
You're correct about corn ethanol, it takes more energy to make than what it contains. Its a net energy loss. There are several reasons why. Firstly, corn is one of the highest fertilizer and pesticide intensive crops out there. And secondly, ethanol is grain alcohol, so the only way to make it is to repeatedly boil and cool the liquid a dozen times or more, extracting the alcohol each time. How much energy do you think it takes to bring a trillion gallons of liquid to a boil, then cool it, a dozen times over? A LOT.

Biodiesel on the other hand requires only a single boil/coil of the liquid. This alone means it takes vastly less energy to create than corn ethanol. Secondly, soybeans are not very fertilizer and pesticide intensive. In fact, soybeans are used to return nitrogen into the soil, reducing the fertilizer costs for other crops in that field.

Biodiesel also contains more energy per gallon than corn ethanol. Ethanol has about 96,000 btu's per gallon, while biodiesel has around 136,000 btus per gallon.

Biodiesel is better in every measurable way than corn ethanol.


RE: Ugh
By Solandri on 9/19/2012 2:40:52 PM , Rating: 2
quote:
And secondly, ethanol is grain alcohol, so the only way to make it is to repeatedly boil and cool the liquid a dozen times or more, extracting the alcohol each time. How much energy do you think it takes to bring a trillion gallons of liquid to a boil, then cool it, a dozen times over? A LOT.

No it doesn't. You don't just throw away all the heat energy after you boil it once. You use a heat exchanger to transfer that heat energy to a second batch which needs to be boiled. You do lose thermal energy at the periphery, but for most processes no more heat is lost compared to doing just one heating cycle. This is chemical engineering 101.

Corn ethanol is a boondoggle because the only reason we have excess corn is because it's subsidized to insure there are no food shortages. That means we always have excess corn, which we're always trying to think of new ways to use. Corn ethanol is a good use for excess corn. Corn that was going to grow moldy in a grain elevator, or be eaten by rodents. But it's a terrible crop to grow for the explicit purpose of making ethanol. Sugar beets are a much better crop to convert into ethanol at North American latitudes.

quote:
Biodiesel also contains more energy per gallon than corn ethanol. Ethanol has about 96,000 btu's per gallon, while biodiesel has around 136,000 btus per gallon.

The amount of energy per gallon is irrelevant except for fuel tank size/weight. All biofuels are solar energy. Plants capture sunlight, store it as sugars and oils. Sugars can be converted into alcohol, or oil with a lot of finagling. Oils can be converted into biodiesel. So the fact that biodiesel has about 40% more energy per gallon just means that 40% more plant matter went into making a gallon of biodiesel than ethanol.

quote:
Biodiesel is better in every measurable way than corn ethanol.

Oils like biodiesel don't burn as cleanly as alcohols. The primary motivation for storing energy as a liquid chemical fuel is for transportation applications. And if you're burning it in a vehicle, that means it's harder to attach scrubbers and filters. Consequently, lower byproduct emissions are a desirable trait in your fuel. Alcohols easily beat oils in this regard.

The problem with alcohols as fuel is that they tend to dissolve most gaskets and sealants.


RE: Ugh
By GotThumbs on 9/19/2012 12:26:56 PM , Rating: 2
While I do not agree with the mandate itself....Bio Diesel has always been an alternative.

There's one key oversight about the fuel sources. Producers don't need to grow soybeans to get the oil they need. They just need to take the millions of gallons of used cooking oil restaurants use each day. Taking a single product (cooking oil) and using it twice is a smart and economic approach. Regarding the efficiency of bio-diesel against ethanol... Diesels were originally designed to run on oils such as peanut oil and there is zero degradation in power/efficiency. Now with bio-diesel, there is an issue with older fuel lines not suited for high % of bio-diesel. Most newer diesels are not affected. It's a fuel alternative that's been long overlooked in the US, but not Europe. Europe has more diesel powered cars per-capita.


RE: Ugh
By dgingerich on 9/19/2012 11:08:25 AM , Rating: 2
Yeah, just as ethanol has increase the price of gas, biodiesel will and has increased the price of diesel fuel. These mandates are just stupid.

