Economic Feasibility of Ethanol Production

July 11th, 2006 | by Walter Greenspan |

Excellent special report from the USDA’s Office of Chief Economist: “The Economic Feasibility of Ethanol Production From Sugar in the United States“. This 78-page report has detailed cost and conversion factors.

  1. 4 Responses to “Economic Feasibility of Ethanol Production”

  2. By Gman on Jul 12, 2006 | Reply

    Basically, I have no problem whatsoever with a new fuel market in ethanol being created BY THE MARKET!!! Where I have a problem is the gov’t subsidization to create the market. Let the private sector determine who wins and who doesn’t in the ethanol market, let alone the energy market in general. If liberals are really concerned about long-term sustainability (their favorite buzzword), then they should let the market hatch the ethanol industry, not the gov’t. It’s unfortunate, really, that the ethanol industry is heavily subsidized. For that reason, this industry will never be able to compete independent of subsidies and consumers won’t benefit. Mainly, ethanol producers will never achieve economies of scale and market price equilibrium because any imbalances in demand and supply can be compensated for with subsidies (which ethanol producers will lobby rigorously for). Subsidies, to put it simply, distort markets. Of course, my overall recommendation is to get all gov’t subsidies and tax incentives out of the energy market.

  3. By Walter Greenspan on Jul 12, 2006 | Reply

    Gman, no argument from me.

    The way things stack up now, within about 18 months, there will be enough ethanol capacity in Iowa that ethnaol plants in Iowa will be able to consume the ENTIRE Iowa corn crop. (Ethanol producers can afford to pay more for corn than can hog and pig operations.)

    A by-product of corn-based ethanol production is brewer’s dried grain (BDG), a cattle feed.

    So, with corn prices higher and BDG lower, it would not be surprising to see Iowa become less of a hog and pig state and more of a cattle and calf state. This MAY NOT BODE WELL for Montana, a marginal cattle-calf state.

    All this because corn state have more senators than do sugar states!

  4. By Walter Greenspan on Jul 12, 2006 | Reply

    Gman,

    I didn’t see your request of this past March for me to eMail you until a Google search (for an unrelated topic) revealed the following URL:

    http://ecityblog.blogspot.com/2006/03/education.html

    However, the eMail address you left back then for me to contact you (siwelsc@hotmail.com) apparently is no longer.

    If you still want me to eMail you, do you have a more current eMail address for me to use?

  5. By Gman on Jul 13, 2006 | Reply

    Walter, you can email me at hsurnag@yahoo.com. I changed my email address.

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