Great news! Ethanol plant reopens in midst of massive drought

posted at 8:41 am on August 10, 2012 by Jazz Shaw

Not too long ago, we took a look at the effect the drought is having on the nation’s farmers, particularly those producing corn. The situation isn’t improving, as is being widely reported, and the farmers are in dire straights. Prices are rising for not only corn for the dinner table, but all the other products which use corn in their manufacturing processes. So it would be rather silly to think about burning even more corn to make unprofitable ethanol, right?

Think again.

Despite raging concerns about the effect the worst drought of 50 years on the corn harvest, the former Bionol ethanol plant in Pennsylvania is back up and running after being purchased by Zeeland Farm Services (ZFS). Production began last month at the now named Pennsylvania Grain Processing LLC and is producing ethanol, dry distiller’s grains and other products.

Nearly all of the former employees of the plant were brought back and there are plans to hire additional employees. Cliff Meeuwsen said the plant is up and running at full capacity. ZFS also owns and operates corn and soybean processing plants in Nebraska and Michigan and is no stranger to operating agricultural businesses in times of challenges.

On the surface this probably sounds like madness in terms of a marketing plan, right? I mean, ethanol isn’t even profitable on the free market when corn is plentiful. With prices rising, you’d have to be crazy to reopen a plant at a time like this, wouldn’t you? Yes… crazy like a fox.

Global pressure on the United States to relax its ethanol quota mounted on Thursday as the top World Bank food official said an “immediate, temporary suspension” of the mandate could help head off another world food crisis.

As the surge in corn prices revives a fierce food versus fuel debate, José Graziano da Silva, the director-general of the UN’s Food and Agricultural Organization, wrote in the Financial Times newspaper that competition for a U.S. corn crop that has been decimated by drought was only going to intensify.

“Much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets,” he wrote in an op-ed just a day before the U.S. government issues a pivotal crop report that is expected to show U.S. corn output falling to the smallest in six years and stockpiles at near record lows.

But hey! It brought back dozens of jobs in an election year! You can’t just turn around and shut it down just because people are running out of food. The fact is, Washington has created a false market for corn-based ethanol no matter how high the price goes. The taxpayer dollars will keep on flowing, so there will always be somebody there to vacuum them up.

We’re still burning our seed corn. Literally. But don’t expect to see an about face from the White House on this one with only a couple of months until the election.


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Political cornography

faraway on August 10, 2012 at 8:44 AM

Incornceivable

Imrahil on August 10, 2012 at 8:48 AM

Putting our corn – really the world’s corn – in our fuel tanks, while we have huge reserves of shale and natural gas waiting to be tapped, is crazy. And par for this administration. I don’t expect 0bama to relent. He’d rather please a hippie than feed a kid.

Romney may murder steelworkers’ wives, but he starves Africans’ children.

cane_loader on August 10, 2012 at 8:49 AM

Here’s how it works. Lib/Progs would rather feel good than do good. It makes them feel good to push Ethanol. Who cares if people in Africa are starving to death because of the price of food?

NickDeringer on August 10, 2012 at 8:49 AM

Stupidity is democrat energy policy.

tom daschle concerned on August 10, 2012 at 8:49 AM

Jinx!!

;-)

cane_loader on August 10, 2012 at 8:49 AM

#headdesk

Flora Duh on August 10, 2012 at 8:49 AM

The Great Cornholio is a Big Bungholio.

cane_loader on August 10, 2012 at 8:51 AM

What proves that idiot liberals don’t really care about “Global Warming” is the fact that ethanol is a horrible fuel as well and gets less mpg than regular crude oil based fuel. I specifically avoid gas stations that say they use more than 5% ethanol in their gas. That’s why I avoid Shell like the plague. It’s either Exxon-Mobil or BP gas for my car as I get much better gas mileage with those 2. It is a bit ironic that those are the two evil villians of the left though.

MobileVideoEngineer on August 10, 2012 at 8:52 AM

Maybe we could get water from China.

