Category: agricluture

“The sun will change the way we power the country, just not the way you think it will. There’s another form of solar power. In my opinion, it’s more potent -- and could be even more life changing than the cheaper next-generation solar panels in development at this time.
“The big idea is to farm massive amounts of algae and harvest the plants for their oils. Internet communities are abuzz, and the technology has the support of numerous academics. That’s right -- universities, venture capitalists and even the government are all racing to squeeze valuable oil out of pond scum…
“Algae are the fastest growing plants in the world. They’re vital to water ecosystems worldwide and consume more carbon dioxide than any other plant. As they grow, algae produce lipids, or vegetable oil. In fact, they produce a lot of oil …
“Let’s put this into perspective. One acre of corn can yield about 28 gallons of oil in one year. In more tropical regions, an acre of palms can yield about 6,700 gallons of oil per year. But algae are in a class all their own. An acre of algae can yield anywhere between 20,000-100,000 gallons of oil per year. This is possible because algae really do grow like weeds. An alga plant can completely reproduce up to six times per day. Try doing that with corn.”
So do your homework and find the companies that have the patents on the algae processing.

Question asked on 09/02/2008 at 06:47 AM :: Comments to date: 0

Category: agricluture

Here’s some interesting news on the alternative energy front. British Petroleum dumped $90 million dollars into research of a weed known as jatropha.

Here’s what BP found: The jatropha plant is a large shrub filled with golf ball-size oily green fruit. It can grow almost anywhere, doesn’t require an abundant water supply, it’s inedible, resistant to pesticides and is essentially worth squat to those surrounded by it. In India, they use the plant to build hedges.

But as it turns out, jatropha oil can be poured right into a biodiesel tank. Making it “potentially” one of the first truly low-impact, high efficiency, natural biofuel sources. And it’s cheap…

Thanks WSJ

At $43 per barrel, that makes jatropha fuel almost a third as cheap as oil. A highly efficient, easy-to-grow biofuel source that has no direct effect on the global food supply?
I expect more money will be flowing in this direction very soon.

Question asked on 07/24/2008 at 07:56 AM :: Comments to date: 0

Category: agricluture

Some of Henry Ford’s ideas were way ahead of their time. In fact a few ideas were so far out that they went nowhere, but not for lack of merit. For example, Ford was always looking for ways to save money on the costs of materials but without sacrificing quality, design integrity or safety. From his childhood background on a farm, and because many of his customers were farmers, Ford was deeply interested in agriculture. Ford often commented that crops could grow quickly, “as compared with lumber or especially iron ore.” So Ford funded a laboratory to assist farmers to find a way to use crops in industrial applications. Ford hired a highly regarded chemist named Robert Boyer to run the lab, where dozens of workers researched industrial uses for farm crops such as cantaloupes, carrots and beets.
Among other crops, Henry Ford was a great promoter of soybeans. In one marketing effort that Ford intended to impress his farmer-customers, every vehicle that Ford sold came with a bushel of soybeans on the front seat. And during the Great Depression, Ford entertained visitors at luncheons in which every course contained locally grown soybeans. The Ford menu included tomato juice with soybean sauce, soybean cookies and soybean candy for dessert.
But Ford used soybeans to do more than just amuse visitors at lunch. Ford was looking for projects that combined industry with the output of agriculture. Among other things, Ford had an abiding interest in developing soybean-based plastics. Throughout the 1930s Ford pioneered the use of soybeans in plastics that he used in his automobiles. The soybean components included plastic parts (even body panels), seat covers and paint. Ford’s soybean-automobile project culminated in August 1941, when he patented an automobile made almost entirely of soybean plastic, attached to a tubular welded frame.
Ford’s soybean-car weighed 30% less than a car made of steel. Even better, the plastic panels did not rust. And an array of experiments concluded that they were ten times as durable as steel. Ford claimed that plastic panels made the car safer than traditional steel cars because the car could roll over without being crushed. Ford hoped that the new soybean plastic would replace metal, which was in short supply in the years just before World War II as the U.S. government was building up the country’s navy. Furthermore, Ford’s soybean-car ran on grain alcohol — yes, ethanol — instead of gasoline.
Ford’s engineers were building a second soybean-based car when the U.S. entered World War II in December 1941. Because of the war, the federal government suspended all U.S. automobile production for the duration of the conflict. Thus Ford’s soybean-based car experiment languished. Almost all of the Ford Company’s resources were directed towards war-related production. Indeed, in one gigantic undertaking Ford converted the massive facility at Willow Run, Michigan to building B-24 bombers. At one point during the war, the Willow Run plant rolled a brand-new B-24 — made of over 140,000 separate parts — off the assembly line every hour. This was a far cry from building automobiles — made of soybeans or otherwise. By the end of the war in September 1945 the idea of a soybean car had simply fallen through the cracks.
Henry Ford died in 1947, aged 84. And we can only speculate about what might have happened if Henry Ford and his company had continued to pursue the idea of a car made out of soybeans, and powered by ethanol

