rice shortage?

Demiurge

rhulett wrote: »

I thought we were talking about how ethanol has caused the rice shortage? Ethanol has caused the price of corn to go up slightly. China and India moving away from a rice diet to a protein diet, has caused corn to increase greatly. That is why you are paying more for your food, not because of ethanol.
For the record, estimates are for somewhere between 3 and 15% of the US corn to go towards ethanol production. Most new construction of ethanol plants have been stopped or slowed, because at nearly $6 per bushel, it's not a profitable option.

Switchgrass will be the eventual choice, easier to grow, easier to maintain, doesn't need as much water and fertilizer. Biofuels will be, at least in part, the future fuel source.

It's all part of the same ball of wax. You have yet to acknowledge that corn is in nearly everything we eat. We've had the biggest surge in food costs in 15 years. We all go grocery shopping, you haven't noticed this?

What happens when the cost of food goes up? Well, some people cease to be able to afford it. Corn, rice, soy bean, are all base food products for 3rd world countries, in which people are starting to starve because they can't afford it. There are also shortages because of all the aforementioned things in this thread.

It's a fact most people are clueless about economics, and this thread certainly proves it's true here in the United States.

To the last point, vegetation isn't the answer to anything to do with powering our vehicles.

Have fun with the rest of this thread, though. It's clear you have an interest in ethanol being mandated into our gas tanks and can't be reasoned with. I support people taking advantage of what's out there for them. It would be stupid not to. That doesn't make this entire situation right.

I am, however, incredibly amused that the same groups pushing for all of this crap are finally seeing the consequences of their collective actions.

mightymouse

We need the food to feed people, not to feed our cars.

Phasearray

Too bad most people here have no idea how waaaay off they are.

rhulett

Demiurge wrote: »

It's all part of the same ball of wax. You have yet to acknowledge that corn is in nearly everything we eat. We've had the biggest surge in food costs in 15 years. We all go grocery shopping, you haven't noticed this?

What happens when the cost of food goes up? Well, some people cease to be able to afford it. Corn, rice, soy bean, are all base food products for 3rd world countries, in which people are starting to starve because they can't afford it. There are also shortages because of all the aforementioned things in this thread.

It's a fact most people are clueless about economics, and this thread certainly proves it's true here in the United States.

To the last point, vegetation isn't the answer to anything to do with powering our vehicles.

Have fun with the rest of this thread, though. It's clear you have an interest in ethanol being mandated into our gas tanks and can't be reasoned with. I support people taking advantage of what's out there for them. It would be stupid not to. That doesn't make this entire situation right.

I am, however, incredibly amused that the same groups pushing for all of this crap are finally seeing the consequences of their collective actions.

I only posted in this thread because you stated that ethanol was the cause of the rice shortage, which it is not. Of course you vomited on that one.

Then, I post again and you call me clueless, and that I have an agenda. Pretty standup position for a moderator.

I have no agenda and I do not profit from any way on ethanol production. I understand that corn is in most products that we consume, and that ethanol will have an effect on those things. On the other hand, you could idle every ethanol plant in the country, and this would have virtually no effect on your price of food.

China and India striving to feed the masses protein, is what is driving the higher costs of food. They are buying up grain to feed the livestock, instead of exporting their own grain. This causes a supply and demand issue.

Wheat products, are a one/two punch. Any body remember the drought going on in Austrailia. That is one of the major factors in the high price of wheat, as they are a major exporter.

On a side note, I can't believe the way new posters are treated. Even though I've been a lurker for years, I can see why new posters are shy. There is a mob mentality for sure.
Rob

Airplay355

Mob? What mob? :: puts down pitchfork ::

Demiurge

First, I am not a moderator.

Secondly, understanding this issue has nothing to do with what industry you're in and everything to do with understanding simple economics.

How various commodities can effect others, such as how the demand for corn affects the price and supply of other commodities such as rice. No, the governments of China and India aren't "switching the diets" of their citizens.

Thirdly, the actual people in the grocery industry directly blame these ethanol mandates for the price of food. High prices mean one of two things -- higher demand or a shortage. In this case it's a higher demand for corn, since 25% (as of this year) of our corn is going into our gas tanks. Our government created a new demand with the mandates. The higher demand for corn causes shortages of other food commodities -- soy beans, rice, etc.

