Thursday, April 10, 2008

Good News In The Gazette

When the market is bad for bean oil it's good for bean oil. If you know what I mean.

High soybean oil prices are bad for biodiesel but good for soybean farmers. There are those who would use high commodities prices to stall biofuel mandates. They forget that the market will decide where the grain goes.

Landmark Services Co-op could break ground on the state’s first soybean
crushing plant in Evansville by June 2009 with the help of a $4 million state
grant announced Tuesday.

Gov. Jim Doyle awarded the grant to Landmark President John Blaska at the co-op’s Evansville facility.

“This is a great moment,” Doyle said, “and a major step forward for Wisconsin.”
Landmark will match the grant to help plan and build an $80 million plant that would process 80,000 bushels of soybeans a day, Blaska said. The plant would be on the city’s east side next to where construction on North Prairie Production’s biodiesel plant is stalled.

And, as a side note, I got a note from my freight forwarder this week that says that export equipment is short. Due to the weak dollar the US is exporting so much grain that there is a shortage of grain ships for export. Consequently, exporters are using regular shipping containers to move feed grains to port.

It's easy to point fingers at ethanol when you don't understand the markets. Reality is, as usual, much more complex than a soundbite.

1 comment:

Jib said...

I agree. That's why I support free trade.

Just the same, your attempted point baffles me. The government has been elbow deep in this particular market. They've been diverting crops to fuel through ethanol subsidization and through tariffs and through mandates. How is it you come to your ivory tower opinion that the markets are working? Because there is a shortage of export equipment? That is just a symptom of the weak dollar and crop failures in other parts of the world. That doesn't excuse ethanol's influence on prices in the least.