Hello Steve >Don't farmers have the right to sell their corn to whoever they want to >sell it too?
In theory. In practice they have no control over the prices. In real terms the price of corn in the US in 2006 was only half the price in 1980, because US farm policy shifted to overproduction. The current prices have nothing to do with production, and though the prices are higher the chaotic market is making life more difficult for farmers, not easier. >Even if corn is going to make ethanol, so? So the world >has increased its demand for oil, and that means that oil costs more, :-) You fell for it eh? You have to pay more attention if you want to get that right, and it's something you ought to get right. Especially since we had all that figured out here in March already, well ahead. "It should be obvious to you all that the [gasoline] demand is outstripping supply, which causes prices to go up." - President George W. Bush, Associated Press, Mar. 5, 2008 But there is no shortage of oil, demand is not outstripping supply. Production is up, well ahead of demand, and the gap is widening, there's a surplus of oil, not a shortage. "On the same day the President and our Energy Secretary made those foolish comments, no less an authority than ExxonMobil (XOM) Chief Executive Officer Rex Tillerson was quoted by Marketwatch as saying, 'The record run in oil prices is related more to speculation and a weakening dollar than supply and demand in the market.' He added, 'In terms of fundamentals, fear of supply reliability is overblown.'" See There Is No Gas Shortage," by Ed Wallace, Business Week, April 1, 2008 <http://www.businessweek.com/print/lifestyle/content/apr2008/bw2008041_945564.htm> Many other commentators have since agreed. Not caused by supply and demand. >that means that we need to find ways to offset that, so we make corn >into ethanol, and now corn costs more. That's a bit mixed up. >Maybe if the oil producing >countries of the world didn't need indoor skiing and rotating towers(see >Dubai), So? See Las Vegas. <http://upload.wikimedia.org/wikipedia/commons/5/52/Luxor_Hotel.jpg> >and such a large profit margin, then we would have gone along >consuming just like we had been. Wrong again. OPEC and the other oil producers lost control of pricing when NYMEX started trading crude in 1983. Four years ago Saudi Oil Minister Ali al-Naimi told a Center for Strategic and International Studies conference in Washington: "Oil markets are complex and not subject to control by anyone. Even Saudi Arabia and other members of OPEC with their vast reserves have only a limited ability to keep prices in their preferred range. This is particularly true when the primary factors driving prices are things other than the supply and demand of crude oil in international markets. This is the case today. Supplies are readily available. Any buyer or seller of crude oil will tell you this. Rather, prices are being driven by other factors including fears of instability in key oil-producing countries and regions, the movement of large investment funds into communities like oil, just in time inventory practices, refining bottlenecks and the industry's struggle to produce sufficient quantities of spec gasoline in the U.S. that meets currently mandated environmental standards. ... OPEC is only one factor that impacts oil prices and the higher crude oil production does not guarantee that there is more gasoline available for U. S. consumers." <http://www.mail-archive.com/sustainablelorgbiofuel@sustainablelists.org/msg34915.html> Not much has changed since then except the price, and Ali al-Naimi's list of the causes has proved accurate, especially the bit about large investment funds. Al-Naimi put it a little more strongly last month: "There is no justification for the current rise in prices." Paul Craig Roberts added: "What the minister means is that there are no shortages or supply disruptions. He means no real reasons as distinct from speculative or psychological reasons." See "Why the Oil Price Is High," by Paul Craig Roberts, 11/06/08 <http://www.informationclearinghouse.info/article20072.htm> "As business and consumers consider the implications for them of crude oil selling at US$130-plus per barrel, they should bear in mind that, at a conservative calculation, at least 60% of that price comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York Nymex futures exchanges and uncontrolled inter-bank or over-the-counter trading to avoid scrutiny (see Speculators knock OPEC off oil-price perch, Asia Times Online, May 6, 2008). " See "Oil price mocks fuel realities," by F William Engdahl, May 24, 2008 <http://www.mail-archive.com/sustainablelorgbiofuel@sustainablelists.org/msg72733.html> Plenty of confirmation of that too. Deborah Fineman, president of Mitchell Supreme Fuel Co. in New Jersey, said: "Energy markets have been dictated for too long by hedge funds and speculators, who artificially manipulate the numbers for their own benefit. The current market isn't based on the sound principles of supply and demand but it is being rigged by companies and speculators who are jacking up prices for their own greed." Former Big Oil man and banker Harry C. Johnson blames the CFTC (which keeps rolling back the already hopelessly weak controls on speculation), the Department of Energy, the Administration, and Congress, as "asleep at the switch on an issue that is probably costing U.S. consumers $1 billion per day." Johnson said: "Some industry experts, who profit greatly from the high price of crude, have stated openly that the worldwide