Chart of the Day: The Dragon Eats Corn
Friday, August 19, 2011 at 12:01AM 
WSJ story.
This is, of course, big news to those of us who own farmland in the Midwest (I do by extension through my wife), because China is already buying up all the soybeans (or so it would seem), and now they're moving in corn in such a big - and I believe, a permanent - way, that a state like Indiana, where damn near everything is corn or soybeans, is feeling pretty good.
Our acreage, BTW, is in NW Ohio - basically the farm my wife grew up on (her share).
With China sucking up this corn and the rest of the world's demand rising as well, it almost strikes me as criminally stupid, in a strategic sense, to continue with the economic farce that is corn ethanol. I've seen estimates where one-third of our crop (!) is destroyed in this manner - and I do consider it "destruction" is a world where 1B are too fat and 1B are malnutritioned (Soylent Green anyone?).
Mini rant for the day. Up to Lambeau tonight to see Pack v Cards in preseason. Taking the Mei Mei.
Reader Comments (5)
With the massive increase in demand, do we have the supply? My thoughts are yes, as we have loads of arable land. Farm subsidies should also go the way of the dinosaurs.
On top of that there is a push to increase the blend of ethanol in gasoline from 10% to 15%. It all goes to show that the (insert your favorite cause) lobbys are pushing policy in Washington not the people we elect. When you are spending as much time raising money for reelection as you do legislating and most of your money is from special interests no wonder there is no coherent strategic focus. Time to consider public financing of elections and term limits?
Are we in for a change in focus on what America exports from technology to agriculture products given the fact the more Chinese population transition from poor to middle class they will consume more food? Also what is the major factor behind Chinese lag in agricultural goods production? Ain't their numbers supposed to translate to cheap labour a key factor in agri biz? Also what aspect of poor infrastructure i.e absence of navigable waters to the interior China plays into the whole picture of lack of a viable method to feed their population?
The concerns sound quite Malthusian.
As an fyi, the blenders credit subsidy is now gone. The tariffs to protect it, left with the blenders credit.
Personally thought it (grain based ethanol) was one of the best public / private partnerships in a generation.
All acres used to to grow the corn for ethanol were taken from U.S. CRP acres that were previously idled.
Next up is celluosic ethanol, which would not be possible w/o grain based ethanol.
I think it was Spengler who pointed out that in a global economy the Arab street is less able to afford grain than Chinese pigs.
Most of the corn consumed in this country is either used as animal feed or made into high fructose corn syrup. Once corn is made into ethanol, about a third of the weight is left as distillers' dry grain which is used as animal feed. I do not believe that there is any moral issue with making corn into gasoline additive but YMMV.
Here's an article about another possibility for biofuels that does not require food as a feedstock.