What's Ethanol got to do with the price of..... EVERYTHING!

Yes, step back and take a good look what the advent of this wonder fuel has done to the price of just about everything you and I consume. Commodities traders, the highly subsidized corporate farmers and the so-called "Exxon of Corn", Archer Daniels Midland (ADM) among others, will be making "obscene profits" every bit as big as Exxon-Mobil made with gasoline. Is there any chance that Liberals and the MSM will want to tax, regulate or otherwise restrict those profits? I think not. 

Early in our President's second term, the farm lobby, with the full backing of the eco-maniacs, convinced our leaders that the way to energy independence and freedom from foreign oil was to begin using ethanol. After all, Brazil was running their cars almost totally on ethanol.  What they forgot to tell most of us is that Brazil's ethanol comes from sugar cane which, according to Wikipedia, "is a more efficient source of fermentable carbohydrates than corn as well as much easier to grow and process."

Why use corn instead of sugar cane? ADM likes it that way. ADM is said to have financed the lobbying effort that led to the blatantly protectionist sugar-quota system that went into effect in 1982 and has held sway ever since. High-fructose corn syrup (HFCS) owes its ubiquity to the U.S. government's sugar quotas.

Here again, we quote Wikipedia: "What does the sugar quota have to do with HFCS? The world price of processed sugar typically hovers well below the production cost of HFCS, meaning industrial users such as soft-drink bottlers have no real reason to buy it. The sugar quota props up the price of sugar in the U.S. to twice the world level. With the sugar price artificially inflated, ADM gained a ready market for its HFCS."

Nice deal! U.S. sugar growers get subsidized. Cheaper foreign sugar is kept out of the U.S. market and ADM makes high fructose corn syrup that is used in just about everything sweet.

So what's all that got to do with ethanol?  Hang on, I'll get to that. More from Wikipedia:  "Today, HFCS is the dominant sweetener in the U.S.; 42 percent of the corn grown here goes into making it. Some scientists think it contributes more to obesity and overweight than equivalent amounts of white sugar. If it weren't for ADM's efforts, no market for it would exist.

As for ethanol, the federal government reaffirmed its love affair with the stuff in the 2005 Energy Policy Act, which renewed tax incentives for ethanol production and decreed that the U.S. gasoline supply contain 6 billion gallons of it by 2006, and 7.5 billion by 2012. Moreover, the Act requires that cars owned by federal agencies use it exclusively."

Today, in 2007, you see the signs on the pumps everywhere you buy gasoline, "Contains 10 percent ethanol."  Corn diverted to the production of ethanol is one of the hottest commodities on the exchange.  Where ADM touted "cheap corn" in 2004 and 2005 (Cheap because of multi-billion dollar subsidies to growers) the market now is driving the price of corn futures. ADM's profits will continue to increase. The price of livestock feed will increase as farmers and ranchers compete with ethanol refineries for the crop.

Corn is a prodigious nitrogen feeder, meaning producing vast monoculture plots of it requires constant lashings of fossil-fuel-based fertilizers.  It takes a metric ton of coal to produce just 5.5 pounds of usable nitrogen. Not a realistic trade off.

Two or three final points.  Beef, chicken, pork, milk, eggs, cheese, butter, all corn products and all of the products that contain high fructose corn syrup are going to increase in price. That in addition to the increase already caused by higher gasoline and diesel fuel prices.

That's here in this country. What about the third-world countries where corn is a primary source of food.  It's more profitable to make ethanol than export corn. 

Ethanol lowers the octane of the gasoline blended with it. Ethanol decreases your gas mileage. Ethanol, being alcohol, has an affinity for water. The 10 percent ethanol in your tank could contain a bunch of water. Does anybody care? Is anyone seriously looking at sugar cane, sugar beets and other ethanol sources like wood chips and corn stalks or does ADM have a lock on the market?

Oh, and just for grins, consider that ADM is also producing bio-diesel from soy beans. Give me a break!