The Good Old Days

Two prices of long ago came up today:

• the penny postcard. (It went to 2 cents in 1951)
• gasoline for <$.30 cents. This was before OPEC got powerful in the 1970's.

Bloomberg on Vertical Farming

 Here's a skeptical article from Bloomberg on the economics of vertical farming.

The issue is mostly the cost of energy usage--if you have cheap energy and efficient lights (LED) you can grow leaf vegetables and herbs, charge a premium price, and break even.  That's state of the art today. What happens tomorrow?

Interesting--as I write this I realize I've not been an enthusiast about vertical farming, but I have about sources of renewable energy.  My theory has been that the learning curve for innovations in solar panels and battery storage will work to drive the cost down below carbon-based fuels.  That seems a tad inconsistent with my lack of faith in the same factors in vertical farming.

Maybe I'll be around long enough to see what the results are.

1970's Oil Shock

Noah Smith has a piece in Bloomberg, describing the 1970's rise in oil prices and attributing several structural changes in the economy to that cause.   This shows gas prices over the last 100 years.  In 1968 when I first began driving as a civilian prices were $.34 a gallon.  Sometimes you had gas price wars, which would drive the prices even lower. Stations might offer premiums, like steak knives, for filling a tank. (Back in the day, banks used to offer premiums to open savings accounts, since interest rates were capped--but that's another subject.) We're still using a couple knives I got back then.

By 1980 the prices had risen to $1.19--tripling in price. That's after embargoes and long gas lines as people panicked (rather like the toilet paper shortages this spring). 

Linking "Vertical Farms" With Microgrids

If I understand this article, a microgrid is a set of power generators dedicated to supplying a set of power consumers.  When the generators are a combination of solar and natural gas and the consumers are "vertical farms" there might be a workable and economic combination.  Vertical farms use lots of energy (the old dream of using sunlight which I laughed at years ago seems now defunct).

The big advantage of a microgrid is that it can be installed along with the vertical farm, so you don't rely on the power company to have the capacity to support your farm.  The microgrid operator can guarantee a price, making it easier to figure out your business plan.

Seems to me in the long run the microgrid is not the best solution.  Vertical farms need a lot of energy and for many hours in the day (apparently if you blast a seeding with light for 18 hours a day instead of 6 you get more growth--that's my impression). But it strikes me that plants are relatively forgiving, which means if you're operating a smart transmission system, vertical farms could easily be cut off when the system gets overloaded for some reason.  See this.

I assume it's also true that there are economies of scale in power generation.  Such economies should mean a power company could undercut a microgrid in many cases.

The article notes it's not clear what price for electricity would enable vertical farms to make a profit.

We'll see.

Jimmy Carter Reconsidered I

I'm reading "President Carter: the White House Years" by Stuart Eizenstat, who was Carter's main policy adviser in the White House.  So far about a quarter through.  It's well written, although it could use closer editing--in a couple places there's near repetition of content/points just pages apart.

That's not really important.  The big issue in the early days was energy, which Eizenstat claims Carter changed national energy policy drastically and permanently.  I'm not convinced yet, but I did run across this graph from AEI, which shows a dramatic drop in energy imports spanning 10 years from Carter's term through the end of Reagan's. 

I may post more later on Carter.

Wind Farm Off Mar-A-Lago? Definition of Zero

What's the chances that the Interior Department will permit an offshore wind farm in viewing distance of Mar-A-Lago?  (The link discusses the administration's leasing of areas for such farms.) I think the answer to the question is "zero".

Texas Runs on Wind?

Texas under governor Perry has rapidly developed its wind resources, of which it has plenty.

Organic Does Not Equal Locavore

A Bloomberg piece on the importing of organic grain from Romania and India.  It's certainly not energy-efficient.

This is related to the next post on Costco springing for the costs of converting farmland to organic.  I'd interpret both as saying the price premium for organic is promising enough to warrant these measures.  I'd also guess there will be at some point down the road an overbuilding of organic capacity, because farmers usually overshoot their market corrections.

Pot-Filled Fantasies of Farming

Treehugger has a post on "sunless farming" (not vertical):

The idea is to figure out how to grow crops in these regulated indoor places so that anyone can grow crops anywhere -- from buildings placed next to supermarkets and malls, to high-rises with a spare floor to rent, and so on. The researchers believe that any space of 1,075 square feet set up with the right equipment and layers of plants could provide a fresh diet of produce to 140,000 people.

Amazingly, some people actually take this seriously.  Maybe they're smoking pot, which by the way is the major crop which is already being grown under lights.  This Freakonomics post links to research on the energy demands and carbon dioxide impact of our current marijuana industry. Two paragraphs:

California, the mecca of medical marijuana, is by far the worst offender. There, the indoor pot industry is responsible for about 3 percent of the entire state’s electricity use, or about 8 percent of all household use.

