The grain bubble

[christij]

http://news.yahoo.com/s/csm/20080118...Augn73TF.7e8UF

Thoughts?

[hillsidedigger]

2.4 billion people in Chi'ndia are increasingly able to afford meat which is largely grown with grain

and many western countries have decided its a good deal to fill a passenger vehicle's fuel tank one time with a year's supply of food for one person.

A family of 4 can be fed with the food grown on an acre or a little more but the vehicle for that family (who drives the average amount in the U.S.) if fueled with ethanol from corn might require 5 to 15 acres to grow the fuel depending on whether the vehicle gets 45 mpg or 15 mpg..

[ladycat]

I've been reading about it for a while now.

[YuccaFlatsRanch]

The Arabs can have Opec to artificially control oil prices. Maybe we should form GrainPEC to artificially control grain prices. Maybe make equitable trades of one for another.

Of course the U.N. will declare that controlling food is inhuman, and will want to take from us to give to them.

[rambler]

Originally Posted by hillsidedigger

A family of 4 can be fed with the food grown on an acre or a little more but the vehicle for that family (who drives the average amount in the U.S.) if fueled with ethanol from corn might require 5 to 15 acres to grow the fuel depending on whether the vehicle gets 45 mpg or 15 mpg..

An acre of corn turned into ethanol here would leave you with 3,400 lbs of high protien DDG. While turned into animal feed, as most corn is, it can be eaten by us humans as well. That would be 850 lbs of food per person per acre _after_ the ethanol is removed.

I understand your point, and it is a valid concern, but if you want to do the math, you ned to include all the math.

--->Paul

[YuccaFlatsRanch]

So has someone done the math as to the NET products produced from the acre of corn or wheat. I.E. how much does the dried distillers grain contribute to the NET energy equation. All the opponents of grain ethanol ever talk about is how energy wasteful it is. I agree it is less wasteful if the byproducts of the distillation still contributed the same as if corn were being fed to animals.

The above would be the real comparison to make.

[pancho]

For the 2007 year the state where I live planted 180% more acerage in corn than in any other year. Yield was 25 more bushels per acre and market price was 15% higher than the previous year.
Wheat made a jump of 335% more acerage than 2006. This along with the increase in price jumped the value of the wheat crop by 514%.
All crops with the exception of cotton was much larger than 2006.

[milkinpigs]

Immediately end the 51 cent subsidy paid to the ethanol producers; drop the 54 cent tariff on ethanol imports and see where grain prices go. As far as DDG; it varies in content...rations must be adjusted with every load and the price has been raised to match all other feed prices.While mycotoxins don't affect ethanol production, the toxins still remain in the byproducts; in other words if aflatoxin corn is used to ethanol, the DDG will contain aflatoxin....already cases of dairy herds having to dump milk until they test toxin free.

[bugstabber]

Originally Posted by rambler

An acre of corn turned into ethanol here would leave you with 3,400 lbs of high protien DDG. While turned into animal feed, as most corn is, it can be eaten by us humans as well. That would be 850 lbs of food per person per acre _after_ the ethanol is removed.

I understand your point, and it is a valid concern, but if you want to do the math, you ned to include all the math.

--->Paul

I think it has a ways to go before it can be used as people food. To slightly misquote crocodile Dundee, "Sure you can eat it, but it tastes like carp."

[uyk7]

"and market price was 15% higher"

I read where the seed companies were going to charge more in 2008 for their product. So much for the profits made by the farmers. The farmers will have to pay more money for the same amount of seed.

[Bearfootfarm]

Originally Posted by uyk7

"and market price was 15% higher"

I read where the seed companies were going to charge more in 2008 for their product. So much for the profits made by the farmers. The farmers will have to pay more money for the same amount of seed.

Seed prices are raised anytime grain prices go up. They dont wait for the years end. Over the last 3 years Rye seed has doubled in price, and fertilizers have almost tripled

[Chuck]

Telling factoid: To fill up the tank of one SUV with ethanol would require enough grain to feed one person for a year.

I didn't know that.

[sgl42]

i find it interesting that the media is so quick to label it a "bubble", when they couldn't see the real estate bubble, or the tech bubble before that.

i believe that after a 20 year bear market in commodities that ended about 2000 or 2002, we're still early in a commodity bull market that will probably run 15-20 years. Not an original thought, but something I believe after reading articles by amoung other Jim Rogers, cofounder of a hedge fund with George Soros.

China is the rising power in the world, and will continue to consume more and more resources, and compete for those resources with the rest of the world.

that doesn't mean that commodity prices won't decline for a year or so, but I'd guess that 5-10 years from now, commodity prices will be higher than they are today inflation adjusted.

Lastly, higher prices are what tells producers to produce more. If prices don't rise, there's little incentive for anyone to plant more acreage. Or any incentive to anyone to cut back on their consumption or waste.

--sgl

[Old_Grey_Mare]

Over on the Oil Drum there is a long article called "Fermenting the Food Supply" about ethanol vs food production in which I find the following:

"Let's just pause a moment and figure out how much food we are talking about when we discuss bushels of corn, or gallons of ethanol. A bushel of corn is 56 lb (or 25.4kg) of corn. At about 8000 btu/lb we get 113120 kCal/bushel. Given the average human diet globally contains 2800 kCal/day (see figure below), 1 bushel represents 40 days worth of calories for a person (if that person eat only corn!). Thus at current conversion efficiencies of about 2.8 gal/bushel, the corn in a gallon of ethanol represents a shade over two weeks worth of food (again, all corn). A 15 gallon fuel tank of ethanol is thus 7 months worth of corn calories for one person."