economic price of crude, absent speculators, would be around $50 to $60 per barrel." According to MarketWatch: "Speculative activity in commodity markets has grown 'enormously' over the past several years, the Homeland Security and Governmental Affairs Committee said in a news release. It pointed out that in five years, from 2003 to 2008, investment in the index funds tied to commodities has grown by 20-fold -- to $260 billion from $13 billion." It's hot money fleeing the dot.com crash and the subprime mortage loan crisis, and all it cares about is profit. >Oil costs around $1-$15 to produce a >barrel. It's sold at $143 a barrel. Someone's making a helluva profit >in there. There's no mystery about who, and how. Hedge fund superstar Michael W. Masters told the US Senate Committee on Homeland Security and Governmental Affairs in May: "Index speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years. "In the popular press the explanation given most often for rising oil prices is the increased demand for oil from China. According to the DOE, annual Chinese demand for petroleum has increased over the last five years from 1.88 billion barrels to 2.8 billion barrels, an increase of 920 million barrels. Over the same five-year period, Index Speculators' demand for petroleum futures has increased by 848 million barrels. The increase in demand from Index Speculators is almost equal to the increase in demand from China. "Institutional investors have purchased over 2 billion bushels of corn futures in the last five years. Right now, Index Speculators have stockpiled enough corn futures to potentially fuel the entire United States ethanol industry at full capacity for a year That's equivalent to producing 5.3 billion gallons of ethanol, which would make America the world's largest ethanol producer. "At 1.3 billion bushels, the current Wheat futures stockpile of Index Speculators is enough to supply every American citizen with all the bread, pasta and baked goods they can eat for the next two years. "Index Speculators' trading strategies amount to virtual hoarding via the commodities futures markets. Institutional Investors are buying up essential items that exist in limited quantities for the sole purpose of reaping speculative profits." See: Testimony of Michael W. Masters, Masters Capital Management, before the United States Senate Committee on Homeland Security and Governmental Affairs, May 20, 2008 http://hsgac.senate.gov/public/_files/052008Masters.pdf >Even barring the fact that some of this corn is being >diverted to other uses, it costs more to produce it when diesel goes up. >Those tractors don't run on water. Not just the tractors, the whole shambolic agri-industrial process of corn production depends on fossil-fuel inputs. Anyway, production costs don't have much to do with prices, and neither does supply and demand, same as oil, same reasons, same culprits. Eg.: "The hot new favorite among traders is betting on packages of energy and agricultural futures. Called CCO's (collateralized commodity obligations), they are like their subprime cousins, CDO's (collateralized debt obligations). Their performance is linked to rising commodity prices; the higher the prices, the more profit to the CCO." And the more money floods into the casino. See "Who Benefits From High Food Prices?", by Nomi Prins, June 20, 2008, Mother Jones <http://www.commondreams.org/archive/2008/06/20/9772/> See also "Deadly Greed: The Role of Speculators in the Global Food Crisis", Der Spiegel, April 23, 2008 <http://www.spiegel.de/international/world/0,1518,549187,00.html> And so on. Not all these links in this message have been posted to the list, but all the information is there in the archives, and it's mostly happened since you joined, it shouldn't be news to you. If you don't follow the list discussions then check the archives before posting a message and getting it all wrong. Best Keith >-----Original Message----- >From: [EMAIL PROTECTED] >[mailto:[EMAIL PROTECTED] On Behalf >Of Chip Mefford >Sent: Monday, June 30, 2008 12:14 PM >To: sustainablelorgbiofuel@sustainablelists.org >Subject: Re: [Biofuel] The food emergency and food myths > > >Keith Addison wrote: >> http://www.grain.org/seedling/?id=552 >> >> Seedling > July 2008 >> >> The food emergency and food myths >> >> Why Bush is wrong to blame Indians for the rise in food prices >> >> Vandana Shiva * > >I really enjoy Vandana Shiva's input. It's clueful and very well >thought out. > >That said; > > > >SNIP >> agribusiness in the current food crisis, both through speculation and >> through the hijacking of food into biofuels, > > >I keep hearing about this 'hijacking of food into biofuels' argument. > >Anyone have the numbers to back this up? > >The increased 'demand' for ethanol in the US, is at least partially >due to the gigantic surpluses of 'feed corn' over the last decade. >That corn is only food in an abstract sense, it's mostly all starch, >not edible directly. I'm sure this year the corn yields will be down, >no doubt. But somehow, I don't see the correlation. > > > >-- >Chip Mefford >-------------------- >Before Enlightenment; > chop wood > carry water >After Enlightenment; > chop wood > carry water _______________________________________________ Biofuel mailing list Biofuel@sustainablelists.org http://sustainablelists.org/mailman/listinfo/sustainablelorgbiofuel Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Search the combined Biofuel and Biofuels-biz list archives (70,000 messages): http://www.mail-archive.com/biofuel@sustainablelists.org/
