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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Wednesday, April 14, 2004

Rising oil prices mean higher farming costs

As oil prices rise, farming becomes more expensive. This is not only due to higher transportation costs, but because many of the chemicals used in farming (fertilizers, pesticides) are of petrochemical origin. Agrinews explains which cost factors of farming are likely going to be affected:

It's going to cost more to put in the crop this year.

Anhydrous prices have risen to 28 cents per pound from 12 to 15 cents a pound in the mid- to late-1990s.

Retail diesel prices averaged $1.64 a gallon in Minnesota and Iowa last week, according to AAA. Prices a year ago averaged $1.57. The highest price ever was reported in March 2003, when diesel prices hit $1.76.

Mike Duffy, an Iowa State University Extension farm management economist, said fuel cost is a relatively small portion of the money spent to put in a crop, but when the products that are derived from petroleum are considered the impact is much larger.

Many chemicals and fertilizers are petroleum-based. Tires and transportation consume petroleum.

Annual production, transport and primary processing of Minnesota's agricultural output consumes 241 million gallons of diesel, 24 million gallons of gasoline, 123 million gallons of LP gas, 23 billion cubic feet of natural gas and 2.27 billion kilowatt hours of electricity, according to research done by Barry Ryan and Douglas Tiffany of the University of Minnesota.

Yet agriculture in the United States uses half the amount of energy per unit of output than it did in 1978, said Tiffany, a research fellow in the U of M applied economics department. Gains have been made from larger, more efficient equipment and processors are more efficient at making fertilizer.

But prices that have doubled in some cases have farmers thinking about ways to reduce cost.

Gyles Randall, a soil scientist at the Southern Research and Outreach Center in Waseca, has received questions about how much nitrogen needs to be applied.

For corn yields up to 175 bushels per acre, 120 pounds of nitrogen is plenty for corn following soybeans, Randall said. In southeastern Minnesota, 90 to 100 pounds of nitrogen is plenty for corn following soybeans.

Duffy said farmers need to use realistic yield goals in establishing the amount of nitrogen they need.

Many factors farmers are considering in terms of fuel economy are practices educators have been trying to get farmers to do from an environmental aspect. Cost saving is an important factor in convincing people to look at alternative types of tillage, he said.

In the short run farmers should be sure their equipment is properly tuned and that implements are clean so they pull easier. In the long run they should evaluate how many trips they make across the field.

"Farming is a lot of tradition � there's a certain pride of ownership, people do things to maintain clean fields that are not economical," Duffy said. "I think what we try to do is present sound scientific based information on the costs and the returns.

"I heard a friend say farmers are all in favor of progress -- it's change they hate."

The U.S. agricultural production system is fairly fossil-fuel intensive, he said, adding that the whole energy arena is going to continue to take on more importance in the future.

"I think that we should prepare ourselves for this wild fluctuation to be the norm, not to be the exception," Duffy said. In 20 to 25 years higher energy prices could change the way U.S. farmers farm.

Producers spent $10.22 per acre on fuel and oil, not including drying fuel, in 2003. The total direct cost on that acre was $288.50. That makes fuel 3.5 percent of total direct cash expense for an acre of corn.

For soybeans, farmers spent $8.20 for fuel. The direct costs were $194.25 or 4.2 percent of the total cost.

By Janet Kubat Willette

Agri News staff writer
Source: South Central Minnesota Farm Business Management Program

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