Written 4/07 This is a picture of an ethanol plant. There are many of these in the area with quite a few others being planned and the ones in operation many of which are being expanded. I bring this up because the dynamics of this area will affect all of our pocketbooks. Last July(2006) we heard of recent land sales that were far higher than what was the norm of 3500 to $4000 an acre. We were not sure whether this was a fluke or not but what I found out this time is that it is not a fluke. Land is selling for that amount and has risen from that lower figure in a very short period of time. Cousin Jay has listed his 80 for $5,400 an acre. There was a recent land sale west of West Bend for $6,000 an acre. It is true that speculators from Chicago are buying land for the asking price sight unseen. The ethanol plant in Emmetsburg uses 100,000 bushels of corn a day. Palo Alto County which has some of the best land in the world cannot produce enough grain for this plant. This fall corn prices which traditionally were below two dollars a bushel went to four dollars a bushel in the same short time land prices escalated. Some operators have contracted two years out at $4.30 a bushel. When I left corn prices had dropped to about $3.50 a bushel. One of the benefits from the production of ethanol is that the byproduct can be fed to cattle at a 30% of the total amount of feed and that does help. The problem is some of these cattle get half drunk and go into town on Saturday night and raise hell. Said this in jest but today 1/27/08 this article suggests feeding this material may be the reason for so many e-coli outbreaks.
The reason I bring this up is that in the very near future the beef and pork you buy will be more expensive how much more is unclear. Right now there is tremendous competition between ethanol plants and the beef and pork producers. For some of these plants grain will have to be transported rather large distances. Greg's wife Lisa runs a supply center for one of the several companies that operates hog confinement operations in the area. Until recently this facility serviced 28 different operations. Recently that number has changed to 60.(it's now close to 80) When I say operation I mean this. Most operations consist of at least two buildings with many having three and there are some that I have seen that have four. Each building contains 1800 to 2200 hogs. In Iowa at county level these confinement centers cannot be denied and all permitting is done at the state level. It does not take much imagination to understand the problems that develop from the magnitude of this business. When the people who are involved in this as conservative as they are state that they are unclear on how all this will play out in the end you can be assured there is cause for concern.