JellyToast on August 10, 2012 at 8:52 AM

Romney may murder steelworkers’ wives, but 0BAMA starves Africans’ children.

cane_loader on August 10, 2012 at 8:49 AM

Oops. More coffee.

cane_loader on August 10, 2012 at 8:52 AM

I think this article gave Al Gore a corngasm.

Rufus on August 10, 2012 at 8:54 AM

Who cares if people in Africa are starving to death because of the price of food?

NickDeringer on August 10, 2012 at 8:49 AM

Aren’t these the same people who continue to support the DDT ban that has resulted in the deaths of what…millions? Why do Democrats hate black Africans?

swinia sutki on August 10, 2012 at 8:54 AM

Too bad Mooch doesn’t like to set her oversized teeth on corn cobs as much as she does lobster tails, you would see TFGRP issuing EO’s left and right to curtail corn ethanol production.

Bishop on August 10, 2012 at 8:54 AM

Political cornography

faraway on August 10, 2012 at 8:44 AM

I vote it as a thread winner.

Archivarix on August 10, 2012 at 8:54 AM

WE’RE ALL TEATERS NOW.

Corn farmers, with subsidies and tax credits.

The auto Industry, with bailouts and continued streams of cash from the government.

The Airline industry, tax incentives, credits, gimmes from local, state and federal governments.

The energy producers, depletion allowances, credits, rebates from states, etc.

Public school systems, Federal state and local dollars headed into these schools to prop up union vote groups all at the expense of kids that want to ACHIEVE and EXCEL.

……and on and on and on.

So when Baracka gets up and talks about working his bailout “magic” on ALL INDUSTRY like he did in Colorado yesterday he’s already almost there. Folks, we’re already living in a Socialist/Facist economy. We just need an authoritarian leader to put the final pieces in place.

Grab a teat (on the Federal sow) everyone. We’re going to need it.

PappyD61 on August 10, 2012 at 8:54 AM

The Gauls will be so busy making menhirs, they won’t have time for war or to go foraging for food. – Caesar

AubieJon on August 10, 2012 at 8:58 AM

See if any of this describes our current economy (corn/wheat/soy/natural gas/coal/oil/fishing/timber/autos/steel/you name it).

Fascism advocates a state-controlled and regulated mixed economy; the principal economic goal of fascism is to achieve national autarky to secure national independence, through protectionist and interventionist economic policies.[21] It promotes regulated private enterprise and private property contingent whenever beneficial to the nation and state enterprise and state property whenever necessary to protect its interests.[21] At the same time, fascists are hostile to financial capital, plutocracy, and “the power of money”.

The original conception of socialism was an economic system whereby production was organised in a way to directly produce goods and services for their use-value; the direct allocation of resources according to satisfy economic demands without financial calculation and the mobilisation of the economy based on physical units as opposed to the economic laws of capitalism (see: Law of value), often entailing the end of capitalistic economic categories such as rent, interest, profit and money.

This is contrasted with capitalism, where production is carried out for profit, and thus based upon indirect allocation. In an ideal capitalism based on perfect competition, competitive pressures compel business enterprises to respond to the needs of consumers, so that the pursuit of profit approximates production for use through an indirect process (competitive pressures on private firms).

Market socialism refers to an array of different economic theories and systems that utilise the market mechanism to organise production and to allocate factor inputs among socially-owned enterprises, with the economic surplus (profits) accruing to society as a social dividend as opposed to private capital owners.

PappyD61 on August 10, 2012 at 8:59 AM

Corntastic

VietVet_Dave on August 10, 2012 at 8:59 AM

What proves that idiot liberals don’t really care about “Global Warming” is the fact that ethanol is a horrible fuel as well and gets less mpg than regular crude oil based fuel. I specifically avoid gas stations that say they use more than 5% ethanol in their gas. That’s why I avoid Shell like the plague. It’s either Exxon-Mobil or BP gas for my car as I get much better gas mileage with those 2. It is a bit ironic that those are the two evil villians of the left though.

MobileVideoEngineer on August 10, 2012 at 8:52 AM

My ancient pimpmobile gets 8.0 mpg in the city on 10% ethanol. Gets 8.6 mpg on straight gas – a 7.5% increase in mileage. (A station near me caters to boat owners and sells it – about 15-cents/gal higher.)

