HAVE A GREAT TUESDAY READERS!

Take a close look at this graph from a recent report on the impact of ethanol production for gasoline compared to food prices. Does this not clearly demonstrate the impact of ethanol production on food prices? I find it rather DRAMATIC!

I continue to hear and read more and more stories how ethanol gasoline is having a greater and greater negative impact on so many industries who are pleading with the government for relief. Here is another story about how the economic impact of the huge increase in ethanol production is affecting everyone. You don't have to ask the shopper in the family about the incredible price increases of everything made from corn.........bread, cereal, meat, poultry, pork, ice cream and so many other items that have increased by 100 - 300% in the last 3-4 years.

Here is another article on this issue:

Report Reveals Ethanol’s Impact On Economy Greater than Thought

Oct 10, 2011 12:30 PM

A report issued last week by the National Research Council (NRC) found that the federal Renewable Fuel Standard (RFS) has “contributed to upward price pressure on agricultural commodities, food and livestock feed since 2007.”

The NRC report concluded that the “(livestock) market has experienced increased competition from the biofuels market.”

The NRC discovered that while distiller’s dried grains with solubles (DDGS), which is a byproduct of the ethanol production process that can be fed to livestock, can reduce some of the pressure, its use is limited because it impairs “efficient production and the quality of the (livestock) products.”

Finally, the NRC found that it is highly unlikely that the ethanol industry can meet the RFS mandate to produce 16 billion gallons of cellulosic ethanol by 2022.

The National Pork Producers Council (NPPC) has repeatedly warned about the negative – if unintended – consequences of U.S. biofuels policy on the U.S. pork industry, especially in the event of a feedgrain shortage.

“A thorough evaluation of the nation’s renewable energy policies can lead to solutions that support production of renewable energy without damaging pork producers and other feedgrain users or without unnecessarily raising food costs for consumers,” says NPPC Vice President Randy Spronk, a pork producer from Edgerton, MN.

"Pete" Landry.........comments welcome at ...............way2gopete@yahoo.com

HAVE A GREAT MONDAY READERS!

Another GREAT WIN for the LSU Tigers on Saturday. That's the 4th win for LSU against top 25 ranked opponents. The Tigers are still ranked #1 in the AP Poll and still #2 in the ESPN/Coaches poll. The first BCS poll comes out after next weekend's games. It'll be interesting to see if LSU is given credit for the 3 wins aginst ranked opponents on the road.

As I mentioned before, ethanol or ethanol gasoline cannot be transported in pipelines as it would corrode the lines. So, ethanol has to be transported to refiners or terminals to blend the ethanol gasoline by rail tank cars. Read the following article on a major fire near a residential area due to overturned rail cars of ethanol in transport which caught fire. Pretty scary..........

Associated Press

Explosions shake Ill. village after train derails

By KAREN HAWKINS , 10.07.11, 09:48 PM EDT

TISKILWA, Ill. -- Most residents evacuated from the northern Illinois village of Tiskilwa after a freight train loaded with highly flammable ethanol crashed and caught fire are being allowed back into their homes.

Terry Madsen of the Bureau County Emergency Management Agency says about 700 to 1,000 residents of the town were evacuated after the accident early Friday.

Officials say the evacuation of Tiskilwa, located about 100 miles west of Chicago, was strictly precautionary. Madsen says most of those kept away live in a small cluster of houses on the northeast side of town.

Officials say they expect firefighters will be working to suppress the fire throughout the night. Madsen says water and foam will be poured on seven burning rail cars and other derailed cars all night.

"Pete" Landry................comments welcome at ....................way2gopete@yahoo.com

HAVE A GREAT SATURDAY READERS!

Several great football games today. LSU will be facing Florida at 2:30 pm. The game will be shown on CBS. This will make the Tigers 4th Nationally Televised game this year. Should be a great game. Last I saw, the Tigers are favored by 12, likely due to the loss of Florida's starting QB.

Here is yet another article on efforts to LOWER the ethanol mandates in the EPA's "Renewal Fuel Standard" or RFS.

Livestock, Poultry Industries Support Legislation To Tie Ethanol Mandate To Corn Supplies

by NCBA, NCC, NPPC & National Turkey Federation Posted: Thursday, October 6, 2011 at 3:42PM EDT Washington – Representatives from the livestock and poultry industries joined forces today, Oct. 5, 2011, to commend U.S. Representatives Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.) for introducing the Renewable Fuels Standard (RFS) Flexibility Act. The legislation calls for a twice annual review of the corn stocks-to-use ratio. If the ratio falls below a threshold of 10 percent, the RFS could be reduced. The groups said the legislation will provide relief in times of tight corn supplies while also ensuring there is enough corn to meet the demand from all end-users.

