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Green Plains Renewable Energy CEO Todd Becker on calls to reduce or end the ethanol mandate.
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So get ready for even more sticker shock at the grocery store the department of agriculture's set to release its crop estimate tomorrow and is expected to -- Corn and soybean protection production potential for this year.
Will drop by at least 20%.
You know what that means.
Your food bills are gonna skyrocket if you asked me.
I can't thank mother nature for all of this I think that's -- producers should take a little bit of the blame here here to disagree with me is Todd -- president and Chief Executive Officer green plains.
Renewable energy Todd thanks for coming on tonight.
Thanks Melissa thanks for having us you know I think everybody is fighting over corn right now there isn't enough out out there in the market especially when you look at a crop report like what we're just talking -- seems like.
When you have.
You know people trying to feed the cattle you have -- for the table court for somebody different uses even to feed -- Mean that we shouldn't be using it for ethanol right now you disagree with that.
Of course I disagree with that I mean basically we're not running out of corn today there's plenty of -- and even today frost -- to feed all of these different different aspects of demand.
And -- -- -- tomorrow and and then let that let that tell us what's really gonna happen I mean the market.
This kind of taking care of itself right now and and tomorrow's a pretty big report as you mentioned.
But the market does not taking care of itself when you're watching prices go higher mean I think the average family -- are already being pinched -- everything else along the way.
Doesn't need the price of their food and their beef.
And everything that contains corn to go even higher right now it's the worst time -- to do it for ethanol when there's so much gasoline out there in the market right now because.
You -- gasoline demand is down because the economy is stagnant.
I don't think they would agree with you -- markets taking care of itself.
Well even as late as just for the Wall Street Journal reported that the average cost to the consumer only about twenty to thirty dollars a year increase in his food costs.
If you wanna do away with ethanol what -- gonna do away with as the cheapest fuel on the world today it's and it's the cheapest source of octane.
And so for for example ethanol basically produces what Libya produces -- and an equivalent basis.
When Libya Libya went down we -- oil prices go up -- our gas prices -- fifty cents to a dollar.
The real harm to the consumer and who is -- -- if that happens and they see their gas prices.
Average of 800 gallons a year and even just fifty cent to get a gallon increase -- gas for.
Did you know I got to stop you right there doesn't work and the Department of Energy it's not cheaper than gasoline and looking at the stats right here.
If you adjusted for the mileage that you get from ethanol right now today the price according to triple way it's four dollars and 35 cents a gallon as opposed to 366 for regular unleaded.
So it's not cheaper than regular -- total.
Only only know -- I tell -- sixty cents a gallon.
It's and natural oils are sixty cents a gallon.
While AAA is now looking at all the right statistics mean when they look at ethanol it's 10% of our fuel supply today -- trading at a discount to gasoline for the next three years.
And when you look at that is -- -- and you look at the octane that it makes our our gasoline.
It -- -- it actually drops -- gallon of gasoline to the consumer that the replacement octane is at least a dollar to two dollars -- have you do away with ethanol.
-- do with the way with the cheapest source locked in in the world and by the way the world's gonna want our our our ethanol.
The Department of Energy really -- -- these numbers original lancet said they believe in them I mean the Department of Energy is it is a big proponent ethanol and they.
Reprint these numbers from triple -- -- that it is more expensive the regular gasoline.
-- favorite have to agree to disagree on that because there's no way you're gonna count as an event -- that was so wrong and opus and triple -- and everybody who.
-- categorize is this I'm wondering -- 40% of the corn supply right now is going to ethanol would you agree that we should at least cut back on that a bit.
At this time when prices are going higher.
And -- cattle farmers are screaming for mercy cattle herders.
Well I think first of all you know -- obviously appreciate the -- guys -- having a tough time right now -- the calls for the reduction in the mandate.
Are necessarily coming from and recover from big corporate.
Cattle guys are big corporate hog guys and it's a bit self serving when they're asking the farmer -- Take less money on your lower crop let's kick you while -- down.
I don't think that's very fair to the US the US farmer.
Just because you're gonna see if you see a a drop in corn prices it doesn't actually mean you're gonna make less ethanol -- mean -- just becomes cheaper relative to gasoline.
So the market's gonna sort itself out there's several safeguards and renewable fuel standard today that are actually helping sort out the market today there -- the -- can blend.
20% in in forward years ago pioneer brands that they can use and not when their ethanol.
Already producing below the mandate the market is taking care of billions of bushels of corn demand right now and we'll see -- Storm yeah legal candidate by pushing the prices.
-- higher though I mean -- that's exactly what the problem is we don't need prices to go just right now with everyone's hurting.
But -- -- -- -- ethanol doesn't actually mean prices are gonna go down.
I mean as a -- It doesn't take about 40% of our product and you take away 40% of the demand -- we're talking about the market sorting itself out of core prices gonna go down.
Yeah but the problem is that the price of corn may go down a little bit for the price of gasoline is definitely gonna go up and up as well as -- -- back -- feeders sixty million tons of distillers grains which is a high quality animal feed.
That they've had the luxury of buying over last several years at a discount the corn.
And only ever really want to talk about the benefit from that perspective as well well.
That still means I mean even if you use that -- can you say they're giving back that portion of the 40% then you're still sorted out 25 to 30% is going to ethanol that's not very much better.
And the farmers not gonna plant them.
The farmers not going to plant the corn the farmer plant in 96 million acres this year because -- -- all whole range of demand.
If ethanol demand and away you will not plant the acres -- because the farmer can't be profitable it takes at least five dollars a bushel for the -- be profitable now because a fertilizer prices.
So just because you gets rid of one demand segment connection with -- find something else we're going to be in the same problem we just have to get through this crop cycle.
The market will sort itself out -- are ready sorting itself out we're -- producing below the mandate as an industry.
A lot of people -- name and the reason why -- want to talk about you don't want to repeal the mandate is because the -- realizes better off without it that prices are at a better level and we'll never get it back again that people on the ethanol industry -- -- -- -- that's necessarily true.
The mandate will never return go ahead.
Let me -- let me just kind of point -- -- out the only person has a monopoly -- the fuel tank and amended -- the fuel -- -- -- big oil guys.
They have 90% of our fuel tank guarantee.
Ethanol is the only single fuel ever in the history that has made an impact to reducing our dependence on foreign oil.
And and the big oil guys say they don't want to put more effort on the -- think because just takes every gallon tonight.
Sell to the retailer is a gallon that they don't sell to the retailer OK so from that perspective the only mandate in places in 90% -- -- -- big oil into our -- think.
-- -- I'm guessing we're out of time although I can't tell Todd -- thanks so much for joining us we appreciate it.
