In simple terms......the CWB is a joke

[Vader]

furrowtickler,

good advice - you might consider underseeding your cereal to clover and then plowing it down in your summerfallow year. Grow your own nitrogen and avoid the astronomical cost of N fertilizer as it spirals out of sight along with natural gas.

25% less production across the continent and in other grain exporting countries should have some impact on prices.

[silverback]

You will have to forgive me for not feeling too sorry for someone who is dropping from 5000 seeded acres to 3750. Some farmers who are seeding 1000 - 2000 acres need to have that land working for them most of the time. In many areas there is also not much chance of buying more land unless daddy is passing down lots of free and clear land, and renting land to try and make a couple of bucks an acre is what a guy has to do.

I am glad you guys are able to drop your production because you don't need it, but many out here can't.

[Vader]

silverback,

you are absolutely right. Many of us are in a position where fixed costs for machinery payments, land loan payments, and just putting groceries on the table dictate that "x" number of dollars are required each year. Given that commodity prices are such as they are that results in the need that every acre they own be producing.

What I am saying is that this cycle will never end (higher production accompanied by higher input costs, and leading to lower commodity prices). It is a game of musical chairs and each year more farmers will fall by the wayside.

An old saying goes that you are either part of the problem or part of the solution.

To me the solution is not finding more markets for this "commodity". The solution is to reduce the supply of this valuable food product and get fairly paid for it.

It is a tough nut to crack. How do you get farmers to voluntarily reduce production. As long as individual farmers cannot find a path to reduce food production while maintaining their cash flow it will not happen. In fact higher commodity prices are counterproductive as this only leads to increased production.

What we need is alternative use. The only solution that I see is energy crops. I am very skeptical about ethanol, but bio-diesel seems to have a lot of potential. I do not hear the debate about energy in versus energy out when it comes to bio-diesel. You don't have to distill the product and drive off every pound of water using a lot of the valuable energy that you are producing. When you crush canola you get oil, and the little bit of water separates on its own.

How many acres of canola would each of us have to grow to supply our own fuel for all of our machinery. Would it take 20% of our acres? What if we had to supply all of the fuel for the trucks, trains and ships that move our products. Would that take another 20% of our acres? Freight and fuel and two of our biggest costs. It would be better if we had a revenue stream to offset these expenses.

Now you don't have to summerfallow 25% of your ground to remove that food production from the system. What would that do to grain prices?

It will all hinge on the price of a barrel of crude oil. What happens when I can produce a barrel of bio-diesel for less than what a barrel of crude is trading for? If you are an oil company and you see that an alternate energy source could be more competitive, can you get your banker to finance the drilling of another oil well, or the expansion of a very costly tar sands project?

Today's cost of oil whether it be $70.00 or $60.00 includes a lot of profiteering since the cost of production has not changed substantially from a year or so ago when oil was at $40.00 per barrel. I am not sure if this means that oil could be driven back down to the $40.00 level since that would ignore the supply and demand issues. I do know that as time goes on the cost of exploration for ever more elusive "new" oil resevoirs does get more costly and that the energy efficiency of recovering tar sands and oil shales will also result in ever higher energy costs. At some point in time we should be competitive as energy producers.

When that day comes I want farmers to be in an equity owners in the bio-diesel production and distribution facilities, rather than just suppliers of the raw material.

If we start now perhaps we can devise a plan where farmers transition some of their acres out of food production while maintaining the vital cash flow to service their debt and provide a living.

[GrainVac]

Don't often agree with you Vader, but this post really makes sense to me...Only problem is I/my farm will likely disappear before it happens. Where/how do we start?

[melvill]

Interesting background to this discussion is that, in the U.S., a huge percentage of the new ethanol production there is farmer owned. Here in Canada, that is not the case.

I believe the U.S. ethanol situation is a deliberate policy decision.

[TOM4CWB]

Vader;

Would the CWB be part of your vision for Canola and Biofuel?

[sshiels]

Silverback...if you are making $ on every acre you seed, then taking 25% out of production is silly indeed. However, with commodity prices where they are, is it silly to take 25% out of production, through summerfallow or whatever, if you are actually losing $ on those acres? I know that you are not farming to lose money, but in poor years, isn't it important to lose less?

[Vader]

tom4cwb,

My vision is as I stated and that is for farmers to be owners of value added bio-energy business. There are many different ways to get there, and the CWB may in fact be one of them but not under the current legislation or governance model.

I note that the government is willing to look at providing some rebates on the high energy costs to some users. Wouldn't it be grand if the energy rebates were based on bio-fuel alternatives (only). The objective would be to move toward a renewable energy base, lower CO2 emissions, and create a sustainable agriculture sector.

[wd9]

Vader, for canola, to become biodiesel it is a simple process using lye and alcohol and some heat to remove the glycerin. The process is called de-esterification. The glycerin can be burned to provide the heat to the process.

Given the price of diesel today, the money is in burning canola, not eating it.

[TOM4CWB]

Vader;

If you don't consider the present CWB "worthy" of taking up the challenge respecting biofuel, what changes would you make to the CWB so it could be an acceptable marketing partner?