Gary, my comments are strictly related to the energy aspect of ethanol. If it's being touted as harnessing more energy than it consumes, then it should be proven.
I understand full well that a lot of corn gets used to make ethanol for the simple reason that corn is cheap (relatively speaking) at most times. I don't begrudge anyone trying to make money on it. I don't blame anyone for trying to get the best return they can from their crop. I know full well that the economics of crop production aren't all that great most times... but I don't believe this crap that ethanol will be our energy salvation. There may be a place and a purpose for it, but an allout replacement for gasoline is not one of them in my opinion.
I also think that if you look closely at the economics of ethanol, you'd find that most of the money being made is being made at someone else's expense at one time or another. I don't beleive that there is necessarly ANY relationship between the economics of ethanol and the energy cycle of ethanol. It doesn't need to be efficient to make money. It simply needs to catch on and be fueled by speculation and various other market forces.
The cycle would seem to start with artifically cheap corn. It's then turned into ethanol. If the guy selling the corn is making money, he's doing it on the relative frugality of fossil inputs at the time, or a nutrient bank he has in his land that's getting mined out (which is basically what Brazil is doing). On the other hand, mabey he's not making money and depreciating his equipment to keep going... With the rise in oil prices, ethanol becomes very profitable. Commodity prices rise. Input costs rise, and rise some more until things get in the strangle we're in right now. Oil is down. Corn is down... and there's a pile of high priced inputs in the system. It doesn't surprise me that there's plants going broke right now. There's apt to be a lot more I think. I also think agriculture in general is heading for a very rough time in the next year unless everybody actually paid cash for all the gear they bought in the past 2 years...
I don't know what everybody else does with all the land. Nothing I suppose... With the BSE 'crisis' we've been dealing with here for the past 5 years and the subsequent price collapse for cattle, we've simply downsized our herd. A lot of those acres are simply not producing as much because we've cut back on inputs. We're selling more hay now into the local horse market so that's taking up some slack... but basically we're doing less. Those were the choices we faced. Scale back or do something else with it. I don't imagine it's much different for anyone else? Hopefully the coming year will see more market for hay around here, but time will tell on that. Traditionally this is not an area that carries a great price for hay...
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