Posted By Mark January 23, 2015
Not to sound like a lunatic but it may be entirely possible, maybe even likely, the American public will be begging for a return to $3.60 gas in the near future.
I know it sounds crazy, but if you are following the public debate you can already see the discussion heating up to argue the true implications of today’s bargain basement petroleum prices. The euphoria consumers and market analysts alike were experiencing a few weeks ago is wearing off like a cheap wine hangover.
One big concern is that near term economic gains in the US related to cheaper fuel may be overstated and ultimately result in deflation and a global economic slowdown.
It is becoming increasingly evident that it could take a few years before the full ramifications of this gas guzzlers holiday are known. However, some comments by an oil industry executive this week provide a peek behind the curtain that often shields the business maneuvering and real objectives of international big oil.
The boss of oil giant BP Bob Dudley has said that oil prices could remain low for up to three years. What results next may make our previous high oil prices seem like a gift from grandma.
Once big oil has beaten oil upstarts like the domestic fracking industry to a bloody pulp, they will remerge from the ashes like a phoenix ready to spank bad little consumers for cheering the development. The paddle they will use according to some industry experts will be $200 a-barrel oil, a considerably richer prize than the $110 a barrel which preceded the $47 a barrel we are currently experiencing.
Any reasonable person would wonder why a business would take such a gamble, cut investment, cut jobs and sustain such a huge loss? The simple answer is they will do it because they can and the payoff is immense.
Sure oil countries like Norway, Russia, Venezuela, Scotland, Nigeria and Angola will take a beating but the big players in OPEC – the ones with the large expanses of beach and no water – have lower production costs and care only marginally more for their business partners than they do the consumers that they bleed every day.
People’s Bank of China governor Zhou Xiaochuan also points out low oil prices could slow down China’s development of renewable energy projects. In a wondrous masterpiece of understatement he says: “We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy.”
Does anyone know how to say “duh” in Mandarin?
If we really want to throw the market manipulating overlords at OPEC a curve we should do the opposite of what they expect. Instead of grumbling and driving circus clown size cars we should immediately find ways to encourage an expansion of existing non-fossil energy development such as ethanol. Then we should back that up by launching the largest energy research and development project in history. I contend we will be forced to do this as finite oil supplies run out. Why not do it now rather than waiting until the wolf is at the door.
Besides, in the business world innovation is one of the few things that can still trump monetary muscle.
Posted By Cindy January 22, 2015
Corn growers have seen some pretty good prices over the past several years, but the downward trend this past year for a record crop is expected to be the norm for the next several, according to Patrick Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI).
Speaking at the American Farm Bureau meeting last week, Westhoff said that due to corn prices dropping to levels not seen in years, farmers will plant less corn in the next two years. More than 90 million acres were planted in 2014 and he expects less that 88 million acres will be planted this year. While Westhoff expects average corn prices to remain low by 2007-2012 standards, “but still well above the level we saw before 2007.”
The demand picture for corn is high on the livestock side, but low on the ethanol side. “We have global demand growth in the animal sectors, here and around the world,” said Westhoff. “But perhaps weaker growth, if any at all, in biofuels – depending on policy, oil prices and a lot of other things we can’t possibly know.”
On the export side, Westhoff says there is a lot more competition. “The high prices of the last several years kicked off lots of supply from Ukraine to Argentina and that’s not all going to go away over night,” he said. And while China is a huge source of demand growth, Westhoff says “the good news is it’s growth, but the bad news is it’s not as fast as it has been. They’re looking at 6.5 percent growth next year.”
Westhoff concludes that the ups and the downs are always dependent on factors beyond our control. “As always, weather, oil prices and other factors will drive annual swings in prices.”
Listen to Dr. Westhoff’s comments here: Presentation on crop outlook by Dr. Pat Westhoff, FAPRI
Posted By Cathryn January 20, 2015
A few years back, I took a look at how the Girl Scouts profit from selling quite a few cookies that contain HFCS while teaching about its so-called “evils.” (Click here for part one, here for part two and here for the final installment.) Today, a story came across that gave me pause. After reading the whole piece, I want to share it. Everyone should have a clearer sense of how their cookie crumbles.