They're driving up the costs of transportation, a vital component of the US economy, right when the economy is weak, curtailing job growth. It impacts every single industry. This is probably the biggest way Obama's damaged the economy. The fuel prices alone have probably cost us a million jobs or more in the last 4 years.


RE: Ugh
By Reclaimer77 on 9/19/2012 11:15:11 AM , Rating: 4
quote:
They're driving up the costs of transportation, a vital component of the US economy


That's been the plan all along.

"Under my Administration, energy costs will necessarily skyrocket"


RE: Ugh
By dgingerich on 9/19/2012 11:28:42 AM , Rating: 2
Combine energy cost increases, regulation increases, government money spent inefficiently, and increased costs of the government borrowing money, and you get the huge unemployment problem we have today. The costs behind running a business have gone way up, while government fat cats (regulators, administrators, and other generally useless positions) raking in great paychecks. It's inevitable that we'll have prolonged unemployment.

It's going to take a decade or more to correct this, even if we get a new President in January.


RE: Ugh
By Ringold on 9/19/2012 11:20:47 AM , Rating: 2
Already can see what an apologist will chime in with: But oil and nat gas output is up on his watch!

Yes, but look at the numbers, and the gains are in spite of him because the vast majority of expansion took place on privately owned land, not federal land. The left has looked on at cheap nat gas in horror; they liked natural gas as a mythical lower-carbon bridge fuel right up until the moment it became economically viable..

If he wanted robust energy sector growth, he'd of given the green light to Keystone, for example, and generally thrown open the doors to bidding on new plots of federal land, onshore and offshore, for exploration and extraction, and leaned on California and Florida to allow for more as well. There's been none of that.


RE: Ugh
By FITCamaro on 9/19/2012 11:54:58 AM , Rating: 2
The new wells were also issued permits under the Bush administration. Not Obama's.

The sole area where Obama hasn't blamed Bush.


RE: Ugh
By dlapine on 9/19/2012 11:41:21 AM , Rating: 2
I don't follow you. If the mandate for biodiesel was only started last year, how could it possibly have driven up the price of diesel for the last four years? Or cost us a million jobs?

Anyone here have an idea as to how much a gallon of biodiesel costs to make? Y'all keep saying that it'll raise the price of diesel, but could you give me some numbers on that? Ethanol costs 60% of whatever the price for a bushel of corn is, plus markup. I'm not sure what the price to produce a gallon of Biodiesel is.

Biodiesel at least has the advantage (vs ethanol) that it produces the same energy as a gallon of fossil diesel, and that no changes are required in any diesel engine to use it.


RE: Ugh
By FITCamaro on 9/19/2012 11:55:56 AM , Rating: 2
He didn't say this mandate did. Obviously that isn't the case.

He said higher fuel prices have. This will just drive diesel prices up further.


RE: Ugh
By dlapine on 9/19/2012 12:07:35 PM , Rating: 1
Ok, but blaming Obama for the higher fuel costs when the EPA mandates don't apply is unreasonable. OPEC might also have something to do with it.

As I noted, biodiesel is about $4.35 a gallon. That's a small increase over current costs, and a definite limit to how much pain the Arabs can inflict on us in the future.


RE: Ugh
By FITCamaro on 9/19/2012 1:19:38 PM , Rating: 2
I don't blame Obama for all the increases in fuel costs over 4 years. I do however blame Obama for doing nothing to help fuel costs from going up in the past 4 years.

As stated yes there are more onshore, private wells now than 4 years ago. But thanks to permits issued under Bush. Under Obama, offshore drilling has drastically decreased(while we're subsidizing other nations offshore drilling), EPA mandates have skyrocketed, coal mining is down, coal power plants are being shut down from the EPA mandates, E15 is coming which will void many car's warranties, etc.

$4.35 might be a small increase in current costs where you are. But here diesel is $3.80ish a gallon. So $0.55 is almost a 15% increase.


