Chubby Cheddar on Today: There is no reason to use High Octane gasoline

The payment related to price is called an LDP (load deficiency payment). There hasn't been an LDP payment for corn in the last four years. The LDP kicks in when the actual price for corn (or other commodities that have similar programs like cotton and peanuts) are below a government set target price. The last farm bill set the target prices very low (under the cost of production for most farmers) and therfroe there as not been any LDP payments in the last few years for corn (or most other commodities, except maybe cotton).

Becasue of the low target prices, the current programs don't encourage planting corn over other crops. There are "direct" and "countercyclical" payments related to past corn production, but they are based on past plantings and aren't affected by what you plant today (or for the last 8 years or so). Program payments to corn farmers have steadily decreased for the last 21 years. I lost my a** on corn in 2009. Corn prices were OK in 2008, but too low this year to have made planting corn a good decision. Ethanol producers may be subsidized to produce ethanol, but corn farmers are not being subsidized in a manner that encourages excess production. I would have gotten the same Government "corn" payments if I had planted no corn, or planted everything I farm to corn.

One other thing people should consider when they attack what little subsidy is still provided to corn farmers - the subsidy counts as taxable income. So, if you actually make any money, a significant portion of the subsidy is returned to state governments and the federal government as income tax. So if you actually make money farming, you probably send at least 50% of the subsidy right back to governments (and remember, Farmer have to pay both the employee and employer parts of medicare and social security - ouch).

And one more little tidbit - corn,wheat, soybeans, and cotton represent significant sources of export revenue. Encouraging over production keeps internal and external food prices low. This makes food cheap for you and exports cheap to generate more export revenue.

My Father farmed his whole life and constantly complained about the Federal farm programs. He felt that the programs kept marginal producers in buisness, which kept prices low, which hurt efficient producers. 2008 was the first year in my memory that corn prices reached the level of the 1970's (and I mean unadjusted prices, much less prices adjusted for inflation). The companies that provide farm suppleis (seed, fertilizer, chemicals, equipment), took the oppurtunuity to jack up their prices greatly. The net was, that although my gross revenue for corn in 2008 were the best in years, my net revenue hardly increased at all. Unless something changes, I plan to plant much less corn in 2010. However, since corn stocks are very low, this might change. There is not a "glut" of corn currently no matter what you may have been led to believe.

Ed

Exactly. The hardware is there already (except for the light). And since pinging is as dependant on driving habits as octane, compression and anything else, I can't understand why this piece of data has never been provided to the driver. A "bad gas" light, with instructions to either switch up to the next grade or back off the accelerator if it lights frequently.

Want to bet that the oil companies have discouraged car makers from providing such an indicator just so they can push multiple grades of gas?

Well that isn't the only way corn is subsidized. But yes thank-you for clarifying my point. No matter how you skin the cat the fact remains that taxpayers are paying less not more in recent years. And you can't just ignore that the ethanol market is soaking up a huge amount of farm production and the effect that has on what washington does.

Ethanol has largely supplanted the need for as much government incentives (I use the word need from the politician's point of view) Nevertheless my point remains taxpayers are now not paying as much. I believe another consequence has been that the government is also in recent years paying farmer less to store grain on farm.

Or any other grain with a low target price.

Then it would have probably also been a bad decision in years before that.

Who are ethanol producers and what subsidy do they get? The only government program for ethanol that exists today is the payments to the oil refiners for the ethanol they add to gas. None of that money goes to the farmer or ethanol plant. Congress's stated purpose of giving the payment (tax rebate actually) to the oil companies was to compensate them for having to shut down their govt mandated MTBE operations.

Well I wasn't attacking farmers. I was saying that from a taxpayer point of view it is a good thing that corn is now being used for something that really gives it value and holds the price up. Some farmers understand that the reason corn and soybean and other grain prices have been so low for so many years is nobody really wanted it (or at least not so much of it) That is why something like 70% of the investment in all ethanol plants is from either private farmers directly or indirectly thru farmer's coops.

Well that isn't really always good thing. Over a million mexican farmers lost their land after NAFTA went into affect and the mexican market was flooded with cheap corn in the 90's. Many of those displaced farmers went North.

Yup, but it will never change. History has taught the politicians that in America the only sure thing that will bring the American voting public out of its stupor and get them to toss the bums out of office is to have the public go to the supermarket and not find food on the shelves. Maintaining a huge farm surplus is the number one priority in maintaining political tranquility.

IIRC It was only a couple years in the 70's.

A glut? Who said there was a glut. 8 months ago there were all sorts of dire predictions that that there were going to be catastrophic shortages if the weather happened to be bad this year.

-jim

Its called switchgrass and it is far superior for producing ethanol than corn. I don't have the numbers in front of me but corn requires much much more energy to produce a gas of fuel than does switch grass. Not to mention switchgrass requires less water and in most places you can harvest 2 times a year.

jim wrote in news:0ridnTxp1Ocy4YPWnZ2dnUVZ snipped-for-privacy@bright.net:

The two fold reason for the subsidies were to guarenty a plentyfull food suppy and at a cheep price. with out the subsidies that would not have happened. On the other hand the subsisied to oil were and are insanely high. If the real cost of oil were passed on it would be in the 10 dollar plus range. Neither is a great deal but in the socialist society we live in now, that is how it is. You don`t pay for the true cost of food OR fuel. KB

"C. E. White" wrote in news:hfm1b3$d6d$1 @news.eternal-september.org:

augh come on now we know you had record yields this year. (wink wink nod nod.) so I hear, but mine sure didn`t come close to any records. down a bunch from even last year, and Wayyyyyyyyy wet so the drying cost was almost 25 to 30 percent of the price anyway. Great year--- NOT KB

jim wrote in news:6ZidnWC1Y9cbBoPWnZ2dnUVZ snipped-for-privacy@bright.net:

subsidies

We haven`t had a farm storage payment program since the early 80s unless you are counting the low interest loans to put up new bins as such. KB

encourage

indirectly

You make it sound like Washington is running a charity. This is not a charity program this is a job security program for politicians.

Can't really argue with that. The thing is food isn't really in any danger of running out or developing shortages any time soon. Petroleum shortages are going to have to be reckoned with a lot sooner.

-jim

It is often made from the fermentation and distillation of cane juice. Bagasse is often used as a fuel for the process.

The used to be a lot of "vodka" made from petrochemical alcohol. It was purer than the fermented stuff and was less likely to give you a real hangover. If they change the law and no longer allow this, I was not aware of it.