If you are interested in the article and the discussion it can be found at:
http://www.theoildrum.com/node/2431#more

Mary

[ladycat]

Originally Posted by Chuck

I didn't know that.

I googled and found this:
For every one bushel of corn, approximately 2.7 - 2.8 gallons of ethanol is produced.
http://www.ethanolresearch.com/about/faq.php

I also found this, but it's probably outdated:
http://www.carbohydrateeconomy.org/l...a_Gallon_.html

[hillsidedigger]

Originally Posted by ladycat

I googled and found this:
For every one bushel of corn, approximately 2.7 - 2.8 gallons of ethanol is produced.
http://www.ethanolresearch.com/about/faq.php

I also found this, but it's probably outdated:
http://www.carbohydrateeconomy.org/l...a_Gallon_.html

So to fill a 30 gallon tank would take close to a third of a ton of corn (more calories than many adults consume in a year), except it took close to another third of a ton of corn to grow that first half ton (if ethanol fueled the machinery, not just to work the fields but also to manufacture and transport the fertilizer, herbicide and insecticide, transport the product, process the product, don't forget a percent of seed is saved (or bought) for next years planting). The dried distiller grain does remain.

Yet this is what our CorpGov has decided to do with one third of this year's corn crop, not even to mention that our food growing croplands are not truly a renewable resource. If overused, they will quickly deteriorate.

[ladycat]

And more links.

================================================== ==

To make a gallon of gasoline, the process requires 1.5 gallons of water. Corn grain ethanol requires 4 gallons of water per gallon of fuel and cellulosic ethanol requires about 9 gallons of water per gallon of fuel.

...a gallon ethanol has 2/3 the energy content than that of gasoline.

http://www.utbioenergy.org/TNBiofuelsInitiative/FAQs/

================================================== ==

If you think you would save any money by using ethanol, guess again. Ethanol is expensive to process. According to the research from Cornell, you need about 140 gallons (530 liters) of fossil fuel to plant, grow and harvest an acre of corn. So, even before the corn is converted to ethanol, you're spending about $1.05 per gallon.

http://auto.howstuffworks.com/question707.htm

================================================== ==

A pro and con discussion:

http://www.businessweek.com/debatero...l_too_muc.html

================================================== ==

As the Minnesota Legislature debates whether to expand the use of ethanol in the state, old arguments against the fuel are resurfacing. One of the most contentious is this: it takes more energy to make the fuel than it produces. The analysis comes from Cornell University scientist David Pimentel. What may be less well known is that Pimentel says his negative energy equation is true for practically all forms of fuel.

http://news.minnesota.publicradio.or...ethanolenergy/

[farminghandyman]

Information take from the new letter found below.
http://www.nfu.org/wp-content/100807...newsletter.htm
or

Farmer's Share of Retail Food Dollar
December 2007



http://nfu.org/issues/agriculture-pr.../farmers-share
above link has a nice colored picture,


jsut a list shows, on this link.

Taken from "Agricultural Prices," USDA/NASS.

Farm Price Barometer
September 2007




Taken from "Agricultural Prices," USDA/NASS.

I am guessing the "pictures of the charts" are not going to show, so click on them and see the information, the farm barometer show the price a farmer gets out of the retail price, and the second is the parity % comparison, of today's prices.


after reviewing the above information IT does not look like the price of grains is the problem for the higher cost in foods or not the major problems.
and notice, when the price of grains drop does or has the price of bread or other products ever drop??????????
(yes I have seen meat some what fluctuate with the price of livestock, but not as much as the cattle fluctuate).

Definition: PARITY PRICE
A measurement of the purchasing power of a unit of a particular commodity. Originally, parity was the price per bushel, bale, pound, or hundredweight that would be necessary for a unit of a commodity today to buy the same quantity of other goods (from a standard list) that the commodity could have purchased in the 1910-14 base period.

http://www.websters-online-dictionar...ity+price.html

[YuccaFlatsRanch]

"Fermenting the Food Supply"

How long will it take before the U.N. tells us that we have to stop fermenting "The Worlds Food Supply"?? You can't convince me that the world is going to put up with this for long. Imagine the pictures of starving people all over the world on TV with the comparison of someone filling their SUV here in the US.

[rambler]

It's unforutnate our school education is so poor, folks can't grasp simple math and see through the junk bantered about. It's easy to mislead people when they don't have basic skills. The highly prized 'free media' in this country is just a bunch of rabble that is too dumb to do any other job but hype & sensationalize any little crumb they can dream up, and facts be derned.

Ethanol or biodiesel is not _the_ answer, but it provides some help, & provides positive energy production as well as food, as well as helping the local & global ecconomies. That can be proved over & over & over & over, then the idiot report from idiot David Pimentel can be regurgitated & everyone bleieves his grotesque lies even tho he has been proved wrong over & over & over.....

And so it goes. Facts be derned, we will rally around whatever we want to believe. And we would rather sit & do nothing and be the problem, rather than do something that helps a bit.

--->Paul