Some of the biggest growing facilities have a carbon footprint on par with many industrial medical and technology operations. According to Mills, a typical indoor marijuana growing facility has “lighting as intense as that found in an operating room (500-times more than needed for reading), 6-times the air-change rate of a bio-tech laboratory and 60-times that of a home, and the electric power intensity of a data center.”

Fight Global Warming: Legalize Pot?

 A headline on a post at Treehugger says 1 percent of US electricity goes to grow pot!  So I'm waiting for the green movement to push legalization of pot as a way to move growing pot outside and save electricity for higher purposes, like maybe tanning salons.

Washington Monthly and the Food Movement

The new Monthly has an article on ethanol and agriculture, incorporating many of the food movement's arguments: Here's a key paragraph:

Let us suppose, for example, that we paid growers like Picht to minimize deep plowing and to plant winter-cover crops so as to prevent erosion, filter pollutants, and build up the soil; to practice rotations of alfalfa, clover, vetch, peas, and other nitrogen-producing plants to minimize the need for chemical fertilizers and pesticides; to grow not just monocultures of corn and wheat and soybeans, but more fresh fruits and vegetables, which currently receive almost no subsidies.

There's two problems with this proposal I'd like to point out:

• if you convert from a corn/soybeans rotation of some sort to include alfalfa...etc., over 10 years you're losing some percentage of your total production.  That means you have to find more land to grow corn and soybeans on.
• the conversion also gives you a large quantity of alfalfa, ...etc. for which there currently is no use.  Either you destroy the prices received by current alfalfa...etc. growers or you have to find a new use for the produce.

Politics Makes Strange Bedfellows

The greens foodies regularly bash the plutocrats of agribusiness who push processed foods down our throats.  But they don't think much of corn-based ethanol, which means they wake up in bed with:

“But when Illinois and Missouri members of Congress opened a new effort recently to extend the tax breaks, a phalanx of opponents quickly mobilized. They include the Grocery Manufacturers of America, the American Meat Institute, the National Council of Chain Restaurants, environmental organizations and pro-taxpayer groups.”

From Farmpolicy on ethanol

Farmers Can Be Optimistic, But Doubling in 5 Years?

From Chris Clayton's post on House Ag hearings:

Rep. Stephanie Herseth-Sandlin, D-S.D., also highlighted that technology is expected to continue boosting farmer yields for corn dramatically in the next five years. Secretary of Agriculture Tom Vilsack reiterated this perhaps a dozen times in his testimony. So if technology is going to allow corn yields to soar, perhaps come close to doubling, then why do we need an arbitrary 15-billion cap on corn-based ethanol in the Renewable Fuels Standard?

Of course, I may be misunderstanding this. But if corn yields are at 150 bushels or more, it's taken about 35 years for them to go from 100 to 150.

I know I'm old and have my head in a dark place (as Tom von G used to say) but when I hear of corn being used for ethanol I've just the beginnings of the same qualms I have when I hear of good farmland growing houses. Corn is for food. Yes, I know better, but that's my upbringing.

Saving Energy, One Woman's Experience

Liza Mundy has an article in today's Wa Post magazine on her household and her attempts to save energy. She digs into some issues, points out some of the problems in cutting energy usage (i.e. her daughter and son have very different tolerances for low temperatures), and is amazed by how little it costs to do so much. (She's thinking as a professional woman freed from the tedium of washing, ironing, etc. etc.)

The household ends by adopting some conservation measures and resolving to spend on their biggest problem--they live in an old house in Arlington, VA, which wastes heat and cooling. That's pretty much the conclusion: focus your energies on the biggest consumers, usually heat/cooling.

Tire Gauges and Sweaters

The Republicans are mocking Obama with tire gauges, every since he observed that increases in energy efficiency could save more energy than drilling for oil (was it off-shore, or ANWAR--I haven't really followed).

Recalls when Jimmy Carter was mocked for wearing sweaters in the White House, turning down the heat in winter, and engaging in energy saving measures generally. Then, of course, there's that President who put solar panels on the White House and went with geothermal heat pumps for his summer house. (Oops, that's GWB, but both sides want to forget about him.)

Bottom line--it's easy to mock, but efficiency is the way to go.

High Gas and Rural Life

The NY Times has an article on the impact that high gas prices have on rural areas. The focus isn't on agriculture, but on those who have to commute long distances. The data is tied to median incomes, and the percent of income represented by gas, so the poorest counties are the hardest hit. Here's a graphic, just in case the article doesn't link to it. Essentially lower New England through the Mid-West is less affected, the cotton South, NM, WY, MT are most affected (up to 15 percent of income on gas).

Whither Corn?

I keep thinking, been there, done that. This farm economy is just like the 1970's. But maybe not. From farmgate:

The energy bill signed into law will have greater impact on farm commodity prices than any farm bill being considered," says MO economist Pat Westhoff at FAPRI. “Mandates to use set levels of biofuels increase demand for corn and vegetable oil and affect market-driven prices more than current or proposed farm bills.”