Ethanol plants continue to get more & more efficient. Ten years ago they got 2.6 gallons per bu of corn. Now they exceed 3 gallons per bu.
During that time, they also have reduced their use of energy. I'm not sure how much, but - less that it used to be.
1/3 of the corn they buy ends up resold as a high-protien livestock feed. As corn & beans go up in price, so does this feed they sell.
Ethanol prices have _not_ kept up with crude oil prices, but as crude goes up, ethanol prices also have risen some.
So, I think you would need to look at your first assumption quite a bit - My understanding is the ethanol plants surrounding me are doing fine & returning dollars to the farmer-investors at $6 corn prices.
I think the ethanol industry is changing so rapidly, any 'number' you get from 3 years ago is about worthless - they continue to improve & retrofit & innovate their operations on a monthly basis. Some are working on extracting the oil from the corn to make biodiesel as well as ethanol from the starch, and still have some feed meal left to sell.
Corn prices have gone up because our ecconomy is in the dumpster; the rest of the world is much stronger. Those other countries are suddenly willing to buy a lot more grains, and our devalued dollar makes our grains a bargin to them.
Few years ago here in MN corn was good to get $1.60 a bu. Livestock growers were laughing, saying they would just buy the cheap corn, only a fool would try to grow any for that price....
Well, duh! :)
Folks are really against ag subsidies, even tho only 19% of the 'Farm Bill' money goes to farmers; 60+% goes to food stamps & other poor-people programs, and the rest is administration & oversite programs.
So, farmers here in MN built their own ethanol industry, the govt helped/ continues to help develop the new industry - as the govt does to _any other insudstry out there_, and the farmers are looking out for themselves - what you all told us to do.
Ethanol ecconomics work out real well.
If high food & oil prices have you bothered, look to the fools who bought houses on credit they couldn't afford & inflated & then collapsed the housing market. That messed up our dollar value, which has created high prices of anything we import, and global competition for several things we export.
Where were you when I was trying to make a living on $1.60 corn & wheat was under $3??? Were you living high off the hog at my expense? Did you care back then if I could make a go of it or not? Were you one of those who said farmers shouldn't get any govt money, should just make it on their own & charge what they need for grain?
Well, what goes around comes around. People either pay for what something is worth, or it disappears until they do.
Too many ignored the problems of cheap grain; so now we have high grain prices.
Stick around, it will change again in 5 years. Always does. Farming is a cyclic thing - ups & downs.
Ethanol is small potatoes in the big picture. It's ecconomics work out well.
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