Combines Ethanol

big_orange

Guest
I don't know whether ethanol is or isn't the answer. 1 bushel of corn makes 2.8 gallons of ethanol, plus the other by products.
 

chuckm

Guest
Rig, A couple clarifications. ICM is not an ethenol plant, they are primarily a DESIGNER of ethonol plants. They also fabricate and build a small percentage of the plants that they design. I grew up in Colwich, and know one of the owners and the director of design personally. The layoffs are being driven primarily by the price of corn. General concensus is that $4.00 _ bu is the economic breaking point for corn ethanol, even in the highly efficient design that ICM pioneered and has driven the company's growth. So, with corn staying above that point, credit tightened up after the sub-prime bust, and other factors there were no options.
 

Rig

Guest
That makes more sense as I was wondering how the plant itself hired 600-some people. My main question is though, how does this all effect the ethanol businessIJ loads of negative press and markets moving against the industry. I guess I kinda enjoyed these grain prices. Hope they stay around a little longer. A bank examiner friend of mine a couple of years ago told me that in his opinion the next economic debacle would be the ethanol industry. He kinda missed the sub-prime mess but still I remember his words.
 

tbran

Guest
these grain prices are due to many things, not just ethanol. AlSO the news media forgets one vital statistic. Corn is STIll useable as feed AFTER the ethanol is produced. South American reduction in production, drought in the mid south and south, and most important is the 'eses' of the world make up the balance of the reasons for the commodity prices. The chinese, tiawanese, vietnamese and on and on. The third world has moved up one notch on the food chain. Instead of eating rice, they are growing grain and feeding it to chickens (thus the world preoccupation of avarian - bird - flu) ((not to be confused with ovarian flu which strikes most farm women after a major new piece of farm machinery is purchased)) and eating meat for the first time. Even the lowly piggy is growing in n's and eating grain instead of sewage and scraps in Asia. Plus, these 'eses' are growing in n's by leaps and bounds ever increasing demands. History has proven that once homo sapiens tastes meat in a 3 plus course dinner, HE rarely reverts to 'veggi-tarian' ways unless one becomes over educated, excessively wealthy, and has nothing much to do. IF there is a great crop this year the 'experts' say 20% reduction in commodity prices will result. IF there is a bump in the production road, all bets are off - people have an affection to eating.
 

Gleamer

Guest
Hey, my farmer wife gets the ovarian flu over much less, like fuel bills, I feel I am being cheated somehow. And gone are the days of starting a brush fire with diesel, used motor oil works fine with a few seed bags and the air blower..
 

R_O_M

Guest
Tbran in his usual inimitable home spun and very clever way has again very accurately summed up the reasons for the current high food prices. I have been following global food supply trends and population growth for perhaps 15 or more years and have told any number of people over the years that the world was heading for a food crisis. I was usually laughed out of court as there just seemed to be so much food and it was so cheap that the current generation just could not imagine actual food shortages developing. I have also said that anybody who put money into bio-fuels needed their heads read as looking at global food figures, it would be a ten year bust at the most. Food at the current prices when measured against past incomes, is still extremely cheap. The following figures are for Australia but I would think that they are roughly comparable to the USA. In 1932 in the depths of the great Depression with 28% of the work force in Oz unemployed, one tonne of wheat in value was equal to the minimum wage set at the time by our wage setting authorities in Australia. In 1947 _ 48 _49 with starvation in Europe from the aftermath of WW2, one tonne of wheat in value was equal to two week's minimum wage. In the late 1960's and early 1970's prior to the Russian's great grain robbery when wheat seemed to be so over supplied that most farmers could see no future for them, one tonne of wheat in value was equal to a tradesman's weekly wage. So we still have a long way to go in prices to match those figures but we will get there! Tbran is absolutely right about the meat consumption but he did not mention the fish. 20% of the world's protien needs come from fish. The global ocean fisheries are fished out and nearly destroyed so farmed fish are being used instead. Farmed fish are being fed grain which is another draw on world grain stocks which did not exist when the ocean's were relied on for fish. Roughly one quarter, the figures are not really known, of the world's food is grown using partial or full irrigation. One third of the irrigation water comes from underground aquifers. These aquifers will be basically exhausted as is the north China Plain aquifer already and which is where China's main wheat crop is grown, by around 2020. The world will lose about 10% of it's current food production due to the lack of water by around 2020. You ain't seen nothing yet when it comes to global food supplies and prices to food producers. The outlook is truly frightening in the longer term. I simply don't think that we can produce enough food for 9 to 9.5 billion people, an increase of about a third more mouths to feed by 2050. Despite increasing yields at the present in the laboratories and plots we are running into field and growing conditions and limitations that will slow the yield increases in the years ahead. But our biggest threats are massive and grossly inefficient Government interference in farming and food production and the take over of food production by multi national companies that will baulk at nothing to grab a chunk of the extremely lucrative food production market. This is already under way in Australia.
 

Rig

Guest
I agree with anything you wrote but I do think that ethanol and biofuels had a tremendous effect on changing market psycology. The threat of huge corn and soybean markets other than the traditional ones woke up the buyers of these crops and convinced them that they had better secure their needs. A lot different mindset than they had exhibited in recent years when it was more "hand to mouth." I still see huge piles of outdoor grain around here. I find $6 corn hard to believe when it appears like there is grain around. So far it seems the opinion that we can enjoy good markets without ethanol. I no longer expect ethanol to be a growth industry and I would think that there would be quite a bit of market resistance to products such as E85 with all the negative press. Ethanol subsidies I also expect to be on the cutting block if more people do not start defending the idea of ethanol.
 

pj

Guest
not all bad. I invested in the garnett KS ethanol plant in 04. I have received all of my initial investment back and a 37% return for 07.
 

R_O_M

Guest
Very good points there, Rig and the psychology is one that I had not considered.