Bedlam wrote:
If fuel is mandated to be mixed with ethanol, it creates an artificial demand that would not exist without this requirement. Perhaps direct subsidies are not going to the farmers, but a demand is still being created for them.
I have a hard time understanding the economics of farming. I see many farms working at a loss year after year and just building up debt until the farm collapses and bankruptcy clears the debt. I am not close enough to this industry to see where the disconnect is between pricing, supply and demand.
Yes, like any market, corn goes up/down, but using it to make ethanol does create an artificial market. Farmers get many subsidies, a nice term for handouts, to keep them going. If one does not run any business responsibly, it will fail. You can't squander the money made during good years, then expect a handout when a lean year follows. Another problem is operating a 250K farm with a million dollars worth of equipment. It is nice to get the planting/harvesting done in a week, but not necessary.
However, like most things political, it is the producers of this ethanol that are flourishing, using every ones tax dollars. They are the ones the politicians are helping, as they help the politicians. On the open market ethanol would not work, it costs way more than gasoline to produce. By using tax dollars to pay this high price, it has eliminated the competition for regular gas. Stations can't sell much regular for .30 a gallon more, so most don't even sell it. Without our tax dollars, it would be reversed, no one would pay more for ethanol.
Apologize for the rant, not meant to offend anyone, other than these filthy rich ethanol producers, that are bribing our elected officials.
Jerry