Wednesday, November 28, 2012

Dark no more...  

I am reading as much as possible about African development, politics, history, etc. in preparation to visit my friend's farms in Mozambique and Tanzania in February. One thing that keeps popping up in the news: China.
In 1997, Prince set up Blackwater, initially with his own money. That company received more than US$2 billion in contracts from US government agencies, including the Central Intelligence Agency and the State Department.
When asked how he turned Blackwater into a business success, Prince said Blackwater was a part of his history and Africa meant the future for him.
However, he said his experience in the SEALs and Blackwater developed his operational expertise for doing business in Africa.
"People come to Africa to help [Africans] to build up the capabilities there and to show them both know-how and capital," he said. "Our job is to put all these things together and make them good investment opportunities."
Prince has good connections in the US government and some African countries, thanks partly to his previous government-related career, which had its first beginnings as a White House intern under president George H.W. Bush in 1990.
"We are the search radar for [Asian investors] in Africa because we have the expertise and we know how to measure and control the risks," said Prince.
His new firm has made investments in countries including the Democratic Republic of the Congo, Guinea and South Sudan. [More]
Before reaching knee-jerk conclusions about neo-colonialism, I'm going to wait for a little more hard data and ground-truthing (literally).  But it's pretty hard to be open-minded when Blackwater is involved.

In a similar sense, a friend with a daughter in South Africa told him the Chinese were kind of the the "Kwik-E-Mart" entrepreneurs there, especially in small towns. In fact, they call them "china stores".
As I head to my woodshop...  

I wanted to share this deeply moving video.


Tuesday, November 27, 2012

Good theology, perhaps...  

But questionable behavioral economics. That's my read on Dan Murphy's reaction to Cardinal Tim Dolan's suggestion that Catholics adopt the practice of "Meatless Fridays".
One of the most prominent—some would say most influential—prelates, Cardinal Timothy Dolan of the New York City diocese, even attached himself to the losing ticket by giving the benediction at the Republican National Convention after Mitt Romney accepted his party’s nomination. Earlier this year, Dolan garnered applause when he introduced a group of Republican politicians, including Rep. Paul Ryan, at a special Mass he celebrated—despite the fact that many other bishops have been openly critical of Ryan’s proposed federal budget, calling it “immoral” because of cuts to food and other programs that serve the poor.
Now, however, Cardinal Dolan has a bigger idea, one that I believe ought to be seriously considered: He wants Catholics to change in their devotional habits and give up meat on Fridays all year ’round.
Of course, that was the law for practicing Catholics during the 1960s, and any kid who grew up back then can attest to the endless Friday fish fries that accompanied childhood.
Personally, I think it’s a great idea. And here’s why.
Giving up meat by itself doesn’t make one any holier or more devout, and even if Catholics took Cardinal Dolan’s initiative seriously, it’s a voluntary plan. Nobody’s going to be held accountable if a burger or a pepperoni pizza makes a Friday appearance on the dinner table, and given the compliance rate of Catholics with the church’s proscription against using birth control, it’s doubtful that many people would offer anything other than lip service to a call to ban Friday meat-eating.
But here’s why such a recommendation is valuable: You don’t sacrifice something that has minimal value, dietary or otherwise. Nobody would propose giving up carrots or graham crackers or even pasta, despite those products’ popularity. They’re peripheral, unimportant individually to our nutritional well-being.
Making it “mandatory” to give up meat on Fridays restores beef, pork and poultry to their rightful place as the centerpiece of our daily fare. Catholics pray to be provided their daily bread, but we all know that animal foods are more important, nutritionally and culturally, to our collective diets. [More]
I always reach back to Abraham and Isaac when the term "sacrifice" is used. I agree with Dan that true sacrifices must hurt, or they have no meaning. It is not a sacrifice to give from your surplus or to vote for policies that give to those in need. It is when you do without, at cost to your own well-being that you begin to understand why sacrifice required the best, the first, the dearest to have any beneficial effect.

That said, this cannot be good marketing news on the whole for a protein industry looking at flagging consumption and growing criticisms about the health and economics of meat-eating. Adding a day when the devout learn to adapt to meatless, and I would suspect cheaper, meals can only grease the slide toward leaving meat out on other days.

Perhaps becoming a special occasion dietary item is higher status. But it doesn't look like a sales booster to me.

Monday, November 26, 2012

Not helping...  

Doing some on-line shopping? Do you read the reviews? 

Notice how some don't really help?

[Many more - timesuck warning]

Sunday, November 25, 2012

Not just the right...  