“Federal food-to-fuel mandates have led to over one quarter of corn to be diverted from food to ethanol production, driving up the price of corn and other commodities to historic highs,” said Faber. “The data released today prove that the result has been devastating for American families: cost of food and beverages have risen and annualized rate of 5% over the first quarter of the year. This is an unsustainable pattern that must be addressed; Congress must re-examine food-to-fuel mandates." - Scott Faber, Vice President for Federal Affairs at the Grocery Manufacturers Association

You claimed only 3% of the corn in this country goes to ethanol. That's either a bold faced lie or you don't know what you're talking about.

Lastly, and to get back to the first post in this thread. Costco and Walmart, who are part of the Grocery Manufacturers Association, decided to start limiting the amount of rice you can buy because of the above.

dkg999

Demi - I think the opinions on the impact on food prices due to ethanol production are off-base. Take ethanol out of the picture, pretend it doesn't exist ......... then consider the impact of $4 plus replacement cost for diesel fuel and the associated impact on the prices of all the inputs into the agricultural process. Based on the increases of the inputs to the process of growing corn, the market price has to rise to very close to the current levels to produce an economic incentive that covers the risk of growing corn. It's not a linear equation, as the level of financial risk incurred to plant a corn crop increases for the grower/farmer, the rate of return must increase at more than a 1x factor to offset the increased risk and justify putting a crop in the ground.

So tell me what you think the ROI a farmer should achieve is? A retailer looks for 10% to 40% margin with little risk from weather related factors and the chance to churn every dollar of inventory investment multiple times annually. What do you think I should be compensated on a bushel of corn, keeping in mind I can only grow that bushel of corn 1 time annually?

tonyb

Doug,
You charge whatever you need to,to make a profit and keep the farm going.As with any buisness,you can't just keep swapping dollars or you'll sink eventually.Weather is the variable that most don't take into consideration.As far as food prices go,it's a combination of things.Ethanol,weather,speculation,gas prices and probably a few I forgot.Be it so,food prices always fluctuate throughout history,no big surprise,but with the growing....how do I say....cost of living rising at every turn,people get their nuts twisted when something else goes up.Your local and federal governments want more of your paycheck,insurance companies want more,gas,of coarse,costs more,food costs more,schools,and on and on.The one thing that doesn't go up is usually your paycheck.
Answer?? Hell,I am no economist,or genius in anything,but what I do know,is when the consumer stays home,stops spending,things change.I'll leave it at that,any further and I will have to throw politics into the scenario,and we all know,thats a no,no.:p:)

Demiurge

I'm really not sure I follow your post. Are you asking what I think you should charge for your product? The whole reason so many farmers are switching to corn (at least where I live, and farmers are in my family) is because of the commodities market. Corn is going to pay more than most other crops, which causes shortages with other agricultural commodities. The reason corn is going to pay more is because of the ethanol mandates. It's a built in demand that wasn't there before.

Your decision comes in as to whether you're going to lock in to what the futures say TODAY for a set PPB or if you're going to wait until harvest time to cash in, when the prices might go up even higher -- or they might fall. Either way is a risk, like there is with any other business.

The same is true for the commercial commodity producer. Risk on their end as well.

petrym

There was a recent article in the Omaha World Herald that stated that the ethanol industry is using feed corn -- not the corn humans consume -- for ethanol production. It would seem this whole situation is a scare whipped up by accusatory politicians in affected countries.

Demiurge

petrym wrote: »

There was a recent article in the Omaha World Herald that stated that the ethanol industry is using feed corn -- not the corn humans consume -- for ethanol production. It would seem this whole situation is a scare whipped up by accusatory politicians in affected countries.

*beats head against wall*

You understand that farmers CHOOSE their crops, right? That it often changes year by year based on the futures market? One year a farmer may plant Wheat. The next he may plant Soy Beans.

Lets make the total amount of all corn produced at 1,000,000 bushels a year (to use a round number).

Lets say pre-ethanol the breakdown is as follows...

80% of it is feed corn, or 800,000 bushels a year.
20% of it is human consumption, or 200,000 bushels a year.

Now, throw in ethanol mandates and you see the availability of corn for human consumption dwindle as the percentages change in favor of feed corn, driving food costs up.

dorokusai

I just spent the evening with two escorts from the Emporers Club for a 50lb bag of basmati.

danger boy

hey doro, why did your members sales rating drop to 23? :eek:

dkg999

danger boy wrote: »

hey doro, why did your members sales rating drop to 23? :eek:

He must not of performed up to expectations for the charming young ladies from the Emporer's Club :eek:

ben62670

danger boy wrote: »

hey doro, why did your members sales rating drop to 23? :eek:

He lost a good feedback for every time he mentioned ****-less chaps:D

danger boy

ben62670 wrote: »

