Allen Family Foods filed for bankruptcy last week putting another 1,600+ people out of work and we know why from today’s News Journal:
“…according to court filings, the company buckled under the weight of surging corn costs, which Allen and other regional poultry producers use as chicken feed.Its cost for a bushel of corn nearly doubled from spring 2010 to March 2011, from $3.65 per bushel to $6.70 per bushel…”
“For Allen, every $1 increase in the cost of a bushel added $10 million in expenses…”
So the destructive boondoggle of the purely political federally subsidized and mandated fuel ethanol program has claimed another victim. Politicians from both sides of the aisle have condemned the program as a failure and a waste of money.
It makes gas more expensive, has resulted in food shortages and riots worldwide, is costing tons of money for subsidies that we have to borrow from the ChiComs and Arabs, takes more energy to make than it delivers, is destructive to older engines (like my 1984 motorcycle and my lawnmower) especially boat motors and actually reduces your gas mileage.
The entire world is being victimized by this imbecilic program. It is too late for Allen Foods but can anyone suggest how these problems could be solved? Is it not obvious? Hmmm…
I have been wondering since I saw the Seanate vote to repeal the ethanol subsidy what this really meant. Would repealing the subsidy eliminate the requirement that our gasoline be adulterated with the stuff?
The answer is no! The mandate continues and the subsidy was scheduled to sunset at the end of the year anyhow. So the problem continues unabated and the Senate cynically claims credit that it cut a subsidy when it was ending anyhow. Without the 45 cent subsidy, I expect the cost of gas to rise although I think that the 54 cent tariff on imported ethanol also goes away. I don’t know whether cheaper cane sugar ethanol from Brazil is allowed to satisfy the mandate.
Good Wall Street Journal article from Friday: Ethanol Vote Barely Alters Biofuel’s Prospects
(I don’t know whether that link will work.)
As usual, it is all smoke and mirrors.