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time to challenge the ethanol scam

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  • time to challenge the ethanol scam

    " In a recent statement, the Chairman of Smithfield correctly pointed to U.S. biofuels legislation as the central factor behind the company's poor returns. This is among the first such direct linkages I have seen uttered of that clear cause-and-effect, in contrast to the misguided, co-opted opinion of even the more knowledgeable grain-market analysts and most agricultural economists : That growing world food demand, price effects of exchange-rate decline, and excessive futures-buying by "index" funds are the instigators of unprecedented grain-price strength. Those things contribute, but are not the prime movers in grain, which is why it is so important that Smithfield state it so clearly in its public statements.

    For the past two years I have been astounded that the meat and baking industries, to name two, did not foresee the effect on their businesses of subsidized food-for-fuel mandates, such as that for next year of an incredible 100 mln mt of corn for ethanol, in time to organize effective opposition. It is truly bizarre that in the United States, laws are enacted to overwhelmingly subsidize creation of a massive and entirely artificial industry, for ends dubious if not actually counterproductive, without generating aggressive opposition by the legitimate industries it would so drastically and unfairly disadvantage. Agriculture is not a government-regulated industry, and I can recall no precedent outside wartime which even remotely approaches the brazenly overwhelming impact of this wildly prejudicial, business-destroying legislation. Few even today, with the clear trends already evident, seem concerned enough to anticipate how monumentally negative and tragic the results will surely be.

    The point that has not been discussed so far as I know is: On exactly what legal ground can the government mandate that 15 bln gal of renewable fuel be manufactured specifically from corn, and additionally, to construct a subsidy and import-duty structure entirely "rigged" and certain to mortally wound legitimate private industry?

    Given that the energy bill signed in December enacts new, higher ethanol mandates and mandates for "biodiesel," to the disregard of already-spectacular price rises and dangerously thin world grain stocks, there is every reason to be concerned that the political log-rolling to even further expand government's commandeering of grain supply will continue. After all, the U.S. can produce much more corn if it grows little else, thereby exporting domestic agriculture industry to Brazil and elsewhere. The aim seems clearly to enlarge mandates further, as corn production grows at the expense of everything else. Particularly if corn supplies were ever to build, giving meat producers some breathing room - what do you think Congressional reaction is likely to be when ethanol plants start going bankrupt, or the rural boom falters as land prices fall, if not to enlarge the ethanol mandate further or increase subsidy?

    As an example that the farm lobby still has Congress under firm control, the current farm bill debate may well establish an absurdly-high $1 million as the upper limit of adjusted gross income eligible for fixed payments. Leading newspaper editorials have for decades decried the "organized larceny" of the farm lobby, but no constituency has ever formed to counter it, the composition of the Senate and the myth of the yeoman farmer being what it is.

    For your part, I would strongly encourage your company to undertake research into whether a challenge as to the legality of the structure of biofuels legislation might have grounds. At minimum, a political constituency must be built to publicize the folly of fuel from food, and to oppose the farm lobby. Not doing so might prove suicidal - don't doubt it. President Bush, in comments today, showed awareness but shrugged off the difficulty his ethanol program has created for the pork industry. You must act not just to protest, but to openly challenge the legitimacy of this policy."

    The preceding is a letter to encourage the challenge of the egality of forcing.mandating that corn to be used for ethanol production...which is contrary to freedom to choose and is clearly the cornerstone of an impending food disaster in the marking.


    dec

  • #2
    Dec you can edit your own post. It is the icon with the paper and pencil.

