A Comment I received from a Reader basically disagreed with my positon on Corn Ethanol. It was a very intelligent assessment, and I think I finally have it posted to the previous Post Comment section. I am going to repeat it here, and then offer further terms.
Corn farmers could switch to growing grasses for ethanol, but the probability is that they won't -- at least not without yet more subsidies. A recent study from Iowa State University's Center for Agricultural and Rural Development (CARD) modelled future ethanol production and concluded the following:"A key and possibly counterintuitive insight is that there is no ethanol price that makes it worthwhile to grow switchgrass because any ethanol price that allows ethanol plants to pay more for switchgrass also allows them to pay more for corn. So long as farms are responding to net returns in a rational manner and so long as ethanol plants are paying their breakeven price for raw material, farmers will plant corn as an energy crop. Switchgrass in the Corn Belt will make economic sense only if it receives an additional subsidy that is not provided for corn-based ethanol."
Not surprisingly, there is now at least one bill before the U.S. Congress proposing new, additional incentives to encourage farmers to produce feedstock crops other than corn. The bill, co-sponsored by two mid-west Senators, John Thune (R-SD) and Ben Nelson (D-NE), (see Press Release) would pay producers a "cost share" for planting energy-dedicated crops and a per-acre rental payment. Once the biorefinery is operational, the rental payment would end and the producer would receive a matching payment up to $45 for each ton of biomass delivered to the biorefinery for up to two years. That would, presumably, be on top of the $0.51/gallon that the blender would receive for mixing the ethanol with gasoline.
Global Subsidies Initiative
The Comment by Mr. Steenblik contains the resolution to the problem of dedication to Corn in such Production of ethanol. The Thune/Nelson bill would pay for biomass by the ton, not by the current method of by the bushel. The total Cost of Tillage, Fertilizer, harvesting, and Delivery to ethanol plant production cannot be accounted by a Mean Price based upon tonnage of biomass. Turning to a principle of turning the Corn crop into Silage cannot permanently provide higher biomass tonnage rates over Gamma grasses, because of the totally disparite amounts of Fertilizer which must be used on the fields (even at current Fertilizer pricing, approx. some $450 per acre). The gist of my Argument remains unchallenged, though the attempt was extremely well-Thought, as Corn will fail as a biomass for ethanol just as soon as Planting Costs replacement is abandoned.
It truly remains at Issue which biomass source need be used for the most efficient ethanol production. It must be native to North American clime, easily tillable, cheaply maintained, and of worthwhile Price to interest American farmers. Corn fails the criterea in the long-run due to Soil Maintenance Costs. Switchgrass may not be the Answer, but let Us abandon a crippled Crop, and One which is necessary to alternate use in domestic Food Production. lgl