Wednesday, December 26, 2012

Got Milk?

I hope everyone had a wonderful Christmas. We had 14 family members over. We began with a smorgasbord of snacks and appetizers, which normally would have fed everyone there for a weekend. That was followed by prime rib, mashed potatoes, gravy, candied carrots, and fresh green beans. For dessert there were pies - acres and acres of pies. I think it averaged out to one pie per person. It was all washed down by copious amounts of beer, wine, liquor, coffee, and milk for the young 'uns.

Which brings me to the topic of this post - good, wholesome, All-American milk. Enjoy it while you can, because thanks to our elected loons in D.C., you might not be able to afford it much longer.

'Dairy cliff': Milk prices may double in New Year
With Congress spending all its time trying to avert the fiscal cliff, a slew of other legislative matters are going unattended. One of them is the agriculture bill which, if not addressed, could lead to a doubling of the price of milk early next year.
We have two teenagers in the house who go through milk like I go through Shiner. A gallon of milk lasts two days around here. If the price doubles, we'll be spending between $21-$28 per week on milk alone. And that doesn't even include ice cream!
...the law states that if a new bill isn't passed or the current one extended, the formula for calculating the price the government pays for dairy products reverts back to a 1949 statute. Under that formula, the government would be forced to buy milk at twice today's price -- driving up the cost for everyone.

"Consumers are going to be a bit shocked when instead of seeing $3.60 a gallon for milk, they see $7 a gallon for milk. And that's going to ripple throughout all of the commodities if this thing goes on for an extended period of time," (U.S. Secretary of Agriculture Tom) Vilsack said.
It should be noted that increases in food and dairy prices were triggered several years ago by federal policies mandating increased use of ethanol as a fuel. Most ethanol is produced from corn, which also happens to be a feedstock for cattle and poultry. In fact, since 2007 food prices have increased at twice the rate of inflation, in large part due to diversion of corn from the table to the gas tank.

How bad is it?
Using current numbers, this year's ethanol mandate would theoretically require 44% of this year's corn crop.
Even the U.N. has urged the U.S. to ease up on its ethanol fuel requirements.

To make matters worse, ethanol isn't an efficient fuel, and damages internal combustion engines.
Alcohol is corrosive and attracts moisture, properties that can threaten mechanical parts.

Alcohol has a high-octane rating, and engines designed to exploit that can produce significant power. But alcohol also has considerably less energy content than gasoline or diesel fuel, so mileage drops as alcohol content rises.
And ethanol is absolutely devastating to small engines, like those in lawn mowers, weed eaters, or chain saws.
In smaller engines, ethanol can create a chain reaction of events that end up clogging valves and rusting out small metal parts — including, crucially, carburetors.

“When you mix ethanol with your fuel, you’ve now put a chemical substance in there that’s going to attract moisture, which is going to promote a quicker deterioration of the fuel that you have,” said Bob Magnotti, owner of Magnotti’s Small Engine Service in Roanoke, Va.

In effect, said Doug Ryms, a mechanic at Como Mower Service in Columbus, Ohio, “the alcohol actually dissipates the oil. So on a two-cycle engine, you’re lubricating the engine, but the oil is being pushed away, so it’s actually not lubricating the engine.”
I started off talking about how congress has screwed up dairy prices, and somehow got off into a rant about ethanol. So to bring this discussion full circle, here's what the congresscritters need to do.
To prevent the price spike, Congress either needs to extend the current bill, pass a new bill, or enact some provision to keep the 1949 law from taking effect.

Given the current state of the fiscal cliff talks and Congress' inability to get things done in general, dairy lovers might want to stock up now.
Of course, another option is for our elected idiots to entirely do away with price subsidies and ethanol mandates, and embrace free market principles.

Don't hold your breath...


Bear said...

If I thought that us dairy farmers would see any of that increase, I'd be in favor. I highly doubt any of that will make it's way into our wallets though.

Our elected idoits embracing free market principles? I guess we can dream, can't we?

Bear said...

Shit. *its

Anonymous said...

I buy my gas at the coop or our propane distributor. It's ethanol free. Otherwise I have to go to Oklahoma. Mel.

CenTexTim said...

Bear 1 - as I understand it, the dairy farmers wouldn't double their profits. Much of the increase would go to the large conglomerates that 'produce' and market dairy products. And yeah, the free market sadly remains just a dream.

Bear 2 - grammar nazi...

Mel - I didn't know you could get ethanol-free gas at coops or propane dealers - or in OK. I'll have to look into that. I drive a 17-year-old pickup that isn't real happy with fuel containing ethanol.

kerrcarto said...

Congress likes to be on top. Because all they can do is fuck up.