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Author Topic: Lies, Damn Lies, and Statistics… Back to Topics
jacksfan

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Lincoln

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Message Posted: Aug 29, 2012 12:23:36 PM

Our View: Lies, Damn Lies, and Statistics……

By Rick Tolman, NCGA Chief Executive Officer

The 19th Century British Prime Minister Benjamin Disraeli has been credited with pointing out that there are three kinds of lies: lies, damned lies, and statistics. While no one knows for sure whether he really said this, what we do know for sure is that we are experiencing a devastating and widespread drought in the United States that has decimated our corn and soybean crops and ravaged our hay and pasture lands across the Midwest.

It is easily the worst drought in our lifetimes, and many will suffer because of it. In particular, the livestock industry is being hard hit and with high feed prices and short supplies.

We also know that it is a time for agriculture to pull together and seek realistic solutions. The national media does not help when they continue to sensationalize the issue and report misinformation. Here are few examples where the national media needs to do a little homework and get the story straight rather than repeat what someone before them misreported.

Full article ...
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borsht
Champion Author Oakland

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Message Posted: May 26, 2013 9:45:27 PM

In December, 56.2 million gallons of ethanol were imported to the U.S. from Brazil, while the remaining 16.2 million gallons came from Caribbean Basin Initiative countries Jamaica and El Salvador. The ethanol shuffle, or Brazilian ethanol being imported to the U.S. while U.S. corn ethanol is exported to backfill demand in Brazil, was not unexpected.
http://ethanolproducer.com/articles/9387/u-s-ethanol-exports-down-from-2011-imports-continuing

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reb4
Champion Author Chicago

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Message Posted: May 26, 2013 7:05:16 PM

borsht, do you really believe that will happen???

Really?
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borsht
Champion Author Oakland

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Message Posted: May 25, 2013 11:28:16 AM

Another quote from Disraeli "“We have no permanent friend. We have no permanent enemies. We just have permanent interests.”
If ethanol is our interest, we must import it.
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borsht
Champion Author Oakland

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Message Posted: May 25, 2013 11:14:56 AM

It should be obvious that we can't supply all the ethanol we will need with the mandates requiring it. We will be importing ethanol form Brazil and other ethanol producers who can make it a lot cheaper than we can here.
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SoylentGrain
Champion Author Illinois

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Message Posted: Mar 21, 2013 8:11:10 AM

"It should be obvious that mandating that we must burn ethanol which is 100% dependant on food supply is pure idiocy."

Ethanol is not 100% dependent on food. It's dependent on grain. Furthermore, food production is just as much dependent on oil as it is grain. No oil, no food.

The difference is ethanol is domestically produced and the US is a surplus producer of grain. It's real simple. If the demand for grain increases, farmers produce more grain.
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tdioiler
Champion Author Detroit

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Message Posted: Mar 19, 2013 9:15:22 PM

"Statistics were once used for examples and insights, today they're used as proof and expected to be unrefutable fact...that's where the trouble is. "

well said panj, well said.
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FocusFree
Champion Author Ottawa

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Message Posted: Mar 19, 2013 8:11:19 AM

If Disraeli was still alive I bet he would add a fourth category, polls. As Panj notes, stats are now used as a proof and polls are the same. Both are easily manipulated to achieve the result desired. The Press, being inherently lazy, blindly follow along.
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panj
Champion Author Pennsylvania

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Message Posted: Mar 18, 2013 10:09:49 PM

Statistics were once used for examples and insights, today they're used as proof and expected to be unrefutable fact...that's where the trouble is.
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goldseeker
Champion Author West Virginia

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Message Posted: Feb 23, 2013 3:58:54 AM

"For me, if I must chose a poison, I'll pick the oil producers in this case."

