[Colorado-Valley]

A magazine column I just wrote:

The Tortilla Crisis

By DON OLSEN

Well, I told Cindy I would try to write something about the looming corn crisis without getting too apocalyptic.

So I’ll say this: Small farmers and ranchers may be about to become very prosperous, at least in the short term ... and maybe even the long term.

Here’s the deal. This year about 17 percent of the North American corn crop went to making ethanol for the continent’s millions of cars and trucks. Next year about 50 percent of the crop is slated for ethanol, and in two years, if all the new distilleries planned are built, 90 percent of the corn crop will go to make fuel for cars. It wouldn’t come near replacing oil, but it might help keep prices down as petroleum gets more scarce.

Already in Mexico there is a food crisis because of the rising cost of corn needed to make tortillas, a staple of the Mexican diet, especially among its poorer people. Last week, 75,000 Mexicans protested the rising corn prices, but I’m not sure what the Mexican government can do about it. Should they politely ask Americans to quit driving their cars?

So I’ve been wondering if we should raise some corn on our ranch in an effort to help the starving Mexican people, as well as maybe make some big money, thanks to the current government-subsidized-ethanol mania.

My dad has always liked growing corn, but usually as silage feed for his Angus beef cattle. But he also has an antique 1950s-era John Deere combine, and he says that one year he used the little machine to combine corn. Just raise the header, open the drum and reinforce the blades. Voila! Shelled corn.

On the other hand, it might be easier to just keep raising cattle, because if all the corn is going to make ethanol, then the nation’s massive industrial feedlots won’t have any corn to feed and they will have to go out of business. Darn! Then the McDonald’s corporation will have to buy beef from us grass ranchers at very exhorbitant prices. Either that or the American consumer will have to go vegetarian and eat soybean burgers. Do you really believe that’s going to happen?

But back to Mexico. The country’s other big problem is that the Canterell oil field, the second largest in the world, has suddenly gone into rapid decline. This means that the Mexicans won’t have any food or gasoline or oil to export to North America. Currently, Mexico is the second largest exporter of oil to the United States, so that means that even more corn, and soybeans, and canola, and whatever else can be made into fuel will be appropriated for cars and trucks as Mexico’s oil disappears.

I can see it now: any conservation-reserve prairie in the Midwest, any hay field in the mountain region, any large row-crop farm in the Imperial Valley will be used to try to grow fuel crops to take advantage of government subsidies. That will make the price of food go up all over the world.

So that’s why I think small farmers and ranchers may do very well in the future. They’re sitting on what is suddenly very valuable topsoil.

Can we really feed seven billion people plus turn all our crops into fuel for cars? Well ... I suppose we’re going to try.

Time to fire up the antique combine.

[eastbay]

Excellent!!!

What magazine will this appear in??

[Bas]

poor countries have been complaining about the european and US farmsubsidies for a long time, looks like we can let go of them soon. And sure we will have some short term market adjustments but in the end the poor countries that have nothing besides agricultural products to export will be better off.

And no we can never replace all the oil with ethanol, but every percent counts.

[MrBill]

$this->bbcode_second_pass_quote('Bas', 'p')oor countries have been complaining about the european and US farmsubsidies for a long time, looks like we can let go of them soon. And sure we will have some short term market adjustments but in the end the poor countries that have nothing besides agricultural products to export will be better off.

And no we can never replace all the oil with ethanol, but every percent counts.

[fletch961]

$this->bbcode_second_pass_quote('', 'H')ere’s the deal. This year about 17 percent of the North American corn crop went to making ethanol for the continent’s millions of cars and trucks. Next year about 50 percent of the crop is slated for ethanol, and in two years, if all the new distilleries planned are built, 90 percent of the corn crop will go to make fuel for cars. It wouldn’t come near replacing oil, but it might help keep prices down as petroleum gets more scarce.

[Aaron]

$this->bbcode_second_pass_quote('', 'M')eat producer Tyson warned the diversion of corn from animal feed into fuel production could result in consumers paying “significantly“ more for food at supermarkets and restaurants.

[Bas]

$this->bbcode_second_pass_quote('MrBill', '
')

and is is a global phenomenon from Brazil to Borneo too
$this->bbcode_second_pass_quote('', 'M')alaysia is the largest palm oil producer in the world and has been keen in recent years — since global crude oil prices began to rise — to develop and use biofuel, a mix of palm oil or palm oil waste and diesel, instead of gasoline.

The Malaysian Palm Oil Board has said the fruit's oil on its own or in diesel mixtures has been used to power private vehicles since 1984. Some palm oil factories in rural plantations have used the waste from processing edible oil to run their tractors or other equipment.