RE: Ugh
By JediJeb on 9/19/2012 6:31:04 PM , Rating: 2
There was a report this week that a major coal mining company was shutting down several mines in the eastern mountain region( West Virginia, Virginia, Pennsylvania) because they are changing from mining energy/fuel coal and are going to move operations to where they can mine coal for steel production which will be shipped to Asia. Thousands of jobs may be lost in that region alone because of many of the "mandates" that have been added in the past few years. The company said it is now more profitable to stop mining coal for fuel and move their entire operations over to the other type of coal that they can ship overseas. I am not even sure their operations will remain within the US, I need to look that up to be sure.


RE: Ugh
By Ringold on 9/19/2012 10:11:16 PM , Rating: 2
West Virginia isn't really a state that can afford to lose those jobs, either.

This is exactly what Obama promised the LA Times before he was elected, though; he said he'd destroy the coal industry.


RE: Ugh
By FITCamaro on 9/19/2012 1:22:51 PM , Rating: 3
Obama has also rejected the Keystone Pipeline resulting in the Canadians agreeing to build a pipeline that will ship crude to China instead. Even his own union supporters are mad at him about that one. They're just to stupid and afraid to speak out loudly.


RE: Ugh
By dgingerich on 9/19/2012 2:20:34 PM , Rating: 2
I blame Obama for the restrictions on building new refineries and the ethanol mandates that did, in fact, drive up both gasoline and diesel prices over the last 4 years. He's doing the same thing all the time: you must buy ethanol in your gas, you must buy health insurance, you must buy "renewable" energy, you must buy biodiesel.

“There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.”
? Robert A. Heinlein, The Moon is a Harsh Mistress

Obama is, in fact, a big tyrant.


RE: Ugh
By Ringold on 9/19/2012 10:14:03 PM , Rating: 2
We're a slight net exporter of distillates, but more refineries would still be great -- we've had a trade deficit for ages, and exporting gasoline and diesel is as good a way as any to bring it down! Plus, refineries create scores of high-paying, high-skilled jobs, from all sorts of different branches of engineering and craftsmen.


RE: Ugh
By Moishe on 9/20/2012 5:06:38 PM , Rating: 2
This administration might want jobs, but they want something else more than jobs. I say this because every opportunity there has been to create jobs has resulted in the opposite choice of what a sane person would do.

I don't know what the issue is, but they're either stupid or doing it on purpose. Either way, I would rather vote for my dog because he is just as likely to produce jobs.

Inaction would be better than Obama.


RE: Ugh
By dlapine on 9/19/2012 12:00:09 PM , Rating: 2
Ah, found it.

"Operating costs other than the cost of feedstock currently average approximately 59¢ per gallon. By-products of biodiesel production (glycerin, fatty acids, and filter cakes) provide revenues of perhaps 8¢ per gallon. Most U.S. biodiesel plants operate on soybean oil. It takes approximately 7.6 pounds of soybean oil to produce a gallon of biodiesel."

So, I'd make that out to be $0.50 fixed cost plus 7.6 times whatever the cost per pound of soybean oil is. Looks like that's currently ~$0.55. The commodity folks list soybean oil prices by pound, so it's easier to find.

So the cost to make a gallon of biodiesel from soybean oil is about $4.35, at the moment.

I'm seeing diesel prices at the local stations right around $4 a gallon.

Yes, mandating the use of this would seem to push diesel prices higher at the current crop prices. It would also set a ceiling for the cost of foreign diesel, so that it wouldn't be able to go much over $4.35.


RE: Ugh
By bah12 on 9/20/2012 5:24:51 PM , Rating: 2
You don't have a clue do you. The $4 you are seeing at the pump is not the raw ingredients cost that you are comparing to biodiesel. There is an average of $.47 / gallon of stand and federal fuel tax in that $4 you see.
http://www.eia.gov/tools/faqs/faq.cfm?id=10&t=10
So the cost of producing normal diesel is closer to $3.50, and bio would be closer to $4.83. So no biodiesel is not even close to a viable option.

And don't even start with an argument that points to a subsidized (aka lower) tax rate on biodiesel, as that is just shifting numbers to support a flawed logic. Suppose there were no tax on biodiesel, you would have to raise taxes elsewhere to recoup the massive shortfall in revenue, or cut spending (yah right!!).