All that effort burning up our food and raising world prices, for a 2.5% net reduction in my gasoline quotient. Maybe it helps the air a little bit, but on the other side of the scale it disproportionately affects poor people and reduces their ability to pay for things like health care.

Liberal math at work.

cane_loader on August 10, 2012 at 9:02 AM

The fact is, this isn’t just Democrat stupidity. Here in Iowa Grassley is all for full speed ahead production. The beef and cattle farmers were petitioning to try to get the mandate suspended because of what the drought will do to feed prices etc on down the line.

All Iowa politicians: Nawww… there’s no problem. Just wait and see and we’ll leave the mandate as-is.

Seriously – how stupid can people be. Ethanol = JOKE

Free Indeed on August 10, 2012 at 9:02 AM

Here’s how it works. Lib/Progs would rather feel good than do good. It makes them feel good to push Ethanol. Who cares if people in Africa are starving to death because of the price of food?

NickDeringer on August 10, 2012 at 8:49 AM

That’s pretty much it. It’s a very sad mentality.

visions on August 10, 2012 at 9:04 AM

MIT ROMNEY IS MAKING ETHANOL AND YOU’RE CHILDREN WILL STARVE!

GarandFan on August 10, 2012 at 9:06 AM

This just in – the USDA projects corn yields to be lower than any time since the 1995-1996 growing season.

And yet neither the feds nor any state appear to have even so much as considered relaxing the corn-a-hole fuel mandates.

Steve Eggleston on August 10, 2012 at 9:06 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years. Why all the hype? Well it is an election year and the Global Warming Meme must be pushed.

LakeLevel on August 10, 2012 at 9:07 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years. Why all the hype? Well it is an election year and the Global Warming Meme must be pushed.

LakeLevel on August 10, 2012 at 9:07 AM

The farmers in Iowa, Illinois and Wisconsin will beg to differ.

Steve Eggleston on August 10, 2012 at 9:09 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years.

I heard the same thing last night on the radio. IIRC, they’ve had a surplus of 20 million bushels each of the last two years (a bushel is 56 pounds). And this year looks to have a surplus as well.

sadatoni on August 10, 2012 at 9:14 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years. Why all the hype? Well it is an election year and the Global Warming Meme must be pushed.

LakeLevel on August 10, 2012 at 9:07 AM

Citation for your claims?

tom daschle concerned on August 10, 2012 at 9:15 AM

OT: MSNBC political analyst Jonathan Alter – formerly of Newsweek – advised the Obama campaign to argue that, if Mitt Romney is elected President, “a lot of people will die” when Obamacare is repealed.

Read more: http://newsbusters.org/#ixzz239J9lEOi

Mitt goes from murderer to mass murderer!!!

faraway on August 10, 2012 at 9:21 AM

The farmers in Iowa, Illinois and Wisconsin will beg to differ.

Steve Eggleston on August 10, 2012 at 9:09 AM

And Missouri. Even though Missouri isn’t a large corn state, the Saint Louis area got a whole 0.72 inches of rain in the month of July. Our average rainfall for the month of July is 4.11 inches. We didn’t even get to 25% of our average rainfall for July. June we got 1.92 inches and the average rainfall for June is 4.28 inches. And then May we got 1.7 inches and the average rainfall for May is 4.72 inches.

I’m not a believer in man made global warming, but our area is down almost 9 inches of rain that we normally get over the last 3 months, so I wouldn’t consider that fiction.

MobileVideoEngineer on August 10, 2012 at 9:21 AM

It’s a crying shame it is denatured.

nimrod on August 10, 2012 at 9:22 AM

This reminds me of the folly of late-1970s smog mandates before the technology was improved by computers.

There’s a reason that my big V8 got some of the worst mileage ever recorded, before or after:

The government-mandated, non-computerized smog controls on the big V8s, in the interest of improved tailpipe emissions per RPM, stifled the engines so badly that the mileage dropped. The results of the resulting decreased gas mileage, (and increased RPMs per mile), were higher gasoline usage, increased emissions per mile, and anemic performance. This technological inefficiency, forced by federal mandate, is one reason that states like California have made a specific push to get 1976-’81 vehicles off the road by tightening smog-check standards on them so tight that it’s difficult for them to pass.

