Another Government Fuel-Proof Idea. A Lesson of Corn and Flake.

NEWS FLASH: We’re Getting Hosed at the Pump. Although you can’t actually find this box of cereal on your grocer’s shelf, you can find it’s concept.  E-85 Ethanol is a bad idea on all levels.  Lets start with a June 2010 article from The Farm and Dairy e-Newsletter;

“The U.S. has been a net importer of ethanol for the last decade, but the nation is quickly evolving into a net exporter. While this is welcomed news to an industry looking for new markets, it serves to undermine the fundamental value of America’s ethanol industry as a domestic replacement for imported oil.”

So even the folks growing the stuff get it’s original intent.  This  Government  Cornucopia  is a MAZE of dead-ends and circles that is really hard to follow when you try to attach logic.

Corn is the number one crop in America and we produce 40% of the world’s total output. With a record 13.1 Billion Bushels produced in the U.S. in 2010, 40% of that is sent to the giant Ethanol Juicer.  Another 40% of that goes directly back to farmers who raise cattle, poultry, and pigs.  That leaves 20% or 2.62 Billion Bushels left for the breakfast table.  Now you know why the price didn’t change on your box of Corn Flakes, but the contents and box dimensions are down as much as that magic 40% number.

Along with the record crop yield, we also have a record Ethanol Subsidy to offset the cost of producing Ethanol. This helps  make it more affordable so people will use it in their “Flex-Fuel” cars.  In 2009 , I did see the price difference as much as $1.00 per gallon. I also witnessed testimony from my sister-in-law in Aurora,  Colorado that her Chevy Tahoe had a significant loss of power.  Gas mileage suffered due to Ethanol’s inability to burn as hot as gasoline , not producing the horsepower to power the vehicle especially in the higher altitude climates.  Even though my brother wanted to save the $1 per gallon, she said it wasn’t worth it and has continued with regular gasoline.  Ethanol creates a continuous vortex of waste, by using more fuel, it requires more corn, which increases tax payer burden  ($6.27 Billion*), because you and I are paying the Subsidies, resulting in higher food costs.

*An estimated  13.95 Billion Gallons will be produced in the US with a $.45 gallon subsidy

With the government making sure the Ethanol producers can make a profit, they legislated  a sliding scale of government mandated “blending” percentages that increase each year.  Add to that  the almost 400 million gallons of Ethanol  that were exported in 2010 with a 25% increase, or a record 500 Million Gallons estimated to be  pumped overseas in 2011, it’s just one more giant Welfare Program for Ethanol Producers.  Wouldn’t it be interesting to find out how many in Congress have some of these companies in their Stock Portfolio?

You know a program is not working when even  Al Gore believes this is running on empty. I end on this note.  Congress just voted to eliminate the subsidy and the the Congressman behind the amendments to the bill……..from  Baking-Management.

The U.S. House of Representatives approved an amendment by Rep. Jeff Flake (R-AZ) that would prohibit the USDA from allocating funds for ethanol infrastructure, including blender pumps and storage facilities. Rep. Flake’s amendment was passed by a majority of 283 to 128, demonstrating growing support for ending subsidies for corn-based ethanol. The Flake amendment received 22 more votes than it did when it originally passed the House in February.”

How can you make up the fact that the Corn bill was promoted by a Flake?


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