Might I suggest you drink a shot of that precious oil on a daily basis and see how long you survive.
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borsht
Champion Author Oakland

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Message Posted: Feb 22, 2013 12:29:38 PM

It should be obvious that mandating that we must burn ethanol which is 100% dependant on food supply is pure idiocy.
Benjamin Disraeli also said regarding Britain, Britain has no permanent friends, it only has permanent interests.
I think this quote applies to those who manipulating our politics too.One may apply this to the oil companies, AND one may apply it to the CORN producers. For me, if I must chose a poison, I'll pick the oil producers in this case. Corn for fuel is totally flawed.
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SilverStreaker
Champion Author Twin Cities

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Message Posted: Feb 22, 2013 10:43:23 AM

More lies and damn lies: Industries try to stop higher-ethanol fuel
"A coalition of oil and food industry groups filed a petition with the Supreme Court Thursday asking it to overturn a lower court decision that said they didn't have standing to sue over a federal decision to allow more ethanol in fuel."
"The groups also claim EPA approved E15 before testing by the oil and auto industries had been completed. Earlier industry testing showed E15 could damage engines and cause vehicles that use it to break down."

This "industry testing" was determined to be "significantly flawed" by the US Dept of Energy: DOE questions accuracy of E15 testing
"most surprisingly, says DOE, CRC decided to select several engines already known to have durability issues, including one that was subject to a recall involving valve problems when running on E0 gasoline and E10"

[Edited by: SilverStreaker at 2/22/2013 10:48:48 AM EST]
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Banjoe
Champion Author Winnipeg

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Message Posted: Jan 10, 2013 8:13:06 AM

Thanks for the new link SilverStreaker.
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goldseeker
Champion Author West Virginia

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Message Posted: Jan 10, 2013 4:11:20 AM

Spot on.
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SilverStreaker
Champion Author Twin Cities

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Message Posted: Jan 9, 2013 1:59:59 PM

Good article, Jacksfan! The original link no longer works, but the article is available here
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MsPeachi747
Veteran Author Cleveland

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Message Posted: Dec 2, 2012 8:11:26 PM

What is rubbish?
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GM1954
Champion Author Illinois

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Message Posted: Oct 27, 2012 8:48:18 AM

"My point from the outset is that the article posted is nothing more than true double speak about the subject. Granted it may have not been written for the average man to understand but is typical of a lot of the double speak used to explain ethanol and corn."

This article is one of the simplest and most concise articles on current corn production I have seen. What part are you having trouble with?
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Jayburt
Champion Author Toledo

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Message Posted: Aug 29, 2012 7:27:08 PM

As brerra said, it's amazing how top leaders of oil companies can say 'gas should be higher' and then it is. Hurricane Isaac has nothing to do with the holiday weekend coming when they feel the need to gouge the consumer once again. But it's getting the blame for it even though as far as I can tell 1 refiner may shut down for a few hrs. to ride out the storm
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brerrabbitTX
Champion Author Houston

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Message Posted: Aug 29, 2012 6:02:52 PM

jacksfan,
Sorry, I did not mean to "jack" with you or anyone else. I traded natural for 15 years and currently work in the retail division of a international oil company. I understand how hedging works but with that understanding also know that some one, some where out there based on how farmers sell forward and ethanol producers buy forward that someone has to have the physical product for sale at the higher price that will allow the commodity side of the business to close out their poistions. Therefore someone who took a huge risk and speculated by buying what the farmers hedged and not locking down their sale through a futures position sale are going to make out like bandits on this deal. So the reality is a lot of corn will in fact transact at the $8 number.

My point from the outset is that the article posted is nothing more than true double speak about the subject. Granted it may have not been written for the average man to understand but is typical of a lot of the double speak used to explain ethanol and corn. The most interesting part of all was that ethanol producers are operating at a loss and will continue too. From what I can see this is because their buyers, basically gas players have said we will pay x and no more because if you cannot maintain a certain spread to gas then it doesn't help the gas guys and its a really big black eye for the ethanol industry. What it points to is, is ethanol really the alternative fuel going forward or merely a stop gap till we figure something better out. If producers are losing money and people are screaming for an exception to the renewable fuels act now, how can we depend on corn based ethanol going forward.

