USDA Secretary Ed Schafer may be getting a hint of the heat generally reserved for higher-profile politicians after he seemed to suggest last week USDA was ready to help ethanol plants that had bet wrong on corn prices this summer.

His comments brought out sharp criticism from opponents of the industry.

DTN Ag Policy Editor Chris Clayton reported this morning that the program Schafer was referring to, the Business and Industry Loan Guarantee program, has been around for quite a while, and is not aimed specifically at ethanol.

In a related story, DTN's Washington Insider stated, "Some observers have been suggesting for some time that it has been remarkable that the 'losers' in the sector-wide restructuring caused by renewable fuels -- the hog, poultry and cattle feeders and milk producers, among others -- have not taken a more active political approach long ago. While there has been criticism from those subsectors -- and, support for the Texas petition earlier this year to slow the growth of renewable fuels mandates -- those complaints have been somewhat muted compared with those of food manufacturers, for example.

"The attention given this issue indicates that the political feelings of those producers -- about half of agriculture -- are much closer to the surface than previously imagined. And, it suggests that pressure for a more measured pace for renewable fuels production growth could be building within agriculture, and will need to be fully reckoned with by the new administration, whoever the winning candidate may prove to be, Washington Insider believes."

How is all this a Market Matter? As the events of this last month or so have made abundantly clear, politics and government involvement in financial matters appears to be on the upswing. If opposition to ethanol gains more political footing, what that might mean for corn demand has got to be a consideration.

Meanwhile, it's interesting to see a focus section and front-page story on ethanol today in the Financial Times.

The FT sums up the pain to investors of the industry's losses:

* Six of the biggest publicly traded U.S. ethanol producers have lost more than $8.7 billion since the peak of the boom in mid-2006 and Oct 1.

* U.S. tax breaks since 2005 for ethanol amounted to more than $11.2 billion, with billions more in direct state and federal subsidies for U.S. ethanol production.

* Fuels analyst Bob Starkey at Jim Jordan & Associates Houston research group told the FT the ethanol industry has "cost $80 billion to get to this point."

The FT did give the industry a chance to speak for itself, quoting the Renewable Fuel Association's Bob Dineen, saying, "I'd challenge you to find any energy resource today that isn't dependent on government support. ... If domestically produced energy is something that you want to have, then some of these subsidies are going to be necessary."

What shape the ethanol industry is really in is a topic that's closely tracked by DTN's ethanol specialist, Todd Neeley, who writes the DTN Ethanol Blog.

In comments today on the FT piece in the DTN Ethanol Blog, Neeley said, "While the construction boom for ethanol may indeed be finished, it isn't necessarily all doom and gloom for those companies already in production. For example, DTN's hypothetical 50-million-gallon Neeley Biofuels Inc. plant in South Dakota suffered losses for much of 2007. However, in recent weeks we've seen the plant return to profitability."