Grain source for bio fuel

[craig]

In discussions I've had recently it was brought to my attention that there are at least 5 different groups out there promoting a specific crop as the one to produce ethanol in Alberta.Four of the five I know and not sure of the 5th. I will list them for you to consider. Triticale. The promotion for this crop is coming from within Alta. Ag. and obviously an attempt to put some creditability behind a crop which has never reached it's stride.Current shortfall in grain producing agronmics. High yield potential and some disease rotation benefits a plus. Soft spring wheat. This is a crop being promoted on it's high yield potential. Historic experience is in southern Alberta on Irrigation. Question mark is to adaptability, maturity and disease.
White Flowered Fababeans. While this may seem far out on first glance it offers things other can't. Producers in Westlock, Morinville area have mastered agronmics and are producing 70 to 90 bushel yields but maturity and drought tolerance are of concern. Big bonus maybe in the by product which might provide source of concentrated protien. Other bonus is it's nitrogen fixing potential. Winter wheat. Another crop looking for an new opportunity. Potential lies in the ability to cross with soft wheats to push up yield plateau. Down side is the KVD issue and the difficulty of producing crosses that don't resemble HRS wheat. Winter crops provide crop rotation benefits but still a struggle getting spring crops off in time to seed. The fiftth could be any number of crops but since CPS doesn't likely have a promoter, barley is the possible fifth. There are other possible options that might have a fit these would include rye, cull sugar beets and cull potato's. maybe even Jerusalum Artichoke. Leave it at that. Interested to here some comments

[wd9]

Craig, has any ethanol input supply type farm group actively lobbied for the policy of mandate, standards, US tax parity, and producer participation in Ottawa?

[parsley]

FYI

The Leader-Post (Regina)
Today's edition

Ethanol firm hunts grain


Build it and they will come, so the story goes. But Terra Grain Fuels
(TGF) isn't taking any chances that its $140-million ethanol plant at Belle Plaine won't have enough feedstock when it begins operations as planned in late 2007.

The privately held, Regina-based company is holding information meetings all over the southern part of the province this winter to round up producers to supply the 150-million-litre-a-year plant -- the largest wheat ethanol plant in North America.

TGF needs 15 million bushels a year of high-starch, feed-quality wheat and is offering producers one- and two-year fixed price contracts to supply the plant located just off the Trans-Canada Highway halfway between Regina and Moose Jaw.

In fact, TGF is offering producers cash advances of up to $75 per acre through its financial partner Conexus Credit Union to grow certain grades of wheat and deliver them to the ethanol plant.

Gary Drummond, chairman of Terra Grain Fuels, says there are several reasons the company is holding producer meetings in 28 communities, including Imperial and Bethune on Thursday.

"Feed wheat, historically, has been the product of climatic problems,'' said Drummond, a Regina lawyer who made his fortune in the natural gas business in Calgary before founding Terra Grain Fuels in early 2006. "It's milling wheat that didn't make the grade.''

But crop scientists have developed new strains of high-yielding, high-starch wheat that are lower in value, but can generate higher returns for grain producers.

"If we sign a farmer up now, then they'll be seeding specific varieties of wheat that suit our purposes. We don't need protein; we need starch.''

In fact, TGF says that producers can make good money growing "ethanol friendly'' varieties, which yield up to 35 per cent higher than other varieties.

"We think our program, on an average year in our area, will yield the farmer over $200 per acre gross. That's a figure that hasn't been attained, except for the odd specialty crop, for a long time.''

Of course, contracting supplies from local producers also reduces TGF's risk of not having sufficient feedstock at the right price when the plant comes on stream in December.

"By next year, we want to have 60 to 70 per cent of our (feedstock) requirements... under contract at a fixed price. So they'll know what price they're getting, they'll know when they're going to deliver and we'll know what we're getting.''

TGF is also offering one-year cash advances administered by Conexus to producers of $30 per acre, based on an average yield of 50 bushels per acre, or $75 per acre for two years.

"It's an interest-free loan really. It's paid back out of the first 75 per cent of their scheduled deliveries,'' Drummond said. "It's geared to allow the farmer, the producer, to lock-in some of the input costs ahead of the rush.''

Drummond said the public meetings have been successful in identifying farmers who are interested in supplying grain to the plant.

"We're trying to establish a core group of producers that deal with us... We're trying to make it as attractive as possible, especially in this first year or two. Hopefully, they'll want to continue year after year.''

Parsley

[craig]

Parsley
They plan to use soft wheat in their plant(Andrew) I believe. Check out their web site as they list buying values for the wheat( I think around $3.85). Not sure what the drought tolerance level is. I think they are predicting 65 to 75 bushel yield. On irrigation they can go up to 120, 130 bushels to acre.

[kamichel]

Yes the ethanol plants want Andrew CWSW wheat. Quite a bit was grown around in my area as PoundMaker out of Lanigan was contracting with shareholders to grow that variety. Since the price of feed is good the feed mills here are using up the extra grown here. One neighbour is now getting his picked up to go to Biggar Malt. He will be delivering at below the current feed price because he will be priced off the pro. SWP contracted some 4 dollar Andrew wheat for Jan 08 delivery on not too much. That was before Christmass. I think the contract price may trend lower come spring.

