Topic: Stopping all biofuels could cut grain price 20%! (Read 10599 times)

rufus · « **Reply #5 on:** April 30, 2008, 01:45:47 PM »

Good work, Furball.

Cash Wheat is already down to a six handle in St. Louis.

furball64801 · « **Reply #4 on:** April 30, 2008, 12:37:09 PM »

These guys are out on every street corner spreading this garbage.

Dan M · « **Reply #3 on:** April 30, 2008, 12:28:10 PM »

Corey if you want to make a table/or spreadsheet take it down to even 50% and we will make it a sticky thread

TinkerFreak · « **Reply #2 on:** April 30, 2008, 11:16:10 AM »

I doubt anyone will stop based on what he said. Arguments like these are pushing cellulosic development into the mainstream.

Corey872 · « **Reply #1 on:** April 30, 2008, 11:12:27 AM »

You heard it here first...

http://www.foxnews.com/story/0,2933,353380,00.html

Quote

If leading nations stopped biofuel use this year, it would lead to a price decline in corn by about 20 percent and wheat by about 10 percent from 2009-10, said Joachim von Braun.

I won't debate how he came up with these numbers, how grain is supposed to be cheaper in the face of even higher fuel prices if biofuels were missing from the picture, etc...but simply assume he is 100% true, 100% of the savings are passed onto the customer and none of the higher energy costs are passed along (that should be the absolute best case scenario!!) Now lets look at the math:

Today:
$6.00 bushel corn, 56 pounds per bushel, 1 pound corn in a box of cornflakes, total cost of corn in cornflakes = $6.00/56 = 11 cents. Cost of cornflakes on the shelf $3.29

If this grand plan goes into effect:
$4.80 bushel of corn, 56 pounds, 1 pound box of cornflakes, total cost corn = $4.80/56 = 8.6 cents
Cost of cornflakes on the shelf $3.27 - wow two cents savings!

Next:
$6.00 bushel of corn, 2.6 pounds of grain used to raise one pound of beef, total cost of grain per pound of beef = 28 cents. Cost of hamburger on the shelf = $1.59/pound, New York Strip - $11.99/pound

The grand plan:
$4.80 bushel of corn, 2.6 pounds of grain/pound of beef, total cost of grain = 22 cents, Cost of hamburger on the shelf = $1.54/pound, New York Strip - $11.94/pound. (five cents savings!!)

Of course this is almost nonsensical as stopping biofuel production would lead to even higher cost of energy. But giving every possible 'benefit of the doubt' Joachim's plan is hardly worth the time it took him to put on paper, and higher energy prices would likely far offset these few pennies of savings on goods that actually contain a large amount of grain.

Edit: tweaked lbs/bushel of corn from 54 to the actual 56