In a well-intentioned story by the Genetic Literacy Project, the group discussed how the Girl Scouts “reject attempts by anti-GMO parents to use fear in their kids campaign.” The author praises the group for, to this point, rejecting calls by a group of agenda-driven parents to ditch GMOs. While certainly a praiseworthy position, the Girl Scouts response exposes the green motives cleverly disguised behind the customary green uniforms.
“At the current time, there are genetically modified agricultural crops (GMOs) in Girl Scout Cookies. Our bakers determine whether to use GMOs in Girl Scout Cookies based on a range of market-related factors and depending on the specific cookie recipe.”
The group sites serious science in the following paragraph, referring WHO and AMA assessments of GMO-safety, and even references the importance those groups place on GMOs as an important tool in the fight to feed a growing world. But, what they do not say seems to speak most clearly to the reality of the situation.
Of the full statement, one phrase seemingly contradicts the others – “market-related factors.” Basically, while the Girl Scouts acknowledge the overwhelming scientific evidence supporting GMOs, they could be swayed. A small group of activist parents may not be enough to do the trick. Driving down profits does have a downer-effect on the organic-only cookie crusade. But, much like they did in the case of HFCS, these pillars of courage and strength (according to their own credo) can cave.
The Girl Scouts stand for building strong, independent young women who think for themselves, stand up to peer pressure and excel both in character and academic achievement. Sadly, this admirable aspiration can seemingly be swayed by the mercurial motivation of collecting more of consumers’ cash. Science, something so-oft advocated as a crucial area of increased achievement for girls, is up for sale when it comes to the Girl Scouts.
Yes, organizations such as the Girl Scouts require profits to pay for their excellent endeavors. But, one must consider the cost. Teaching young women science only matters when it pays the rent may not be the best lesson. Science matters to persons of character, from Galileo to Servetus, because they desire truth, knowledge and character more than the fleeting favor of the en vogue estimation.
Standing up against the crowd may not be lucrative. It often proves the more challenging option, and it often brings consequences that seem unjust at the time. Yet, for centuries now, it has been seen as the rock upon which true character is built.
The Girl Scouts aspire to high ideals. They push young women to challenge themselves. As an organization, they too must live up to their goals. Standing by science, steadily supporting tools that will feed the world, they can. Now, the question that remains is if they will.
Posted By Cindy January 13, 2015
Farmers from around the country had a chance to ask Agriculture Secretary Tom Vilsack questions during an informal town hall-style meeting at the American Farm Bureau convention this week in San Diego.
The last question he took was from a South Dakota farmer who asked about continuation of strong biofuels policy in the United States. Vilsack detailed his continued support for the industry, particularly in the area of exports. “I am a firm believer in the future of the biofuels industry,” he said. “Ethanol production is at record levels…we’re now beginning to see great interest in the export market, not just for ethanol but also for dried distillers grains.”
Vilsack also noted the need to update the research on ethanol when it comes to indirect land use. “A lot of the push back to the industry is based on studies that took place 15 years ago, 10 years ago, and there have been enormous increases in productivity of American farmers, that basically suggest the indirect land use calculations are not as accurate as they need to be,” he said.
Listen to the secretary’s comments on biofuels here: Secretary Vilsack at AFBF on biofuels
2015 AFBF Convention photo album
Posted By Cindy January 9, 2015
Agricultural companies and organizations united this week to launch the U.S. Agriculture Coalition for Cuba (USACC) to work toward liberalized trade and re-establishing Cuba as a market for U.S. food and agriculture exports.
Agriculture secretary Tom Vilsack says the conversation to normalize relations with Cuba is long overdue and important for US agriculture. “Cuba imports about 80 percent of its food,” said Vilsack. “It’s a $1.7 billion market. Our rice growers, our wheat growers, our corn growers, our soy producers, our poultry and pork and beef producers, all have opportunities in this new day.” Secretary Vilsack at US Ag Coalition for Cuba kickoff
One of several lawmakers who attended the Ag coalition kick off was Congressman Rodney Davis of Illinois who says re-establishing normal relations with Cuba will help the Cuban people. “I believe that opening more trade with agricultural products…increasing the trade that we already have in the Cuban nation, is going to allow America to invest in a Cuban economy that’s going to free the Cuban citizens from the conditions they live under now,” said Davis. Cong. Rodney Davis of Illinois at USACC launch
Rep. Kevin Cramer (R-ND) says he is excited about the opportunities of increasing trade relations with Cuba. “The real excitement to me is the opportunity to … spread Democracy, the opportunity to do what farmers do naturally and that is feed hungry people,” he said. “Trade ought to be a part of diplomacy.” Cong. Kevin Cramer of North Dakota at USACC launch
The National Corn Growers Association (NCGA) is one of the many agricultural organizations that have joined the coalition.
