AutoblogGreen

You ask "Live green , go hungry?"

No. Most greens don't understand the free market. They will start growing more, and more and more corn.

Did you realize there are probably 25,000,000 acres in this country that farmers are being paid NOT TO FARM? It's true. Setaside acres should begin to come off now and return that land into profitable use. Same with Mexico. They will grow MUCH MORE CORN next year.

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It's remarkable how many things some Mexicans can find to blame the evil U.S. for. Their tortilla prices go up so they blame Americans. I just read in the Baja Times newspaper (I was in Mexico last week) that the Mexican gov't is now importing corn from the U.S. duty-free to try to meet demand. Here's the article: http://www.bajatimes.com/art3.html

Not a single mention of the word "ethanol" or "fuel".

It's a supply and demand thing. There is not enough corn so the price goes up. How is this America's fault?

From the article: "Mexico is the world's fourth largest produced of corn, which is grown on nearly half of the country's 8.4 million hectares. One million of that is yellow corn and the rest white corn. Overall the country produces 22-million tons of corn also needs to buy more from the U.S. to meet its domestic demand."

What percentage of Mexican corn is used to make ethanol? I'm guessing it's a much smaller percentage than in the U.S.

The importation of corn from the U.S. is actually intended to LOWER the price of corn in Mexico, so the U.S. would be helping Mexico with this problem. Though I'm sure it's much easier to blame those Yankee multinational corporations like WAL-MART for ALL of Mexico's problems!

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This is complete rubbish trying to blame US ethanol production when corrupt Mexican businesses and officials are more clearly the problem. Sadly, Mexico is filled with cartels and monopolistic businesses.

From a reputable publication:

"industry executives and some government officials initially attributed the price jump to tight supplies and higher international prices for corn owing to increased production of corn-based ethanol in the US. This was quickly debunked, as the corn consumed in Mexico is not of the same type as that used to produce the alternative fuel. (Mexicans consume white cornmeal, while ethanol is made from yellow corn, which has limited uses for human consumption). Moreover, Mexican farmers produced a healthy-sized crop of white corn in 2006, according to official data."

See http://www.economist.com/daily/news/displaystory.cfm?story_id=8575130

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The markets work quite well, even in the face of very complex inputs, and a major increase in demand is usually followed by a major increase in supply.

But here, we have some other complications: Ethanol is a lousy fuel, and corn is a lousy feedstock. The investment community has taken note of the fact that the energy return is negligible (if not negative), and the investment newsletters that I follow all predict a major 'correction' in that market. When Political Correctness is confronted by the Market, the Market always wins in the long run.

Here's how the scenario appears to be developing: Politically Correct ethanol production will soar with the addition of several new plants this year, which will send corn prices through the roof, which will send ethanol prices far enough north that even the Politically Correct will back off. Then the bust will come even more quickly than the boom, and a lot of people that invested in ethanol at the urging of the government will lose a lot of money.

From an investment newsletter that I subscribe to: "The hype climaxed this past summer as the shares of every company even remotely involved in the production, transportation, or marketing of ethanol surged to all-time highs. The shares have since fallen back down to Earth. In fact, most of the stocks have given back as much as 60%-70% of their gains[...]The economics of the ethanol industry are simply not suitable for longer-term investing[...]it's an inefficient alternative fuel. But don't bother telling that to the folks in Washington. They love the idea of ethanol. After all, in Washington, D.C., no bad idea goes unfunded."

Political Correctness makes for bad science, bad public policy, bad economics... and REALLY bad investment strategy.

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you know, that tortilla looks *remarkably* like the surface of the moon!

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Ethanol is just another big taxpayer give-away for the rich agbiz. billions in subsidies. These programs were meant for the small farmers in the 1930's but now lobbyist attorneys concock ways to rip off the taxpayers. THese frmers are already making millions on the USDA scam programs. One asshole divided his ranch into 62 sections and then collected subsiies for each. It is common practice. ethanol is a joke, it costs more energy to make it by far than it will save. Meanwhile these crooks hire illegals, then treat them like disposible animals. They don'teven have to provide benefits instead the workers get all the bennys from the county programs, again subsidized by the taxpayers. What a price for a cheap head of lettice.

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