Gary Edwards Anamosa, Iowa | Ray, You are using common sense and reason in your thoughts. The attitude in DC on switchgrass is absolutely crazy. Every sentence that mentions renewable fuels also mentions switchgrass. Corn for fuel is now bad for the environment, will break everyone in food cost and cause worldwide hunger. Switchgrass on the other hand uses land that won't produce anything else. Industry is telling congressmen that the technology for competitively turning cellulose into ethanol is only 2-3 years away, the same lead time needed to establish enough switchgrass to feed the plants. No one stops to think that building the plants and infrastructure will not instantaneously happen along with the technology. The incentive payment started out as a program to help pay for establishing switchgrass on CRP acres followed by a program to allow the farmer to sell one cutting/year while keeping his CRP payment. Not a bad program. Then came the realization that many of the 10 million acres more corn would come from CRP and the incentives were raised to match the anticipated profits from growing corn. Next the meat & egg guy's want their feed costs back to pre '06 harvest levels. First they went after the import tariff, and that didn't work, so they went after the blenders credit and that didn't work, now they are promoting switchgrass in hopes to divert ethanol production from corn. They haven't thought through the fact that as incentives for switchgrass increase it will start taking some of the corn out of production which will in-turn raise the price of the remaining corn. Hopefully,sooner or later the government will realize that the market will take care of the corn/switchgrass/fuel/food debate and congress will have to do nothing. What programs prevail from all the discussions is anyone's guess at this time. That only makes the market more volatile. I still think we are more likely to see $5.00 than $3.00 corn next December-March. |