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Author Topic: ADM Hurt by Ethanol and Oilseed Back to Topics
antiguzzle

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Wichita

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Message Posted: May 2, 2012 12:54:41 PM

ADM Hurt by Ethanol and Oilseed

"Ethanol profit fell sharply as expected, as excess production and stockpiles continue to weigh on the market. ADM reported earnings in its bioproducts division, which includes ethanol, fell 69% to $37 million."

---OUCH! Everybody loaded up on the last round of the "gravy train" (see: subsidy) and now there is a glut of supply. Considering that ethanol is by-and-large a non-profitable industry without gubament support, it isn't surprising they would all over-produce throughout the final months of the subsidy.

"Poor ethanol margins "have slowed industry production, improving alignment of supply and demand," the Decatur, Ill., company said. ADM has said it would maintain production while waiting for poor margins to cause smaller companies to cut back. Chief Operating Officer Juan Luciano said Tuesday that scarce corn supplies could prompt some ethanol plants to halt production as early as this month, hastening the production cuts."

---As the industry continues to reel from having its umbilical cord snapped, you will see the smaller ethanol companies die off just as ADM is predicting. This is all normal because the synthetic ethanol demand was being propped up by the subsidy. This buys larger companies like ADM some time in the ethanol industry, but eventually they will cease to produce ethanol as well unless ethanol starts to make sense for the general public, which at this point, it still doesn't (see: gas mileage penalty and insufficient price disparity).
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borsht
Champion Author Oakland

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Message Posted: Jan 24, 2014 12:06:58 PM

The article says:
"Considering that ethanol is by-and-large a non-profitable industry without gubament support, it isn't surprising
they would all over-produce throughout the final months of the subsidy."

We have a government mandate for the use of Ethanol and they claim that ethanol does not have government support anymore!!!!

Isn't government subsidies purpose to assist in getting something good started. It should have a good business plan, and get government guarateed loans that they will pay back. if it was really great it should have started with private investment.
This ethanol crowd is looking a lot like the solar cell crooks. Just hit the goverment for money and run.

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RS101
Champion Author Minnesota

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Message Posted: Jan 24, 2014 7:09:21 AM

ok
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GM1954
Champion Author Illinois

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Message Posted: May 7, 2012 7:08:45 AM

"The only subsidies should be for national defense...nothing else should be Federally subsidized."

So you are fine with paying taxes upon taxes, like the fuel excise tax. Because, what you called an ethanol subsidy was, in reality, partial relief from the excise tax on the fuels you place in your car. With the ethanol
subsidy gone, more of your gasoline dollar goes for excise tax.

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Edpap
Champion Author Pennsylvania

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Message Posted: May 6, 2012 8:01:59 PM

The only subsidies should be for national defense...nothing else should be Federally subsidized.
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GM1954
Champion Author Illinois

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Message Posted: May 6, 2012 7:59:36 AM

"--OUCH! Everybody loaded up on the last round of the "gravy train" (see: subsidy) and now there is a glut of supply. Considering that ethanol is by-and-large a non-profitable industry without gubament support, it isn't surprising they would all over-produce throughout the final months of the subsidy. "

That would have been impossible. The "subsidy" is not paid to the producer. It's paid to the oil distributor at the time of retail sale. Furthermore, it's not as much of a subsidy on gasoline, as it is a tax break for not only ethanol, but gasoline and diesel fuel as well. The seller of ethanol fuel products receives a tax credit on road tax paid at the pump.

So, it wouldn't make any difference how much ethanol ADM sold. ADM or any other ethanol producer never received a "subsidy" in the first place. The Volumetric Ethanol Excise Tax Credit ended December 31, 2011. When that happened, you, the consumer, started paying more in road tax on ethanol, gasoline, and diesel fuels.

[Edited by: GM1954 at 5/6/2012 8:05:40 AM EST]
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chemist74
Champion Author Cleveland

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Message Posted: May 3, 2012 8:55:01 AM

Every government program offering grants, stimulus or tax breaks draws startups with poor business plans. When the sunsidies end, the companies with poor technology and business plans are forced out of business. The companies that can operate without the subsidies have earned the right to survive.
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