Where's the Beef (Competition?)

John Whitehead notes a Retreat from the provision of Prime Cuts of Beef, while he previously provides access to an NYTimes article about biofuels and how they might raise Pump prices. The drive to ethanol seems to be destroying the Meat market, and causing Refineries to downsize their capacity in the face of Rising Prices–Right! A 60% Rise in the price of Corn will have an impact on Feed Costs of Beef, but not over about $1.60 per lb. at the Counter dressed; Restauranteurs are venting their Operating Costs forward, and blaming it on Beef prices. The Threat from ethanol cannot be impacting the decision to develop Refining capacity, not with a daily Shortfall of 2 million barrels, combined with functional inability of biofuels to assume more than 26% of the necessary fuel complement because of lack of Acreage. Biofuels, at Most, might substitute for Refined Imports. Refiner Management who fears for loss of Profitability to biofuels need be replaced, especially as distillation Costs for biofuels is competitive with Refining Costs.

Japan might think of entering into Refinery construction in the United States, as it seems that their Export picture may be tied to American capacity to attain cheap Gas. They are more likely to gain the necessary Operating and Building Permits than Americans for Refinery construction on American soil, given the Bush commitment to selling American assets. Any Opposition to such a Program could be circumvented by Mexican willingness to allow such Construction across the border, if Output was devoted solely to American Sale. The Japanese could also consider major Investment in American Beef Feeding operations, if they ran the Numbers on potential Costs and Profits. The Japanese are past Masters of assuming competitive advantage, and both the American Refining industry and American Beef industry suffers from monopolistic pricing resulting from lack of competition. lgl