Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 21
Corsair H150i Pro iCUE Firmware Update Says Bye Bye - H100i, H115i, Bricked Jet Engine Fans Fix - 27th Apr 21
Bude Cliff Walk and Secluded Pebble Beach Tour in VR 360 - Cornwall UK Holidays 2021 - 27th Apr 21
The Top 3 CBD Oils with Anti-Inflammatory Properties for Stopping Pain - 27th Apr 21 -
Biden’s Green New Deal - 27th Apr 21
Gold Stocks Upleg Accelerates - 27th Apr 21
The Tax Plan to Slay the Stocks Bull Market? - 26th Apr 21
See What’s Next for European Markets - 26th Apr 21
Gold's Perfect Storm - 26th Apr 21
Biden’s ‘Green Reset’ Could Be Great for Silver - 26th Apr 21
SPX Stock Market Short Squeeze – Here Or Not? - 25th Apr 21
Fiscal Guilt: What a Shift in Monetary Policy Portends for Investors - 25th Apr 21
Gold Price Reversal? Have No Fear! - 24th Apr 21
No Fear Of Inflation; Threat Of Deflation - 24th Apr 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Insane Ethanol Biofuels Policies Cause of Food Crisis

Commodities / Ethanol Jul 05, 2008 - 11:59 AM GMT

By: Mike_Shedlock

Commodities Best Financial Markets Analysis ArticleA World Bank Report suggests Biofuels behind food price hikes .
Biofuels have caused world food prices to increase by 75 percent, according to the findings of an unpublished World Bank report published in The Guardian newspaper on Friday.

The report's author, a senior World Bank economist, assessed that contrary to claims by US President George W. Bush, increased demand from India and China has not been the cause of rising food prices.


"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the report said.

16 Ethanol Planys File Bankruptcy

The US Ethanol Industry Is In Distress .
The U.S. ethanol industry is in trouble and can expect to see a rash of bankruptcies and dismantling of at least some production, according to a specialist who helps companies in distress.

Alex Moglia, president of Moglia Advisors based in the Chicago area, said he knows of at least 16 ethanol companies that are filing for bankruptcy, and there will be at least two to three times that number filing within the next year.

The weakness of the U.S. dollar makes it possible for foreign investors to acquire ethanol plants "at a deep discount," he said.

"They can buy as low as 20 or 30 cents on the dollar," Moglia said. "That should scare the hell out of anyone in the biofuels industry. I've worked with plants that are incomplete, others that can't offer profitably so they've all shut down. This will shake out most of small- and mid-sized players. Larger players will survive because they have buying power."

More ethanol producers will continue to file bankruptcy, he said, because of high feedstock costs and a "limited upside flexibility in terms of how much you can sell ethanol for."

"The demand for ethanol is not there," Moglia said. "The same thing happening to ethanol is happening in the biodiesel business. It will be the Wal-Mart-ization of the ethanol industry. It's just a mess."

Peiffer said many ethanol plants are and will be folding because "the business model they were built on doesn't work." Farmers and their cooperatives have either borrowed money or pledged their land as collateral in building ethanol plants, he said.

For every 10 ethanol and/or biodiesel plants "you read about in the media, there are probably 50 to 100 others that are in financial difficulty and are contemplating shutdown," Moglia said.

Since ethanol production is mandated by the federal government, he said they are already "operating outside free-market fundamentals.

Ethanol Tariffs An Economic Failure

Ethanol Producer Magazine is reporting Brazil launches campaign to remove ethanol tariff .
The Brazilian Sugarcane Industry Association is launching a public relations campaign on the Fourth of July designed to encourage the American public to pressure the U.S. Congress into removing the 54 cent ethanol import tariff. The 2008 farm bill extended the tariff, designed to support an emerging U.S. ethanol industry and to prevent foreign ethanol producers from benefiting from American subsidies, through 2010.

The Are We There Yet? campaign, which consists of an interactive Web site and television ads, is supported by various U.S. food and meat processing companies. The association chose to launch its campaign on the Fourth of July holiday because it's one of America's busiest travel holidays.

“Americans are being denied an opportunity to save money at the pump,” said Joel Velasco, chief representative for UNICA. “There is a solution that could have an immediate impact on [the] price at the pump – lifting the tariff on imported ethanol.”

Government Mandated Solutions Fail Again

  • 16 ethanol producers have gone bankrupt, many more are on the way.
  • Farmers pledging land as collateral for ethanol production are at risk.
  • Food prices are higher.
  • Consumers are paying higher prices at the pump.
  • Corn is fertilizer intensive. Growing corn for ethanol production drives up the cost of fertilizer.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2008 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Christopher Calder
06 Jul 08, 11:23
Barack Obama is king of starvation and ethanol insanity!

Barack Obama voted for turning mountains of our own precious food into water contaminated, low energy ethanol fuel that is a financial rip-off and a substantial cause of food price inflation. Barack Obama does not have a clue about economics, science, or mathematics, and he is irrationally is trying to vilify the very people who can give us lower priced gasoline if we only let them.

Oil price increases have not shrunk the human food supply, but biofuel production has. The more biofuels we produce, the less food we have to eat, because we grow biofuel crops, even switchgrass, using the same land, water, fertilizer, farm equipment, and labor we use to grow food. Biofuel production accelerates global warming, creates water shortages, and erodes topsoil. A new study says biofuels from cellulose sources, such as switchgrass, wood chips, crop waste, etc., will never be cost effective.

See biofuel facts at - http://home.att.net/~meditation/bio-fuel-hoax.html


Upwithbiofuels
07 Jul 08, 05:48
Biofuels

The major problem in the world today is FOSSIL FUELS and the fact that their prices are skyrocketing makes matters even more worse.

1. Fossil fuels cause wars. Saddam Hussein invaded Kuwait. Why? It wasn't because he wanted a better seaside villa on the Persian Gulf. All the descending wars from this one were either directly or indirectly caused by FOSSIL FUELS.

2. FOSSIL FUELS cause global warming. This is fact and if you disagree you must be an American Republican.

3. FOSSIL FUELS not biofuels are the major reason for the increase in global food prices. Every process from planting seed to preserving the food after it reaches market is affected by the price of fossil fuels. I would list them but it would take several pages.

4. FOSSIL FUELS are the major reason for all other inflation today around the world. If it would take several pages to explain the processes involving fossil fuels in the food industry it would take a book to explain their affects on all other markets.

It has been proven that with wise management and sustainable practices that the world can produce enough food and fuel from the land. This will not only reduce greenhouse gas emissions but provide income to rural areas around the world where so much poverty exists today. Over 1 billion people in the world today have an income of $1 or less. This would change with the advent of biofuels.


jamie in brooklyn
07 Jul 08, 09:11
Stop Burning Our Food---Free Energy Now!

I don't think we should be burning our food. Period. I love the idea of clean, planet friendly fuels, but we need to develop free energy that runs on sunlight, or self-generates. I know it's out there, Tesla developed it, but it's sitting on a shelf in a Top Secret room somewhere. Until the Oil Industry goes bust, and it will, we will not know the great benefits of free energy.

Stop burning our food! Senator Obama, please drop the ethanol drive!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in