Question asked on 03/14/2008 at 06:36 AM :: Comments to date: 0

Category: agricluture

Investing Safely in this Bull Market Mega-Trend
Well, fortunately it is much easier to invest in agricultural commodities and agricultural companies than it once was. Here are two ways to do it:
Market Vectors Global Agribusiness ETF (MOO) – If you want to achieve wide global diversification among agriculture-related companies, there is no better way to do it than this ETF, with the appropriately named ticker. MOO tracks the DAXglobal Agribusiness Index and holds positions in 40 companies trading on 13 global exchanges.
These companies run the gamut from equipment makers Komatsu and Deere, to seed and fertilizer companies such as Monsanto and Potash, to firms involved in agricultural chemicals, irrigation, food and livestock operations, ethanol and biodiesel, and food distribution.

Buy on any pullbacks
This ETF began trading in September 2007 and gained 39 percent by the end of December. Considering the long-term fundamentals of the agribusiness sector, this is just the beginning of greater gains ahead. But keep in mind that this ETF is stretched to the upside, so it might be a good idea to accumulate on weakness.
PowerShares DB Agriculture (DBA) – There are few ways to invest directly in agricultural commodities without going into the futures markets. But the PowerShares DB Agriculture ETF is one of the best. This ETF provides equally weighted exposure to the four most widely traded “soft” commodities: corn, soybeans, sugar, and wheat.
DBA gained 34 percent in 2007, and with the supplies of these four commodities under long-term pressure from rapidly rising demand, this upward trend should continue in the years to come.
The Train is Leaving the Station ... Are You on Board?
No matter how strong the fundamentals, bull markets don’t move up in a straight line. This one will be no different. There will be certainly be volatility and corrections along the way. But the fundamentals of the supply and demand equation foretell a long-term uptrend.
Do you expect the price of energy to go down in the long run? Do you believe that governments will stop encouraging biofuels? Do you think that the two billion people in China and India will stop eating anytime soon?
If you answered no to these questions, then it is time to build a long-term position in agribusiness companies and food commodities. This mega-trend is on solid ground and the bull market is just beginning.

Question asked on 01/06/2008 at 06:11 AM :: Comments to date: 0

Category: agricluture

CHINA'S LAST EMPEROR, PU YI, LOVED HIS SOYBEANS.
They were a staple of the Manchurian diet in Northern China. In the 1930s, a forward-thinking Brazilian friend asked Pu Yi if he could take some soybeans back to Brazil. Pu Yi, only a nominal regent by this point, complied. The beans eventually made their way to bustling Rio de Janeiro.
Of course, neither Pu Yi nor his friend could foretell the momentous role soybeans would play in Brazil's future. Nor could he predict that investors one day would pine to own acreage in the sun-filled green lands of South America.
Up until that time, soybeans were unknown to Brazil. But in Brazil's fertile soils, soybeans found a welcome new home. Over the ensuing decades, they would become one of Brazil's most important crops. Today, soybeans are Brazil's largest export.
Vignettes such as this, little odds and ends, make up so much of history's important turning points. ( the Pu Yi story from Robyn Meredith's interesting new book, The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us. ) It's always fascinating to me how one person's decision, sometimes even on just a whim, can have such enormous impact over the years. Perhaps soybeans would have eventually made it to Brazil anyway. But the world would surely look different depending on when and how.