I have long assumed it would be the hardline stance by the right that would finally, finally end our farm subsidy embarrassment. And certainly it has been stalwarts such as Jeff Flake and Ron Paul, backed by every conservative think tank I know about who have battled to end them.

But a darling of the left may be equally as adamant.
As a candidate for the US Senate, Elizabeth Warren showed a livelier interest in raising federal revenues than in cutting government spending. But about one spending target the senator-elect has been admirably blunt. When asked to name some items in the federal budget she’d like to see slashed, the first program she cites is one of the most indefensible: agriculture subsidies. [More
As the payout for this year's crop insurance grows to enormous numbers, and while record farm income (again!) is loudly proclaimed, if we can't end this "safety net" farce now, we won't get a better chance.

In fact, farmers have set themselves up for a one-two punch: loss of an excessive farm program and a bitter estate tax result. Both of these items look like ideal negotiating chips for both sides, compared to other cherished budget items.

Saturday, November 24, 2012

Why I think corn yields...  

Will be really, really hard to predict. From about 130 Iowa scientists, led by climatologist Gene Takle and signed by Elwynn Taylor, to name a couple familiar to farmers:

1. Globally over the past 30 years, there is clear statistical evidence that extreme high temperatures are occurring disproportionately more than extreme low temperatures. The climate likely will continue to warm due to increasing global emissions and accumulation of greenhouse gases.
2. In a warmer climate, wet years get wetter and dry years get dryer. And dry years get hotter that is precisely what happened in Iowa this year. We can expect Iowa to experience higher temperatures when dry weather patterns predominate. The latest science, based on overwhelming lines of physical evidence, indicates we can expect dry periods to be more frequent as soon as the 2020s.
3. Iowa also has experienced an increasing frequency of intense rains over the past 50 years (Iowa Climate Change Impacts 2010,, likely due to a higher surface evaporation in a warmer world. Because of these extremes in precipitation (drought and flood), Iowans will increasingly need infrastructure investments to adapt to climate fluctuations while developing and implementing mitigation. 

I have been trying to guess what one more strange production year would do in the ag economist community. My understanding is much of our belief in future yields rests on an assumption of weather being a factor whose average doesn't change very fast or much, so assuming past averages should work. Furthermore, as we saw last year, this assumption allows "outlier" years to be discounted as rare anomalies.

But how many 2012's will it take to start the hard work of generating a different weather assumption and its impact on national yields?

Meanwhile, the drought outlook doesn't seem optimistic.


And watching The Dust Bowl certainly doesn't reassure either.

Friday, November 23, 2012

Sentences of the Week...  

[Maybe a new feature. Maybe not.] Posted without comment:
  • "Someone once joked that the Tea Party Movement was my generation's punishment for teaching our parents how to use the Internet." [Link]
  • "Just in terms of allocation of time resources, religion is not very efficient. There's a lot more I could be doing on a Sunday morning." [Link
  • The workplace ranks dead last among the places people express gratitude, from homes and neighborhoods to places of worship. [Link]
  • Nevertheless, recent findings in happiness research appear to vindicate the wisdom of novelist Gertrude Stein’s wry observation, “Whoever said money can’t buy happiness didn’t know where to shop.”[Link]
  • If Karl Marx had been alive in 2007, he would have been working for a bank. [Link]
The explosive topic...  

Of over-screening, especially for breast cancer, just got some more evidence of misuse.
The reason is that no other medical test has been as aggressively promoted as mammograms — efforts that have gone beyond persuasion to guilt and even coercion (“I can’t be your doctor if you don’t get one”). And proponents have used the most misleading screening statistic there is: survival rates. A recent Komen foundation campaign typifies the approach: “Early detection saves lives. The five-year survival rate for breast cancer when caught early is 98 percent. When it’s not? It decreases to 23 percent.”
Survival rates always go up with early diagnosis: people who get a diagnosis earlier in life will live longer with their diagnosis, even if it doesn’t change their time of death by one iota. And diagnosing cancer in people whose “cancer” was never destined to kill them will inflate survival rates — even if the number of deaths stays exactly the same. In short, tell everyone they have cancer, and survival will skyrocket.
Screening proponents have also encouraged the public to believe two things that are patently untrue. First, that every woman who has a cancer diagnosed by mammography has had her life saved (consider those “Mammograms save lives. I’m the proof” T-shirts for breast cancer survivors). The truth is, those survivors are much more likely to have been victims of overdiagnosis. Second, that a woman who died from breast cancer “could have been saved” had her cancer been detected early. The truth is, a few breast cancers are destined to kill no matter what we do. [More]
As we grapple with health care costs, over-screening must be tackled. I don't think individuals are prepared enough to objectively make these decisions (although that can change slowly, perhaps) and it isn't in the medical industry's interest to find ways to decrease services rendered yet. So despite all the railing about some government body deciding when and whether to treat, that seems the most practical method. We already are habitual bureaucrat haters, so not much to lose there.