“Cuba is not a level playing field for American farmers. It’s time we have a chance to better compete for Cuba’s business. NCGA has long supported normalized trade relations with Cuba, as part of our efforts to expand markets for U.S. corn and feed the world,” said NCGA President Chip Bowling.
The USACC believes that normalizing trade relations between the U.S. and Cuba will provide the U.S. farm and business community with new market access opportunities, drive enhanced growth in both countries and allow U.S. farmers, ranchers and food companies to efficiently address Cuban citizen’s food security needs. Under current sanctions, U.S. food and agriculture companies can legally export to Cuba, but financing and trade restrictions limit their ability to serve the market competitively. The USACC ultimately seeks to end the embargo and allow for open trade and investment.
Posted By Cindy January 8, 2015
The National Corn Growers Association spent Tuesday on Capitol Hill this week, welcoming the 114th Congress to Washington and talking up the importance of agriculture to the American economy.
“We are here to welcome the new Congress, and to encourage them to work together with one another and the Obama Administration to advance policies that help agriculture and family farmers,” said NCGA President Chip Bowling, pictured here with Rep. Rodney Davis (R-IL). “I was encouraged not only by the warm reception we received, but also a hope that lawmakers will set aside past divisions, find common ground, and get things done.”
After overcoming the challenge to his bid for re-election as Speaker of the House, Rep. John Boehner of Ohio used a very agricultural metaphor to urge Democrats and Republicans to work together. “Every day you and I come here, try to cultivate good seeds, and take care of the pests. And then with patience, sacrifice, and God’s grace, there will be a harvest,” said Boehner. “Let’s make this a time of harvest.” Speaker John Boehner harvest quote
NCGA executive vice president Jon Doggett notes that you have to plant a crop and nurture it before you harvest it. “I think there will be a lot of actions taken in the first few months of this Congress that will set the tone as to whether or not we’re really going to be able to harvest anything at the end of this Congress,” said Doggett.
With the latest farm bill being implemented, Doggett says corn growers are mostly concerned with protecting what they have during the budget reconciliation process. “We may see some attacks on Title 1 of the farm bill (and) on the crop insurance program,” he said. “Both have piles of money that folks will want to rob.”
Doggett talks about opening day for the 114th Congress and priorities for corn growers in this interview: Interview with NCGA Executive VP Jon Doggett
Posted By Cathryn January 5, 2015
Falling gas prices have dominated news coverage over recent months. From “price at the pump” reports to longer diatribes over the economic and political impacts of falling oil prices, media outlets of all genres present a wide array of viewpoints on the topic.
Not surprisingly, this puts the American Petroleum Institute in the spotlight once again as eager journalists inquire about the causes of the downswing. Not shockingly, Big Oil’s mouthpiece provides a persuasive argument for why increased domestic production pushed prices down. While this makes sense, it diametrically opposes their earlier stance on the correlation between production and price in their industry.
In late October, the Renewable Fuel Association’s Geoff Cooper first pointed out the inexplicable shift in how API views the laws of supply and demand. Simply, it somehow seems that if the increased supply comes from ethanol, and thus not the petroleum industry which it represents, it increases prices. If the increased supply comes from their Big Oil-backers, it decreases prices.
The basic laws learned by every student in an entry-level econ class only apply if they suit Big Oil’s all oil agenda. When they do not, one is to believe the basic tenets of economics reverse themselves. The laws of economics actually bend to suit API’s needs.
To read his full post, click here.
In reality, the rules do not change. Through well-funded, carefully crafted campaigns of confusion, API obfuscates the obvious – ethanol benefits American consumers by lowering the price at the pump. But, as it does not line Big Oil’s already bulging pockets, it remains an inconvenient truth that they would rather repudiate until its basis suits their own base interests.
American consumers can certainly celebrate the momentary relief falling oil prices bring, but it makes sense to remember the hard facts every day.
Ethanol lowers prices and decreases reliance upon the Big Oil’s near monopoly. Fuel choice fuels the economy in a more reliable, substantial manner than volatile market conditions ever could. Supporting domestically produced, renewable ethanol means supporting a paradigm shift toward a more stable, more affordable energy future.
