This time of year is the only time associated with Indian corn, but did you know that corn came into the world through the Great Spirit?
That’s according to an old Indian legend I googled across. It’s pretty lengthy, as legends tend to be, but I found it pretty interesting reading on several levels. You can read the more traditional version here – or a more contemporary version here.
Here’s the Corn Commentary condensed version:
Our hero is a young Indian man named Wunzh who comes from a poor family with a father who is “kind and contented and always gave thanks to the Great Spirit for everything that he received.” Young Wunzh is the same way. When it comes time for him to fast “so that he may see in a vision the Spirit that is to be his guide through life” he goes off filled with longing to do something for his family and his tribe, specifically in the form of finding easier way to get food “than by hunting and catching fish.”
His fasting period where he is visited by a “stranger” whom he must wrestle bears a striking similarity to Jacob wrestling with the angel of God in the book of Genesis. You might recall Jacob would not let the man in his dream go until he blessed him. So Wunzh wrestles his stranger successfully and fasts one extra day to meet him again, wrestle him to the death and bury him as he had been directed in the vision.
But he never forgot the grave of his friend.
Daily he visited it, and pulled up the weeds and grass, and kept the earth soft and moist. Very soon, to his great wonder, he saw the tops of green plumes coming through the ground.
Weeks passed by, the summer was drawing to a close. One day, Wunzh asked his father to follow him. He led him to a distant meadow. There, in the place where the stranger had been buried, stood a tall and graceful plant, with bright-colored, silken hair, and crowned by nodding green plumes. Its stalk was covered with waving leaves, and there grew from its sides clusters of milk-filled ears of corn, golden and sweet, each ear closely wrapped in its green husks.
“It is my friend!” shouted the boy joyously. “It is Mondawmin, the Indian Corn! We need no longer depend on hunting, so long as this gift is planted and cared for. The Great Spirit has heard my voice and has sent us this food.”
Then the whole family feasted on the ears of corn and thanked the Great Spirit who gave it. So Indian Corn came into the world.
So the moral of the story is: be thankful for corn this Thanksgiving!
The turkey industry has been one of the most vocal opponents of corn for ethanol production in the last year. So, it’s not surprising to see that the cost of the turkey is the largest contributor to the overall increase in the cost of the 2008 Thanksgiving dinner, according to the American Farm Bureau Federation’s annual survey.
The cost of a 16-pound turkey, at $19.09 or roughly $1.19 per pound, reflects an increase of 9 cents per pound, or a total of $1.46 per turkey compared to 2007. Meanwhile, a bushel of corn has decreased 21 percent from $4.28 on Nov. 21 last year to $3.39 on the same day this year (prices are for Dec. 2008 futures). However, big food companies are still blaming increased use of corn for ethanol production for the higher cost of Thanksgiving dinner.
What’s wrong with this picture? The Renewable Fuels Association did the math and found that only 1.4% of price for the typical holiday meal for 10 this Thanksgiving can be attributed to the U.S. ethanol industry’s demand for corn.
Here’s how they did the math: First, they determined the amount of corn required to produce the common Thanksgiving dinner items – including turkey, stuffing, peas, cranberry sauce, rolls and milk. About 31.5 pounds of corn, with a market value of approximately $2.50, would be required to produce those food items – since only the turkey and the milk require corn. The value of corn required to produce these products accounts for roughly 7.1 percent of the total retail price.
Finally, we examined ethanol’s impact on the price of corn, and in turn, on the price of the Thanksgiving meal. An October 23 Reuters article stated that the consensus among analysts is that the ethanol industry’s demand for corn has accounted for “around 20 percent” of recent corn prices. Thus, only 20 percent of the $2.46 worth of corn required to produce a Thanksgiving dinner for 10 can be attributed to ethanol.
The result is less than 50 cents – about 1.4 percent – and that is of the TOTAL retail price for the dinner.
Incidentally, the less than 6% increase in the Thanksgiving meal this year is still a bargain in anybody’s book. This year’s average cost of $44.61 is equivalent to $20.65 in 20-year inflation-adjusted dollars, according to Farm Bureau. That means the actual dollar cost of the Thanksgiving dinner has declined more than 8 percent since 1988.
Definitely something to be thankful for this year.
There’s a bunch of corn growers out there worried about getting burned by VeraSun’s falling star.
The nation’s second largest ethanol producer filed Chapter 11 reorganization less than a month ago and now the National Corn Growers Association (NCGA) Chairman Ron Litterer and others have filed a formal objection with the U.S. Bankruptcy Court over how corn contracts with the VeraSun may be handled. The grower from Greene, Iowa stands to lose personally because he has an outstanding contract to deliver corn to VeraSun. He filed the objection with and on behalf of corn growers in at least seven other states that have similar situations and are concerned with VeraSun’s proposed procedures to reject outstanding contracts.
