bio energy getting bashed....again

[northfarmer]

comments this morning on my new services regarding cattle producers in manitoba crying foul agsint rising feed prices casued by the rising prices in in feed grains, and economists crying about food inflation are once again pointing the finger at subsidized energy production from bio fuel...granted this is driving some of the surge, but so is unabated demand for plant based oil globally, and not just for biofuel, historically low wheat carryouts......byproducts from ehtanol and biodiesel include high protein feed products so the feed value is somewhat displaced on the other end of the process....and the whining about food inflation, big flipping deal, very little of this can be attributed to the rising cost of the plant inputs, more of those rising costs reflect higher energy costs related to processing and distribution, never mind the ever stable and lavish profits made on value added after the farm gate.

....we have both a grain and cattle operation.....the cattle thing will settle out when the finnished meat prices adeqautely reflect the higher cost of the feed needed to get them to slaughter.....and for now, I plan on buying more cattle.....

for many years I gave sold my feed grains at below break even prices as that is where the market was at, when my feed wheat was netting me less than $2 a bushel i did not blame the hog producers and feedlots that were tunrning my cheap grain into market gains...

....grain producers need to clear up some of the misinformation picked up by the msmedia, anyone and everyone from big oil, environmentalists, and even our fellow farmers in the meat sector are taking up the battle of trying to influence public perception on biofuels and the rising cost of food...

..fact of the matter is that we do not operate in a completely free market environment. biofuel may be subsidized, but you are full of %$#@ if you do not think there are indirect and direct sources of public finanical support for most other forms of energy, from conventional carbon based fuels, hydro, nuclear and even wind......never mind the fact that we have terorrists runing around parts the world holding the developed world as hostages as they use oil and our access to it as leverage!

[jensend]

yeah you're right. we should go ahead with biofuels even though it's a bogus idea (to quote my favourite philosopher, jeff spicoli) just because you can't make any money growing feedgrains. if it's a bad concept on an energy balance basis it's just a bad idea. ask the europeans if it's good for anybody but the ethanol producers.

[craig]

Somewhere in the middle is likely a workable solution for everyone. We need a strong livestock sector but not at the expense of grain producers. We do need more demand for our grains especially to keep surplus supplies in check. There is demand in the energy sector and the bio fuels market needs to grow and adapt new technology. While you can argue the merit of bio fuels you could also easily argue the merits of grain production in western canada. Can you justify feed barley production for export when you add up all the transportation costs to get it to market. While I understand a common sense question re bio fuels I also understand that grain farming doesn't always stand up to the common sense argument.

[northfarmer]

biodiesel from canola has a positive energy balance.....the technology they are now using for ethanol production is not the same as it was twenty years ago, the efficiencies are way higher and that has tipped the energy balance but not to the same extent as bio diesel, biorefining and the use of crop based materials for the contruction of body panels for equipment and vehicles is here now and will only grow in the future....bio plastics and building materials....there are major global players including Cargill heavily investing in these technolgies..

......the point about cheap feed is that there should never be a place in time when we are foces to sell our grain, at well below it intrinsic value based on its composition of starch, protien, fibre and other components because narrow minded myopic people think we should only do what is in the sights of their narrow view.....i have done this long enough, and remember a time when based on the current technology employed, and the production efficiency utilized that extracting biutmen from the tar sands was uneconomic......$14 dollar a barrel oil, had a lot to do with that.......with oil breaching $90 a barrel equates to what oil value alone in a bushel of canola seed? never mind the other components?

we have built a whole livetock feeding industry based on the utlilization of low cost feed grains..that will have to change.....at the ILC at Calgary recently the thinking is that we will have to go back to 1985 numbers for out cattle herds, the economics of today will drive more cattle to finnished on less grain and backgrounded on more grass.....IMHO

[jensend]

i am sure we will see fewer cattle in canada and that won't be good for grain producers either. my point is that biofuels are probably a bad idea if they need to be subsidised with fossil energy or dollars. biodiesel is predicated upon $60 oil and $5 canola. if you figure it out that's about right because a bushel of canola produces about 8.5 to 10 litres of fuel. nobody has ever told me what the meal is worth but by the time you add in processing and trasportation this will very likely be a significantly subsidised industry. aren't we further ahead to burn the fossil fuels and eat the food? i can see the americans wanting biofuels because they are huge importers of energy but there is no real reason for canadian production. you can't pipe ethanol only truck it so be sure to add in that energy inefficiency in your calculations.

[Zaphod]

Does anyone know what the net energy gain from oilsands petroleum is? I think it's pretty low too, and there are plenty of subsidies involved there.

