Thursday, August 2, 2012

Would you like some ethanol with your meal?


I covered farming when crop prices were never above cost and always too low.

As years went on, ethanol, of course, was heralded as the savior for low corn prices. In the ensuring decade or so, it worked like a charm. Market prices for corn were solid, and the government subsidies went down.

Now, apparently, we think ethanol is the culprit for corn prices being too high. And we want the government to fix that too.

Where are we? 1984. George Orwell would be proud of how good has become bad and bad has become good. Unispeak reins.

Livestock groups have corralled some lawmakers into asking the EPA to grant an exception to the ethanol mandate in fuel, meaning less ethanol would be made and less corn used, thereby lowering the prices for livestock producers who buy corn for feed.

Some say high corn prices are killing the livestock industry and companies that make and sell meat.

Of course, the corn industry and ethanol promotion groups argue the waiver should not be granted and the market should be allowed to work.

The first government policy on ethanol worked. It became an industry that consumed millions of bushels of corn, now almost 40 percent of U.S. domestic production.

Why is this a problem?

The proposed new government policy aims to turn back the one that actually worked.

The livestock industry should like, uh, buck up, and pay higher prices or reduce their consumption, kind of like the rest of us have to do when prices get high.

It's called the free market system.








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