A Malaysian company also announced last year that it was building the world's first plant to commercially produce ethanol from local nipah palm trees, with the product aimed mainly for export to countries looking for alternatives to gasoline.

[Bas]

$this->bbcode_second_pass_quote('Aaron', '6')0 billion gallons of ethanol displace just under 1 billion barrels of gasoline.

[Aaron]

$this->bbcode_second_pass_quote('Bas', '')$this->bbcode_second_pass_quote('Aaron', '6')0 billion gallons of ethanol displace just under 1 billion barrels of gasoline.

[Bas]

well, it fooled me.


and they should convert it to barrels/a day cuz I don't do yearly stuff.

oh and it does cut import because if ethanol is cost effective the oil import would already be shrinking, so it would only be shrinking faster.

PS wow that was confusing

[Aaron]

$this->bbcode_second_pass_quote('Bas', 'w')ell, it fooled me.


and they should convert it to barrels/a day cuz I don't do yearly stuff.

oh and it does cut import because if ethanol is cost effective the oil import would already be shrinking, so it would only be shrinking faster.

PS wow that was confusing

[MrBill]

Bas wrote:
$this->bbcode_second_pass_quote('', 'a')h yes, they are selling "green" energy in holland that was produced burning palm oil and now people started protesting because rainforests in borneo have been chopped down to produce that palm oil.

Still all in all higher crop prices is what alot of people having been waiting for a long time; Let's drop those farm subsidies!!!

the environment however will feel increased pressure, thinking about it; maybe the next WTO talks should be about protecting forests in exchange for the dropping of western agricultural subsidies but I'm not sure (I doubt it actually) if that's going to work.
_________________

[Bas]

$this->bbcode_second_pass_quote('', 'S')uppose we reach the administration's ultimate target of 60 billion gallons in 2030. That would offset less than half the projected increase in annual oil use by then. Here's why. First, it's necessary to convert the 60 billion gallons into barrels. Because there are 42 gallons in a barrel, that means dividing by 42. Further, ethanol has only about two-thirds the energy value of an equal volume of gasoline. When you do all the arithmetic, 60 billion gallons of ethanol displace just under 1 billion barrels of gasoline. If that merely offsets increases in oil use, it won't cut existing import dependence or greenhouse gases.

[Bas]

$this->bbcode_second_pass_quote('MrBill', 'B')as wrote:
$this->bbcode_second_pass_quote('', 'a')h yes, they are selling "green" energy in holland that was produced burning palm oil and now people started protesting because rainforests in borneo have been chopped down to produce that palm oil.

Still all in all higher crop prices is what alot of people having been waiting for a long time; Let's drop those farm subsidies!!!

the environment however will feel increased pressure, thinking about it; maybe the next WTO talks should be about protecting forests in exchange for the dropping of western agricultural subsidies but I'm not sure (I doubt it actually) if that's going to work.
_________________

[MrBill]

$this->bbcode_second_pass_quote('Bas', '')$this->bbcode_second_pass_quote('', 'S')uppose we reach the administration's ultimate target of 60 billion gallons in 2030. That would offset less than half the projected increase in annual oil use by then. Here's why. First, it's necessary to convert the 60 billion gallons into barrels. Because there are 42 gallons in a barrel, that means dividing by 42. Further, ethanol has only about two-thirds the energy value of an equal volume of gasoline. When you do all the arithmetic, 60 billion gallons of ethanol displace just under 1 billion barrels of gasoline. If that merely offsets increases in oil use, it won't cut existing import dependence or greenhouse gases.

[Bas]

those are rough estimates but I surely couldn't come up with better ones. And because I read too much doomer porn I actually think those estimates look very encouraging

[Aaron]

$this->bbcode_second_pass_quote('', 'I')f we accept that 60 billion gallons of ethanol will offset one billion barrels of gasoline that is 100 days of demand. About 25% of total demand. Demand destruction may account for another 25% of total demand. Then higher prices, demand destruction and ethanol is all of a sudden accounting for 50% of total current demand.

[MrBill]

$this->bbcode_second_pass_quote('Aaron', '')$this->bbcode_second_pass_quote('', 'I')f we accept that 60 billion gallons of ethanol will offset one billion barrels of gasoline that is 100 days of demand. About 25% of total demand. Demand destruction may account for another 25% of total demand. Then higher prices, demand destruction and ethanol is all of a sudden accounting for 50% of total current demand.

[Aaron]

I was really quibbling about "demand destruction & ethanol meeting 50% demand" statement & got carried away...

[MrBill]

$this->bbcode_second_pass_quote('Aaron', 'I') was really quibbling about "demand destruction & ethanol meeting 50% demand" statement & got carried away...