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Leading Investment Expert Reveals This Is NOT The Year For Ethanol

By Mr Ethanol | June 6, 2007

Whiskey And Gunpowder:
DID YOU KNOW that corn is a type of food? If you do, then you may have keener insight than some people who write headlines at The New York Times. I mention this because of the rather curious headline above an article in the business section of the Times (pg. C-7) on Jan. 5, 2007: “Rise in Ethanol Raises Concerns About Corn as a Food.”

Huh? OK, let me see if I follow the logic. The background issue is that the world needs to find substitutes for depleting supplies of oil and natural gas. We know that, and you may well have heard it here first if you are a longtime reader of Whiskey & Gunpowder. We also know that ethanol is one of those potential oil substitutes. People have been running vehicles on ethanol for well over a century. But oil has been so cheap for so long that there was never any need or economic scale in using the hooch for internal combustion. (I mean, the kind of internal combustion within a vehicle engine.)

And we know that a lot of corn is presently being diverted to manufacture ethanol. This is a fast-growing industry, and we will discuss that below. But have we really reached the point where the headline writers are so value neutral on the issue of food versus fuel that they shamelessly imply that there is some sort of economic or moral equivalency between using corn to manufacture ethanol and refer to “concerns about corn as a food”? Give me a break.

Continue reading: Ethanol Plants and Half the Corn Crop.