As an example, my dad’s old German tank from that era has failed the smog check every time for 15 years running, though it’s tuned perfectly to original specs, and the smog technician is forced to tune it so that it will barely run, to get it to pass. Dad then has to take it back to his regular mechanic after every passed smog check to have it readjusted to where it will run well and fail smog.

Government’s mandating higher ethanol use (corrosive E15, which is demonstrated to wear engines out faster – increasing emissions – is around the corner), instead of fully developing natural-gas technology, reminds me of the same zero-sum folly.

cane_loader on August 10, 2012 at 9:25 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years. Why all the hype? Well it is an election year and the Global Warming Meme must be pushed.

LakeLevel on August 10, 2012 at 9:07 AM

I heard the same thing last night on the radio. IIRC, they’ve had a surplus of 20 million bushels each of the last two years (a bushel is 56 pounds). And this year looks to have a surplus as well.

sadatoni on August 10, 2012 at 9:14 AM

And this would be the same USDA throwing parties to get folks on food stamps, and applauding Monsanto’s buying up of all independent seed reserves to create a monopoly, and pushing laws to clamp down on independent farmers?

Yeah, right.

AubieJon on August 10, 2012 at 9:29 AM

Doubling down on idiocy.

Bmore on August 10, 2012 at 9:29 AM

There’s an apocryphal story from the Dust Bowl years. There’s a debate in Kansas on the viability of being a farmer. The “pro” side gets up, extols the virtues of farming for half an hour. Then the “con” side gets up, goes to the corn bin, takes out some fresh corn cobs, throws them in the pot-bellied stove warming the debate hall, and then sits down without saying a word. He was declared the winner. Who knew that “joke” would reflect reality one day, and that raising food crops with the intention of burning them was thought to be a good idea.

Paul-Cincy on August 10, 2012 at 9:35 AM

I’m expecting to see a shift in crops in the Imperial Valley (CA) to corn anytime now… They have a 365 year growing season, expecially around Yuma (AZ) and they have PLENTY of water…

They used to grow a LOT of lettuce on the farms along the railroad track in Winterhaven (CA), but have noticed a shift to wheat lately…

Khun Joe on August 10, 2012 at 9:47 AM

Is there a specific type of corn used to produce ethanol? Is it good for anything else? I know the corn used to make corn syrup isn’t much good for eating. There’s corn and then there’s corn.

Paul-Cincy on August 10, 2012 at 9:53 AM

Ethonal aside,this drought is mostly fiction. Certainly some areas are hard hit, but the latest USDA crop estimates show this years corn harvest HIGHER than 13 of the last 20 years. Why all the hype? Well it is an election year and the Global Warming Meme must be pushed.

LakeLevel on August 10, 2012 at 9:07 AM

CNN has an article up now showing the USDA predicting a low corn crop this year. Unless you’re just a troll who posts crap and then runs away, maybe you’ll respond to this.

AubieJon on August 10, 2012 at 10:00 AM

Is there a specific type of corn used to produce ethanol? Is it good for anything else? I know the corn used to make corn syrup isn’t much good for eating. There’s corn and then there’s corn.

Paul-Cincy on August 10, 2012 at 9:53 AM

Well we all know there is eating corn for humans and then eating corn for animals. Even if we are simply burning eating corn for animals this causes meat as well as pet food to go up.

MobileVideoEngineer on August 10, 2012 at 10:01 AM

From USA Today:

USDA Lowers Corn Crop Estimate

AubieJon on August 10, 2012 at 10:05 AM

Is there a specific type of corn used to produce ethanol? Is it good for anything else? I know the corn used to make corn syrup isn’t much good for eating. There’s corn and then there’s corn.