Look people there is a reason why Big Oil is so damn BIG, and it has nothing to do with conspiracy. Fact is good ole petroleum and coal are still far and away the logical source of energy on this planet. Any delusions you have that these propped up "green" alternatives are anywhere close to competitive, borders on pathological denial or flat out ignorance.

Not even are they not in the ballpark, they are at home on the couch unaware the game is even being played. Yes quite literally they are that far from being anything more than a niche.


RE: Ugh
By FITCamaro on 9/19/2012 11:53:56 AM , Rating: 2
Yup. Which then increases prices on every other good. Food being the main one.


Unlike E-85, Biodiesel makes sense
By Beenthere on 9/19/2012 9:08:33 AM , Rating: 2
Unlike the lie that is E-85, Biodiesel makes sense but mandating/subsidizing it's production with tax payer dollars is unscrupulous just as is subsidies and tax breaks on EVs. Our government caters to Big Biz and punishes most of it's citizens to pay for their crimes.




RE: Unlike E-85, Biodiesel makes sense
By Paj on 9/19/2012 10:23:15 AM , Rating: 2
Better get rid of all agricultural subsidies too. Let the invisible hand decide!


RE: Unlike E-85, Biodiesel makes sense
By dgingerich on 9/19/2012 12:17:17 PM , Rating: 2
except the cost to produce it is much higher than regular diesel. I've seen it quoted (in the comments posted on this story) that it costs $4.35 to produce a gallon of biodiesel, but that didn't include the cost reductions of soybeans due to subsidies (figure in a 40% increase in that cost) and the cost of actually transporting the components around. In all, it's probably closer to $6/gallon. Current market rate, without taxes, is about $2.5/gallon for regular diesel. With this mandate, we're increasing the cost of diesel fuel used by our transportation systems by about 15%.

It doesn't make sense right now. Perhaps, when oil come up in price to about $180/barrel, it might make sense in the future. When it does, a free market would take it up. Forcing it now only costs jobs, jobs we can't afford to lose right now.


RE: Unlike E-85, Biodiesel makes sense
By dlapine on 9/19/2012 12:49:49 PM , Rating: 2
What? Where do you get $6 from? What 40% increase in the cost of soybeans? Diesel costs $2.50 a gallon before taxes? I think you might be mistaken in your numbers.

Take a look here- http://www.eia.gov/petroleum/gasdiesel/

Taxes are just 13% of the cost of a gallon of diesel.

Soybean oil, open market, today is $0.55 a gallon. period, End of story. That's what you, me or anyone else can buy it for. Just like Brent crude oil is $108 a barrel. Any subsidy that US government pays the farmers is included in that price, just like the subsidies we pay the oil companies ($8B a year, last I checked) is included in the price of crude oil.

As for shipping costs:

Brent crude oil (at about $0.55 a gallon, strangely enough) needs to be shipped from the UK, to a refinery in Louisiana.

Soybean oil gets produced in Indiana and other places in the midwest.

You really think that the shipping costs for domestically produced soybean oil are higher than shipping fossil crude across the Atlantic ocean?

Lastly, the EPA mandates that BP, Shell and the other oil companies buy 1B gallons of locally produced biodiesel a year. This is at a ~10% premium ($4.35 versus $4.00), but how many gallons of fossil diesel do we use per year overall? 134 billion, so the effect of a 10% price increase on less than 1% of your supply is, well, nothing.

Any price increase you see at the pump is due to the board of Shell deciding that they'd like to have buy a third yacht this month, instead of their normal 2. They get to use the mandate as plausible reason for the increase, just not a real one.


RE: Unlike E-85, Biodiesel makes sense
By Solandri on 9/19/2012 2:53:27 PM , Rating: 2
quote:
Just like Brent crude oil is $108 a barrel. Any subsidy that US government pays the farmers is included in that price, just like the subsidies we pay the oil companies ($8B a year, last I checked) is included in the price of crude oil.

The U.S. uses about 7 billion barrels of oil a year, so a $8 billion subsidy works out to $1.14 a barrel, or less than $0.027 per gallon of petroleum distillate (like gasoline). Compare that to fuel taxes which amount to about $0.46 per gallon.

