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232 comments on DrumBeat: July 29, 2006

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Robert Rapier on July 29, 2006 - 8:30am Permalink | Subthread | Comments top
American Coalition for Ethanol VP Brian Jennings is caught telling a lie about ethanol subsidies:

Caught in a Lie

He says that the subsidy is actually an incentive for the petroleum industry, and that ethanol producers don't benefit. But guess how he reacted to calls for ending the subsidy?

Also, drought starting to impact ethanol plants:

Drought Impacting Ethanol Plants

Corn fields in the Aberdeen area are withering from this summer's hot and dry conditions.

Heartland Grain Fuels General Manager Bill Paulsen says, "There's a large amount of corn that won't be harvested Aberdeen and West."

And for ethanol plants like Heartland Grain Fuels...that's bad news. The company usually gets corn locally from areas West of town.

Paulsen says, "We're running on last year's crop and we will through harvest of this year, so the crunch really starts coming next summer, is when the biggest crunch for the lack of corn that's produced in northeastern South Dakota."

Cheers,

RR

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Consume More on July 29, 2006 - 8:51am Permalink | Subthread | Parent | Comments top
Every corn-producing state west of the Mississippi is suffering from some degree of drought:

http://www.drought.unl.edu/dm/monitor.html

This area produces nearly 60% of the US corn crop, led by Iowa, Nebraska, and southern Minnesota.  Most of the major corn growers east of the Mississipi (Illinois, Indiana, Ohio) appear to be better off.  Wisconsin is the exception; it is experiencing unusual drought in the north and central parts of the state, but less so in the south, where most of its corn is grown.

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alan on July 29, 2006 - 11:58am Permalink | Subthread | Parent | Comments top
Corn production by county for comparison
http://www.nass.usda.gov/Charts_and_Maps/Crops_County/2005/Maps/cr-pr.asp
Irrigated corn
http://www.nap.edu/openbook/0309092302/html/45.html
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Nate Hagens on July 29, 2006 - 10:54am Permalink | Subthread | Parent | Comments top
Robert - for every farmer thats showing drought conditions or poor crops, there are two not saying anything because their crop is great.

Corn futures (and soybeans) are near their low prices for the year - if there was too much ethanol demand and/or drought, prices would be much higher. The market will not solve our long term problems, but its pretty good at pricing short term supply and demand.

december corn futures chart

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Robert Rapier on July 29, 2006 - 11:04am Permalink | Subthread | Parent | Comments top
Depends on how much is irrigated. Look at the link that "Consume More" supplied. All of central South Dakota is experiencing exceptional drought conditions. Note that the guy I quoted said they are still using last years crop, and next year is when they will feel it.

Cheers,

RR

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Nate Hagens on July 29, 2006 - 11:18am Permalink | Subthread | Parent | Comments top
that makes a bit more sense.
Next years future (dec 07) corn chart doesnt look as bad
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fallout on August 1, 2006 - 2:07pm Permalink | Subthread | Parent | Comments top
Crop futures prices are not a bellweather for future supplies.
Call the USDA, they'll tell you the same thing.
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232 comments on DrumBeat: July 29, 2006

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