[Bioenergy] RE: [Gasification] USDA Crop Forecast, Corn & Ethanol...

Fri May 19 13:42:18 CDT 2006

To Dear Mark and listers.

Mark wrote:

>>>>>I think it's going to be very hard for the corn ethanol industry to
go 
>>>>>bankrupt unless something else causes the price of oil to decline
long >>>>>term. Anyone have some candidate causative factors?

....your forecast makes sense and everybody would agree with you, myself
included but.........you never know, life itself is wholly unpredictible
and sometimes it comes over with unforeseen events... so, one has to be
prepared to anything...don't you think so...???? 

Kindest regards.

Oscar.

-----Mensaje original-----
De: gasification-bounces at listserv.repp.org
[mailto:gasification-bounces at listserv.repp.org] En nombre de Mark &
Elena Gallmeier
Enviado el: Viernes, 19 de Mayo de 2006 09:24 a.m.
Para: Denny Haldeman; Roger Samson; gasification at listserv.repp.org
CC: bioenergy at listserv.repp.org
Asunto: Re: [Bioenergy] RE: [Gasification] USDA Crop Forecast,Corn &
Ethanol...

To Roger, Denny & All,

>However who will bail out the ethanol plants as they go bankrupt
because of 
>high corn prices<

The ethanol plants are indirectly setting the price of corn now.  What's

really driving marginal corn prices is the oil market.  They may as well

move the corn and soybean futures trading from Chicago and Kansas City
to 
the New York Mercantile Exchange, right next to the unleaded gasoline
and 
diesel fuel pits.

I think it's going to be very hard for the corn ethanol industry to go 
bankrupt unless something else causes the price of oil to decline long
term. 
Anyone have some candidate causative factors?

The wisdom of this food crop to ethanol policy was (emphasis on past
tense) 
extremely debatable from many sides.   I think that debate is over.  In 
North America for the foreseeable  future the vast majority of food
prices 
will be set directly by the price of oil.  This applies to anything that

uses corn and soybeans in the production cycle, or uses land that can
grow 
corn and soybeans.   And oil is going to set a minimum price floor for 
ANYTHING that can be wet milled or dry milled and then distilled into 
ethanol.  Just one example.  If you are a potato farmer, why would you
ever 
take less than you can get for turning your spuds into ethanol?

Regards,

Mark

----- Original Message ----- 
From: "Denny Haldeman" <dennyh at bellsouth.net>
To: "Roger Samson" <rsamson at reap-canada.com>; "'Mark & Elena Gallmeier'"

<mgallmeir at comcast.net>; <gasification at listserv.repp.org>
Cc: <bioenergy at listserv.repp.org>
Sent: Thursday, May 18, 2006 6:34 PM
Subject: Re: [Bioenergy] RE: [Gasification] USDA Crop Forecast, Corn & 
Ethanol...

> How many ethanol plants are running solely on their product, including

> planting, harvest, processing and distribution?  That will tell the
truth. 
> Waiting.  Denny
>>
>> From: "Roger Samson" <rsamson at reap-canada.com>
>> Date: 2006/05/18 Thu PM 02:44:14 EDT
>> To: "'Mark & Elena Gallmeier'" <mgallmeir at comcast.net>,
>> <gasification at listserv.repp.org>
>> CC: bioenergy at listserv.repp.org
>> Subject: [Bioenergy]
>> RE: [Gasification] USDA Crop Forecast, Corn & Ethanol...
>>
>> This story is better for a bioenergy posting. The Bush corn ethanol 
>> policy
>> is in fact really great news for all US farmers. It's inevitable with
the
>> across the board rise in energy and mineral commodity prices that ag
>> commodity prices were eventually going to increase somewhat, but now
they
>> could soar as demand for farm products for energy increases with the 
>> massive
>> construction of corn ethanol plants. However who will bail out the 
>> ethanol
>> plants as they go bankrupt because of high corn prices and high
energy
>> prices to operate them.
>>
>> The real story is the need to redesign the bioenergy industry so that
>> taxpayers, farmers and the environment win. Only the farmers that
didn't
>> invest in the corn ethanol plants and the agribusiness input
merchants 
>> are
>> the beneficiaries of the current corn ethanol policy. Once corn
ethanol
>> crashes we will begin to appreciate Pimentel's concerns about the
energy
>> balance of corn. He forewarned America about the coming corn ethanol
>> boondoggle.
>>
>> Roger Samson
>>
>>
>>
>>
>> -----Original Message-----
>> From: gasification-bounces at listserv.repp.org
>> [mailto:gasification-bounces at listserv.repp.org] On Behalf Of Mark &
Elena
>> Gallmeier
>> Sent: Thursday, May 18, 2006 1:06 PM
>> To: gasification at listserv.repp.org
>> Subject: [Gasification] USDA Crop Forecast, Corn & Ethanol...
>>
>> To All,
>>
>> ...is out.  It's the hook for this story:
>> http://news.yahoo.com/s/ap/20060512/ap_on_bi_ge/crop_report  USDA is
>> forecasting a 15% - 30% increase this year in U.S. corn prices.
Ethanol
>> demand was cited as the primary market force behind this expected
move.
>> USDA is forecasting a 34% one year increase in the amount of corn 
>> converted
>> to ethanol.
>>
>> And the wheat harvest is forecast to be the lowest since 2002, down
12
>> percent from last year:
>> "Meanwhile, the nation's soon-to-be-harvested winter wheat crop is on

>> track
>> to be the smallest since 2002, analysts said. Farmers are expected to
>> produce 1.32 billion bushels of winter wheat, down 12 percent from
last
>> year.  Drought in Texas, Oklahoma and throughout the central and
southern
>> Great Plains has dramatically reduced yields..."
>>
>> Left unstated is the wheat acreage this year and how it compares to 
>> previous
>>
>> years.   A reasonable expectation is for corn and soybeans to now 
>> displace
>> wheat on all acreage where realistic choices exist of which crops to 
>> plant.
>>
>> Decline of Corn Reserves.
>>
>> "Demand has risen so sharply, the amount of corn in storage is
expected 
>> to
>> drop to half of last year's levels, the department said.  "That's
really
>> good news," said McCauley, who farms nearly 4,000 acres with his son.

>> "The
>> more corn you have on hand, the less prices will go up.""
>>
>> Great news alright.  Three millenia of ancient wisdom - carrying
grain
>> reserves to guard against events like drought reducing subsequent 
>> harvests -
>>
>> is now being replaced by Just In Time Agro-Manufacturing.  Even
better 
>> are
>> the New Farm Economics.  The old discredited system centered for 
>> thousands
>> of years on increasing yields and productivity to increase farm
incomes.
>> 'Value added.'   The new system is much simpler.  Drastically
increase
>> demand to raise prices strongly to increase farm incomes.
>>
>> Well, too many Americans suffer from obesity anyway, so some lean
years 
>> will
>>
>> help shape them up.  Time's running out to survey and stake claims to

>> sites
>> and prepare to farm those jumbo-sized family gardens in the USA,
folks. 
>> A
>> lot of potential locations will need soil amendment which takes time.
>> Barrel farming potatos will cause all scrap auto and truck tires to 
>> vanish
>> in flash.
>>
>> Mark
>>
>>
>>
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