Using your $108 per barrel price, oil gets a 1.06% subsidy. Renewables like wind and solar typically get a 30%-50% subsidy relative to price of energy produced. Not that I think there's anything wrong with that - it makes sense to subsidize developing technologies more heavily. But you're completely off the mark if you're trying to argue the $8B indicates we subsidize oil too much and renewables not enough.

When comparing things with different quantities, you want to be comparing percentages, not absolute amounts. Otherwise I could claim a homeless shelter wastes money because it spends $100 a day on food while I spend just $10 a day. Never mind that the shelter is feeding 100 people while I'm just feeding myself.


RE: Unlike E-85, Biodiesel makes sense
By dlapine on 9/19/2012 3:20:07 PM , Rating: 2
Pretty sure you're comparing apples to oranges.

The point of a government subsidy an industry is to ensure that that industry survives in the face of a compelling pubic interest during a period of economic decline.

Kinda like how the Navy pays extra to have 2 manufacturers of aircraft carriers or submarines available now. It would be cheaper to just pay the best one, but it's in the public interest to keep two for various reasons.

There's absolutely no reason to pay profitable oil companies extra money to continue doing what they already do.

The appropriate quantity to compare here is how much money it will take to keep these industries in business for the duration of public need. For the Oil companies, that amount is $0. For the newly formed renewable energy companies, that amount is not $0.

The issue of subsidies is moot to this article anyways, as the article is about the mandated use of American-produced bio fuel.


By Solandri on 9/19/2012 11:51:20 PM , Rating: 2
The vast majority of the subsidies for oil companies goes towards new oil extraction techniques like shale oil. It's not money given to them to do what they're already doing as you're theorizing. They're new technologies being developed, and thus they're being subsidized.

I actually think subsidizing most of these oil extraction techniques (and "clean coal") are a mistake, as the price point where they become cost-effective is so high they'd only really be useful if oil permanently settled at $120+/bbl. Why subsidize research of a technique which will provide oil at $100/bbl, when you can subsidize research which can provide, say, $50/bbl equivalent?

But from a purely financial standpoint, it's an apples to apples comparison. Subsidies are going to new energy generation technologies, whether it be solar, wind, or oil.

quote:
The point of a government subsidy an industry is to ensure that that industry survives in the face of a compelling pubic interest during a period of economic decline.

No it's not. The point of a subsidy is to promote R&D (and maybe production) into a method or technology above and beyond levels dictated by simple market forces. That is, you subsidize something because you want to accelerate its development. Not because you want to keep some company around. The goal is new technology, not the survival of some company.


burn food just brilliant
By glennforum on 9/19/2012 9:38:04 AM , Rating: 1
Only an idiot would think it is a good idea to burn food.

Soy prices will rise and more people will starve to death.

How come it takes millions to die before progressive are happy with their stupid mandates?




RE: burn food just brilliant
By freedom4556 on 9/19/2012 10:12:58 AM , Rating: 2
Oh, it's better than that. They'd rather burn our food than pay foreigners (mostly muslims) for their otherwise useless dino juice. If they were really bleeding heart liberals, they'd send the starving third world the food rather than burning it to keep money out of the hands of sheiks.


RE: burn food just brilliant
By Ringold on 9/19/2012 11:14:22 AM , Rating: 2
Don't know why that got voted down to zero; some self-described progressives upset at hearing the truth?

Here's a fact: We use more than 1/3 of our corn/maize crop for ethanol production. You can not possibly take 1/3 of the crop from one of the worlds largest corn producers and burn it and not significantly boost food prices.*

Here's another: This is exactly the same thing, and with a crop that commonly gets swapped with maize.

Final fact: Trade protection has caused millions in the past 5-6 years to go hungrier then need be, and progressives historically have had to run millions of people in to the ground before getting thrown from power. Most famously, Stalin, Mao and their successors thought they knew best what industry should do; how will did that work out? France's Hollande thinks he knows best too, meanwhile businesses flee the country as quick as they can.