Then entire case presents a lot of "food" for thought.
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jacksfan
Champion Author Lincoln

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Message Posted: Aug 29, 2012 5:02:14 PM

brerrabbitTX, commodity markets and marketing and risk-management tools are complex. Here's a scenario:

A lot of corn farmers forward contracted (sold) their 2012 corn crop (or a significant portion of it) earlier this year or last year or maybe even two years ago for delivery after the 2012 harvest. At the time, $5 or $6 per bushel looked like a pretty darn good price, especially since they knew corn acres would increase and likely drive up supply. Then the drought hit. Some farmers won't harvest enough corn to meet their contracts. They'll have to buy some $8 corn to fulfill their contract for which they received $5 or $6 per bushel.

As for the ethanol plants, many likely bought some of that forward contracted corn as a risk management tool on the chance prices would go up. Most likely thought -- like the corn farmers -- that production would increase supply and corn prices would be lower, so they didn't want to overbuy. Now ethanol plants have processed that lower-priced corn they bought or are waiting for delivery of the 2012 crop that they bought on contract. Either they temporarily shut down or they buy some $8 corn in the interim.

Corn is a commodity. Ethanol is a commodity. There are lots of risk-management tools available to buyers and sellers. I don't pretend to understand any more than the most elementary of them. Basically, those corn farmers and ethanol plants with the most savvy risk managers are making money whether the markets go up or go down.
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brerrabbitTX
Champion Author Houston

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Message Posted: Aug 29, 2012 4:03:41 PM

From the article:

We empathize with those who are victims of this devastating drought. Corn producers who do not raise a crop do not benefit from higher prices. They are victims as well. Corn producers know that $8 corn is not sustainable and serves to destroy the demand that they have long worked to help develop. Much investment by the U.S. corn sector has gone into supporting and promoting the U.S. livestock industry. They are indeed our best customers, and indeed many of our growers raise livestock and are hit by higher prices and reduced feed availability. We feel their pain.



In turn, we feel the pain of the ethanol industry. More than 20 ethanol plants have had to shut down or significantly cut back in response to high corn prices. And the losses in the export market due to current high prices will take years to regain.

So is this double speak? I really don't get it. No one is getting $8 a bushel for their corn, but corn producers know that $8 a bushel is not sustainable but no one is getting that much and in turn they feel the pain of the ethanol industry that has shut down or reduced production at 20 plants in response to high corn prices.

I really do not understand this article. Logically it takes you in circles and dumps you out the back door more confused than you were when you started reading it.

So who is getting the high prices because by gosh he said they are high?

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brerrabbitTX
Champion Author Houston

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Message Posted: Aug 29, 2012 3:55:21 PM

"Nowhere. As he stated, "Very little corn has traded, or is trading, at $8""

Then why are ethanol producers losing money? And if there is very little being traded at $8 that suggests it is trading closer to $5 to $6 and that would mean ethanol producers are losing money at that level. So how much do they lose at $8.

I am full blown gonzo confused at this point because if I was losing at $5 and it looked like my cost was going to $8 then I would seriously be considering closing the doors on the place.
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jacksfan
Champion Author Lincoln

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Message Posted: Aug 29, 2012 3:05:26 PM

"So my question is simple where is the $2 to $ 3 dollars going?"

Nowhere. As he stated, "Very little corn has traded, or is trading, at $8"
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reb4
Champion Author Chicago

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Message Posted: Aug 29, 2012 1:26:18 PM

BrerrabbitTX, don't believe any direct indication is being made that ethanol producers are paying $8 for corn... Now I know why the ethanol industry does so well with the congressman and Senators...

[Edited by: reb4 at 8/29/2012 1:31:58 PM EST]
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brerrabbitTX
Champion Author Houston

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Message Posted: Aug 29, 2012 12:54:43 PM

Quick question. Who is getting $8 a bushel for corn then? He spends time explaining that farmers are not, they are gettin $5 to $6 but then turns around at the end of the article and says ethanol producers are losing money because they have to pay $8 a bushel for their corn to make ethanol. So my question is simple where is the $2 to $ 3 dollars going? He does not explain that piece.
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stickyvalves
Champion Author Iowa

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Message Posted: Aug 29, 2012 12:34:37 PM

Spoken like the CEO of the National Corn Growers Association should speak. He has used statistics to his purpose as he should.
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