Articles in this document:

· Exxon Profit Soars Again Amid High Oil Prices

· The corn conundrum: Which should come first, the chicken or the Chevy?

Exxon …trying to fight back the ethanol scourge

· AMI, Ag Groups, Send Letter in Support of Imported Ethanol Parity Act

Exxon Profit Soars Again Amid High Oil Prices

By DAVID BENOIT

Wall Street Journal

July 31, 2008 8:28 a.m.

Exxon Mobil Corp. reported a 14% increase in second-quarter net income as record high oil prices led the company to once again set the standard for the highest quarterly profits of any U.S. company.

The world's biggest non-government oil company had net income of $11.68 billion, or $2.22 a share, up from $10.26 billion, or $1.83 a share, a year earlier. The latest quarter includes a $290 million, or 5-cent, tax charge from the finalized Supreme Court decision on the 1989 Valdez oil spill.

Analysts polled by Thomson Reuters expected $2.52.

The company broke own record for income of $11.66 billion from the fourth quarter.

Revenue soared 40% to $138.07 billion, also a quarterly record, topping the first quarter's $116.85 billion.

Earnings at the company's oil-and-gas production unit -- the so-called upstream side of Exxon's business -- surged 68% on crude oil and natural gas prices. Liquid oil volumes fell 8%, with the loss of Venezuela operations and a Nigerian labor strike accounting much of the loss. Natural gas production was down 3.3%.

Profits in the refining segment -- Exxon's so-called downstream business -- fell 54% as margins slumped. Earnings in the chemicals industry were down 32%, also on margin declines.

Exxon Mobil spent $7 billion in capital and exploration projects, a 38% increase, as it looks to find more oil and more alternatives to oil.

The company also continued its ambitious stock repurchasing plan, spending $8 billion to reduce outstanding shares by 1.7% during the quarter.

online.wsj.com

The corn conundrum: Which should come first, the chicken or the Chevy?

by Barbara Murray, July 30th, 2008, 6:00 am

Bizmology

Native North Americans believed in the Corn Mother (the first woman to bear offspring, a kind of Eve). After the white man took over and tamed North America, corn became the Midwest’s gift to the country and the world – year after year of bounteous corn crops grown on rich farmland fed us and almost everyone else.

Now corn is a high-priced double whammy. At least it appears that way to the average American consumer progressing through an average weekend.

First, on the average American’s to-do list for the weekend: gas up the car. We all know the story on that. Suffice it to say the price of gas is out of sight. (Hummers, and even your run-of-the-mill SUVs are the dinosaurs of the auto industry — big galoots doomed to extinction but that’s another blog.)

Then on to filling the fridge for the week. A fryer from the supermarket, a gallon of milk from the convenience store – it doesn’t matter where you go. It’s costing more. And if our average American decides to see a movie – alas, even the popcorn at the theatre, never a bargain in the best of times, costs more.

What does corn have to do with all this? Lots. You see, in December 2007 the federal government passed an energy bill mandating that ever larger amounts of ethanol be used to run our vehicles. The bill was passed with seemingly good intentions (if not outcome). It was meant to reduce the US’s dependence on foreign oil and to help curb global warming.

But our lawmakers forgot to take into account that the product of choice for making ethanol in the US is corn, as in an ingredient that food manufacturers large and small turn into Aunt Jemima Syrup, Froot Loops, Fritos and hundreds, if not thousands, of other products. (There are other options for ethanol production. Brazil, for instance, makes it from sugar cane, probably no better a choice, as it is a food crop as well. But ethanol can be made from agricultural byproducts such as corncobs, straw and sawdust. Kraft and General Mills don’t use much of those in their plants, at least I hope not.)

Corn farmers supported the bill of course, but hey, here was a chance to make some extra income. The law awarded farmers money for every bushel of corn that was used for ethanol production. Ethanol manufacturers (everyone from agricultural giant, Archer Daniels Midland – the #1 ethanol producer in the world — to small newly formed companies created to take advantage of the government’s largesse) became preferred corn farmers’ customers, at the expense of long-time corn users/customers such as dairy and poultry farmers, beef ranchers who use corn for animal feed, and food and food-ingredient manufacturers who use corn for people feed.

(Big oil companies like Exxon are trying to fight back the ethanol scourge, no matter what it’s made from, but they seem to have lost their influence in this debate.)

The double whammy (a whammy we’ve smacked our own selves over the head with) is this: We use corn to make foods we eat, we use corn to fill the fuel tanks of our cars and trucks. Food vs. fuel.

It’s not nice to try to fool Mother Corn. She’s known for millennia what corn is for. It’s for sustenance. It’s for eating. It is her gift to us, a gift of food — for human, not transportation, systems.

bizmology.com

AMI, Ag Groups, Send Letter in Support of Imported Ethanol Parity Act

TheCattleSite News Desk

July 31, 2008

US - The American Meat Institute, joined by a number of dairy, livestock and poultry groups, has sent a letter in support of the Imported Ethanol Parity Act (S 3080), introduced by California Senator Dianne Feinstein.

The legislation, if passed, would reduce a trade barrier on clean and climate-friendly ethanol imports that could save American consumers money on a product that is mandated and at a time of record high gas prices.

"By reducing or eliminating the tax on imported ethanol, this legislation could ease the economic strain that is heavily impacting the agriculture, food and beverage industries," the letter notes.

"At a time when animal agriculture is facing pressures on many fronts, this slight modification could produce positive relief on record high corn prices."

The letter added that this measure paves the way to introduce ethanol produced from highly productive non-feedgrain inputs, thereby easing domestic feed and food price inflation concerns.

Internationally produced ethanol is often derived from sugar cane, which can produce more than twice as much ethanol than domestic sources from the same acre of land.

"While our industry would like to see the elimination of the ethanol tariff altogether, this legislation is a crucial step in the right direction," the letter concludes.

To view this letter in its entirety, click here: http://www.meatami.com/ht/a/GetDocumentAction/i/40629

thecattlesite.com