*: I've seen studies that have a hard time picking up the price impact, but I blame inadequately designed analysis and poor statistics. It's a common sense thing that if demand goes up by a huge degree, prices will rise, but the effects of a rising global demand backdrop and farm land being converted between crops muddies the statistical waters enough that quick, 9 o'clock local news analysis can be difficult.


RE: burn food just brilliant
By Paj on 9/19/2012 11:31:21 AM , Rating: 2
quote:
Trade protection has caused millions in the past 5-6 years to go hungrier then need be


So you're happy to eliminate farm subsidies then? Good luck convincing the farming lobby.

Food prices have risen dramatically because regulations on trading food derivatives were lifted.

Billy Bob can speak to his bank and agree to sell his crop at a certain amount come harvest time - this could protect him against risk if the harvest is poor. But then that agreement can then be traded with another bank for more than the price agreed with Billy Bob - it becomes a security, a tradable asset. Do this several times and the price becomes astronomically higher than the original amount as each middleman adds a commission on to it.

What this does is completely distort the role that supply and demand plays in determining the price of food.


RE: burn food just brilliant
By JediJeb on 9/19/2012 6:57:46 PM , Rating: 2
The middle man trading is the biggest problem with food prices. My family has been in farming for decades and it is sad to say but even now you can sell a bushel of corn for nearly the same price you sold it for in 1970. Depending on the market timing, especially around harvest time watch the prices drop. The only farmer who can make higher prices on their crops are the ones who can contract at the exact right time or who have storage space to hold it until the prices increase. The problem with the contracts is if you contract to deliver at say $3/bushel and 1000 bushels and the price goes up you still have to sell at $3, if the price goes down you win. On the other hand if you have a bad crop year(like the drought this year) and you only grow 800 bushels, you have to cover the missing 200 bushels somehow(penalty to price or you must buy at a higher price and sell at lower price to cover your shortage).

They call them Farm Subsidies, but most of it goes to the middlemen not the farmers. Even if you look at the price of corn in 1970's when it was only $2/bushel and now at maybe $4-$5/bushel that is a 2-2.5x increase, yet diesel fuel for your equipment was maybe $0.30/gallon in 1970, is it only $0.60-$0.75/gallon now? Even with corn at $8/bushel as it was a few years ago during the price spike equivalent diesel prices should be at $1.20/gallon now. What farmers make versus what their expenses are has dropped quite a bit in the last 40 years or so. A tractor that cost $5000 in 1970 now costs about $60,000, same with vehicles, equipment and almost every other item a farmer buys yet for a cattle farmer a steer sold for about $1.00/ pound in 1970 and maybe $2.00/pound now. I bet the price in the store or restaurant has more than doubled in that time frame.

quote:
Trade protection has caused millions in the past 5-6 years to go hungrier then need be


Greed within the system has cause the prices to go up, not down at the farm level. Also the reason most in foreign countries are going hungry is because of their government, not a world wide lack of food. We grow enough food to feed everyone comfortably, yet two bit dictators are spending their countries money on weapons and bobbles for their mistresses instead of the food their people need. There are countries in most of the third world that are full of resources like diamonds, gold, oil, coal, and more where there people go hungry because of abuse of their governments.


RE: burn food just brilliant
By Ringold on 9/19/2012 10:26:34 PM , Rating: 2
quote:
Food prices have risen dramatically because regulations on trading food derivatives were lifted.


This has been put out in the public realm by fear-mongers and refuses to die. Liberal economists, from Nobel laureate Paul Krugman, conservative economists, both agree on one thing: Derivative contracts can have little to no impact on commodity prices. They by their very nature cancel themselves out. Several studies, including by industries, government agencies (such as CFTC), NBER and academic economists in published papers (MIT) all find little to no evidence of volatility not consistent with known information, and point out that various commodities that do not have futures contracts or any derivatives at all, such as onions, show the same patterns of volatility AND the same increase in price. First link I found from it was from left-leaning CNN, even those idiots got it right.

Also, as someone that's traded commodities on occasion, commissions are cheap. This isn't 1970.

But again, as much as I think Paul Krugman is a left-wing loon, google for his blog post "it takes two to contango" from a couple years ago. He explains how its nigh-impossible to impact real prices via derivatives markets.

