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Ethanol: What do farmers think?

Agriculture.com Staff 07/07/2006 @ 9:14am

Ethanol is a popular topic of conversation these days -- from the co-op and coffee shop to the discussion groups here at Agriculture Online.

Several threads on ethanol are currently buzzing in the Farm Business forum, where farmers find themselves on both sides of the issue, and with questions about ethanol's future.

JR, an Iowa farmer who grows corn, soybeans and alfalfa and raises polled Herefords, wonders if ethanol can survive higher prices at the pump. At a recent fill-up in Mason City, Iowa, he says the ethanol blend was 10 cents higher, and he went with the less expensive gas. "My old Ford farm truck runs better without the Ethanol and it was cheaper to boot," he says. "I do not have any investments in ethanol plants and have never even directly sold corn to one. However, I burn it when it is cheaper than the straight oil product. When it's not I do not use it."

He says the gas station attendant told him there had been a drop in ethanol sales because of the higher price, and that people tend to buy what's least expensive.

Ray Jenkins, a corn merchandising manager for Cargill's wet milling plants in Eddyville and Cedar Rapids, Iowa (which produce ethanol, among other things), says it's about more than the money.

"If you are operating on the theory that ethanol is only a 'good thing' if it's perpetually cheaper than gasoline, you are not recognizing the real reasons for ethanol in the first place," he says.

Jenkins says ethanol -- like any industry -- is going to have growing pains. "Rome wasn't built in a day and neither will the capacity to produce or E-85 stations," he says. "This is not a snap-your-fingers exercise."

Regardless of the price, however, Jenkins says alternatives must be sought. "Unless you want to use all of the world's petroleum supply and then worry about what to do next, there is no other choice but to work on alternatives," he says. "They aren't going to be cheaper, but they will extend supply."

He says part of the problem in the U.S. is that we haven't had the will to move away from oil because fuel costs will be higher in the short run. "We need to be preparing for a different world than what we've lived in for the past 25 years," he says. "We've had it easy because we've avoided the 'hard questions' ... time for a change."

Ethanol is a popular topic of conversation these days -- from the co-op and coffee shop to the discussion groups here at Agriculture Online.

Other farmers agree that ethanol is about more than savings at the pump. Mike, a Missouri corn, soybean and wheat grower, has investments in two ethanol plants, and says both are doing well, thanks in part to ethanol promotions in his state. "My 21-year-old daughter called this morning and was complaining about ethanol being 7 cents higher," he says. "I told her just to consider it a donation to the farm."

Kay, a producer from North Carolina, says one of her main concerns about ethanol is the non-farmer investors. "These are people who can afford to take a loss here and there, maybe more often than not, as they simply use the writeoffs to shelter other income," she says. "They need farmers to give the proposals the political correctness they need to pass in many places, to garner local support. They don't really care if farms and farmers are helped by the proposed facility or not. They aren't betting their farms on the thing."

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