Excellent read

[grassfarmer]

Here is a link to Kit Pharo's newsletter that I thought people might find interesting. There are good articles highlighting how the price of corn will negatively impact chicken and pork production way more than it need affect beef. Also an article by Jo Robinson on healthy fat.

http://www.pharocattle.com/Jan_Feb_2007.pdf

[cswilson]

There might be an upside to the great ethanol goldrush after all. I'm sure 'whine' production will be up in places. One thing about Kit he's always thinking-it's worth your dime to call him up and discuss the State of the Union-he's a knowledgeable and interesting guy.

[rkaiser]

Should have been at the ABP annual meeting Mr. Wilson - they were pouring drinking, absorbing and force feed tubing that whine. Missed my chance to meet Kit in Edmonton this fall but hope to get another chance some time soon.

[blackjack]

...if corn goes to 6 bucks and stays...that will mean a whole lot less cattle in my area...the land use will go from pasture or hay back into crop production or rented out to those that gamble to make a buck...heard some interesting news...germany has excess bio-fuels and are looking at export...makes me wonder how long the ethanol production will last...

[cswilson]

Long enough to break a few people-beef isn't the only thing third world countries can raise cheaply. Guess we'll wait and see where the punch comes from then roll with it.

[cowman]

The other day I met a hired hand of the local feedlot. I had heard a rumor that they were selling their cow herd(1200) and asked him about it? He said yea they are all going to Strathmore in March. He went on to tell me they were breaking up as much of the pasture land as possible and growing canola! Said in the big picture they were phasing out the feedlot(7000 head) too!
Now I've known the owner of this huge spread all my life and he is a very smart cookie and always seems to be ahead of the curve. He was into holistic management before anyone else I know. He grazed corn and turnips before anyone else. He grew trees(on a big scale) for the landscape industry. I gotta believe he knows whats coming.

[cswilson]

$4 Canola lol. When I worked for Bill Hunt in the early 80's we took a dozen Char bulls to a big outfit by Cereal-kind of like your guy-considered very smart-he was breaking up sod and selling cows to grow wheat-I don't think that was quite the recipe for success then either. Mind you volounteer Round Up ready canola makes great grazing so his neighbors should do all right.

[cowman]

Now I'll tell you this outfit has been around since a long time before the 1980s? These boys aren't a flash in the pan and will be in business probably long after you and me are both long gone!
Good business men who know how to make a buck!

[cswilson]

The outfit I was talking about was a third generation one also-it seems in Agri-ville.com a pessimist or a quitter is a good businessman kind of a contradiction in terms-we'll see I've outlasted a few guys who were smarter than me. I bet your fellow keeps his fingers in the cattle business too. Established farmers are having trouble making a go with Canola can't see a quasirancher hopping in and ringing the bell-I'm sure he'll shift some eggs from one basket to another but I bet he doesn't turn it upside down and shake it either.

[grassfarmer]

Cowman,
I understand the initial enthusiasm of farmers towards the ethanol story - they have been taking poor prices for their commodities for a number of years and suddenly commodity prices are rising. That's half the story - the other half is to consider why commodity prices were poor in the past and if this will impact them in future with ethanol. Commodity prices across all sectors have been poor in recent years, not because there was no market - have you seen prime beef cattle destroyed because there was no demand for them? have you seen grain left in the fields because no-one was buying the grain? The answer to both is no. There are buyers but because of the nature of the buyers (few and powerful) they can artificially manipulate the product price. Evidence of that is to be seen when you compare beef prices in store or oats price in the store and compare it to the price producers receive.
With that clear evidence why would you expect producers to get rich in ethanol production if corn hits $5 for example? History shows it is likely the return to the producer will remain the same, or even decline over time. Look at the current fertiliser price predictions on the commodity boards to give you an idea of where this new found wealth in ethanol will go - it isn't headed for producers pockets.

Ethanol production from grain or canola will prove to be biggest white elephant of our generation IMHO. If we want to be more environmentally friendly (which was originally the idea behind all this wasn't it?)it would be smarter to seed more marginal grain land in western Canada down to pasture and move hundreds of thousands of cattle out of intensive livestock operations in the Oldman, Bow and South Saskatchewan River watersheds.
This would result in less greenhouse gas emissions than burning 8 barrels of ethanol to produce 10 barrels of ethanol. Ethanol production as it is proposed using grain crops is very inefficient. The driving force is really the Government subsidy that will pay millions of dollars into the pockets of the few large processors that are running plants. Just the same as the current beef situation with Cargill and Tyson - I don't see too many beef producers out buying new John Deeres or extra fertiliser based on the price of cattle.