Fact is, billions of people are working their way up the income ladder in post-Deng Xioping China and semi-reformed India, Brazil and elsewhere. And what do they want with that extra income? A lot of things, but chief among them, something other than pig fat and rice to eat. FFS, do you blame them? It's all econ 101.


RE: burn food just brilliant
By Moishe on 9/20/2012 5:03:00 PM , Rating: 2
Absolutely. The first round of Food =Fuel worked so well... let's do it again!

Morons.


Bother!
By danjw1 on 9/19/2012 12:01:20 PM , Rating: 2
Using food stocks for generating fuel when the country (and world) is in a drought is not a great idea. We need to be looking at algae and cellulosic ethanol, not take away from the food stocks.




RE: Bother!
By dlapine on 9/19/2012 12:17:04 PM , Rating: 2
This is snarky, but really, how much tofu can you eat? Soy plays a less direct role in human consumption than corn or wheat.

The reason we use soy is that we are already good at growing it and do so in record amounts. There are other oil crops we could grow to adjust for the changing climate (hotter and drier) and I suspect some farmers will look at alternatives for the next season. This season was bad.


RE: Bother!
By danjw1 on 9/19/2012 12:47:01 PM , Rating: 2
With climate change, this season may well be the new normal. Soy is also used in feed for animals, which has gone up in price significantly with the drought. Also there are any number of food products other then tofu that use soy beans. Unlike many people, I read food labels. You should go through your kitchen and look through the ingredients on the packaging, you would be surprised how many food products actually include soy products.

I really do want to see us move off of foreign petroleum imports. As a veteran, I really do want to see us move away from using the ever depleting fossil fuels as quickly as possible. Too many of Americas warriors have lost their lives and been maimed in our endeavor to protect the flow of oil to this country and our allies. I drive a hybrid and walk and bike more then I drive. I also support the rise in CAFE standards advanced by the administration.

In addition, I am concerned about the use of corn ethanol in fuel because several studies have shown that it leads to greater CO2 emissions then straight gasoline. The problem is we have several problems and importing foreign oil is only one of them. We need to take more into account then just reducing our dependency on petroleum, us much as we have to address that as well.


Yipes
By Cluebat on 9/19/2012 9:18:16 AM , Rating: 2
This will not end well. Another entitlement to industrial farmers that will never go away.

So what's the five year plan?




RE: Yipes
By dlapine on 9/19/2012 12:25:56 PM , Rating: 2
I'm not sure that "entitlement" is the word you're looking for.

The EPA mandate is to the sellers of fuel- they must include 1B gallons of biodiesel from US producers for their sales next year. This would potentially replace 1B gallons of foreign oil.

That's not an "entitlement" for US farmers, but an opportunity.

Personally, I'd rather see US farmers get that cash, rather the Iranians, Iraqis and Venezuelans.

The five year plan is to use domestic supplies rather than foreign oil.

But maybe you're not a fan of "Made in America"?


VW
By btc909 on 9/21/2012 10:02:46 AM , Rating: 2
Oooo let me go buy a VW TDI based vehicle. Wait, it's a VW, no I won't be buying a VW TDI based vehicle. Enough said.




RE: VW
By superstition on 9/23/2012 1:12:19 AM , Rating: 2
Ford is planning to introduce a diesel Cruze next year and Mazda has said it plans to also introduce one.

However, most recent VW diesels are rated for a maximum of 5-10% biodiesel, due to the way the emissions system uses fuel. The biodiesel doesn't volatilize the same way and ends up in the engine oil, diluting it and causing premature wear.


better not...
By Manch on 9/19/2012 8:57:20 AM , Rating: 2
Better not raise the price of soy sauce. I use that stuff on everything!




Wow, just wow...
By klstay on 9/19/2012 9:13:04 AM , Rating: 2
We really have fallen that far?




law of conservation of . . .
By superstition on 9/23/2012 1:28:09 AM , Rating: 2
Soil depletion is something that people seem intent to ignore. Oil is crop biomass. That biomass comes from the soil. Where does it go?

Up in smoke.

Let's burn away our soils. That's the ticket.

Let's dump more chemicals into our water supplies while we're at it.




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