The other minefield to be cleared is late-life care. With about 25% of all medial expense paid out in the last year, something has to change there as well. Feeding tubes are one example.
The benefits of a feeding tube -- helping elders who have forgotten how to eat -- seem so obvious that it is used on one-third of demented nursing home residents, contributing to a growing device market worth $1.64 billion annually.
Except it does little to help. And it can hurt.
Decades after the tube achieved widespread use for people with irreversible dementia, some families are beginning to say no to them, as emerging research shows that artificial feeding prolongs, complicates and isolates dying.
The tale of the feeding tube, known as percutaneous endoscopic gastrostomy (PEG), is the latest installment of "Cost of Dying," a series exploring how our technological ability to stave off death creates dilemmas unimaginable decades ago, when we died younger and more quickly.
Food is how we comfort those we love; when all other forms of communication have vanished, feeding remains a final act of devotion. So the easy availability of feeding tubes forces a wrenching choice upon families: Do we say yes, condemning a loved one to dependency on a small plastic tube in their stomach? Or do we say no, consenting to their death?  [More]
We are losing any familiarity with the death process, and our fears of death simply override reason. Too much medical treatment complicates impending death.

Almost all dying patients, even those who are hand-fed, lose their interest in eating and drinking; this is the body's signal that death is coming, according to palliative care providers. If food is not artificially provided, patients typically die within two weeks, although exceptions are common. Lack of food triggers a biochemical process called ketosis, which actually blunts hunger and eases discomfort due to the release of natural morphine-like agents.
"We are putting in feeding tubes much too quickly," concluded Dr. Joan M. Teno of the Center for Gerontology and Health Care Research at Brown University Medical School.
"We're thinking: It's nourishment," said Teno, author of some of the field's most influential studies. "We don't think of the myriad reasons they cause problems." [Same as above]

Updating our medical POA's is clearly a necessary process to make sure those who care for us have emotional backup to make seemingly harsh decisions. Telling our children/spouse/etc. exactly what we think about our death process may seem gruesome and awkward, but the alternatives keep getting grimmer.

Socialist agriculture...  

Isn't pretty. But its end is even uglier.
The collapse of his farm is part of an even larger puzzle – the catastrophic decline of agriculture in the breadbasket regions of the former Yugoslavia. Food imports and prices are rising in countries that once fed themselves comfortably.
In the lush plains of Serbia, farmers are getting poorer, while their children migrate to the cities for work. In Croatia, agriculture today accounts for three percent of the Gross Domestic Product (GDP), compared to almost 20 percent two decades ago.
Trade liberalization and the current economic crisis bear some of the blame, as do the conflicts that tore the former Yugoslavia apart. But across the region, experts say it is corruption and mismanagement that have brought agriculture to its knees.
No soldiers traded gunfire over Mr. Zivkovic’s farm in eastern Croatia. Instead, its workers spent the 1990s fighting businessmen and lawyers for their tractors and orchards – the spoils of a privatization deal gone wrong.
“It was like a small war zone,” says Marko Tominac, an insolvency manager who tried to settle the farm’s accounts among Zivkovic and his colleagues. “Everybody was screaming that everybody else was getting the bigger part – including the workers.”
The privatizations of the last two decades were largely – but not universally – disastrous. A handful of the region’s largest collective farms have changed ownership and remained productive.
But most of the small and medium-sized concerns did not survive the transition from socialism. They were treated as the low-hanging fruit of the privatization boom – bought cheap, stripped bare, and discarded – by men who had little interest in agriculture. [More]
We've seen this before in East Germany as unwinding collectivization descends into blatant corruption not unlike hyenas at a kill. Usually party apparatchiks get in first, aided by a dysfunctional judiciary and non-existent law enforcement. It seems to take a generation to arrive at something workable.
Agriculture in Germany continues to bear the hallmarks of the divided country, with small and mainly family-operated farms in the west and south and enormous collectives in the east.
Gabel's Torney collective, named after a babbling brook that runs through the village of Pripsleben, is a perfect example, with 1,300 hectares of corn, rapeseed, barley, potatoes and beetroot, plus 300 hectares of pasture.
In addition, Gabel farms hundreds of cows, calves and pigs for meat, sold locally throughout the state of Mecklenburg-Western Pomerania in the form of salamis, hams and cutlets.
After what promises to be long and painful negotiations on the budget in Brussels, Gabel's half-million-euro annual support is likely to be slashed, said Frank Offermann, an agricultural expert from Germany's Thuenen Institute.
While some EU countries want the budget slashed, others want the funds redistributed. "In either case, the transfers to German agriculture will diminish," said Offermann.
If a proposed cap on the handouts per farm is introduced, "it will cost us 200,000 euros," said Gabel.
But he is not without a more modern plan B.
Rather than scrapping with the red tape needed for CAP handouts, he is busy hiring out the roofs of his barns for solar panels and his fields for wind energy turbines. [More]
I don't have a good feel about the odds, but it interesting to ponder what the aftermath of drastically reducing our peculiar socialized crop insurance safety net. How would the lending industry respond? How many would be priced put of the system by paying 100% of the cost, or ending the government role as backup lender?