The National Cattlemen’s Beef Association (NCBA), the National Chicken Council (NCC), the National Pork Producers Council (NPPC) and the National Turkey Federation (NTF) participated in a press conference hosted by Reps. Goodlatte and Costa to introduce the legislation. The groups raised concerns about the impact tight feed supplies and high feed prices, partially because of the RFS, have had on livestock and poultry producers.

“Cattlemen are not opposed to ethanol. We simply want the federal government to get out of the marketplace and allow the market to work,” said Kevin Kester, California cattleman and president of the California Cattlemen’s Association, an affiliate of NCBA. “USDA has projected this year’s corn crop will be more than 400 million bushels smaller than last year. Supplies are already tight due to drought, floods and rising demand, driven partially by the mandate. A smaller corn crop will put even further strain on corn stocks. It’s time to add a layer of common sense to our nation’s renewable fuels policy. We commend Congressmen Goodlatte and Costa for their leadership on this issue and we urge all members of Congress to support this commonsense bill.”

“The nation’s inventory of corn has fallen to critically low levels and will most likely fall further to only about two and a half weeks’ worth of corn on hand. This is due primarily to the enormous draw on the corn crop by ethanol producers – about 40 percent of the total. Chicken producers are facing corn shortages while ethanol producers are actually exporting corn-based ethanol to other countries. In North Carolina, a thousand plant workers lost their jobs last month and 150 farm families no longer have contracts to grow chickens because a chicken company was forced to close due to the high cost of corn,” said Bill Roenigk NCC senior vice president and chief economist. “Is it fair to family farmers who have grown chickens for generations to risk foreclosure and the loss of the family homestead so that ethanol can continue to be exported?”

“America’s pork producers, who need corn to feed their animals, are grateful to Congressmen Goodlatte and Costa for sponsoring legislation to protect the nation’s livestock and poultry producers should there be a shortage of corn,” said NPPC President Doug Wolf, a pork producer from Lancaster, Wis. “Production of biofuels is important to the U.S. economy but so is production of food. The Goodlatte-Costa bill will help ensure that Americans have affordable, abundant meat and poultry in times of short supplies of corn.”

“While no one item is a silver bullet to fixing the low corn stock problem, the National Turkey Federation applauds Reps. Goodlatte and Costa for introducing legislation that will help alleviate the tight corn stocks and protect livestock and poultry producers from excessively high prices caused by the government mandates that divert nearly half the nation’s corn into the fuel supply,” said NTF President Joel Brandenberger. “For many years, the turkey industry has been looking to reform the existing ethanol policy and commends this forward thinking legislative proposal. The proposal would put a safety net in place that ensures the availability of corn and reduces price volatility in the future. The Renewable Fuels Standard should be reevaluated by creating a policy that provides practical, automatic and meaningful protection against a poor corn harvest. We look forward to working with Congressman Goodlatte and Costa and appreciate their leadership.”

Source: NCBA, NCC, NPPC & National Turkey Federation

"Pete" Landry..........comments welcome at.........way2gopete@yahoo.com

HAVE A GREAT FRIDAY READERS!

Weekend just around the corner and more great football games again this weekend. Don't forget that the LSU vs Florida game is set to kickoff at 2:30 pm on CBS (another nationally televised game). LSU opens a 12 point favorite against Florida, likely due to the loss of their starting QB from the Alabama game.

Here is another article by US Congressmen to start to put limits on the EPA's ethanol mandates. We're slowly starting to see more and more rebellion against ethanol gasoline from many different factions.

Here's one of the latest articles on the subject:

Lawmakers seek to cut ethanol mandates

12:12 PM, Oct 5, 2011 | by Philip Brasher | .

The biofuel usage mandates that underpin the ethanol industry could be rolled back sharply under legislation introduced in the House today

The bill, which is backed by meat processors and livestock producers, is aimed at putting a break on feed prices. The legislation would add a trigger to the annual ethanol usage mandates to lower the targets when corn supplies are tight. If the policy were in place now, the mandate would be reduced by reduced by 25 percent. A 2007 law requires refiners to use 12.6 billion gallons of ethanol this year and 13.2 billion gallons in 2012. The mandate tops out at 15 billion gallons in 2015.

