By The Right Scoop


A truck driver called in to Levin’s show on Friday night to say that the price of corn that usually sells at $3.20/bushel has now more than doubled to $7.85/bushel because of the lack of corn being planted this year due to the cold weather and the rain. Considering that corn is used so profusely along with the continued push for ethanol, this could have a huge effect on food prices this fall.

Levin backs up what she says noting an article in Pajamas Media which says basically the same thing, except they reckon we will have to import more corn:

It would seem corn is back on the radar after having fallen off after the 2008 election, when ethanol was no longer a convenient club with which to beat the Bush administration.

Before that particular fight was over, however, former President George W. Bush had signed legislation which required 40 percent of the U.S. corn harvest to be slated for ethanol production, and for massive subsidies to make corn economically viable. …

This year could be a bad year; much of the corn in the eastern cornbelt is late getting into the ground, and from west Texas into Nebraska we’ve got the worst drought in 40 years. Parts of western Kansas have gotten no more than a quarter-inch of rain since the beginning of the year. This means the corn stocks could slip still lower.

Why is this a problem? Much like the price of oil, the price of grain worldwide is based on the dollar. In the case of oil, it’s because we’re the world currency and the largest user of oil. In the case of corn and indeed all grains, it’s because we’re the world’s largest producer and exporter. …

Now imagine we have to start importing grain. Suddenly Brazil or Argentina is setting the price, not us. Once you become a net importer of grain, you cease to be a world player in agriculture.

The issue with the mandate is that it is inflexible. Instead of allowing the market to decide how much corn should be sold to ethanol plants and how much should be sold overseas or used domestically, we’re mandating a certain percentage must go to fuel.

A fuel, it must be noted, which is inefficient when compared to gasoline, is hard on engines, and requires massive subsidies to be competitive with conventional fuels.

What remains to be seen is what happens next year, with the subsidies expiring, corn stocks likely lower yet, but a huge, inflexible mandate still requiring 40 percent of the crop go to fuel.

This is likely to be hard on food prices at a time when they are already going up. In an attempt to appease environmentalists — for whom nothing is ever enough — we risk mandating ourselves right out of dominance in one more area of the world economy.

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  • Anonymous

    Fairy tales used to begin with “Once upon a time”. But now it starts with, “If I am elected,” our electricity price will necessarily go skyrocket with shut down of coal industry and drilling ban, the oceans will cease to rise with EPA green energy policy, our planet will begin to heal with the uprising of Arab Spring youth movement …

    • http://punditpawn.wordpress.com PunditPawn

      And Guantanamo Bay will be closed, the deficit will be cut in half during my first term, you can keep your doctor and Insurance if you want to, Our oil production is higher than ever, The borders are more secure than ever, and Arizona is my favorite State (to sue).

      Uggh.

      • Anonymous

        Uggh, I have a good memory but a short one.

      • Anonymous

        And Texas is our favorite state to screw over. But golf is good.

      • Anonymous

        and I will bring our troops home from Iraq and Afghanistan…. but I will send them instead to Libya and Yemen……

  • http://www.facebook.com/people/John-Ramirez/721818750 John Ramirez

    I think I recall a man stating something about”and we will be burning our food”,
    You think it’s unsafe to go to McDonald’s now,
    just wait till you only get 2 chicken nuggets for $5.00.

  • Anonymous

    According to commodity prices on CNN Money, corn prices have increased 123.14% in past 52 weeks.

  • Anonymous

    The #1 (AND ONLY) priority of bailout bernanke and his feckless fed: ENSURE MASSIVE MULTI-BILLION DOLLAR PROFITS FOR BIG BANKS and WALL STREET CRONY CAPITALISTS, especially their masters at Government (Goldman) Sacks-full-of-money.

    Let’s not forget the OFFICIAL feckless fed statement: THERE ARE NO BAILOUT BERNANKE BUBBLES from the reckless, irresponsible zero-interest rate and QE2 dollar devaluing policies — zip,none, zero, nada, zilch!