He lost a good feedback for every time he mentioned ****-less chaps:D

i think he lost the ratings for every time he WEARS his **** less chaps to the grocery store. :eek:

ben62670

The visual of old ladies, women, and children spotting him walking down the isles swinging a cane, wearing a fuzzy pimp hat, shaking his money maker, and said chaps has just ruined me. I am going to need some sort of crisis counseling:eek::eek:

dkg999

Demi - my point is that if you take ethanol out of the picture, there are still a whole host of other factors impacting the corn market, and the production decisions at the farmer/business level. Based on the costs and risks to produce a crop, I'm not sure that the current market prices for corn are that out-of-line from a return on investment perspective. I just don't see ethanol as the main/root cause. And ethanol production is quickly moving away from corn as the source. Corn doesn't have an ideal carbon-chain make-up, and other sources such as switchgrass, sunflowers, etc. do. These sources are also multi-time harvestable per year, and also use more low-value and less than ideal soil land to grow on. Unfortunately that land will probably come from the animal grazing land, so meat prices would be impacted, and then soil/water conservation becomes an issue.

There's really no easy answer. We've got too many people on this rock and our energy and food production systems are strained to their breaking points. The balance of people to agricultural production available is out of whack, and we keep taking land out of food production and turning into housing (with associated increased commuting energy use) at an alarming rate.

sucks2beme

tonyb wrote: »

Doug,
You charge whatever you need to,to make a profit and keep the farm going.:)

??? It's a farm. You grow/raise it and sell it at market price.
If the market is bad, you lose money. And lose more money.
You can't control the weather, or the price. The current corn
prices are about the only bright spot for most of the midwest
in years. Damn straight they are cashing in on the trend.
And when that drops off, they'll try another crop.
This market is just delayed payback for the crash caused
by Jimmy Carter's export embargo that killed off a ton of family farms.

There are a lot more products than ethanol coming from corn.
There's a big movement to make plastics from corn that break
down in a landfill in about 50 years. Petro based plastics will
outlast pyramids. This isn't a high % yet, but it will start to
squeeze prices too.

dkg999

A financially strong agribusiness economy that is significantly shaping the alternative fuels and green products direction .......... that's something that will keep an oil company exec up at night :eek:

Demiurge

The oil companies are in favor of ethanol....

sucks2beme

Demiurge wrote: »

The oil companies are in favor of ethanol....

That's because corn based ethanol is pretty much a stupid answer to
a tough question. The right answer will take a leader with vision and
a hell of a strong will to put into action. So far, we seem to be picking
guys who don't push long real solutions to anything. We had over 30
years to fix this, and the answer was SUV's and Hummers.
Corn based plasic is good. Corn based ethanol is politics.

dkg999

Demiurge wrote: »

The oil companies are in favor of ethanol....

Notice I said "significantly shaping"! Right now the oil companies are still driving the bus, and they know ethanol is not the answer or a threat. Once something knocks them out of the driver's seat, it will get ugly.

The real answer would be a serious motivation/incentive for the oil companies to develop alternative fuels. Right now they really have no incentive, and that's really not totally their fault.

sucks2beme

dkg999 wrote: »

Notice I said "significantly shaping"! Right now the oil companies are still driving the bus, and they know ethanol is not the answer or a threat. Once something knocks them out of the driver's seat, it will get ugly.

The real answer would be a serious motivation/incentive for the oil companies to develop alternative fuels. Right now they really have no incentive, and that's really not totally their fault.

They are limited by what they are. Stockholders want profits, not research.
Core business is OIL. This is the common problem with most U.S companies.
When oil prices were low, there was no spare money for research. Or new
refineries. And what's the return? Kill your business with a non-oil product?
Kodak laid the groundwork for digital photography, and it destroyed their
core business, film. Someone's gonna have to put a lot of money into this
to get the job done. Sadly enough, half of what it cost to kick Saddam's
butt would of been enough to get us there. Then we wouldn't be sending
all our money to **** that want to destroy our way of life.

Lowell_M

I was in China when this story first hit the news. It was hilarious. The business associate I was visiting was concerned for my health and suggested I stay a little longer in China until the shortage is over. The Chinese news made is sound like we are all going hungry over here.

danger boy wrote: »

ok. do we really need something else in short supply?

I was at Costco today.. and they are limiting how much rice you can buy.. because of a world wide rice shortage. Every other cart had a bag of rice in it.. American's don't eat as much rice as other countries around the world.. so i'm not to concerned at all.

What do you all think about the impending rice shortage?

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/24/BUUR10AOLH.DTL