My guess is crop insurance would be an agonizing decision for most, if not all, producers. That is how accurately underwritten insurance tends to "feel" - just on the borderline of cost and perceived risk. Would producers respond immediately or pay whopping premiums for a couple of years before observing those who didn't had an initial, say $100 to spend for cash rent?

Now factor in the insurance industry's growing recognition of climate change, and the business model for crop insurance could be very different soon. Our fledgling private insurance industry could have a headstart on creating products to fit these new circumstances.

I can imagine individually tailored policies to cover specific risks for specific times, for example. More likely will be the typical insurance market that prompts more high equity/relatively low risk operations to self-insure, which results in higher costs for marginal ground/more leveraged farms. I'm not sure we can fully predict what would happen, but judging from the de-socialization agonies in other countries, it will be very hard on many of us. 

If nothing else, the fiscal cliff and spending anger makes the idea of previously unthinkable outcomes for farm policy worth imagining.

Thursday, November 22, 2012

The rise of North America...  

To the consternation of many who are still struggling with the election result, the American recovery is still crawling along. Sign of doom are actually fading, the fiscal cliff not withstanding. And compared to the rest of the West, it is definitely more hopeful.


I will admit it is a remarkably boring, and still too slow, rate of growth, but maybe it is the best we can expect with US government austerity already underway for the past three years, which is a definite anti-stimulus.

But the real surprise for NA is right under our noses, cartographically speaking. Mexico is getting its economic act together.
Let's apply the "extent of the market" analysis to Mexico's improving fortunes. The focus of trade policy is certainly relevant:
By throwing open its market under the North American Free-Trade Agreement (NAFTA) with the United States and Canada and a host of other bilateral trade accords, Mexico has become a base from which carmakers export to both halves of the Americas, and worldwide. Volkswagen, for example, makes all its Beetles and Jettas there. Although Nissan produces some vehicles at a Renault plant in Brazil, most of those it sells in Latin America come from two plants in Mexico. In all, 2.1m of the 2.6m vehicles produced in Mexico last year were exported.
By contrast, in Brazil the main aim of public policy has been to push carmakers to build local factories from which to supply the country's huge domestic market. Only 540,000 of the 3.4m vehicles manufactured in the country last year were exported. Around three-quarters of Brazil's car exports go to Argentina. Mercosur, to which both countries belong, has long aspired roughly to balance trade in cars and car parts between the two.
I wonder over the long run whether other factors aren't also working in Mexico's favour. America's weight in Mexico's market potential may be rising thanks to rapid population and economic growth in America's Sunbelt. Cultural and social ties are almost certainly rising across the two economies thanks to large-scale immigration from Mexico. The prospects for substantial convergence in incomes north and south of the border look better than they have in some time: a fascinating and heartening development. [More]
So let's sum up. We have Canada to the north quietly, albeit slowly, steaming along, a slow but resilient recovery in the middle (US), and strong growth south of the border. Add in encouraging signs in the housing market, and the predictions of the hard right could be upended: things very well might get better.

Tuesday, November 20, 2012

Another reason...  

