Ethanol advocate, Tom Cox, in a recent letter to the editor, made the point that because the adjusted Ontario corn basis hadn't increased because of ethanol production in Ontario, then ethanol was not harming hog producers.
Unfortunately, Cox ignores the fact that his "no change in adjusted basis" position, therefore means, by definition, that ethanol hasn't helped Ontario corn farmers one iota. And, if there has been no basis improvement for corn farmers because of ethanol, why are we subsidizing it? Cox is trying to have it both ways - he is also completely ignoring the fact that ethanol has done nothing to change Ontario's status as a net importer of corn, and that's exactly the point made by the George Morris Centre in reference to higher Canadian feed grain prices "relative to the US".
Indeed, because ethanol keeps us a net importer of feed grains, we're eventually going to lose both our hog, and livestock industries in Ontario. Hogs and livestock always gravitate to where the corn is coming from, and not the other way around. By believing Cox, Ontario corn farmers are eventually going to lose both the hog and livestock markets for their corn - then they'll regret their "affair" with ethanol. The simple fact of the matter is that we're either going to have an ethanol industry in Ontario, or a hog industry, but not both.
Stephen Thompson
Clinton
Comments
I didn't make it overly clear that I completely disagree with Cox's research methodology, and therefore, his conclusions The acid test of any research methodology is that it must produce believable results when applied to both sides of the equation, and Cox's adjusted basis methodology fails miserably.
Cox would be the first to object if someone used the zero change in adjusted corn basis to "prove" that Ontario corn farmers had enjoyed no benefit from ethanol, yet he uses that exact-same methodology to "prove" that hog farmers have experienced no harm from ethanol.
The fact of the matter is that Ontario farmers have enjoyed considerable benefit from corn ethanol, which is exactly the opposite conclusion to that derived from using the adjusted basis scenario. This means that since adjusted basis measurements are completely unable to measure benefit to corn growers, they are also completely unable to measure harn to the hog producers who buy that corn.
The completely undisputed facts of the matter are that firstly, corn ethanol has been of tremendous benefit to North American corn growers, but, secondly, corn ethanol has been an albatross to North American hog feeders - the key point is that we, in Ontario, unlike many hog producing areas in the US, were in a net import position for corn, even before ethanol came along. This means that, to Ontario hog farmers already already at a competitive disadvantage for corn supplies, ethanol, in effect, "kicked them when they were already down"
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