Clicker,
I am not calling you out, but there are a number of errors in your post. And for the record, I no longer farm, but am still active in initiatives in the farming industry and have a good feel for the markets.
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Cars are turning to electric these days, soon I’m sure they will be mostly electric. Thus the demand for corn for the use of fuel drops.
I would wager a guess that the US will never have a higher number of electric cars than gas. It is simply not efficient. Electric cars are in essence taking the pollution from the tailpipe, and putting it at the smokestacks. It is a coal vs gas discussion. Neither of which benefits our wildlife. We also do not have adequate charging stations or a power grid to support a very high load.
I do think we are at the brink of developing different technologies that will allow us to use different fuels, but we are far from there now. Switchgrass is a huge buzzword, but we would be 15-20 years away at best. There is also some interesting research on use of cattle/hogs to produce methane for power, but all the research I have done shows a huge initial output, and huge operating and maintenance costs. Just adding fuel for thought.
If I were to invest in some “clean” fuels right now, it would be a biodiesel facility. HUGE upside, moderate initial investment, and works within our existing infrastructure. For about $10,000 I could have my own biodiesel plant and run my vehicles off of some form of recycled cooking or vegetable oil. The downside to this is the regulation of “green” lobby not allowing the construction of new facilities for this, similar to oil refineries. These technologies are in a similar place to computers in the early 80’s. They have a long way to go, but there are some great possibilities.
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Farmers who are taking advantage of the corn being used for fuel, are getting rid of live stock such as cattle because the corn yields higher profit. So now some farms have no live stock and pastures. Thus they have no use for corn, or corn stalks for feed. Now with the ethanol on low demand, the farmers could really be in trouble with low payouts per bushel.
Farmers are not raising as much beef because they have to feed $4 per bushel corn to an animal. They flat out cannot afford to do this. A cost benefit would put their money WAY better spent on planting corn.
Farmers are selling a product on an open market for what the market is offering. They are not selling for fuel, for food, or anything else. Congress has made this bubble with these mandates. If you do not agree with ethanol (and I don’t), send our legislators mail letting them know. IMHO, the only benefit to ethanol is investing money in research for future fuels. A kind of “we need to start somewhere” mentality.
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Then tell them this. The CRP Program is a program for agricultural landowners that will receive annual rental payments and cost-share assistance to establish long-term, resource conserving covers on eligible farmland.
CRP provides an average annual payment per acre of $55.06. Compare that to the rent in our area of around $250 per acre and you can see that while it is the right thing to do, it is very hard for a business person to put any major acreage into this program due to dollars and sense.
Farmers then also have to plant cover crop (hay, grasslands, etc) and keep any weeds (thistle, sunflower, elephant ear) mowed from these lands. It is far from a free lunch.
Now I am not disagreeing that this is a valuable program, and should be considered by a lot of people, especially in areas of marginal farmland and highly erodible surfaces (what it was designed for), but how much money would you be willing to loose. I don’t think many, if any, of us would be willing to donate over half our paycheck to a cause.
However, I do see this corn market and corresponding land values tanking in the near future very similar to the housing market bust. If this does happen you will see a increase in the amount of farmland put back into CRP, but we are still a few years from this. This would have to happen along with our legislators slowing/eliminating the ethanol mandates, but it will eventually happen.
I think a far bigger issue is draining of marginal farmlands via drain tile. My crystal ball tells me that this cannot continue to happen and within the next 10 years you will see more drain tiles feeding into “settling ponds” similar to what you see in city developments. These would allow for wildlife, less water into our rivers, and less runoff. I would also be a huge fan of developing these into shelter belts. There are some programs that provides trees at a heavy discount to help with this, but I do not know any of these details about that program.
I know we as sportsmen feel like farmers are these great “stewards of our land”, but in truth they are just guys like us trying to make a living. Sometime these two things work together, but sometimes they are not. As with everything in life, there are good and bad people/farmers and the bad seem to be much more visible.
And just to throw some more junk into an already long post, look into the “Farm” budget sometime. About 10% of this relates to real farmers. Most of this budget is used on welfare, food stamps, etc.