Paul-Cincy on August 10, 2012 at 9:53 AM

Corn for human consumption is typically taken from what is a wide variety of “sweet corn”. The corn used in feed is more often what is called “white field corn”. It’s filling but almost tasteless. From a chemistry viewpoint, the higher the sugar content, the more potent the ethanol I would think.

Like MobileVideoEngineer said, whatever variety is used will cause prices to go up for human or animal consumption.

AubieJon on August 10, 2012 at 10:10 AM

Here’s how it works. Lib/Progs would rather feel good than do good. It makes them feel good to push Ethanol. Who cares if people in Africa are starving to death because of the price of food?

NickDeringer on August 10, 2012 at 8:49 AM

Ain’t that the truth. I was recently talking to a “greenie” in Colorado who thought 0bama was doing a great job of supporting the solar panel industry. I asked him, what are the actual results? 0bama has thrown billions of taxpayer dollars at companies like Solyndra, First Solar, etc, just to have each and every one of them go bankrupt, lay off all of their workers, and cease to produce anything. His eyes instantly glazed over as if he hadn’t heard about any of this.

Such informed youth we have.

UltimateBob on August 10, 2012 at 10:17 AM

The Great Cornholio is a Big Bungholio.

cane_loader on August 10, 2012 at 8:51 AM

In other words, the Obama administration has bungholed it.

backwoods conservative on August 10, 2012 at 10:18 AM

Well we all know there is eating corn for humans and then eating corn for animals. Even if we are simply burning eating corn for animals this causes meat as well as pet food to go up.

MobileVideoEngineer on August 10, 2012 at 10:01 AM

Uhh, there is sweet corn, and there is field corn. Sweet corn is what is frozen or canned. Field corn is ground into corn meal, steamed and flattened into corn flakes, ground and/or flaked to put into animal feed. Or burned by your car. There is no difference in the kind of field corn that goes into food, feed, or fuel.
http://www.extension.org/pages/35796/what-is-the-difference-between-sweet-and-field-corn

hoosiermama on August 10, 2012 at 10:20 AM

PappyD61 on August 10, 2012 at 8:59 AM

Cars running on ethanol.

POTUS running on his record.

180+ in rank for GDP growth.

But we are beating the developed world. (Accoding to ex-Obama economist on Greta last night.)

Could it be that socialism is corrosive?

IlikedAUH2O on August 10, 2012 at 10:30 AM

hoosiermama on August 10, 2012 at 10:20 AM

I edit one of the CoPs on eXtension.org. It’s a very informative website, but I didn’t see anything in that article about fuel. Where did that info come from, please?

AubieJon on August 10, 2012 at 10:33 AM

What proves that idiot liberals don’t really care about “Global Warming” is the fact that ethanol is a horrible fuel as well and gets less mpg than regular crude oil based fuel…

MobileVideoEngineer on August 10, 2012 at 8:52 AM

These are the same idiots that think biomass fuel is great. It’s a fancy way of saying that you’re burning wood scrap, and paper waste. The furnaces are still emitting CO2 – but the power source is renewable. And that makes the tree huggers happy. Sheesh!

As far as ethanol goes – the world tries to shame us into reducing our carbon footprint – but b!tches about our method of doing it. (not that I’m a fan of ethanol – I just want the global community to butt out.)

Hill60 on August 10, 2012 at 11:09 AM

I swiped this ear of corn from a field across the river in Illinois last week. These drought stories are not fearmongering. They are the truth.

http://www.flickr.com/photos/72328875@N00/7685642170/

creeper on August 10, 2012 at 11:38 AM

I would like to point out that the vast majority of ethanol plants (dry milling type) are actually owned (50%+1) by local farmers.

The same farmers each of contractual obligations to provide corn to those plants. When such plants close the farmers actually lose money. It matters little what the name on the sign reads since that is the manager/minority owner.

This is the only way that most ethanol plants can exist, and that is if farmers are the owners then they receive a direct cash state subsidy.

I don’t know about PA subsidies, but Midwest and Great Plains state have a 20 cents, or more, per gallon subsidy depending on the state.