    FACT: Silver prices are at a 30 year high – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: The S&P 400 Mid-Cap Index is at a record high over more than a 20 year period – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: Cotton, sugar, copper, coffee and countless other items are at record high prices – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: food prices around the world are reaching historically high levels – THIS IS NOT A BAILOUT BERNANKE BUBBLE

    Just as “You Lie!” hussein doesn’t see his $14+ TRILLION DEBT, the Feckless Fed:

    SEES NO bailout bernanke bubbles
    HEARS NO bailout bernanke bubbles, and
    SPEAKS NO bailout bernanke bubbles.

    As these NON-EXISTENT bubbles burst, LOOK OUT !!!!!

    BTW: bailout bernanke also says THERE IS NO INFLATION – pass it along …it’s the joke of the day !

  • Anonymous

    A truck driver? He knows? In 1978, white corn went to 6 bucks a bushel..I made extra money picking up what our combine left in the field. We were getting about 3 bucks a bushel for corn. Diesel fuel had spiked up to 50 cents a gallon to fuel my new (used) tractor my old man bought for about 5 grand. Lets see, diesel is now 4 bucks a gallon, and if you farm and have a MILLION in equipment, your small time. And the price of corn is supposed to be the same it was 40 years ago? That was the same year my grandpa got paid to NOT plant corn.
    Ethanol has nothing to do with the price of your Dorritos, your canned pineapple, or your pork chops. And there is no corn shortage. I live 2 blocks from an ethanol plant. (don’t worry, they just make it for booze) and last September, the trucks were lined up for 3 weeks trying to unload last years crop to make room for this years.
    Ignoring the cost to produce a bushel of corn, and to transport it is beyond ignorant. The price of Wheat and Soybeans are all up because of ethanol?? No we are not planting corn instead of wheat. We sow wheat in the winter and cut it in the spring and then plant another crop of beans or corn.
    All this crap comes from people like Levin that have never got there shoes dirty in a corn field.

    • zytekfan

      Ethanol does because ethanol for use in fuel has taken up 40% of corn produced in the United States. Trying to say ethanol has no affect on anything else using corn in the US is idiotic. Anything that uses a product of corn in it, has gone way up in price. Partially because of the weaker dollar and because of how much corn ethanol for fuel is using.

      • Anonymous

        US President Bush Signs Energy Independence and Security Act into Law
        Dec 2007

        increases ethanol production (requires the annual production of 36 billion gallons of renewable fuels by 2022, including from corn and cellulosic sources),

        http://futures.tradingcharts.com/chart/CN/M

      • Anonymous

        Nonsense…you may want to take a look at what China is using, and how many MILLIONS of bushels Obama is giving away to other countries.
        Odd..I didn’t see anyones outrage when my friends and family were losing their farms in the 80s. But now everyone knows all about the problems that farmers cause.

        • Anonymous

          There was a huge amount of discussion of farmland loss all through the eighties. It was major, frequent, and got lots of coverage. It was replaced on the left by worry over “greenbelts” and then replaced again by concern over Global Warming. In fact, if there’s one simple phrase that sums up the attitude of the left toward farmers, especially family farms, it’s “drop dead.”

          Concern over the loss of farms has not been replaced on the right. People on the right support farmers and the right for small farmers, especially, to make a living without being driven out of business by government regulation, and especially by new housing developments nearby.

          I know folks who lost their livelihood thanks to a few subdivisions opening up next to their farm. All because of “the smell.” I get mad all over again just typing that. Those subdivisions wouldn’t have happened if regulators hadn’t made stupid regs favoring large-operators only. The new neighbors who hated farm smells appeared because of families forced to sell their farmland.

          And you are claiming “everyone” is blaming farmers. That’s bogus. The left may be like that, but people who aren’t lefties blame government. Period.

      • Anonymous

        Ethanol uses 40% of corn? That is completely false. At last check ethanol consumed 26% of yellow corn, most of this corn was STILL used for food production, AND the U.S. was exporting corn.

        Next?

      • Anonymous

        Ethanol uses 40% of corn? That is completely false. At last check ethanol consumed 26% of yellow corn, most of this corn was STILL used for food production, AND the U.S. was exporting corn.