[craig]

Soft wheat might be an option to look at if we can grow it. Ontario winter crop is in poor condition and there is a concern about the eastern U.S.(where most of the soft wheats are grown) as cold temperatures are now in the region. If the eastern area were experiencing the same mild temperatures as Ontario earlier in the winter the crop could be in a vulnerable position. Seed supplies might also be tight if it is going into ethanol. Surprised that the feed mills are taking soft wheat as we had heard in past that soft wheat didn't mill all that well.Also indicates that the motto of one shoe fits all doesn't always fit the bill. The CWB basically discouraged the development of soft white winter wheat for western canada just as it discouraged the introduction of hard white winters. Now we have possible demand for a product and our breeding programs will have to scramble to catch up.

[kamichel]

Andrew has yielded so good here that it is hard to find a farmer planning to grow CWRS wheat this spring. Worried too much will be grown for the market, but I do not know how much is grown other areas. The guys at the elevators are warning farmers that if there is too much of that wheat grown then the feed mills may not accept it as it is lower in protien. I talked to one feed mill and they said they have done some tests on the wheat and they said the digestable protien is just a high. He said there is a difference in the protien that the tester at the ellevator would show and the type of test that they do. protein and digestible protien are different I was told.

[wd9]

Why would I build a plant in Canada when I could pick up 1$/gal credit in the US? Sorry, but it isn't bushels per acre that is going to make ethanol viable in Canada. Unless of course the plan is for $1/bushel thru high yields. Craig, what's up?

[craig]

WD9
I guess I probably had the same question as to why build in Canada. I'm not the one doing the business plan on this stuff. What I do know is that plants are proposed, are being build or are in production. My interest is how this plays out for the farmer. Some plants are already factoring higher yield in their prices offered and how that compares with other options. For all those who seem to hate marketing a locked in known price will look attractive. For those who like to lock in profit ahead of planting this might also work. As a farmer it has strong appeal to me if we can grow something that has a fit with what we already grow but that provides additional benefits in terms of rotation, price stability, built in market. The caution relates to the above thread where producers jump in whole hog growing a crop that basically only has one end use. The market is telling us there is a place for high yielding wheat. Too bad our emphasis still remains on quality at the expense of yield. If things progress to where domestic consumption is the major player in the wheat business we will be paying a heavy penalty for our past history.

[agstar77]

There are rumblings of concern in the U.S. about the large use of corn for fuel. There are concerns about the efficiency and the propriety of using food stock for fuel, This process coud crash as quickly as it rose. The big tech boom of the late 90's was just such an occurrence. Any use of grains for energy or fuel would have to better for the enviroment, not affect food supply and be economical. The politicians will move in whatever direction the political wind blows. We may see some short term gains in the grain sector but don't hold your breath waitng for this to be our saviour. The use of veg oils for specialty oils both industrial and for human consumption hold much more promise than ethanol production.

[cropduster]

Agstar,good to see you`re back!!Just got done reading Nettie`s article I see.Or did you author it??What a sad outlook on life.NO opportunity for advancement!NO hope!U.S. Democrat ,Barack Obama`s book talks about "The Audacity of Hope".Maybe `lefty` CWB directors should read it to give themselves some hope.What an atmosphere of DOOM they must give our employees!!!!! Don`t know if the extra grand they got at Xmas could fix even that!

[agstar77]

Have not read the article, but do get financial newsletters from U.S. Financial advisors that are not sold on ethanol. I guess if George says its good it must be , he was also right about WOMD. I wish etanol was as good as some say but like the old saying goes that which looks to be too good to be true probably isn't.

[ianben]

Here in UK we are in a similar position to you I think lots of talk and plans for ethanol and biodiesel plants.

The fact that we both have the real thing ie crude oil I think makes a big difference to government attitude towards alternative fuels and therefore the ecoonomics of where production takes place.

However biproduct prices, ****meal and grains, do have an impact. I am lead to believe the biodiesel plants being built in UK will export fuel to Sweden and Germany( no oil and real green fuel incentives)but leave the **** meal here for our livestock to consume.

Could this be a reason to build plant in Canada rather than US?

Sweden is promoting triticale as ethanol base I belive due to its lower cost of production.

I think as farmers we should resist too much specialisation for these new plants and grow dual purpose varieties which can fill both food and fuel markets.

I think more buyers will give us better prices than one guy with a bonus on a specific one use crop.

Here we are being told these companies will not invest if they cannot ensure supply and we will miss out on the plants being built in UK.
We should commit some grain at the prices they are offering.

We have been told we should manage our risk useing to futures markets.

That is what they are for.

Is that not also true for someone building an ethanol plant?

More buyers higher prices is that why I need to sign up?

[kamichel]

Uk not neccessarily similar in that most of your grain production I am only guessing goes into local human consumption and local animal feed. So not much left over for other uses as biofuels. Here in Canada we know that being too reliant on export markets for our grains has left us with very low commodity prices at times. So I still remain bullish and have taken some of the contracting opportunities in the ethanol industry. All my cerials will be AC andrew wheat. It can be sold to ethanol plants, feed mills, any feed market, limitted human consumption, and growing malt demand. I would not say that all my eggs are in one basket here. Advantages to Andrew wheat is higher yield, less chance of downgrade in the feed markets, good standability, strong straw, current and new crop contract prices increasing feed grain demand and open market access as well as CWB contracts. Dissadvantages are later maturing, easier to sprout, susseptible to rusts, must seed treat.

[kamichel]

Triticale is a no no, no ethanol plant will want it.