Kermit on August 10, 2012 at 11:41 AM

AubieJon on August 10, 2012 at 10:33 AM

Not sure what you’re asking. Why I understood MobileVideoEngineer’s comment to be, was that there was a difference between a field corn raised for human consumption, another for animal consumption, and yet another for ethanol. It all depends on to whom it’s delivered. In our area of the country, the farmers take it to whomever is paying the highest price/bu. When the ethanol companies pay more because they’re subsidized by taxpayer funds, it drives up the cost for local feed mills to produce feed, and cuts deep into the costs of cattle and dairy farmers.

http://www.dailytech.com/article.aspx?newsid=25334

I’m a citygirl married to a countryboy, and far from an expert. This has just been what I’ve seen happening in our local area, and it’s just one more thing that is killing family farms.

hoosiermama on August 10, 2012 at 11:43 AM

creeper on August 10, 2012 at 11:38 AM

Depends which state and where. NW Iowa is doing fine per my neighbor who made a recent visit home to the family farm. Doing okay where the highest concentration of ethanol plants are.

Kermit on August 10, 2012 at 11:43 AM

hoosiermama on August 10, 2012 at 11:43 AM

I was just wondering because I’ve not seen or heard which is most often used for ethanol: sweet or field corn. Thanks.

AubieJon on August 10, 2012 at 12:22 PM

I was just wondering because I’ve not seen or heard which is most often used for ethanol: sweet or field corn. Thanks.

AubieJon on August 10, 2012 at 12:22 PM

Oh, gotcha. No, sweet corn is just for people. Ethanol is made from field corn.

I would like to point out that the vast majority of ethanol plants (dry milling type) are actually owned (50%+1) by local farmers.

Kermit on August 10, 2012 at 11:41 AM

And it also needs to be pointed out that these farmers are grain farmers. Their profit is hurting their dairy/cattle/hog/chicken farming brothers & sisters. Those farmers are not being compensated in kind by a rise in what they’re paid for their product. If they were, our meat and milk prices would be crazy.

hoosiermama on August 10, 2012 at 12:36 PM

Yep. Burn the food.

J.E. Dyer on August 10, 2012 at 12:44 PM

Hey, Jazz! The phraise is “dire straits” as in, “A narrow passage of water between two hazardous land masses” as opposed to the “dire straights” that you used, which I assume is more like “a a frustrated patron who must navigate a narrow passage to a chicken sandwich between two same-sex kissers.”

JohnD13 on August 10, 2012 at 12:56 PM

And then I go and mistype “phrase.” I hate my fingers… *blush*

JohnD13 on August 10, 2012 at 1:14 PM

Energy is to socialism’s weapon as a worm on a hook is to a trout.

Don L on August 10, 2012 at 1:26 PM

Ethanol isn’t just a Democrat energy policy. Republicans from farm states have also been guilty of promoting this abomination, including many politicians thought of as conservatives.

Test any Republican Politician from Ohio to Kansas on their support for ethanol and I would bet 60-70% will support it.

jpmn on August 10, 2012 at 4:00 PM

And in a related story:

Next from the EPA:
Four-Gallon-Minimum Gas Purchases

http://pjmedia.com/tatler/2012/08/09/next-from-the-epa-four-gallon-minimum-gas-purchases/

mrt721 on August 10, 2012 at 4:37 PM

hoosiermama on August 10, 2012 at 12:36 PM

All depends on the price of DDGS which is higher protein livestock food and a co-product of dry milling ethanol production.

Kermit on August 10, 2012 at 6:15 PM

jpmn on August 10, 2012 at 4:00 PM

Indeed just like at the GOP Iowa Caucuses results and which then candidate was a larger threat to the ethanol mandates and the results from ethanol precincts mostly above the imaginary ethanol line which is from SW to NE corners of the state. Above is where the dry milling ethanol plants are. While other plants are larger especially along the Mississippi River, they are mostly for corn starch and other corn products, ethanol is more of a by product with these.

Kermit on August 10, 2012 at 6:19 PM

Subsidized Corn ethanol is very immoral.

V-rod on August 10, 2012 at 6:42 PM

Silly pols! Ethanol’s for drinking!

Olo_Burrows on August 11, 2012 at 7:48 PM