John Polk wrote:The article points out the fallacy of our idiotic policy of 'trading food for fuel' (aka biofuel).
For the last decade the High Fructose industry has been pushing the false notion that corn based ethanol removes corn from the food supply.
1) the corn used for ethanol is field and dent corn, used as fodder for animals. Its not the sweet corn that is bound for food markets.
2) Ethanol is created when yeast eat sugar and produce alcohols. Yeast eats simple sugars, it does not break down cellulose, it does not break down complex carbohydrates or proteins.
3) When you make ethanol, you cook the corn, remove the sugars, and then dry the corn so you can
SELL it as FOOD for LIVESTOCK.
4) Corn that has been processed through an ethanol plant is higher in protein/pound and easier for animals to digest.
5) The real culprits in the rising price of corn are:
a) The High Fructose Corn Syrup industry, which does use sweet corn that would otherwise end up on your table, turning TONS x 10 of corn into gallons of HFC syrup.
b) The steadily increasing price the gas. Corn, with the exception of mirai, being exclusively planted, cultivated and picked mechanically is a very fuel intensive crop. Not to mention the fact that most mechanical planters are very large gas guzzlers; the International Harvester, the industry standard and workhorse, gets less than 3 miles/gallon.
c) The most insidious reason resides halfway round the world in the royal house of Saud, who have been buying up both corn futures and short options on corn.
When you buy futures you're telling the stock market that you believe that the price is going to rise and you want to buy it cheaper early. In agriculture, buying early usually means you think the crop will fail this year, therefore increasing the price by cutting supply.
When you buy short options, you're literally betting with a broker that the futures price is going to drop due the a failure in the industry, and that you will be able to buy futures cheaper later.
In agriculture, buying short usually means you believe that crop will fail this year.
Both these figures are very high now, making to corn industry seem VERY unstable, increasing the amount of speculators who will also follow the big players and want to make profit.
Even when we have good years, the amount of speculators has caused an unnaturally high price.
In bad years like this one, the people who bought short options profit, further increasing the price of an already catastrophically wounded industry.
But the worst part of these figures is that when they are as high as they are now, bankers are very unlikely to give out loans.
The only loans farmers can get now, most of whom depend on loans to buy seed, fuel for the season, and enough that they can live on till the first harvest, are hard to get and have unnaturally high interest rates, increasing the costs to the farmer and plum putting many out of business.
Not to mention how Monsanto buffalo farmers into buying their genetics, which I'm sure most of you are aware of and my hands are too tired to go into their despicable practices.
I hope this was concise, feel free to ask me any questions if you want to elaborate on something I didn't fully explain.