Posted By Cindy January 5, 2015
It was probably the biggest agricultural news story of the year. What was supposed to be the 2012 farm bill was passed and signed into law this year as the 2014 farm bill, a multi-tasking piece of legislation according to President Obama.
“Despite it’s name, the farm bill is not just about helping farmers,” said Obama as he signed the bill in February. “Secretary Vilsack calls it a jobs bill, an innovation bill, an infrastructure bill, a research bill, a conservation bill … it’s like a Swiss Army knife.”
Well, that’s like about 20% of the knife, since 80% of the $956 billion price tag on the legislation is for food assistance and nutrition programs. “That’s why my position has always been that any farm bill I sign must have protections for vulnerable Americans,” said Obama. “This bill does that.”
USDA has spent the majority of 2014 working to implement the nearly 1000 page bill, and will continue that work into 2015 as farmers make their choice between the new ARC and PLC farm programs by March 31. “In addition to ARC and PLC, we’ve seen the institutional of our supplemental crop insurance option, the STAX program for our cotton growers, and the whole farm policy for our specialty crop growers,” said Secretary Vilsack.
One of the issues from the new farm bill that remains to be resolved in 2015 is the definition of “actively engaged” for a farming operation. “That is a definition that has great significance and importance out in the countryside,” says Vilsack, who noted that Congress exempted small family farms and family held farming corporations. “It will probably be limited to partnerships and joint ventures which represent somewhere between four and five percent of all production.”
2014 may be the year we finally got a new “Swiss Army knife” farm bill, but 2015 is the year we’ll finally get to use all of the implements.
Posted By Cathryn January 2, 2015
While we often hear politicians declare that they know “the greatest problem of our time,” few have the courage to face what really confronts us- a finite supply of oil.
Yes, today, oil is cheap. American consumers do not currently fork out the incredible sum to which they have become accustomed. Despite the momentary reprieve, oil remains of incredible importance for not only our country but the rest of the developing world.
Drivers increasingly demand an ever-growing supply of the fossil fuel abroad. At home, demand has declined somewhat but remains high when viewed in light of less auto-dependent nations. The family car remains a symbol of both status and freedom that elicits incredible desire.
This week, the Des Moines Register ran a commentary authored by a Gulf War veteran explaining not only how our oil-dependence impacted the wars of the past but fuels the conflicts of the future. Simply, continuing to depend upon oil dooms the U.S. to a cycle of conflict in the Middle East.
“Sadly, our continued addiction to petroleum here in the U.S. and across the globe makes doing so nearly impossible, and the rise of ISIS on the profits of the oil trade should remind us all that our oil dependence is dangerous and unsustainable,” David May explains in his piece. “Thus far, elected officials have opted to use military force to protect our national security by disrupting ISIS’s ability to bring a supply to the oil market. But another option — one that every American can play a part in — is decreasing the amount of oil needed to fuel our cars, trucks and heavy machinery.”
To read the original post, click here.
The news has made the growing threat of ISIS incredibly visible to Americans. Media portrayals, whether created by ISIS itself or domestic commentators, have shown the brutal reality faced by those living under its rule.
The danger appears larger-than-life. The underlying support hides in its shadow.
May argues on behalf of the Renewable Fuel Standard. This veteran, someone with real experience and hard-gained understanding, supports fueling our nation with fuel produced in our nation. His argument deserves serious consideration.
American corn farmers proudly grow the largest feedstock for domestic fuels. At the same time, rural America also supplies a disproportionately large number of America’s troops.
While more and more articles announce the return of a cheap oil economy, consider the ramifications. Depending on a finite resource has consequences. Ethanol offers a solution.
The future can be both greener and more peaceful. It is in our national interest.
Posted By Cindy December 24, 2014
Have yourself a corny little Christmas,
May your price be right
From now on,
Gas prices won’t be out of sight
Have yourself a corny little Christmas,
That’s what we can say,
From now on,
The weather will be good, we pray.
Remember back in the olden years
Fruitful golden ears of corn.
All our friends get John Deere for us.
Gather near to us once more.
Through the years
The harvest will be plenty,
If the Fates allow.
Hang a shining star as you prepare to plow.
And have yourself a merry little Christmas now.
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