“With the increased use of food and feed stocks diverted for ethanol, the higher cost for these crops is passed on to livestock and food producers,” Rep. Bob Goodlatte, R-Va., who is cosponsoring the bill with Rep. Jim Costa, D-Calif. “In turn, consumers see that increased price reflected in the price of food on the grocery store shelves.”

The price of corn for livestock feed is the key cost of raising poultry as well as hogs and cattle and the price has risen dramatically over the last few years as ethanol production has increased along with global grain demand. The Agriculture Department estimates that farmers will earn about $7 a bushel for corn this year, up from $5.20 on last year’s crop and $3.55 in 2009.

The reductions in the annual mandates could range from 10 percent to 25 percent depending on the ratios of corn stocks to usage. The 10-percent reduction would be triggered when the stocks-to-use ratio ranged between 7.5 percent to 10 percent. The 50-percent cut in the ethanol mandate would kick in if the stocks-to-use ratio were to fall below 5 percent. The reductions would be based on estimates of corn supplies made by August 1 and Nov. 30 of each year.

The ethanol industry already is braced for losing its 45-cent-per-gallon subsidy, which is set to expire Dec. 31, and is working to preserve the mandates, known as the Renewable Fuel Standard, or RFS. Allies of the industry in Congress say that the RFS is much less vulnerable than the subsidy has been. The usage mandates have come in for less criticism than the subsidy, which was a target for budget cutters.

The ethanol industry argues that demand for corn from their producers is only one of several factors driving increases in grain prices and that the stocks-to-use ratio fluctuates too widely to be a fair way of adjusting the ethanol mandates.

“If waiving a portion of the RFS did in fact lead to less ethanol production, as some have suggested, consumers would undoubtedly suffer through higher fuel prices,” warned a letter to the lawmakers signed by ethanol industry groups and several farm organizations, including the American Farm Bureau Federation and the National Corn Growers Association.

Goodlatte hopes the bill will move through Congress on its own but said he couldn’t speculate on what will happen to it.

Read the bill here: GOODLA_039_xml

"Pete" Landry..............comments welcome at way2gopete@yahoo.com

HAVE A GREAT THURSDAY READERS!

Every once in awhile I get an e-mail from a reader asking if it is true that the Louisiana labeling law requiring posting a label on gas pumps that sell ethanol gas is expiring this year. I addressed this in an article I wrote last year, but I thought it might be worthwhile to re-post the article. The information I listed in this article is still accurate today. It is still Louisiana LAW that a gas pump which dispenses ethanol gasoline MUST have a prominently posted label indicating the gasoline contains "Up to 10% ethanol". Here is the article.

One thing which I did not include in the article, is that if you suspect a station is selling ethanol gasoline, but there are no labels on the pump, please call Mr. Richert Williams, the Louisiana Director of the Fuels program in the Department of Agriculture at 225-922-1380 in Baton Rouge. He will send out an inspector to test the stations gas. If it does contain ethanol, and is not labeled according to Louisiana law, he'll be given a written warning giving him a week to have the labels installed. The fine for failing to label can be as high as $500/pump/day for violating the labeling law.

Ethanol Labeling Still Required on Fuel Pumps in Louisiana

By "Pete" Landry

January 18, 2010

Several fishermen have e-mailed me with a concern that they were told that ethanol gas-pump labeling was no longer required in 2010 or beyond. I researched this concern and this is what I is what I learned.

I spoke with Mr. Richert Williams, director of theLouisiana Department of Agriculture's Fuels Program, the week of Jan. 4, 2010, and explained to him that there was a rumor floating around that beginning in 2010 the labeling on gas pumps selling ethanol gas would no longer be required in Louisiana.

This is NOT TRUE according to Williams.

It is a Louisiana State law developed by the Department of Agriculture and approved by the Louisiana Legislature that any gas pump selling ethanol fuel must be labeled. Williams gave me the link to the state labeling law.

Personally, I don't think it is tough enough, however. I'd like to see a the penalty for failure to post the ethanol label written directly into this labeling law. Williams told me that there is a penalty involved, but that it is in another section of the law. Anyone interested in reading the Ethanol Gas Pump labeling law, click on this link: http://doa.louisiana.gov/osr/lac/07v01/07.doc (this is a rather lengthy MS Word document). I did learn that the penalty for failure to install the warning labels on ethanol gasoline pumps is $500/pump/day. If you suspect that a retailer is selling ethanol fuel but does not have the warning labels installed, call Mr. Williams at his office in Baton Rouge at 225.922.1380 and file a complaint. He’ll send out an inspector to test the station’s gasoline for ethanol.