“It is doubtful that we can influence the courts to require VeraSun to pay the contracted price for our corn. However, we do hope to influence other issues of concern to growers,” Litterer said.
VeraSun released a statement recently saying that they are continuing to work with suppliers while pursuing long-term financing. “Unfortunately, the Company will need to reject some corn contracts for delivery through Dec. 31, 2008 at our Janesville and Welcome, Minn., facilities due to the delayed startups,” the statement continues. “Other contracts may need to be rejected or renegotiated as we continue to work through them on an individual basis.”
The corn growers are objecting to specific concerns with VeraSun’s proposed procedures under bankruptcy, which may allow VeraSun to wait until 10 days before contracted delivery date to notify growers of their rejection of the contract. This would essentially leave corn suppliers in a state of limbo while VeraSun is free to determine the market price for corn before deciding whether to accept deliveries under a contract or summarily reject the contract. Litterer believes this would be fundamentally unfair to corn growers and other corn suppliers.
According to information available to NCGA, potentially thousands of corn growers from Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and other states have contracts with VeraSun.
Meanwhile, VeraSun has announced that it received a “non-binding unsolicited indication of interest with respect to the purchase of substantially all of its assets.” At the same time, POET – the world’s largest ethanol producer – says they are “in serious discussions with a couple of ethanol producers regarding possible acquisitions.” You do the math.
Many news outlets have covered the CRA’s “Changing the Conversation on High Fructose Corn Syrup” campaign recently. A well-timed “Halloween” initiative directed at moms was rolled out in late October that included dozens of TV and radio media interviews. More media tours are being planned.
Earlier this year the whole focus was on commodity shortages – not enough wheat, smaller corn carryout. Now, all of the sudden, we are hearing that there are “big supplies” of wheat and corn.
That’s what Reuters is reporting today. “U.S. corn and wheat futures eased lower on Friday, extending heavy losses in the previous U.S. session, as grains remained under pressure from hefty global supplies and demand concerns in a deteriorating economy.”
Corn and soybean futures both dropped four percent in Thursday’s trade while wheat was down three percent. Reuters reports that corn was “feeling the squeeze in particular as traders took the view that the world was well supplied with feed grains and demand for ethanol production would be cut back.”
Corn has now dropped from a record high in June of $7.65 to the level it was trading at the start of 2007.
Big Food often suggests a “lag effect” exists before changes in commodity prices are reflected at the retail level (they say that’s why food prices haven’t come down, despite the plunge commodity prices). However, it is clear there was no “lag effect” in early 2007. When the producer price index (PPI) for farm products increased rapidly, food companies reacted quickly, as demonstrated by the accelerated trend in the consumer price index (CPI) for food. And as producer prices for farm products have dropped dramatically since June, food inflation continues to increase at a faster‐than‐normal rate.
Meanwhile, the big food companies are reporting “higher‐than‐expected earnings for the quarter that ended in September 2008, due in large part to higher prices for consumers.” Something stinks here.
The Iowa Corn Indy 250 may someday be running on Brazilian sugarcane ethanol instead of Midwest corn ethanol.
Under a multi-year deal signed earlier this week, Brazilian Ethanol will supply the 23 races of the 2009 Indy racing season.
This is not sitting well with the domestic ethanol industry, which was largely responsible for the IRL switch to 100 percent ethanol two years ago. The Renewable Fuels Association is urging the league to reconsider the decision, imploring the IRL to “at least ensure that the Indianapolis 500 be run on American homegrown ethanol.”
An exception has reportedly been made for the Iowa Corn Indy 250 to run on homegrown corn ethanol, and Brazil is also expected to partner – at least initially – with a U.S.-based ethanol company to supply the IndyCar Series with corn-based ethanol.
Vermeer says the CCX770 Cob Harvester new wagon-style cob collection system “will revolutionize corn harvesting by enabling farmers to harvest corn and cobs simultaneously.”
The harvester is towed immediately behind select corn harvesting combines to collect and unload the cobs. While the main idea here is to harvest the cobs for cellulosic ethanol production, the company points out that there are many other uses for corn cobs, such as livestock feed supplement for mixed
rations, livestock and pet animal bedding, blending cobs with coal to co-generate electricity, gasification to create several types of energy for industrial processes and other industrial applications including
construction materials, abrasives and absorbents.
Speaking to members of the media after a speech at the Cellulosic Ethanol Summit Wednesday, Secretary of Agriculture Schafer said the group that held a press conference yesterday calling for an end to ethanol subsidies “stood up there with no credibility whatsoever,” when they claimed that it will take 18-24 months for the lower commodity prices to bring food prices back down.
“I just think that they are totally off base,” Schafer said. “They are trying to justify the increased cost and increased profits that they’re making at the expense of another industry and that’s just not appropriate.”
Schafer is especially concerned that the group is working against important public policy for energy independence. “Why would be they be against energy independence?” he asked. “They’re working against economic activity. Why would they be against economic activity?”
