Believing they have a surefired recipe for economic success lawmakers from sugar producing states have been jumping on the Ethanol fuel bandwagon. The only problem it’s too expensive to make ethanol from sugar, or at least thats the conclusion of a recent report by the USDA according to Forbes:

Making ethanol from sugar could be profitable with the current high demand for the gasoline substitute, but it probably won’t be for long, the Agriculture Department said Monday.

“At this high, unusual price, I can conclude that it’s economically feasible to produce ethanol from sugarcane and sugar beets,” the USDA’s chief economist, Keith Collins, said at a news briefing. “However, I would not want to pour concrete based on $3-a-gallon ethanol prices” because the futures market predicts ethanol will drop to $2.50 by next year.

The report concluded that sugarcane and sugar beets were nearly 2 1/2 times as expensive to turn into ethanol as corn.

Aked why it is economically feasible for Brazil to use sugar in thier Ethanol industry the USDA spokeman noted that sugar is cheaper in Brazil. Anyone who has watched Striptease with Demi Moore knows why; Price controls.

above Demi demonstrates her mastery of Free Market Economics in a way that would make Adam Smith proud

h/t jiblog

This entry was posted on Friday, July 14th, 2006 at 3:37 pm by Chad and is filed under Your Tax Dollars In Action. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.