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Ethanol Plant Construction Stopped, Or Buy Cargill Stock

Cargill citing unfavorable market conditions, which reads as “corn is too expensive” announced it has stopped construction of an ethanol plant. Just one of four they were to have built in the Midwest.

Media reports have cited the slowdown of the ethanol industry, and the rising price of corn as factoring into the company’s decision. Cargill spokesman Bill Brady told the Topeka Capitol Journal Tuesday, “The economics are not at a point where we see fit to move forward. The economics are not where they were a year-and-a-half ago.”

He added that, “Unless market conditions turn around, we have to remain suspended.”

But before you cry for Cargill. Note this, the recent “energy” bill mandates the use of ethanol.

Mandates as in you will have to use it. The free market has just spoken, ethanol is not cost effective, however the Federal government has decided differently and will make it happen.

Which means, you’ll pay for mandatory ethanol at the gas pump at inflated prices, and you’ll pay for it in your taxes. You’ll pay for it at both ends. And you’ll pay for it at the pump in after tax dollars.

You’ll spend more in energy to make ethanol than is latent in ethanol and you’ll pay for the subsidies in your taxes and you’ll pay for it at the pump in higher “gas” prices.

You’ve been fleeced.

Here’s what will happen, Cargill has exited because it does not make economic sense. It will make economic sense when the Federal mandates kick in and THEN AND ONLY THEN there will be a shortage of ethanol, because it does not make sense to make it on an economic basis. The price will rise to unheard heights and we will foot the bill and pay it, because we will have no choice, because the Federal government mandated it.

You are about to be fleeced like you’ve never been fleeced before. From a fleecing point of view, fleecing is best when you are backed up by Federal law. Sweet.

Buy Cargill stock.

3 Responses to “Ethanol Plant Construction Stopped, Or Buy Cargill Stock”

1. Jcard Says:
   February 28th, 2008 at 2:08 pm

   Good post. I also love how they will blame the oil companies when the price of food and fuel go up.
   They ruin the free market, watch the consequences and then blame the market for the problems.

2. JOE Says:
   March 19th, 2008 at 1:36 pm

   TOO bad you can’t purchase CARGILL stock, its privately held and only available through it employee stock program

3. Matt Says:
   April 9th, 2008 at 5:51 pm

   It is true that using corn, wheat, soybean, etc. as feedstock for ethanol or biodiesel show little understanding from a commodity standpoint. However, when one considers the number of plants in the world to choose from as feedstock and then optimizes the biofuel chemical process, all it takes a degree in engineering (not business)to see the value in being self reliant on your fuel.

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