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How many stations keep the price of E-85 high while sucking in gov subsidies?

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Here in Indiana in the middle of the corn belt I pay more for E-85 than I would for regular pump gas while getting significantly lower fuel milage.  I do it for the performance advantage in a turbocharged car, and for moral reasons dealing with importing oil when we could be energy independent.

 

Keith

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I'm afraid lots of places pocket the subsidy money. Here in Iowa there is generally a 2 to 5 cents a gallon spread between 10% ethanol and straight unleaded---10% being cheaper. You still see some stations selling both at the same price so you know they either pocketed the sub. or they cheapened up their unleaded.

Marty

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I'm afraid lots of places pocket the subsidy money. Here in Iowa there is generally a 2 to 5 cents a gallon spread between 10% ethanol and straight unleaded---10% being cheaper. You still see some stations selling both at the same price so you know they either pocketed the sub. or they cheapened up their unleaded.

Marty

 

Most of the Kum & Go's and Kiwk Trips  from what I have seen are managing to keep E85 .30-.40 less per gallon than  there least expensive 87 Unleaded/10% eth

 

The higher prices seem to be at the Co-ops..which is really baffling..you'd think they would be trying to offer the best possible price..promting their agri business..my last trip down to Iowa last month.. I came down 63 this time and stopped at the Five Star Coop in New Hampton just north of Waterloo... Ibelieve they were only .20 less per gallon..

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If the Co-op is for the benefit of the farmers, it makes sense to keep the price high..... just like high oil prices benefit the oil companies.  The vast majority of the ethanol produced for fuel goes to the oil companies for E-10 production.  If the co-op is selling at high prices to the oil companies they would be silly to drop the price for local E-85 production.  I know there are plans for another Ethanol plant close to me, so I hope prices drop at that point due to competition.

 

Keith

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If the Co-op is for the benefit of the farmers, it makes sense to keep the price high..... just like high oil prices benefit the oil companies.  The vast majority of the ethanol produced for fuel goes to the oil companies for E-10 production.  If the co-op is selling at high prices to the oil companies they would be silly to drop the price for local E-85 production.  I know there are plans for another Ethanol plant close to me, so I hope prices drop at that point due to competition.

 

Keith

 

Oh it benefits them alright ..first they get record prices for thier corn ..then mark up their E85 higher than everyone else  ;D     

 

Only 1% of all Ethanol for vehicles actually goes towards E85..rest is for oxygentation(I say let the oil companies blow bubbles to oxygenated their unleaded ;) ) , E10 and E20 mandates ..  none of which are alternative fuels.

 

The way I am looking at it Keith is you'd think the Co-ops would want everyone to use thier E85 product ..and the way to make that happen is through pricing..  99% of the people wont use E85 for any reason..other than if  it makes sense price wise .

 

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If the Co-op is for the benefit of the farmers, it makes sense to keep the price high..... just like high oil prices benefit the oil companies.  The vast majority of the ethanol produced for fuel goes to the oil companies for E-10 production.  If the co-op is selling at high prices to the oil companies they would be silly to drop the price for local E-85 production.  I know there are plans for another Ethanol plant close to me, so I hope prices drop at that point due to competition.

 

Keith

 

Oh it benefits them alright ..first they get record prices for thier corn ..then mark up their E85 higher than everyone else  ;D      

 

Only 1% of all Ethanol for vehicles actually goes towards E85..rest is for oxygentation(I say let the oil companies blow bubbles to oxygenated their unleaded ;) ) , E10 and E20 mandates ..  none of which are alternative fuels.

 

The way I am looking at it Keith is you'd think the Co-ops would want everyone to use thier E85 product ..and the way to make that happen is through pricing..  99% of the people wont use E85 for any reason..other than if  it makes sense price wise .

 

 

If they were not selling every single cob of corn that they grow at high prices I would agree with you... but they have to ramp up corn growing just to meet the demand from E-10 now that MBTE is no longer used.... so they would be foolish to sell for less than the going market price, and in fact would be driven out of business by such an action.

 

If I make bread, and I am bakeing as much as I can as fast as I can and the price of a loaf is $1.00 I would have to be insane to sell my bread for $.50  So why would you expect farmers to be any different?  Now, if the "bread market" was glutted with over production and I can undercut my competition by selling for $.50 while still making a profit then in that situation the price of "bread" will come down.  Replace the words "bakeing" with "growing" and the word "bread with the word "corn" and you have the reality of the situation.

 

Keith

 

PS:  Notice that the person complaining the most about E-85 prices (me) is the one explaining WHY they are higher than they could be :)

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Keith..  once again..they are already making a HEFTY profit  .. the idea that they would be foolish to lower the price of E85 to what the competion is selling it for is"foolish" ;)  My point is they the Coop arent selling any e85 at that price..now that is what is foolish.. 

 

Farmers are simply selling to the Ethanol plant ..dont they get the same for their corn at the plant..right ?

 

 

 

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You guys are forgetting that 1outlaw's ethanol plant is doing a good job on pricing. The ethanol plants I'm in( just figured up my percentage of the gallons produced is about a 100,000 per year) petroleum marketers get their paws on it and that's where the big markup comes from. Even though the plants are very profitable they don't get near what the public pays. Unfortunately our "free" country is mostly politics. Here's something else to think about---good farmland has been renting in the $150 range for years which was plenty and too much without a subsidy so now that corn prices are going up some of the aggressive farmers that can't get enough are willing to pay $250 since the landowners think that sounds like a good price to them---just one big vicious circle. I'm a farmer but have been satisfied to stay small potatoes.

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You guys are forgetting that 1outlaw's ethanol plant is doing a good job on pricing. The ethanol plants I'm in( just figured up my percentage of the gallons produced is about a 100,000 per year) petroleum marketers get their paws on it and that's where the big markup comes from. Even though the plants are very profitable they don't get near what the public pays. Unfortunately our "free" country is mostly politics. Here's something else to think about---good farmland has been renting in the $150 range for years which was plenty and too much without a subsidy so now that corn prices are going up some of the aggressive farmers that can't get enough are willing to pay $250 since the landowners think that sounds like a good price to them---just one big vicious circle. I'm a farmer but have been satisfied to stay small potatoes.

 

From what I have read  a 10 million dollar Ethanol Plant pays for itself in under 2 years !

 

As far as selling most of ethanol to Petro..I hate it but I understand it's a neceassry evil to build the E85 market..stations, Cars , public awareness

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The first plant I put money in was finished and going April of 2003--cost $45 or so million for a 40 million gallon. It was expanded to 52 mil last year and now going for 92 mil in another year or so. I guess the original size could have been paid for by now but I've gotten some pretty good dividends the last couple of years so technically I don't think it's paid for yet. New construction is closer to $2 a gallon and such a big waiting list that I've heard of $5 million offers to get an up front build slot vs. waiting to start construction.

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