        Next?

      • Anonymous
        • zytekfan

          http://www.agmanager.info/energy/CornSupplyPropects_US-EthanolProduction_10-26-09.pdf

          “Ethanol use of U.S. corn were relatively small until the turn of the century. From 2000/01
          forward, ethanol use of U.S. corn has grown successively larger on an annual basis. During the
          last three marketing years ethanol use of corn as a percent of total use has increased from 24% to 31% to 32%. Non-ethanol demand for corn for food, seed and industrial use continues to be steadily increasing over time, accounting for a projected 10% of U.S. corn use in the 2009/10
          marketing year.”

          That report is from 2009.

          With a now projected lower yield for 2011, and demand for ethanol production still rising, we may see 40% used for ethanol.

    • http://www.theancient.us The Ancient

      Whether or not Ethanol has any impact on the price, the fact remain that all food commodities are spiking, which will naturally lead to increase in prices, combined with increase in fuel costs, and you will see a massive dip in the economy,

      As to if the current price is fair or if it should be a $3, the price is what the market will allow, if people can afford $7 corn (which they cant) then the market would stay there, but what will happen is people will eat less, creating a surplus and crashing the price, which will be worse for the farmers.

      Personally Ethanol is the WORST thing for farmers, I see nothing but pain in the future for any farm that tied their lively hood to the scam that is Ethanol

      PS. I have live in Indiana all my life, That is all we have here is corn…….

      • Anonymous

        All you have there is corn??? Indiana was recently shown to be one of the top free-est states in the country, with Hawaii, New York, Mass. and California in the last spots, i.e., least free.

        Also, I understand they have some raucus racing happening in that state somewhere. Nascar, Formula I, and everything else. C’mon, Indiana has all kinds of positive things going for it. I live in Michigan and we should be envying some of your accomplishments, but we had a durn democrat gov. for that past 8 years. Now we have a republican gov, house and senate, and are starting to fix some things.

        There’s one ok thing about the price of corn rising in my opinion. It allows the small farmer to stay in business. His expenses go up, up, up but the selling price stays the same? That won’t work folks. It bothers me that family farms are going away fast. As BarryNMooch said, (who I admire already) it is getting extremely expensive to raise corn and everything else, when it includes the heavy equipment needed to sow, harvest, and get it to market, along with everything involved along the way. Of course, it always includes these things, unless you have a few rows of it your yard and can do it all by hand.

        May God richly bless the farmers and ranchers across this land! I think they are the best of the best that this country has to offer. Which group of folks are more important? There isn’t one. What does a bank or an automaker produce that we can’t do without for many years? Duppin’ that’s what. I LOVE FARMERS! You do too.

        If you ate anything at all today, please say a prayer for American farmers. I’m talking about the family farmer here. These folks ROCK!!!

        • Anonymous

          So you no doubt have noticed how much nicer the farms are looking in Michigan these days. Twenty-five years ago, a huge number of them looked more like old horses put out to pasture. They don’t suddenly look like Canadian farms because of the the great economy, that’s for damned sure. That corn subsidy is hurting other industries, and hurting taxpayers, and it it’s doing long-term damage to farming.

          I love farmers, too. I don’t like subsidies.

          Loans, yes. Farm bureaus, yes. Subsidies, no.

    • Anonymous

      I just watched Ag Report (RFD-TV), and they pretty much point out you are full of cr*p. Inflation from weakness in corn (pssst, last year’s corn is done) is going to crank up, big time. And by the way, the wheat harvest isn’t going to be anywhere near record highs.

      Truck drivers know more about commodities than you seem willing to give them credit for. How many commodities do you touch?

      Truckers see it all. And all Levin did was let her talk, so blaming this on him, especially since the truck driver was correct, is bizarre.

      • Anonymous

        With all due respect, he didn’t blame it all on truckdriver(s). He asked a simple question. “A truck driver? He knows?” That’s it. You stretch what he said to irrational levels here. Are you a truck-driver?

