Enviroment policy to be unveiled today in SASKATOON

[SASKFARMER3]

Hopefully we will get some news today about the Canadian Bio Fuel program. Lets hope (pray) that the feds listened to farmers and has a system similar to the USA. Wouldn't it suck if ND Crushed oil was trucked to Regina to up-grader to add to diesel (because we have no incentive to have farmer built plants) and then deliver Bio Diesel back to ND in same truck.
Then because we didn't do our homework Canadian farmers would deliver Canola to Velva ND to be crushed. Jobs ND, Profit ND Spinoff ND, Grain farmers in Canada still a supplier of raw product.
LETS HOPE MY VERSION WONT HAPPEN

[Zaphod]

This is a good point, but I'm not sure I quite agree. If the canola will be grown and crushed here, but not turned into biodiesel, farmers still get a large benefit from the global biofuel boom. If they own part of a biodiesel plant where the profitability is dicey, I wonder if they are that much better off.

I have to compare it to the hog barn ownership deal a few years ago, where every second farmer was investing in hog finishing barns but got burned later when the market collapsed. I don't think anyone would argue that hog production should have been subsidized to help support the farm economy. Meanwhile, some folks have made a good living shipping weanlings to the US. Does it really matter where the last bit of processing gets done?

[charliep]

In looking at Canadian canola, I would also look at trends around transfats and other consumer health issues. Crush capacity is increasing but consumer health issues is as much a driver as bio fuels. Agree the issue is to increase value added processing with the highest paying market the best one to sell too.

Should we subsidize bio diesel to put them on a level playing field? That is the question? Lots of discussion about sulfur in diesel fuel and steps to reduce. Even remember discussions about farmers ability to buy smaller diesel trucks similar to what you would find in Europe.

[charliep]

Something to note out of the US. Anyone who is trying to book nitrogen will be starting to note the impact of a potential 7 mln acre increase in corn (at the expense soybeans and cotton) to satisfy the ethanol market. Takes a lot of nitrogen to produce an extra 28 mln tonnes of corn (more than a Canadian wheat crop in size).

Similar issues as the US starts to move conservation reserve program land back into the cropping system. The question will always be what is the energy benefit of bio fuels relative to their cost of producing. The answer will be different on the best quality land versus the marginal stuff.

[SASKFARMER3]

Guys a US plant is paid for and making its investors money in less than 16 months, Nitrogen hit a high of .50 cents a lb a year ago, Cheap off shore nitrogen will make its way in to feed the us farmers. Natural gas is at a 10 year low, Etc. Get your facts strait.
FOOD GOT TO A POINT THAT NO ONE CARED ABOUT IT BUT FUEL THEY ALWAYS CARE ABOUT AND ALWAYS PAY>

[cowman]

I would point out if you take a good portion of "food" out of the food supply...the price of food will rise? So take out a big chunk of canola and wheat from the food supply and the price of food will have to go up? Simple supply and demand?
On fertilizer prices: I think demand will be very high this spring...maybe overwhelming the supply? I'm not sure about offshore fertilizer? Natural gas is a global commodity and pretty well trades at a world price...everywhere? Now maybe China or someone can run a plant a lot cheaper than here, but I really doubt it as we should have a technological advantage and a definite freight advantage? Maybe it is more about the net profit the fertilizer companies expect to make here?

[Zaphod]

So canola and wheat prices might double. Big deal. Once that happens, where will land prices be? Where will fertilizer prices go? There might be a short-term surge in profitability but eventually the margins will return to normal.

The point about the 16 month payback is irrelevant. The market will quickly adjust to make the big profits disappear. Besides, that was when crude was $70 and that was only for ethanol. Biodiesel was just over breakeven and now development is already slowing down in the US and Europe. In Canada, we will get overbuilt so fast, it will make your head spin and then everyone will be crying for more money to keep it going. There's no free lunch.