Scroll down to page 348, section 337, titled "Gasoline - Alcohol Blends."

However, if you don't care to wade through their rather lengthy Web site, I copied and pasted the exact law below:

§337. Gasoline-Alcohol Blends
A. A dispenser of motor fuel containing greater than 1 percent but no more than 10 percent ethanol by volume shall have a label on both sides of the dispenser stating "contains ethanol" or "contains up to 10 percent ethanol," or "may contain up to 10 percent ethanol," or similar wording approved by the commissioner.

1. These labels shall be located on the upper 50 percent of the dispenser’s front panel in a position clear and conspicuous from the driver’s position, in a type at least 12 millimeter (1/2 inch) in height, 1.5 millimeter (1/16 inch) stroke (width of type).

2. The color of the lettering shall be in definite contrast to the background color to which it is applied.

AUTHORITY NOTE: Promulgated in accordance with R.S. 3:4608, 3:4673, and 3:4680.
HISTORICAL NOTE: Promulgated by the Department of Agriculture and Forestry, Office of Agro-Consumer Services, LR 34:2550 (December 2008).

HAPPY WEDNESDAY READERS!

Great reception from the Mississippi Bay Spring Rotary Club on my ethanol gas presentation last Monday. I continue to get the response "I didn't know that?"

Hope everyone is enjoying the beautiful fall weather we've been enjoying the last several days. Just hope it continues.

In the event you were not aware, the Chalmette "Murphy Oil Refinery" is being bought out by Valero Refining. Here is an article which appeared just a few days verifying the completion of the transaction. The thing that concerns us a lot is that Valero is currently selling ALL of it's gas as ethanol gas. We just hope they allow the Murphy refinery to continue to produce ethanol free gas................I plan to write to the CEO of Valero asking him to please allow the Murphy refinery to continue to produce ethanol free gas.

Valero completes purchase of Murphy Oil refinery in Meraux

Published: Saturday, October 01, 2011, 10:00 PM

By The Associated Press

Valero Energy Corp. has announced the completion of its acquisition of Murphy Oil Corp.'s refinery at Meraux. In a Saturday news release out of San Antonio, Valero said it acquired the refinery and related logistics assets for $325 million plus inventories valued at approximately $260 million.

Valero said that in addition to the refinery, the purchase price includes an adjacent product terminal, a 20 percent equity interest in the Collins Product Pipeline and T&M terminal, and a 3.2 percent interest in the Louisiana Offshore Oil Port.

Last month, Valero said it planned to fund the purchase from available cash.

El Dorado, Ark. based Murphy Oil has said the sale is part of a plan to exit the refining business. The refinery has a capacity of 135,000 barrels per day.

"Pete" Landry...........comments welcome at ............way2gopete@yahoo.com

HAPPY SATURDAY READERS!

Several great football games Saturday. Arkansas vs Texas A&M will be interesting to see how the Aggies (who will be joining the SEC next year) do against the Hogs. But, the one that will give LSU a good insight about two upcoming opponents will be the Alabama vs Florida game. It will be on national TV at 7:00 pm on ESPN.

Don't forget the LSU game against Kentucky kicks off at 11:20 am (before noon). I know the fans hate these game times as do I. There is absolutely nothing better than a Saturday night game in "Death Valley"!

I will not Blog on Sunday, my day off. Also, I will be out of town on Monday, returning on Tuesday afternoon. Giving my ethanol gas presentation to the Rotary Club in Bay Springs, Mississippi.

Here is a rather interesting article related to ethanol that I think you will find very interesting:

Analysis: Corn export dominance to bend, not break

By Karl Plume

CHICAGO | Fri Sep 30, 2011 12:14pm EDT

Reuters) - For the first time in 40 years, U.S. corn exporters are not out-selling the rest of the world.

Domestic ethanol is sucking up record crops. Emerging suppliers like Brazil and Ukraine are taking export share, while traditional exporters like Argentina move to open new markets. And consumers worldwide are looking to save every penny, cutting shipping costs or using other types of feed.

After supplying four out of every five kernels of corn traded internationally in the mid-1990s, U.S. market share was projected to shrink to 45 percent this season, with U.S. dominance particularly hard hit in the past 10 years.

However, that decade-long erosion should stabilize or at least slow as global demand growth may start to outpace steadily rising production outside of the United States, and as demand for corn from the U.S. ethanol industry plateaus.

Still, the stiff competition in a market the United States once dominated appeared to be here to stay.