    BTW

    This debate of which came first the chicken or the egg is all meaningless. What difference does it make? Katrina brought on the problem with the damage it did in the gulf topped off by Chavez. The thing is we have an oil shortage brought on at a time when world wide drought hit and caused food grain stock decline. What if we had not had a significant decline in food grain stock pile and oil price still caused fertilizer price, trucking, irrigation and tractor fuel prices to triple? Production costs were already at a point where any unplanned expense caused a net loss without equipment upgrade. The whole discussion is baseless grain prices would have gone up for one reason or another. If production cost tripled and the price of grain remained static the farmers would have all been broke within two years anyway. This would have lead to an even greater swing. Once farmers lose faith and quit farming they never go back… People need to count their blessings and appreciate the farmer more. Most of them are born and bred to farm. They don’t understand what drives them but it is a very stressful life with no break you are always behind and the work is never finished. That which is created can not be greater than that which created it. So it is simple God created the chicken and the chicken created the egg. Ethanol did not create the food shortage. God created a short term oil production problem using Katrina and God created a weather related food shortage in order to divert an even greater disaster down the road. What we need to do is figure out how to use less oil and make sure the farmer never quit raising the food. I like what Chris had to say about stock piles and I think I heard a 19 percent carry is not a surplus. We went for 30 years creating a year supply a year in advance of a one day market. Talk about taking the farmer for granted. Now they want to hang us all because we aren’t getting the food to them for nothing.

    This reminds of the people who delivered a brand new refrigerator that had been dropped on the curb. It was all squashed out on the bottom and I told them when they got it half way through the front door to get it out of here I don’t even want it. They took it out and set it on the side walk and come back in saying they need to call the store. They called the store and were told to leave it so the owner would have a frig to use till they got a new one in. I told them no I didn’t know if the owner wanted the thing in here and they said well we don’t care we are going to leave it for her. We took it over and it wouldn't fit between wall and the cabinet because it was about 1 inch wider from being dropped so I took a hammer and pounded the flimsy metal shell back in a bit straightening it out to more of its original form,,, actually improving the damaged piece of crap so it would fit. About 10 minutes later I called the store to make sure they really called the store and that they were in fact going to bring a new one. I never got to words out and the lady started screaming her head off at me saying you don’t take a hammer and beat someone else's property I was going to put that back on the floor and sell it as damaged. She told me I was going to have to pay for it. So that is how people are they bring this lady a bent up frig and try to get it passed her but if that don’t work blame the carpenter. People need to wake up.

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    • #3
      All it would take Dec is a stroke of the pen and the ethanol mandates can be gone.....and you'll be happy. So don't get your panties in a wad just yet.

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      • #4
        That's right and we still need to figure out how to use less oil... With input cost triple. Don't forget about all the ones who finance operating expenses. Most farmers will be broke in 2 years regardless… then what? So with a stroke of a pen do away with ethanol mandates they blame who then for high food prices. Looks like we are between a rock and a hard place when they blame the wrong thing after holding food prices way below cost of production for 30 years it would seem odd to have to pay for food while driving their $60,000 gas guzzling hummer. Better sue someone.

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        • #5
          Dec posted---In a recent statement, the Chairman of Smithfield correctly pointed to U.S. biofuels legislation as the central factor behind the company's poor returns.
          __________________________________________________ ______

          The problem with Smithfield is they got involved with something they know nothing about. Hog production. They should have stuck to what they know best--slaughter. They thought they could put the screws to the farmers, keep it all for themselves, and just like the paper traders of the housing industry, they are now losing their tail. Justice is being served. The paper traders in Chicago are the next in line. They are killing the gold laying goose, no body wants to play because of their excessive greed. They all grab until their hands are worn raw and then they blame it on the greedy farmers and their ethanol.

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          • #6
            dec-' I say let them eat cake." Agriculture in this country needed an opportunity and a market that would let it retool, that is why John Deere has huge backorders on its books and running its plants overtime.

            I do not think farmers should have to liquidate their operations so dumb a$$s working 40 hours a week can continue eat up lost equity experienced by farmers over the past 20 years. Why should I be expected to allow my equity in equipment and land be depleted by a transfer of my equity to cheap food so someone can eat at my expense.

            I was on the wrong side of the game in the 70;s and I paid dearly, I do not plan on or expect the remaining farmers in this country to have to bear a burden that is not shared by the other 98% of the Americans who do not know what end of a hoe to use.

            Sorry, we have no entered the age of still eating cheap when compared to other countries, but I if they did anything right for the grain farmers it was attempting to create a market of an alternative fuel.

            Corn will not be the ultimate choice to make the fuel we need, but it is the beginning and it is what we had available at the time.

            More important, what has happened with food prices rising, is that the world is now aware that it is more important to feed their people from a point of national security, if they want to remain in power. If we have to pay $7 a gallon to free ourselves ot the Arabs so be it, because the alternative is unthinkable.

