|Corn farmers have been watching the growing demand for ethanol with anxious anticipation. They have been watching more and more of their grain being turned into energy, thus tightening world stocks and driving the price higher. But let me be the first to break it to you, it was all a dream, and the dream is over. The elitists have decided corn is just too expensive to be used for ethanol; we have to use something else.
This pronouncement came a week ago when the editorial board of the Wall Street Journal, the official voice of American capitalism, pronounced corn-based ethanol a bad idea. “This is a fairly typical case study in how political meddling distorts energy markets,” said the Journal. They went on to accuse American corn farmers of “peddling misinformation.”
The publication then engaged in spreading its own misinformation. They blamed the spring jump in gasoline prices to hikes in ethanol prices. This statement is simply not true and is something that has been proven by dozens of government and private organizations. The price of ethanol is a minor factor in the price of a gallon of gas.
The editorial then brought corn subsidies into the argument saying taxpayers pay twice for ethanol, once with corn subsidies and again with ethanol subsidies.
Never known for their insight or accuracy on farm issues, the Journal missed the mark again. When total corn subsidy payments are matched against corn production, the average bushel of corn has $0.4464 of subsidy payments in it. By the time the corn is made into ethanol, it is down to about $0.18 of farm subsidy in a gallon of pure ethanol. Yet, since most ethanol is blended at the 10 percent level, the big subsidy bite in fuel prices is $0.018 a gallon.
The charge that corn farmers and the ethanol industry have misrepresented ethanol is bogus. I have covered the industry for more than two decades, and no responsible organization has ever said ethanol will replace oil.
We would have to plant corn on every inch of land in the U.S., including Alaska, to even come close to producing enough ethanol to replace fossil fuel. While this would be an improvement for many of our urban centers, it is not practical. Ethanol will “lessen” our dependence on imported oil and will be “part” of the renewable energy industry on which our nation will come to depend. I guess those subtleties get lost in the noise of Wall Street.
So since the big boys in the Big Apple don’t think we should use corn to make ethanol, what do they suggest? Sugar. They suggest we copy the model of Brazil that makes most of its ethanol from sugar. Obviously whoever suggested this has not looked at the sugar subsidy program lately.
Government subsidies to sugar producers make corn subsidies look like pocket change.
The real answer is that the future for ethanol does lie in finding less costly raw materials. Research is underway that will use a variety of products we now consider waste to make ethanol. One such possibility caught my attention: newspapers. Yes, soon we will be able to make ethanol from newspapers.
Just think of it: that large stack of old Farm World newspapers that is perched precariously on the corner of your desk could be turned into fuel for your truck. After you have scanned the classifieds, noted the important auctions, and read this column, you can load the truck and take those bundles to town to be turned into ethanol.
Here is even a better idea: how about we stop printing so many newspapers and turn them right into ethanol. The Wall Street Journal is a nice thick paper that would certainly reduce our foreign oil imports by several barrels a day. Turning it into ethanol before printing it would also reduce the world’s dependence on misinformation.
This farm news was published in the June 28, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.