        Truck-drivers see it all? Hows that? I have truck-drivers pull into my property at least twice a week with truckloads of products. I don’t think they know dick about our economy, our agriculture, or our politics…as a group. I’ve met a few of them that were smarter than a box of rocks. Am I type-casting them? Yes I am. Sue me. Barry on the other hand, might sue you. He is on the front lines. Are you?

        Congrats on watching an AG report! WOW!

        • Anonymous

          Let’s hope they listen to Rush on the radio doing their routes.

          Pet food will skyrocket being so much of it is made out of corn base meal, at least the cheaper stuff is.

        • Anonymous

          I did read all of it, thanks. I happen to follow AG, especially the commodities aspect, and more with focus on energy these days. So while you seem to think AG Report is not much of a source, I’d beg to differ. They know the bushel count. They get the info from the folks selling supplies to farms and from the folks at the first stage of the market (elevators, barge operators). Commodities traders (those damned, dirty speculators) read AG reports every day.

          There are millions of truck drivers. You truly expect all of them to fit your description? (How many farmers do you know? Are they all like those folks on Hee Haw? No.) A lot of truckers are independent Owner/Operators, and have small fleets (like six trucks). Are they as dumb as you seem to claim? Amazing they can run a business. They get a feel for the economy just by seeing what the customers want delivered.

          Think of oilfield workers. Are they economists? No. But they know where the work is. That’s hard data I can count on, whether it comes from a guy with a 300IQ or not. Not all drivers are going to meet your requirements for commentary on the economy, but among three million or so, you might find a few.

          And he specifically wrote “All this crap comes from people like Levin.” That’s the only “all” I was referencing when I wrote “blaming this on Levin,” that’s what I meant. So I’ll stick up for the caller, and for truckers in general. I love farmers, too, but I don’t love seeing taxpayer money poured into a long-term trap for farmers that raises a false dependency on a fraudulent market.

          Right now, the corn subsidies have made a bubble that has helped farmers. Some of them have been helped a lot. When that bubble bursts (due to cuts in spending by Congress, the growth of horizontal wells, and better use of fuels by industry), as it will, farmers are going to be damned upset.

          Evidently upset enough to dump on truckers.

          • Anonymous

            And by “subsidies,” I’m including ALL such taxpayer expenditure on corn-to-ethanol. I know the subsidy money doesn’t ALL go directly to farms.

          • Anonymous

            “There are millions of truck drivers. You truly expect all of them to fit your description? (How many farmers do you know? Are they all like those folks on Hee Haw? No.) A lot of truckers are independent Owner/Operators, and have small fleets (like six trucks). Are they as dumb as you seem to claim?” (K_Bob)

            1. No, I don’t expect all of them to fit my description. However, if I were a truckdriver, at least one one them would be brilliant as well as FABULOUS :-)
            (yeah right)

            2. My parents both grew up on farms in North Carolina. I have many farmer customers. These guys are freakin’ amazing. They have to be proficient at everything. They’re engineers (in many fields), mechanics, animal husbandry-ists, horticulturists, carpenters, HVAC specialists, accountants, buyers, sellers, meteorologists, chemists…you name it, these old boys (and girls) can do everything. In fact, I’d say there ain’t nothing worth doing that these folks can’t do, and they usually do it, on their own with their own.

            3. There are lots of folks in Michigan who get paid subsidies. The government screws things up when they try to manage things. We all know that. If the government would go away, the “invisible hand” Adam Smith spoke of could do it’s thing. I’ve heard of unrelated businesses buying up chunks of land when farming was never something they had any plans on doing, just for the subsidies. Every time the gov is dumb enough to rain money, there are folks smart enough, or shady enough to shower in it.

            4. Mostly though K_Bob. I wanted BarryNMooch to be given respect and the benefit of every doubt. If the choice were between a farmer and a truckdriver. I’d go with the farmer every time.

            • Anonymous

              I feel the same way about farmers, and have told folks this many times over the years. It’s still the single most dangerous occupation to be in, outside of being on the front lines in an actual war. So kudos for giving them props.