[cowman]

Zaphod: Prices on land and probably fertilizer will rise...so you don't think it is good idea to get more for what you produce? Are you happy how things are now or the last several years?
This whole bio thing, whether we like it or not, is taking off...and it really isn't going to quit!
And in reality it has to be the best bet for agriculture on the prairies we've ever seen? Come on rural Sask., Man, and Alta. haven't exactly been rolling in clover the last several years?
Just think...a market close to home where the railroads, elevators, and every other damned parasite can't rip off their little chunk? Does that sound good? How about the jobs, infrastructure, local business activity, municipal tax base? Do you think anyone in your community might benifit here?...Or should we just keep doing the same old-same old until we die?

[wd9]

Right on Cowman, well said. Others sit back and whine about the way it was and hope some magic fairy will wave a wand and voila profitable farming is here to stay. Get a fricken grip on reality. Everything is competitive today and will be more so in the future. Only the innovative and creative will survive.

[Zaphod]

All I'm saying is that there is no magic bullet that will make us all rich so we can retire at 50. Somehow, the market always works back to a balance. I see it every time. When prices are at their lows, we hear that the good times will never return. And when prices are high, somehow it's a new era in prosperity. How many cycles (crop or livestock) do we have to go through before we learn that lesson?

Oh, and good luck trying to market or grow anything without those "parasites". Everybody's got to make a living and if someone is going to make too much profit, there is always somebody else ready to step in and create a competitive market (except for the CWB).

[SASKFARMER3]

Zaphod you dont farm do you lets face it.
If I invest in a plant and its paid for in 16 months and is returning dividends etc to me thats money in the bank. If it slows and ethonol doesnt pay the plants paid for so it folds no big deal read paid for in 16 months. Thats like having my land paid for in 16 months then there is no demand for grain I could pay taxes out of the profit for quite a few years till grain farming returns.
Simple fact is that you as a URBAN person are worried that you will have to finally pay for FOOD>

[Zaphod]

You're absolutely right. I used to farm but don't anymore. Does that somehow make me stupid? It seems I spend my time defending farmers from URBAN people. It's too bad that some folks like yourself are just as short-sighted and like to label everyone. Grow up.

It's true that some plants made a 16-month payback, but that situation is already disappearing. At the rate that plants are being built in the US, they will be producing ethanol beyond their Renewable Fuels Standard. It's true they might bump up the RFS, but you can bet that soon supply will outstrip the legislated demand. What happens then? Do you think they will still allow impots from Canada? Not if they have a democrat government. Even if the tax credit stays in place, it won't be the ethanol maker that gets the whole shot. The fuel companies will start keeping some of that themselves. Good luck then with a 16-month payback.

[JACKFLASH]

Getting back on the topic. I was dissappointed with the announcement.
It should have been minimum 10% ethanol blended,and minimum 5% biodiesel. 2 and 5% barely sc**** the surface.

If were going to do a job lets do it.

[Vader]

Talked to a farmer from Ontario yesterday. He says there are two ethanol plants down there and two more being built. They are intended to use corn (American corn).

Ethanol is value adding. We should not be value adding to US corn. We should be value adding where Canada has a feed grain surplus.

If the entire Canadian ethanol program (5% blend) were premised on wheat it would take about 6 million tonnes per year. That would be the equivalent of a pretty serious drought on the praries each year and would eat significantly into world wheat stocks over time.

[cowman]

And Vader, I hope you see that as a good thing? Canadian farmers cannot continue to grow crops at below the cost of production and hope like hell the government bails them out? If food consumers have an oversupply of food why would they pay anymore? If they won't pay for bread...let them have ethanol!
Zaphod: Of course there will be some fallout as plants come on line? And perhaps, as we get further into meeting the "environmental threat", the levels of the blend will be raised? I believe in Brazil you can get a variety of blends at the pumps and the favorite is 100% ethanol! More power/better fuel economy...according to W5! Of course you need a car built for that...which practically all the new cars in Brazil, are?
Now think about that? How about a future where every car in Canada burns 100% ethanol...well the fact is we would never have to export another bushel of wheat...unless there was a significant bonus!
And yes I do know the corporate world would probably try to squeeze all the profit out of the system...and hopefully we would have a government in place that would bring some real meaningful competition laws and laws against predatory business practices? Corporations shouldn't be allowed to operate like a bunch of robber barons!