The biofuels program is a regressive tax on food production.

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shorthorns r us

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Economist Claims that "The biofuels program is, in effect, a regressive tax on food production."
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At the recent American Meat Institute meeting in Nashville, a strong case was made about the high cost of ethanol policy on corn prices we have seen in this country. The actual increase that ethanol policy has provided is about $2.77 per bushel for farm level prices in 2008, according to economist Dr. Tom Elam, the president of FarmEcon LLL. Speaking at AMI's Annual Meat Conference in Nashville this week, Dr. Elam said ethanol tax credits have added about $1.33 per bushel to corn prices and may drive costs above $5 at the farm level in 2009.

Dr. Elam cites other impacts from the nation's biofuels program including:
An additional cost this year of $117.50 per fed beef animal.
Ethanol would have been $1.69 a gallon, but increased demand for corn and higher corn prices are driving prices up, and they now are 51 cents a gallon higher than they would have been without the program.
The biofuels program is, in effect, a regressive tax on food production. Dr. Elam contends that the windfall gains from the program go to a relatively small number of corn and soybean producers.

Elam adds that the federal government's renewable fuel program will also lead to a financial hit on the U.S. food industry of about $100 billion from 2005 to 2010, adding that he expects food price inflation to be around 5% or 6% in 2009.
 

knabe

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subsidies are a regressive tax. 

that said, it seems as if republican donors have pounced on the opportunity to get government money.  it seems to go hand in hand, the democrat enviros mandate something, and the republicans find a way to be the early adopters.

it really makes me fume every time i see an ADM commercial with all that sensitive caring music and tone of voice stuff.  they have been fined for price fixing in the lysine market.

http://www.uoregon.edu/~bruceb/lysine_l.htm
http://www.bankrate.com/brm/news/investing/20001221c.asp

i'm thinking farm subsidies are either past their prime or need to some serious overhaul.

i watched an old lady comparing prices on baloney in the grocery store yesterday and felt guilty.  i used to eat baloney, spam, macaroni and cheese with canned peas, skimmed milk.  could be eating it again.
 

Dusty

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I agree on the ADM thing.  I read a book about that whole lysine price-fixing scandal.  I imagine it was dramatized quite a bit, but still was very interesting on what truly goes on in the business world, like I've said in earlier posts, very few things in life are right and fair.
I agree that farm subsidies need an overhaul.  The first program I would can would be the Conservation Reserve Program.  The CRP program was started in order to take land out of production because we were producing too much and it was depressing market prices,  now it is time to bring those acres back into production.  There are litterally millions of acres out there that could be raising crops and instead of being a place for the deer to hang out.

I'm not rich by any means, but I could afford to eat pretty well, but I still eat and compare prices on bolonga, spam and mac and cheese.  I think that comes from 4 generations of tight wad men in my background.    Things aren't always what they seem...

On a side note, if food prices go up 30%, basic food is still dirt cheap, I spend more on fuel a week than I do on food, by far.
 

knabe

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here's an interesting article

http://www.technoride.com/2008/03/bmw_diesel_beats_prius_in_econ.php

note: cars were driven at 78 mph.  i drive my hybrid about 70 -80 and get 53-57mpg and mostly drive freeway.

this is why i purchased a honda civic hybrid.  today on the way to work, i got 57 mpg.  still, it doens't pay compared to a regular honda in terms of cost of ownership over 200,000 miles which mine has.  a new battery and labor cost to replace it costs about $4700 dollars, plus about $1000 to replace the second catalytic convert (yes, it has two).  so the gas savings is not even offset by this cost, even though i also got a federal tax break of 2000 dollars (off the gross income for the year of purchase).

it simply doesn't pay to subsidize this technology.  the batter has to be recycled, haz mat teams have to be staffed and trained and called to the scene of a hybrid accident, as well as safety personnel have to be trained and carry a special pair of snippers to cut through the orange labeled battery cable from behind the seat (underneath the car) to the engine compartment to reduce injury from electrocution and/or fire, as well as having to be aware of a lot more potential battery acid spill (haz mat team).

all in all, i would not purchase a hybrid again, and would recommend a conventionally powered civic or corolla or some other car that gets 35-40 mpg or greater with simple, cheap technology.  this is what happens when you subsidize something, all the hidden costs add up, in this case, rather dramatically. 

i have submitted all my maintenance and service bills, gas mileage and comparisons to local newspapers, but none will print the story.  no suprise.

pretty much the only reason to get a hybrid was the commuter lane sticker.  but if you look at all the hidden costs, even this is a big fat lie.  that's probably the real reason the newspaper won't print the story, all those greenies would get upset about not being able to go in the commuter lane, which at this point, i think should be gotten rid off.  that lane probably saves me 15 minutes each way.

 

knabe

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food is energy.  it's not pure energy (spock reference), but it's pretty powerful as it stores the power of the sun.
 

Dusty

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Ethanol is only about 10-15% of ADM's gross revenue.  They make a lot more money in the other niche markets(lysine, sweetener) than they do in ethanol. 
 
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