Stopping all biofuels could cut grain price 20%!

[Planet E85 .....E85 Ethanol Discussions]

Planet E85 .....E85 Ethanol Discussions  > E85 Ethanol General Discussion > General E85 Discussion >  E85 in the News > Topic: Stopping all biofuels could cut grain price 20%!

[1outlaw]

I do completely agree with you about local production and small scale but even commercial sized plants can cut out most of the double freighting by direct marketing E85 thru blender pumps in a 80 mile radius- alcohol is trucked once and the customer choses the mix. While this does not allow for the efficiencies of hydrous ethanol (Fed/State regs) or at this point E98 it is a far more efficient distribution than trucking/railing to an oil rack and trucks hauling final blends back out again (and oil companies having the pleasure of making it less competitive by tacking on 20-50 cents).

If this is going to happen though banks need to free up credit soon.

With home production at least you are in full control no matter what happens and that gives real peace of mind.

[Thumpin455]

We need the fewest fingers in the pie, the most efficient distribution, increasingly efficient production of ethanol, development of many feedstocks (grain, sugar, cellulose, waste whey, municiple solid waste, algae, etc), a lot of time for the markets to adjust and settle (markets are just a pendulum), fair press (not asking for unrealistic but accurate), and some public assistance to level the playing field in E85 while the automakers come around with better and more flex vehicles (and legislature to remove some of the oil subsidies). For ethanol to survive well it also needs other alt fuels from non-fossil sources such as wind/solar/geothermal/ and nuclear derived electric to ease some of the increasing pressure on ethanol to "do it all" in transportation fuels. These will need to be regional solutions for the long run. 

You are so close to the solution that if it was a diamond back rattle snake you would be dead. One thing that drives the price of ethanol up is centralized distribution, having it produced all over, then trucked to a distribution point, then trucked out again. Too many fingers in the pie is exactly the right metaphor.

If we change our thinking to small scale production utilizing untapped natural resources all around us, and use feedstocks that have a very high yield per acre, that dont require prime crop land, then we can make more than enough for everyone. Make it a regional economy rather than spreading it out over hundreds of miles. Only having to go 20 miles at most to the source of fuel would make a huge impact on cost. Add in not having to buy fuel for the process would impact the cost even more. Small operations make using more alternatives easier.

[Dan M]

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

I suppose I could put something together...what did you have in mind?

Thats ok..I just stickyed this thread .. http://e85vehicles.com/e85/index.php/board,6.0.html

[Corey872]

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

I suppose I could put something together...what did you have in mind?

[Dan M]

.. a lot of time for the markets to adjust and settle (markets are just a pendulum),

I think thats where we are now ..I believe we swung to far to the right too fast.. lets hope a correction that dosent cause more damage

[1outlaw]

Dan- I do not feel there are too many secrets;

We need the fewest fingers in the pie, the most efficient distribution, increasingly efficient production of ethanol, development of many feedstocks (grain, sugar, cellulose, waste whey, municiple solid waste, algae, etc), a lot of time for the markets to adjust and settle (markets are just a pendulum), fair press (not asking for unrealistic but accurate), and some public assistance to level the playing field in E85 while the automakers come around with better and more flex vehicles (and legislature to remove some of the oil subsidies). For ethanol to survive well it also needs other alt fuels from non-fossil sources such as wind/solar/geothermal/ and nuclear derived electric to ease some of the increasing pressure on ethanol to "do it all" in transportation fuels. These will need to be regional solutions for the long run.

The ethanol plants are built and must be run full out if you do not want the financial markets to turn their back on all alt fuel investments. I would prefer E85 to receive more tax credit than E10. The state of Wisconsin charges the same road tax for E85 that it does for NL and Diesel- how is it fair that a gallon of diesel at 138,000 btu pays the same tax as NL at 114,000 btu or E85 at about 82,000 btu??? E85 users pay more road tax per mile they drive but the states see it as a windfall to cover increasing buget shortages. If the federal credit continues to shrink then this will need to be fixed.

[Dan M]

So $6 dollar corn is just a minor part of the increase in food. Transport (fuel) cost , Labor , inflation and retail markups are the main "culprits"  So the Food vs Fuel debate is closed

That's all fine and dandy but what isn't closed is what $6 corn does to the cost of ethanol. Most corn plants are now only marginally profitable, some will go bankrupt and others have stopped plant projects dead in their tracks .


Our concern should be Fuel Vs Fuel debate ..  Shouldn't we have cheap ethanol so it can compete against expensive gasoline

We do not get cheap E85 by mandating ethanol as an additive .. slower but certain stable growth of E85 keeps the investors in and the price run up of the speculators out

This seems to be one the largest challenges ..ensuring everyone (farmer, ethanol company, distributers, blenders) makes a nice profit while at the same time giving the consumer the best alternative fuel product ethanol can put on the Market (E85) at a price that drives OPEC up their greasy wall

[1outlaw]

Corey- The author's name ends in Von Braun but he sure aint Werner. Nice! 

[rufus]

Good work, Furball.

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

[furball64801]

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

[Dan M]

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

[Gran Touring Labs]

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

[Corey872]

You heard it here first...

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

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