[northfarmer]

good point Zaphod......and exactly the point about comparing the value of bio fuels to the real cost of fossil fuels...the real oppotunity cost of extracting high cost non renewable fossil fuels, here in Canada and elsewhere opposed to the production of renweable fuels sources to power existing engines.....

..the intrinsic value of the byproduct meal from canola crushing is significant, i have seen financials on biodiesel from canola based on 8 to 9 dollar canola and 70 to 80 dollar oil that make good returns....

there will be fewer cattle in canada because our industry is based on primarily supplying the US market, they can feed cattle cheaper there than here beacuse they have lower feed cost at the moment, that frankly will not hurt my grain farm in the short term becasue the export market right now will pay more for my barley, canola, wheat, oats and peas than the domestic feeding market, even with the high cost of freight to get it to the markets..and the STE that governs some of these exports.....that certainly is not bad for my grain farms returns.....and if and when the cost of feed for domestic feeding of animals makes better sense economically I am quite certain the pens will fill again and the grain and/or byproducts of domestic bio fuel production will find the way into the bellies of animals here in canada...

to say that bio fuel, or bio refining does not makes sense because some self serving pr machine and the msmedia says it cannot becasue of subsidies and blah blah blah is a load of crap...just because Canada is a net energy exporter is poor logic, we export nearly the majority of everything everything we grow , harvest and extract.......conduct verifiable, quantifiable, non biased, finanical ,economic, and scientific evaluation of these technologies as to where they fit in the globes long term energy consumption alternatives, until then my mind will be open to the potential, not closed by someone else's myopic self serving self interest...IMHO

[TOM4CWB]

Wall Street Journal has this to say:

Cheap Shot at Toyota

Never underestimate the value of hypocrisy, which makes the world go around and the lives of social animals livable. But there's hypocrisy and hypocrisy. Herewith, a defense of Toyota and a slam of the ethanol lobby. Toyota suddenly finds itself in a position as whipping boy for environmental groups (its usual allies) only because it makes the Prius, sold as a "green" car, never mind that it burns gasoline like any other car. Brand imagery is hostage-giving, and the Natural Resources Defense Council and fellow rabblers now find it convenient to promote the storyline "Toyota = hypocrite" because the company recently signed up with GM, Ford and Chrysler to oppose a Senate bill mandating higher fuel mileage targets in favor of a House bill with somewhat less demanding targets. For an example of truly pernicious hypocrisy, forget Toyota and consider the ethanol lobby. It endlessly invokes global warming and energy security for a program that positively obstructs both, while enriching an industry that wouldn't exist except by government handouts. Two years ago, Congress was debating a new law forcing motorists to buy more ethanol. Two years later, oil has hit a near-record high of $90, but ethanol still can't stand on its own feet. Far from it. The industry is plagued by a glut and falling prices, while costs have gone through the roof because of the surging price of corn.

(Wall Street Journal commentary, Oct. 24, 2007)

(http://online.wsj.com/…)

Certainly a biased view expressed... if there ever was one... Corn prices are obviously not responsible for ethanol problems right now!

Adjusted for US currency... US Corn is close to mid range historical prices!

Who do these folks think pay for environmental advances and pollution/air cleanups over the last 20 years... the tooth fairy?

Why can't I buy a small diesel pickup with 50-100% better fuel economy... that are and have been avaliable since 1987 everywhere BUT in North America?

We CAN do so much more!

We in Canada could make up Road Trains like the Aussies do... US grain haulers are even further behind...

[northfarmer]

good point on diesels.....25% more fuel efficent than gas powered pick ups, when I wan in Brazil and Argentina the farmers there were driving half ton ford 4x4's with diesel engines.....why not N armerica, when they have them all over S America, Europe, and elsewhere in the world....

[just_wondering]

I would say that bio fuels are a WTO green way of getting money to farmers. (someone please correct if I'm wrong

and that subsidising usage is a much better policy than subsidizing production. in that production hurts farmers in the third world while usage farmers the world over

get the benefit from, through higher prices. If they want to grow food or fuel that's up too them

Every energy source in the world requires some govt support from favorable royalty rates in oil to wind farms subsidized by the taxpayer and everything in between

Cattlemen and ranchers were all to happy to take feed grain off my hands at lower than the cost of production, and once they increase prices of meat at the retail counter they will get their due.


And don't even get me started on how little we in North America pay for our food and how little of that gets back to the primary producer.

People are more than happy to have real estate with double digit gains, but if food goes up the s**t hits the fan.