          • Anonymous

            Eliminating agricultural subsidies will be a painful thing to a lot of farmers.
            But it is something that I think must be done.
            We need to phase it out…over several years, to lessen the pain.

            The idea behind these subsidies was a fairly sound one, 30 years ago.
            But the world’s population has doubled since then.
            So it is an outdated idea now.

        • Anonymous

          You might be surprised, Rshill, who is driving a truck these days.
          Some of them are Phd’s…computer sci degreed…guys who got disgusted with their corporate jobs…all sorts.
          But you’re right that they don’t ‘see it all’…none of us do, really.
          But there are truckers out there who try to keep themselves informed, and their travels give them a glimpse of things that they rest of us don’t get to see.
          :)

      • Anonymous

        I apologize for my tone. You just got me a little ticked off bagging on Levin and truckers, when you should be mad as hell at the government.

        A lot of corn producers have moved on to wheat because they’ve already lost this year’s corn. That’s what the caller said, and that’s what the AG report said. The USDA says corn harvest will be back down to levels not seen since the mid-90’s. Futures traders are bullish because demand is higher than ever. So producers will do well, despite the smaller harvest.

        But all of us will pay more for everything corn connected. Feed, Food Additives, Fuel, Grains, doesn’t matter. We’ll pay more. Are paying more.

        Stock prices for meat producers went down because of that. Translation, meat packing jobs lost later in the year. So don’t blame workers in other industries. Blame the government.

      • Anonymous

        You watch RFD-TV?
        RFD-TV…is…cool.
        I love that channel.

  • http://www.facebook.com/profile.php?id=100000220027383 Troy La Mana

    Why not build hydroponic farms for all the corn?

    • Anonymous

      Because, between Monsanto’s monopoly on seed and governments control on farms through subsidy programs, the farmers are barely scratching a living. Not to mention that government and corps like Monsanto don’t want any real free market or competition. That is why they are attacking the little guys and trying to shut down organics. Either way, alternative farming is expensive and would raise the cost of food if we didn’t produce poison crops to feed the country. If we get away from GMOs we won’t have as high of a cancer rate, and our population would start growing. We need to kill off the old and keep the vaccinations and fluoride pumping into our children so that we can curb the population through chronic disease propagation. You can’t control the masses with health care law if they are not chronically ill.

  • Anonymous
  • http://www.theancient.us The Ancient

    If you look at the Charts Corn Spike this high in 2008 when the Last Collapse Happened

    Prepare if you can, because all indicators are that The rest of this year and all of next year at minimum is going to be a rocky ride…..

  • Anonymous

    Is ethanol the answer? No…is it part of the answer? Yes. That and drilling everywhere. You hate ethanol subsidies but think giving Oil companies the same amount in Billions when they make Billions a day in profit is great. My neighbor works at an ethanol plant, I worked 2 years building 2 of them, farmers are 50 percent of my biz. and when I go hunting, farmers allow me to use their ground to enjoy. You know what I have gotten from some rag head that hates my guts? NOTHING.But screwed while they are lighting cigars with 100 dollar bills.

    • Anonymous

      Farmers are about 10% of my business. Based on the USGS, we have more oil and natural gas than any other country, including many times more than Saudi Arabia. That our officials will not let us get our own oil in our own country makes me livid!

      Thanks for your contribution here today sir.

    • Anonymous

      That “oil company subsidies” thing is not money given to large oil companies. It’s for small independents only. It should be gotten rid of, right along with ethanol subsidies.

      You’ll have to look pretty hard to find any Conservatives that “think giving Oil companies the same amount in Billions when they make Billions a day in profit is great.”

  • http://profiles.google.com/larry.gibby Larry Gibby

    Ethanol is a boodoggle for the green-eared monster in then White House. Soros flunky surrounded by a pack of communist hyenas who blame our problems on the system that supports them. They don’t have a replacement for gasoline that is effective and economical. Coal doesn’t cause asthma. These people breaking our backs and it isn’t because they’re stupid – it’s intentional!

  • http://www.facebook.com/profile.php?id=504624590 Chris G.

