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Corn Dogs
As for the bottom line, processors and distributors of agricultural commodities—from Kraft to Morton's Steakhouse—are being pinched by rising costs of grains and energy, tough competition, and softened demand stemming from the weakening economy. These factors are shrinking margins at every rung of the food-processing business. Ethanol producers are no different than cookie-makers and restaurants in this regard. After all, their biggest inputs include an agricultural commodity (corn) and energy.
While environmentalists have warned that the rapid growth of ethanol posed a danger to sustainability, the alarm may be somewhat misplaced. Oil has topped $122 a barrel and could be heading to $150. But the ethanol bubble has already popped. The recent poor results from ethanol producers is far more likely to hinder further development than any change in government policy.
© 2008
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Member Comments
Posted By: smokey_joe @ 05/14/2008 5:26:55 PM
Comment: An executive of the South African corporation, Sasol, has stated in a TV interview that his company can set up facilities to convert coal to liquid fuel by the Fischer-Tropisch process for any state or region in the USA that has coal deposits that they would like to exploit. Governor Brian Schweitzer, did you hear that?
Posted By: misterharban @ 05/12/2008 11:31:06 AM
Comment: My entry should state that the use of beets to make ethanol has no economic or agricultural advantage over corn
Posted By: misterharban @ 05/12/2008 11:28:43 AM
Comment: Brazil uses sugar CANE, not sugar BEETS. The production of sugar from cane is very, very labor intensive and, by most standards, as practiced in Brazil borders on human rights abuse. Notwithstanding, that the United States does not have very many places where the climate favors growing sugar cane, the cost of production of sugar from cane is much higher here than in Brazil. As to the use of beets to make ethanol in the United States, it has economic or agricultural advantage over corn.
Ethanol, whether in Brazil or the United States, results in a reduction of miles per gallon of vehicles switching from gasoline to ethanol.
In Brazil, any reduction of air pollution from the use of ethanol would come from the reduced sulfur content of the ethanol blend. This is not an issue in the United States since our refineries remove most of the sulfur from our motor fuels. Refineries in many other countries, for example Mexico and Brazil, are not required to do this.
Finally, it is likely that Brazil will become less and less dependent on ethanol as it becomes the western hemisphere???s largest oil producer as a result of its development of its newly discovered oil reserves. Like the United States, it will discovery that if there is any commodity in the world more valuable than oil, it is food. Land set aside to grow sugar cane, beets or corn can almost always be more valuable for growing food than for growing fuel.