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Thread: here's another 'ethanol' consequence nobody predicted ...

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    Default here's another 'ethanol' consequence nobody predicted ...

    According to the article, corn based ethanol's tremendous new demand for fertilizers has increased their price sky high, such that some third world countries can no longer afford to plant as much wheat because the required (same) fertilizer is now too expensive for them to buy. Thus by choosing not to buy expensive fertilizer now, in the fall they will instead be forced to import expensive foreign grown wheat as a result of a reduced harvest !!!

    It would also appear that countries which have attempted to limit domestic increases in food prices by instituting 'price controls' (see food riots thread) are now running the risk that a global 'black market' will leave them short of food ... since the same wheat / rice / corn / whatever can be sold at higher non-controlled prices right across the nearest border.

    This is going to end VERY badly !


    (snip)"April 8 (Bloomberg) -- Wheat rose after Pakistan, Asia's third-biggest producer, said it will produce less of the grain than forecast after high fertilizer costs prompted farmers to reduce planting.

    Pakistan will harvest 22 million metric tons, less than the 24 million tons estimated in October, the farm ministry said today. Fertilizer use fell to 600,000 tons, less than half of the amount last year, after prices jumped 44 percent, the ministry said. A smaller crop may force the country to import wheat, which has doubled in price in the past year.

    ``Traders will be very keen on watching for any tenders by either Pakistan or India,'' said Mike Zuzolo, a chief market analyst at Risk Management Commodities in Lafayette, Indiana. ``If they do tender, this will suggest to the trade that there are indeed problems of self-sufficiency in these countries for wheat.''

    Wheat futures for July delivery rose 13 cents, or 1.4 percent, to $9.475 a bushel on the Chicago Board of Trade. Futures reached a record $13.495 on Feb. 27 on speculation global stockpiles will decline to the lowest in 30 years, after excessive rain hurt U.S. crops in 2007 and drought curbed yields in Canada and Australia.

    Shakeel Ahmed Khan, Pakistan's wheat commissioner, said last month that unless farmers get the favorable weather needed to reach a 24 million-ton goal, the country will need to import grain.

    Grain Smugglers

    Smugglers have worsened the supply situation, sneaking wheat into neighboring Afghanistan where they can sell the grain for about twice what they can get in Pakistan, officials said."(snip)

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    Senior Member Paul in Saudi's Avatar
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    Default Re: here's another 'ethanol' consequence nobody predicted ...

    I have never met anyone who thought this ethanol thing was a good idea. Someone please remind why they heck we are doing this.
    If I give all I have to the poor and surrender my body to the flames, but have not love; I gain nothing. Paul’s 1st Letter, 13th Chapter

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    Default Re: here's another 'ethanol' consequence nobody predicted ...

    ^^^ democrats seeking midwestern swing votes ? Also the 'production tax credits' provide a very attractive investment for the uber-rich living in high tax rate (democratic) states, since the tax credits can be used to offset other tax obligations dollar for dollar.

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    Default Re: here's another 'ethanol' consequence nobody predicted ...

    Quote Originally Posted by Melonie View Post
    http://www.bloomberg.com/apps/news?p...er=commodities

    According to the article, corn based ethanol's tremendous new demand for fertilizers has increased their price sky high, such that some third world countries can no longer afford to plant as much wheat because the required (same) fertilizer is now too expensive for them to buy.
    Here's the complete article from the posted link. Let's read it carefully......

    ..........

    ...

    .

    Wheat Rises as Pakistan Cuts Crop Forecast on Fertilizer Costs

    By Tony C. Dreibus

    April 8 (Bloomberg) -- Wheat rose after Pakistan, Asia's third-biggest producer, said it will produce less of the grain than forecast after high fertilizer costs prompted farmers to reduce planting.

    Pakistan will harvest 22 million metric tons, less than the 24 million tons estimated in October, the farm ministry said today. Fertilizer use fell to 600,000 tons, less than half of the amount last year, after prices jumped 44 percent, the ministry said. A smaller crop may force the country to import wheat, which has doubled in price in the past year.

    ``Traders will be very keen on watching for any tenders by either Pakistan or India,'' said Mike Zuzolo, a chief market analyst at Risk Management Commodities in Lafayette, Indiana. ``If they do tender, this will suggest to the trade that there are indeed problems of self-sufficiency in these countries for wheat.''

    Wheat futures for July delivery rose 13 cents, or 1.4 percent, to $9.475 a bushel on the Chicago Board of Trade. Futures reached a record $13.495 on Feb. 27 on speculation global stockpiles will decline to the lowest in 30 years, after excessive rain hurt U.S. crops in 2007 and drought curbed yields in Canada and Australia.

    Shakeel Ahmed Khan, Pakistan's wheat commissioner, said last month that unless farmers get the favorable weather needed to reach a 24 million-ton goal, the country will need to import grain.

    Grain Smugglers

    Smugglers have worsened the supply situation, sneaking wheat into neighboring Afghanistan where they can sell the grain for about twice what they can get in Pakistan, officials said.

    Farmers in Pakistan sow the crop in November and December and harvest it from April to June. The country is the world's sixth-largest wheat producer. China and India harvest more in Asia.

    Rain persisted in the U.S. eastern Midwest from Arkansas to Ohio, flooding fields and lowering yield prospects for crops emerging from winter dormancy.

    Part of the region got as much as six times the normal amount of moisture in the past month, National Weather Service Data show. More rain and thunderstorms are expected in the next five days, private forecaster Meteorlogix LLC said in a report today.

    Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.

    To contact the reporter on this story: Tony C. Dreibus in Chicago at [email protected].
    Last Updated: April 8, 2008 17:39 EDT
    .................................................. .................................................. .......


    Funny, I don't see ethanol mentioned at all in the article.

    The price of fertilizer has gone up dramatically, not because of increased corn production but because of the high price of oil.

    This is effecting American farmers as well.

    Edited to add, this fucking rain isn't helping matters right now either.

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    Default Re: here's another 'ethanol' consequence nobody predicted ...

    ^^^ oh please ... energy costs are a factor, but a minor one compared to corn ethanol's increased demand for fertilizer !


    (snip)"World fertilizer prices soar as food and fuel economies merge

    Global fertilizer prices rose more than 200% in 2007 as farmers applied more fertilizer to maximize production of corn -- now used for ethanol -- at record prices; hardest hit are African farmers who need fertilizer to replenish nutrient-depleted soils

    World fertilizer prices rose steadily from 2004 through 2006—then soared in 2007. Food prices also rose sharply. Reasons include new demands for food crops, especially corn (or maize), for ethanol and other biofuels, increased energy and freight prices, higher demand for grain-fed meat in the emerging economies of China, India, and Brazil, and increased use of natural gas as liquefied natural gas (LNG), says Dr. Balu Bumb, leader of the Policy, Trade, and Markets Program of IFDC—An International Center for Soil Fertility and Agricultural Development.

    “Farmers in industrialized countries are applying high levels of fertilizers to maximize harvests of grain at the highest prices ever,” Bumb says. “Those forces drive fertilizer prices higher.”(snip)



    I would point out that this report does not come from some political organization with an anti-biofuels agenda, but from the IFDC itself !

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