    “…legislation which required 40 percent of the U.S. corn harvest to be slated for ethanol production, and for massive subsidies to make corn economically viable.”

    SHAME on the GOP for nominating people like GWB to be their POTUS nominee, & the so-called “conservative” voters that voted for him TWICE!

    • Anonymous

      So you think AlGore would’ve been a better president?
      And Kerry?

      There wasn’t much of a choice.

  • Anonymous

    IF you like your food producers, you can keep you food producers.

    Until we need them for phony energy alternatives.

  • Anonymous

    Another looming problem with using AG products in the energy sector has to do with soil.

    It’s nice to think about using AG waste (corn stalks, etc) instead of fruits to produce energy. But classically, those things were used to replenish soils. Composting, silage (leads to manure!), and other areas of farming have helped reduce dependence on chemical ferilizers for a long time. Now we are considering all of those waste products (including manure!) for energy production. So what do we do with the soil?

    For now, in this fantasy world of ethanol from farms, we step up chemical fertilizer usage (and of course, better techniques for managing soils and erosion). That should fix it. Right?

    Wait, didn’t we hear about a looming potash shortage? Also a phosphorus shortage? And those are produced by evil, hated mining companies. Good luck opening a new Phosphorus operation in this “green” enviro-whacko world. (What a load of manure!)

  • KenInMontana

    Ethanol is an economic boondoggle. Consider this, for every one unit of ethanol produced, six units of energy are consumed. http://www.sciencedaily.com/releases/2005/03/050329132436.htm

    • Anonymous

      Yeah, but governments get to mandate it and make their buddies rich while causing food and gas to cost more. Even though a gallon of gas with ethanol gets 20% less fuel mileage, we still get to go green and feel good about ourselves while we are being screwed.

      I just don’t see your problem.

  • Anonymous

    I have no idea what the real story is- I did hear this show, I have read articles and heard opinions- all saying different things. All I know, and believe me, I have a very high regard for farmers- especially the smaller family owned trying to make it among farm conglomerates, but all I know is that having my husband unemployed for over 2 years now, we have no income whatsoever, so I have to really, really squeeze everything I can get out of every dime I spend on food or feed for our chickens. I buy chicken at the store (ours are a few hens for eggs) I can’t afford much more for meat other than chicken, as the prices for meat has gone through the roof. The price of feed has gone up some, as the layer mash and grain scratch I buy is a little more, but not so much to justify the price of meat- especially beef and pork at the grocery store. We grow as much as we can in a hot climate, we give some to others we know who are hurting more than we are. I can understand on a small scale what it’s like to be a farming family, so I don’t want to place blame on them- but what is the truth, and why is everything gone up so much (other than all of dear leader’s marxist programs).

  • Anonymous

    The bottom line here is…government intervention…in everything.
    Government programs live on long after the thinking behind them switches from being a good idea to a bad idea.
    Paying landowners to ‘not’ grow certain crops was sort of a good idea back when the world’s population was less.
    But it has outlived whatever usefulness that it once provided.

    The same with developing our energy resources.
    It made sense back in the 80’s to import more and more cheap foreign oil, and to hold our own oil & gas resources in reserve…to preserve them for the future.
    But the future is now…the future has arrived.

    Cheaper fuel for transportation and crop production will bring down the cost of crops.
    Everything is connected…to everything.
    And the government intervention into…everything…has the net effect of making everything more expensive for the end consumer.

  • Anonymous

    The bottom line here is…government intervention…in everything.
    Government programs live on long after the thinking behind them switches from being a good idea to a bad idea.
    Paying landowners to ‘not’ grow certain crops was sort of a good idea back when the world’s population was less.
    But it has outlived whatever usefulness that it once provided.

    The same with developing our energy resources.
    It made sense back in the 80’s to import more and more cheap foreign oil, and to hold our own oil & gas resources in reserve…to preserve them for the future.
    But the future is now…the future has arrived.

    Cheaper fuel for transportation and crop production will bring down the cost of crops.
    Everything is connected…to everything.
    And the government intervention into…everything…has the net effect of making everything more expensive for the end consumer.