            The main problem right now is the livestock farmer, and I mean farmer, not Smithfield, and the situation he faces for the next twelve months.

            Herds may be liquidated, or Feed lots emptied, but when the surplus inventory is gone, the livestock producers will be able to return to profitability and will have priced in the high cost of corn and other feed products to produce meat protein, for which they will receive a much higher price.

            The days of $50 steaks may come to the Midwest, but at least it will be available at a price where everyone can make some money.

            If Americans do not like the higher price, they can eat a bowl of rice and a piece of fish like the other half of the world does.

            Soon all farmers will be making money and that is what people will remember none of them will remember all of those who got wiped out because of this nations cheap food policy, just so a few of us could still be standing here today.

            So,I say let them eat Cake. Have a great day. john

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            • #7
              The meltdown of markets worldwide now is far worse than any ethanol debacle. And guess what....the entire mess was perpetrated by paper traders out of control. When they ran out of paper to trade, the came up with fancy new names for more paper to cover up the paper that they already had issued which was worthless. The alphabet soup of worthless paper that investors think represents real wealth is nothing more than paper......and nobody wants to admit it has no value.....but they are soon going to have to acknowledge it.

              The same scenario is about to unfold in grain markets in the not too distant future. When the surplus is gone, you can throw paper at it until you're blue in the face, but unless you can get your hands on the actual commodity, the paper is worthless.

              Starvation is at hand, make no mistake aboiut it....but before people starve, they'll be giving up some of their idiotic pastimes, pleasures, and toys....and a whole lot of pain is about to be inflicted upon people who don't produce anything of necessity...hello 60% of the American workforce.....and when the ****y arrogant Chinamen come to realize we don't need all that $hit they're sending over here to Wally World, my guess is that they'll be some big crocodile tears running out of the slits in their face as well.

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              • #8
                Dec raises an interesting point on the legality of subsidies to make ethanol. There is a court case making its way through the courts in Arizona. It seems local government offered a developer the right to keep the first $80 million or so sales taxes collected on sales made by stores in a new shopping mall if the developer built the mall plus condos and apartments. Other storeowners in the area are suing the state on the grounds that by exempting the developer from the sales taxes he is disadvantaging them because their customers have to pay the taxes and they go to the state, not the store owner.

                I think a case could be made that by subsidizing the use of corn by ethanol plants the government is disadvantaging other users of corn which do not receive a similar subsidy.

                How would farmers in a county feel if the county government offered to pay the first $100 of cash rent to another farmer to encourage him to move into the county and begin farming? It would be the same thing.

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                • #9
                  dec and beaners examples, compared to this:

                  A semi trailer factory, gets tax breaks, utilities art cost, the building built to the manufactures specs, paid for by the county---because the employes will spend money in the county with their wages--well, yes, the beer and cigerette sales, but NOT clotheing, school supplies, vehicles, food, medical needs, because NOT only is some of the listed NOT available, the money can be diven across the county lines where things are available---
                  all the while, a young person wants to start a small crafting and wood working business, utilizing "old stores" on main street, is "given" a tax break for 1 year, nothing about utilities, who is being screwed?(besides the county tax payers)

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                  • #10
                    Beaner the developer is also building condos and apartments... for which the new owners would be contributing to help alleviate property tax burdens of shoppers of the existing store owners. I think a real comparison would be if the shoppers were to sue the state had it been a benders tax going to the existing store owners.

                    <blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by Beaner</i>
                    <br />Dec raises an interesting point on the legality of subsidies to make ethanol. There is a court case making its way through the courts in Arizona. It seems local government offered a developer the right to keep the first $80 million or so sales taxes collected on sales made by stores in a new shopping mall if the developer built the mall plus condos and apartments. Other storeowners in the area are suing the state on the grounds that by exempting the developer from the sales taxes he is disadvantaging them because their customers have to pay the taxes and they go to the state, not the store owner.

                    I think a case could be made that by subsidizing the use of corn by ethanol plants the government is disadvantaging other users of corn which do not receive a similar subsidy.

                    How would farmers in a county feel if the county government offered to pay the first $100 of cash rent to another farmer to encourage him to move into the county and begin farming? It would be the same thing.

                    <hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

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