Everyone should do their own taxes. Clearly we don't understand how tax rates work.
Kristina Collins, a chiropractor in McLean, Va., said she and her husband planned to closely monitor the business income from their joint practice to avoid crossing the income threshold for higher taxes outlined by President Obama on earnings above $200,000 for individuals and $250,000 for couples.
Ms. Collins said she felt torn by being near the cutoff line and disappointed that federal tax policy was providing a disincentive to keep expanding a business she founded in 1998.
“If we’re really close and it’s near the end-year, maybe we’ll just close down for a while and go on vacation,” she said. [More]
Plenty of bloggers have jumped on this innumeracy - i.e. the above lady's tax rates would only go up on income OVER $250,000 - but hooting derisively doesn't solve the problem.
You see these idiots every time a tax hike becomes possible again. They have no apparent idea how marginal rates work. Right now, if her and her husband make $250,000, they pay at most a 33% tax on some of that income. If they made $251,000, they would have to pay the same rates for everything except that last $1000 -- that, they'd be taxed at 35%. If the rates increase across the board that top rate becomes 39.6%.
How do people still not understand that, and how does it color the debate over taxes? Barack Obama's managed to win two elections on a pledge to hike that top rate, and yet the people who don't understand it manage to get quoted every year. [More]
Maybe Kevin Drum has a slightly less irritating way to help: do the math for them.

But I agree with all of them that this inability to grasp the arithmetic of income taxes is a real factor in the public debate about how to resolve the upcoming fiscal confrontation.

My only thought on Petraeus...  

When did we become the Soviet army?

 And compare to Ike:

Some of 'em aren't even US awards. A good discussion here, here and here.

Sunday, November 18, 2012

Still the one...  

After 10 months of 2012, we've kinda lost track of how honkin' hot this year has been.  A little refresher:

 [Click to enlarge][Source]

Unless something bizarre happens soon, 2012 is truly going to stand out from the crowd.
The silence shortage...  

It is slowly dawning on me that the future may belong to people who can, you know, shut up. As a committed and prolific talker/writer this is doubly disturbing. But ubiquitous, instantaneous communications have changed the rules for public (and ostensibly private) utterances, and most of us haven't quite grasped the consequences.

It's not just gaffes - which should be in the running for Overused Word of 2012. It's seemingly innocent statements easily taken out of context, ad lib diversions from tightly scripted information controls, or just a collections of words that can be analyzed in convoluted ways by people like me with way too much access to too many minds.

Just this week we saw some missed opportunities, for example:
  • Mitt Romney, after a gracious concession speech, erased any doubt of his indiscretion with a remark he could have swallowed instead: "The president's campaign, if you will, focused on giving targeted groups a big gift," Romney said in a call to donors on Wednesday. "He made a big effort on small things."
  • Israel's Interior Minster thought it was a good time to channel Curtis LeMay: On Saturday, Israeli Interior Minister Eli Yishai was quoted by Israel's Haaretz newspaper as saying that the goal of the operation was "to send Gaza back to the Middle Ages. Only then will Israel be calm for 40 years".  
And I needn't mention Mourdock and Akin. 

Or so many seemingly smart people who somehow think their e-mails are private.

The New Rules seem to me to be: Everything is on the record and forever. The truth is out there but so is all the other stuff you think out loud about.

Reluctantly, I am forced to the conclusion that this century will belong to reticence and discretion, both individual and in groups. Simply remaining silent more often will pay off defensively as you will have less baggage to carry forward and more degrees of freedom. (Although to be fair, tolerance for opportunistic flip-flopping seems to be increasing - perhaps as a consequence)

Of course, these words will come back to haunt me, I just realized.

Thursday, November 15, 2012

Junkbox, Episode NDCHAOS...  

Back from ND (Minot and Bismarck) - it is a state full of wild stories and an agriculture in real upheaval.  More on USFR.  Stuff I found on the sitting in the airport.
If they move Black Friday up to tomorrow, what will all the women-folk do on the Friday after Thanksgiving? (Bless their little hearts)

Monday, November 12, 2012

Just a reminder...  

Recovering from and analyzing the implications of the election have been taxing (heh). Plus I was forced to spend some time in Las Vegas speaking to dairy producers.

But two recent items helped me makes some sense of these events.

First a reminder we are the Purple States of America:

 [click to enlarge] [Source]

I think shifting to this image from the red-blue digital mode is a better model for our brains to use. We have stark divisions enough without introducing an arbitrary and inaccurate choice of two options.

