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Wednesday, April 11, 2007

TANSTAFL - Ethanol version

TANSTAFL - There Ain't No Such Thing As a Free Lunch - might apply to the ethanol issue. While relying on corn for fuel rather than the Middle Eastern (and other) folks sounds good, it is useful to remember that the corn crop is not a guarantee. Perhaps, in the end, the option to use crude is still available and that might make some people sleep better at night. Personally, I would feel a lot more comfortable with the ethanol "mandate" if it came from the market and not from the Federal government.

Why the gloom and doom this morning? The recent cold snap in the Southland has probably destroyed most of the peach crop and now there are concerns that the early planting of corn might have been damaged. For those of us who are non-farmers, it is worthwhile reading the following report from Southeast Farm Press, if only to remind us of TANSTAFL:
The Southeast is expecting a large corn crop for 2007, but a record cold Easter weekend storm may put a damper on this year’s crop. At greatest risk is corn planted during the last week in March.

If corn seed absorb moisture and freeze while in the soil the seminal, or seed roots, may be damaged or destroyed. The resulting underground corkscrew effect will cause some seed to not germinate and others to be stunted and non-productive throughout the growing season.

Overall, the extent of damage caused by the record setting Easter weekend cold weather will not be known for some time.

And Virginia Tech Agronomist Wade Thomason cautions growers against making a decision to replant too early.

"In Virginia, we are hopeful the warm soil temps prior to this cold snap will help buffer these cold air temperatures and that damage will be minor to moderate. At this point I think it's really too early to assess the full extent of the problem so it's too early to talk about replanting," Thomason says.


Yet another question the politicians likely never thought about: how do you move all this corn from Point A to Point B? Another warning of TANSTAFL:
"The implication to me is that there is going to be a huge shortage of barges, and I think barge freight rates are going to go through the roof," the president of Brock Associates, told producers at the Mid-South Farm and Gin Show. "A lot of this grain is going to be moved in August and September. Unless there is a drought and a shortage of corn, I think the basis will be awful come this fall."

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