“They’re trying to justify their corporate policy in increasing costs to the consumer by blaming it on somebody else – that’s just simply wrong.”
Now that gas prices are lower and corn prices are down, everyone wants to know why food prices are still higher than they were a year ago. But, the companies and organizations most responsible for the price of food went on the attack again today blaming ethanol, specifically corn ethanol, for the problem.
Calling ethanol the “30 year old still living in the parents’ house,” the “Food Before Fuel” group called for an end to all ethanol subsidies on what they called the 30th anniversary of government incentives to help development of the industry. The focus was totally on corn ethanol, without even a mention of moving into next generation fuels. The group took a few questions from the room, but the phone system must not have been working and no questions were taken from the phone.
Here’s what I wanted to ask National Turkey Federation president Joel Brandenberg, who was the main speaker on behalf of the organization: What if all the restaurants and grocery stores in the country were owned by the beef producers? How would the turkey industry compete? What incentive would they have to sell turkey? That is the situation the ethanol industry has been facing for the past 30 years (even though at least the first 20 shouldn’t count). How long do you think it would take to build up the turkey industry from scratch, teach people how to cook it, get farmers to breed and produce the birds, get processing plants in place, get federal regulations for turkey inspections, etc. You get the picture. This industry has been built literally from the ground up in less than 30 years.
And don’t get me started on the food price issue. They said it will take “18-24 months, assuming no future spike in corn price, to work through the damage that was done this summer,” said Brandenberg. Yet these were the same people who promised that if Texas were granted a waiver of the Renewable Fuels Standard that food prices would drop immediately.
The group claims that the general public agrees with them. Sure, if you tell them that the production of ethanol caused by government policies is driving up the cost of their food prices – of course they are going to agree with you. Problem is, that’s not true and the fact that they are saying the drop in corn prices will take TWO YEARS to work through the system while the increase in corn prices had an immediate affect on food prices proves that it’s not true.
Needless to say, the corn and ethanol industries immediately struck back after the press conference today. “These same ethanol critics are the ones who virtually promised to reduce food prices immediately, and have failed to do so, even though corn prices and energy prices are down by more than half in the last few weeks,” National Corn Growers Association president Bob Dickey said.
The newly-formed ethanol organization Growth Energy held a press conference after the food industry event, calling on them to “come clean about the misinformation that it has been spreading” noting that even though the Grocery Manufacturers Association was not out front in the media event, they are still the “ones that are funding most of the misinformation campaign that we are trying to work on.”
Growth Energy launched a countdown clock this week to track the hours and days elapsed since the group called on GMA and its members to lower prices for consumers at the grocery store in line with drop in the cost of corn and oil, which have decreased significantly. At a press conference last week, Growth Energy challenged GMA to either lower food prices or admit to the fundamentally flawed argument it has been making about biofuels.
I hope to see Congress have a hearing on this issue and pull in the food manufacturers like they pulled in the oil companies to at least rake them over the coals a bit for making big profits at the expense of the consumer and then blaming it on someone else. At least they aren’t lining up for a bail-out – yet.
One of the buzz words for agriculture in 2008 has been sustainability and that was one topic being discussed by National Corn Growers Association officials at the National Association of Farm Broadcasting annual meeting last week.
CEO Rick Tolman says NCGA is part of a group called the “Field to Market” Keystone initiative to look at sustainable agriculture. “Basically what we decided is that to be sustainable is to be doing more, being more productive, with the same amount of resources,” Rick said. The Keystone group, which includes agriculture, environmental and food companies and organizations, just released a draft Environmental Resource Indicator Report in September.
Sustainability is also a major issue in the ethanol industry, especially when it comes to land use, but Rick says the reality is that corn farmers continue to be more productive.
Here’s the Corn Commentary condensed version:
What’s wrong with this picture? The 
VeraSun released a statement recently saying that they are continuing to work with suppliers while pursuing long-term financing. “Unfortunately, the Company will need to reject some corn contracts for delivery through Dec. 31, 2008 at our Janesville and Welcome, Minn., facilities due to the delayed startups,” the statement continues. “Other contracts may need to be rejected or renegotiated as we continue to work through them on an individual basis.”
Earlier this year the whole focus was on commodity shortages – not enough wheat, smaller corn carryout. Now, all of the sudden, we are hearing that there are “big supplies” of wheat and corn.
Under a multi-year 
The new 
Speaking to members of the media after a speech at the 
And don’t get me started on the food price issue. They said it will take “18-24 months, assuming no future spike in corn price, to work through the damage that was done this summer,” said Brandenberg. Yet these were the same people who promised that if Texas were granted a waiver of the Renewable Fuels Standard that food prices would drop immediately.
One of the buzz words for agriculture in 2008 has been sustainability and that was one topic being discussed by National Corn Growers Association officials at the National Association of Farm Broadcasting annual meeting last week.