The ethanol scam

What Stella refers to is called the "Loan Deficiency Payment" or LDP.
Google is your friend and it can become complicated. Basically, when local
corn prices fall below a certain level this daily adjustable subsidy kicks
in to hold the price up to that predetermined level. This level varies from
county to county, currently for us it's around $1.75 per bushel for our
county.

If a farmer applies for a federal loan, using his corn for collateral, and
the current market is below the posted minimum county price, the farmer can
apply for the LDP. When the current market is above the posted minimum
county price, as it is at this time, there is no LDP available.

In simple terms, consider it a government price support, although it is at
very low levels compared to the cost of production which is between $2.25
and $2.75 per bushel in our area.

There are two other payments that corn growers can receive. The first is
the direct/guaranteed payment and this is capped at a max of $40,000 per
entity. This maximum requires a history of planting roughly a minimum of
1500 acres per year. Vegetable crops, if planted, count against these acres
and can reduce this payment. It's the governments method of guaranteeing
corn production in lue of other crops that may be more profitable.

The second payment is the counter-cyclical payment and this is a long
confusing government formula based on current markets, the posted county
price multiplied by 88% of your base acres times the historic county average
yield minus $2.60.... if I can remember it correctly... obviously with corn
at $3.20 and higher, this is currently a negative number and will not be
paid.

These payments also require the farmer to comply with local DNR and
Conservation Department planning and recommendation, so they are also used
to protect wetlands and marginal areas that could be farmed, especially if
prices rise high enough, but if the farmer does so he is then barred from
any government programs.

So, the answer to your question would be that the farmer would receive the
guaranteed payment, the counter cyclical payment, and the LDP in varying
amounts to subsidize his corn price up to but not beyond the minimum posted
county price, of roughly 70% of the cost of production.

No need for Ambien, huh

Jim



"AES" wrote in message
...
In article ,
Stella Starr wrote:

It may be worth noting that corn growers are getting NO federal crop
subsidies, since the price is currently high. Not as high as it's been
in adjusted dollars in the past, but high enough that the capitalist
system responded in admirable fashion, inspiring growers to announce
plans to plant a record number of acres in corn.

Yes, but just for information, what would have been the "admirable
capitalist response" of all parties involved -- here in the U.S., I
mean -- if the price had instead gone way down?

[This is a question . . ]

"Dan Luke" wrote in news:13a4ar220gb1q13
@news.supernews.com:


"Bertie the Bunyip" wrote:

Just in case you didn't know, Graham is a known net-kook.

I didn't, but it was becoming obvious.

Thenk yew


Bertie

On 2007-07-20 21:16:26 -0700, Stella Starr said:

C J Campbell wrote:

There have already been riots in Mexico because of the corn shortage.
But you will have about as much luck fighting "Big Corn" as you did
"Big Oil."


It may be worth noting that corn growers are getting NO federal crop
subsidies, since the price is currently high. Not as high as it's been
in adjusted dollars in the past, but high enough that the capitalist
system responded in admirable fashion, inspiring growers to announce
plans to plant a record number of acres in corn.

Guess Mexican farmers would be free to do that too, wouldn't they?

There are not enough acres in the whole USA to plant enough corn to
meet the President's ethanol goals. If all our corn goes to ethanol,
then we have to import food from somewhere else. Two things happen: we
become dependent on a foreign power for our food, and the impoverished
in other countries suddenly find us outbidding them for their own
produce.

The way we beat the oil cartels during the fuel crisis of the early
'70s was we simply pointed out that we can live for some time without
oil, but those countries were almost wholly dependent on us for food.
Guess who could go longer -- us without oil or them without food? It
was no contest. The end result was simple inflation and oil actually
dropped in relative value to other commodities.

But if we start burning all of our corn we will no longer have that leverage.
--
Waddling Eagle
World Famous Flight Instructor

"C J Campbell" wrote in message
news:2007072208012916807-christophercampbell@hotmailcom...

The way we beat the oil cartels during the fuel crisis of the early '70s
was we simply pointed out that we can live for some time without oil, but
those countries were almost wholly dependent on us for food.


Wrong on both accounts: first, deregulation kicked up explorartion and
production. Second, we never tied food to oil as that would have been "bad
for the children" (though the kids got very little of the food compared to
all the dictators military/militia forces.

Guess who could go longer -- us without oil or them without food?

You do know that the US is a net food importer, don't you.

It was no contest. The end result was simple inflation and oil actually
dropped in relative value to other commodities.

But if we start burning all of our corn we will no longer have that
leverage.

The US has more reserves in the Continental shelf than most A-rab countires
combined.

If the people, via the environuts and their enablers in the EPA, want to
keep it off limits, then let "the People" suffer and endure the
consequences.