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Tuesday, September 16, 2014 Helping Dealers Succeed!

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Our View: Beware the Free Corn Coalition

Posted: 3/25/2014 | Views: 317

Recently, ethanol opponents in the livestock and poultry sector signed a letter supporting the EPA’s proposed cuts in the Renewable Fuel Standard. In the letter, they complain about how high corn prices have affected the viability of the industry.

It is one thing to complain about the price of corn when it is $8 per bushel, as it came close to doing in the late summer of 2012, when the drought reduced the corn supply by four billion bushels. Now, with corn nearly half that price, livestock and poultry producers are still complaining and singling out ethanol. The fact is, there are a lot of people who want corn to be priced around its historic, if unsustainable, two bucks a bushel. We’re sure they’d even prefer it to be free, and so we call them the Free Corn Coalition.

In order to bolster their point, these critics also greatly exaggerate how much corn is converted to ethanol. In their letter, they claim that “Today, roughly 42 percent of the corn crop goes into ethanol production to meet the RFS mandate.” Forty-two is a fairly exact number, and they don’t say how they get it. The quick and accurate math tells another story. USDA estimates about five billion bushels will be used this year for ethanol and other products. Subtracting the amount of corn these other products represent makes the amount of corn going directly into ethanol equal about 3.9 billion bushels – from a total corn supply of 14.8 billion.  That’s only 26 percent. The other 1.1 billion bushel of ethanol co-products becomes more feed for livestock and poultry.

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Source: National Corn Growers Association

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Comments
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Tim Rouch Says:
3/26/2014 11:03:21 AM
I would side with the animal industry. I don't want higher feed prices which then causes higher meat prices. I am in the lawn, garden and chainsaw sales and service business and ethanol has and is creating a lot of problems with small air cooled engines. Fuel lines don't last very long and fuel with ethanol absorbs water right out of the air on a humid day. It does create more repairs for us but customers complain how engines use to have less trouble and lasted longer. We demonstrate to our customers by pouring gas into a clear glass bowl and while we are watching it you can see the water being absorbed into gas and building up in the bottom of the bowl. we are trying to convince the customers to keep their lid an vent closed all the time except while pouring. It has created a lot of problems for us. The comment about wanting the corn free was not fair. I want my lawn mowers free to but I don't expect it. I even wish they were cheaper so I could make more profit. But to be competitive I would probably sell them cheaper. I raise the price when they raise it to me.
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