Today I also read something that may help explain why current events are so troublesome for many: the pace of change is really remarkable.
Whether we intended to or not, whether it was sufficient or not, whether we liked it or not, we have been living through a remarkable period of political change in these last few years. We have bored through so many hard boards that we’re no longer surprised when we reach the other side, and we mainly wonder why we haven’t gotten through more of them, or why we didn’t choose different ones. But viewed against most other eras in American life, the pace of policy change in these last few years has been incredibly fast. Historians, looking back from more quiescent periods, will marvel at all that we have lived through. Activists, frustrated at their inability to shake their countrymen out of their tranquility, will wish they’d been born in a moment when things were actually getting done, a moment like this one. [More well worth the time]
We do get tricked into forgetting all the changes we have seen. Perhaps we have become better at adapting. But there is a pace that discomfits us. I think we have met or exceeded that for many, and will continue to face difficult adjustments.

Sunday, November 04, 2012

Sleep well?...  

You may never know. 

A number of studies have shown that drugs like Ambien and Lunesta offer no significant improvement in the quality of sleep that a person gets. They give only a tiny bit more in the quantity department, too. In one study financed by the National Institutes of Health, patients taking popular prescription sleeping pills fell asleep just twelve minutes faster than those given a sugar pill, and slept for a grand total of only eleven minutes longer throughout the night.
If popular sleeping pills don’t offer a major boost in sleep time or quality, then why do so many people take them? Part of the answer is the well-known placebo effect. Taking any pill, even one filled with sugar, can give some measure of comfort. But sleeping pills do something more than that. Drugs like Ambien have the curious effect of causing what is known as anterograde amnesia. In other words, ingesting the drug essentially makes it temporarily harder for the brain to form new short-term memories. This explains why those who take a pill may toss and turn in the middle of the night but say the next day that they slept soundly. Their brains simply weren’t recording all those fleeting minutes of wakefulness, allowing them to face each morning with a clean slate, unaware of anything that happened over the last six or seven hours. [More]

I always liked Steven Wright's answer: "No, I made a couple of mistakes."

Saturday, November 03, 2012

Further into irrelevance...  

I was getting ready for fall speeches, now that harvest is finished. (Whew!) One of the curious trends I will be sharing is gasoline consumption.  In short we may be talking Peak Gas(oline).

 Of course, note that the scale makes the "hump" more dramatic than if it was based at zero, but still, it seems to me the advances in engines and stricter mileage requirements are having a big impact.

Now add in this unexpected trend:

(Apologies for the lack of source links - I forgot to load them with the pics)

In short, even with a recovery clearly in progress, we may not see gasoline consumption rise back to former intensity.  in fact, with even a few more CNG vehicles, although facing an uphill battle for acceptance, demand for gas could be dull at best.

That has big implications for the RFS. Also the upcoming changes in the RFS focused on biodiesel. Hence when Scott and Darrel did the math on the ethanol impact for corn, the arrived at a unexpected place, IMHO.
The biofuels era that began in 2006 helped propel corn and other crop prices to a new higher level that has been sustained for nearly six years. One might be tempted to conclude that this new era is coming to an end as corn consumption for ethanol levels out and corn production begins to catch up. Instead, it actually appears that the new era of higher crop prices could be extended well into the future as a result of the RFS for advanced biofuels that in all likelihood can only be met with a rapid expansion in biodiesel production. To gain some perspective on the potential size of this expansion, consider our projection of 3.113 billion gallons of biodiesel production in 2015. This would require about 23.5 billion pounds of feedstock when total consumption of fats and oils in the U.S. currently totals about 28 billion pounds annually. Consumption of tallow and grease, another biodiesel feedstock, is thought to be near 10 billion pounds per year. At the projected level for 2015, biodiesel would account for over 60 percent of fats and oils consumption from all sources. This compares to about 20 percent in in 2012. The new price era, then, would not be extended by rising corn demand, but by rising vegetable oil demand. Whether this scenario actually is realized depends crucially on the evolution of biofuels policy here in the U.S. and energy policies in Brazil. We will be monitoring these issues closely in the future. [More]
I just don't see how policy makers will let fuels compete this directly for food - unlike corn, which is largely for feed, we're talking human consumption of vegetable oils. Demand for same is strong, driven by oil-deficit nations beginning to upgrade diets. No longer is oil a drag on oil-commodity prices - it is often the driver these days.

The persistent assumption - and I admit it still seems reasonable - is corn production will resume what we thought was a permanent acceleration of yield, thanks to biotech, better tools and our immodest brilliance. Climate change may brutally revise those expectations for many of us, but it will take a couple more clunker national yields before we will address it, I would venture.

The battle over the ethanol mandate could replace Afghanistan as our longest war. And it may be not so much resolved as just quietly fizzling out. Oddly, perhaps the same as Afghanistan ends. Maybe the longer the conflict, the fuzzier the end.