Hot weather drought

[begreen]

The consequences of the heat dome that is over most of the country are not trivial. Just take corn. We have developed a global market and need for corn and corn by-products. When the crops don't show, the world now feels the stress.

http://www.earth-policy.org/plan_b_updates/2012/update104

 

[Shadow&Flame]

I am sure watching the meat prices...gonna load up on beef when it drops due to all the cows being sold off. Going to be
a tough winter.

 

[begreen]

Folks should also remember that our winter gasoline has 10% ethanol that also comes from a corn crop that is not going to make it very well this year.

 

[Jags]

Folks should also remember that our winter gasoline has 10% ethanol that also comes from a corn crop that is not going to make it very well this year.

BG - the feds do have the right to drop the ethanol additive to our gas. This may be the year that we see it. At 8+ bucks per bushel, corn ethanol is bad business. Considering the shortage that we are going to see the corn may be redirected to other markets. But also keep in mind that the DDG's that are the by-product of corn eth will not be in use. So there will still be pressure on corn for the feed.

Beef will probably have a large drop in price, short term (this does not necessarily get represented in the price at the store) . In two years it is gonna be big bucks and that assumes that normal corn production happens next year.

 

[begreen]

Linking our fuel supply to vulnerable crop cycles is a bad idea in general. There are better sources now and developing that should get us off the ADM/Monsanto corn cycle asap.

 

[Jags]

Linking our fuel supply to vunrable crop cycles is a bad idea in general. There are better sources now and developing that should get us off the ADM/Monsanto corn cycle asap.

Yep - there has always been better sources. There was really only two reasons we went with corn eth.
1.) we had an over abundance of the stuff and it was sub $3.00 per bushel. Corn eth probably saved a bunch of small farmers (I am not using this as a justifying argument)
2.) It was the only crop that had an infrastructure already in place large enough to handle the volume.

It sure as heck ain't the best crop to grow for ethanol for many reasons.

 

[Delta-T]

it is my understanding that there is a stockpile of ethanol...so no worries there. If we were smart (heh, I know) we'd stabilize the price for domestic corn sales and stick the export corn/wheat/soy with a massive hike in price. I really wish the Russians would let us borrow their weather control device for a few days.....they so stingy.

 

[Jags]

Oh boy, Delta. You start messing with the price of a tortilla and there will be serious heck to pay. Been there and done that a few years ago.

The weather control device is on temporary loan to China. We should be seeing replications of the machine in Walmart by mid August.

 

[Delta-T]

I recall something to do with the tortilla prices a few years back...and I believe you are correct, not pretty. Maybe its just me, but I think, if there's to be $billions (with a B) to be lost because there is not enough water, then it might make sense to invest hundreds of millions or even a few billions into some water storage system or hairbrained "cloud seeding" experiments. On the "upside" there's no water left for fracking...so, it was all part of the "green" agenda.

 

[MasterMech]

I spoke with my grandfather (who lives in Southern IN) and he said some farmers have thrown in the towel and are bush-hogging cornfields.

 

[Jags]

Yep, Southern IL is plowing them under. Gonna see a lot of beef hit the markets. Farmers can't afford to feed them.

 

[BrotherBart]

Didn't we do this dance in 2008?

 

[Jags]

Didn't we do this dance in 2008?

Every handful of years, Bro. Same-same. Crop flop, people griping, food prices up in the air. 3rd world countries bitching cuz their tortilla prices increased by .000003 cents. All the anti-ethanol people get bunched undies...blah, blah, blah.

 

[BrotherBart]

If they don't use corn liquor for oxygenating the fuel I guess they could go back to MTBE and poison us all.

 

[Jags]

If they don't use corn liquor for oxygenating the fuel I guess they could go back to MTBE and poison us all.

Whoa now, you are not actually suggesting that there is a positive side to ethanol are you?

 

[BrotherBart]

The MTBE thing was really funny way back when. The refiners had this nasty stuff by product of the refining process. Costly to get rid of. They put up a great looking fight looking like they didn't want Congress to make them blend it off in gasoline and sell it.

Sheer genius.

 

[Jags]

Yep, Kalifornia really took a sucker punch with that crap, too.

 

[begreen]

July ended up being the warmest on record. The drought toll continues to mount. Farmers and the UN are calling for a halt in ethanol production, the USDA has corn and soybean yields down 13% lowest in 17 yrs so far and Mississippi River navigation is getting affected:
http://abcnews.go.com/US/wireStory/water-mississippi-float-steamboat-16976371#.UCUPuNDTCa8
http://edition.cnn.com/2012/08/09/business/un-us-ethanol/index.html