"Other countries have been stepping up to the plate and improving their exporting abilities, getting phytosanitary agreements in place, and things of that sort," said Sterling Smith, analyst with Country Hedging.

For instance, Argentina, the world's No. 2 corn exporter, is currently working out a health protocol that would allow China, the world's second largest consumer of the grain, to import corn from the South American country.

Argentina, Ukraine and Brazil, the world's largest corn suppliers behind the United States, could see their combined market share grow to 41 percent in the marketing year ended September 2012 from 18 percent a decade ago, according to U.S. Agriculture Department data.

"As foreign production over the past 10 years has grown faster than foreign consumption, our export potential has eroded," said Rich Pottorff, chief economist with Doane Advisory Services.

"The outlook is a little brighter over the next decade than it was in the past decade, but that's not to imply that U.S. exports are going to rebound to the kind of market share we had a decade ago," he said.

PEAK ETHANOL

One big obstacle for U.S. corn exports has been the ethanol industry, seen soaking up 40 percent of the U.S. crop this year, up from less than 10 percent a decade ago. Proximity to crops in the Midwest farm belt often allows ethanol makers to outbid exporters.

That rapid demand growth was seen tempered by 2015 as the Renewable Fuels Standard tops out its requirement for corn-ethanol blending in the U.S. fuel supply at 15 billion gallons, up from 12.6 billion gallons this year.

With U.S. corn production steadily trending higher as science pushes the upper bounds of yield potential, a larger share of the U.S. crop would then be available to livestock feeders and exporters, analysts said.

"Assuming that they don't raise the renewable fuels standard mandate and 15 billion gallons of ethanol is about all we can use domestically, then we've clearly seen the big gains in demand from the ethanol industry already," Pottorff said.

CHINA'S DEMAND GROWING

The next great growth area for U.S. corn demand may now lie half a world away -- in China.

An increasingly affluent population in the world's most populous nation is urbanizing and upgrading diets at an exponential rate, requiring more grain to produce meat, eggs and dairy products. Demand from industrial processors was also soaring.

"With demand from the (U.S.) ethanol sector topping out, China's going to be the next big market factor," said Shawn McCambridge, grains analyst with Jefferies Bache.

"Their string of self-sufficiency in feed grains is slowly declining. If their economy continues to grow and demand for corn-based products such as meat continues to increase, they're going to have to come into the market more aggressively."

U.S. corn prices plunged more than 6 percent to a nine-month low on Friday after the USDA pegged quarterly corn stocks well above market expectations. This revived trade talk of potential large corn purchases by China, although no deals have been confirmed.

China's domestic corn consumption, projected by USDA at 182.5 million tonnes this year, is rising faster than production, seen at 178 million tonnes, according to USDA. Its state stockpile of the grain has been whittled down in recent years and is believed to be at less than a one-month supply.

China, formerly a large corn exporter, imported more than 1 million tonnes of U.S. corn in each of the previous two marketing years and was projected to import at least 2 million tonnes in the current 2011/12 season, according to USDA.

In a Reuters poll on Thursday, analysts on average forecast imports to hit 4 million tonnes. Other forecasts have suggested even larger imports of up to 9 million tonnes this year and 20 million tonnes by 2020.

ACREAGE THE KEY

Whether corn production outside the United States can keep pace with such a jump in world import demand will be the key to determining if U.S. market share continues to shrink, stabilizes, or if it bounces back.

Corn output outside the United States has grown far faster than global demand for imports over the past 10 years, thereby narrowing the world corn deficit that U.S. supplies have traditionally filled.

The deficit of 61 million tonnes in 2001 will shrink to a projected 39 million tonnes this year, according to USDA data.

If foreign corn acreage were to freeze at the current level while yields and demand continue to grow as they have over the past decade, the deficit would rebound to roughly 2.5 billion bushels, or about 63 million tonnes, Pottorff said.

But if acreage continues to grow by the roughly 6 million acres a year as is has averaged over the past decade, along with demand and yield growth trends, that deficit would narrow to 1.4 billion bushels, or about 35 million tonnes, he said.

The reality -- to be determined by market prices, the broader economic climate, global weather and other factors -- lies somewhere in the middle.

High corn prices will keep encouraging output growth, which must come from higher yields in the United States and China as the top growers have little room left to expand farmed acres.

China this week said it would look to boost domestic production, possibly planting higher-yielding genetically modified crops.

Brazil and Argentina were more likely candidates for opening up unused land to corn seeding.

"Pete" Landry..........comments welcome at......... way2gopete@yahoo.com