Question asked on 11/28/2007 at 06:03 AM :: Comments to date: 0

Category: agricluture

The U.S. currently has 116 ethanol plants in production. The 79 more that are under construction will come online within about two years, allowing for some construction delays due to worldwide shortages of critical inputs and components. (The usual suspects…cement, galvanized steel, copper tubing, etc., thanks to the ongoing construction boom in China.) In addition, there are at least 200 other ethanol plants in the planning stages in the U.S., with a capacity estimated at an additional 3 billion gallons per year.

Gallons and Barrels and Energy Production

There are, according to convention dating back to the Pennsylvania oil boom of the 1860s, 42 gallons in a barrel. So the forecast annual U.S. production of 11 billion gallons of ethanol translates into about 262 million barrels of that type of fuel produced over the course of a year. And I am not even adjusting for the energy density of ethanol, which is far lower, only 59.5%, than an equivalent barrel of petroleum. The standard, accepted measurement of energy density for ethanol is 26.8 megajoules per kilogram. This clearly compares unfavorably with the energy density of gasoline at 45 megajoules per kilogram.

Therefore the mixing of ethanol with the gas has alowed the inefficiencies of the combudtion engine to work just as well with a lower grade of energy per gallon. This will continue to work as long as the price of corn stays low.
But just think everything will be priced in a true market to a BTU equivalent. So if oil stays high then ethanol and coal and nuclear and natural gas will remain high. As these energy source are being expanded they will replace the depleteing oil resources. Right now the law of demand and supply in the market place is working well. Mild winters in the world has created less demand for energy and the price of oil has come down. Now OPEC is crying because they want the higher income so they are going to cut back. What a vicious cycle. But to understand the laws of economics and greed and fear are to know the market.

One of the biggest agricultural firms in the world is ADM.
Its price is going with the price of oil.
Soon due to the expansion of etanol plants it will make more than people are projecting for it now.
Once the downtrend line is broken BUY ADM.

Question asked on 01/14/2007 at 06:27 AM :: Comments to date: 0

Category: commodities

“Beijing Sets National Standard for Methanol as Automotive Fuel,” stated the well- regarded Financial Times newspaper. Methanol? Yes, good old “wood alcohol.” This is the stuff that if you drink it, will make you blind. But this particular label of Chinese methanol is not and will not be somebody’s moonshine. Instead, this Chinese methanol will be derived from coal in the so-called “Fischer-Tropsch” chemical process, which leads to an industrial method described as “coal-to-liquid” (CTL). Added to gasoline, coal-derived methanol creates a cleaner-burning type of fuel. And at oil prices above about $35 per barrel, methanol is very much a cost-competitive option for automotive fuel. Very clever, those Chinese. Here are a few of the key paragraphs from the Financial Times report:

“Beijing has settled on a national standard for methanol as an automotive fuel, a decision which will legitimize and bolster a market that has been growing rapidly without central government approval. The standard, which has yet to be officially announced, was reported in a trade magazine and confirmed yesterday by an official attached to the National Development and Reform Commission (NDRC), the economic planning body responsible for the standards.

“Local companies have under construction, or are awaiting approval to build, plants to produce methanol equivalent to about 20% of China's present oil consumption…By the time the plants, which convert coal to liquids, start producing in 2011-2013, China's oil demand will have doubled, allowing methanol to supply about 10% of the market.”

Continued on 12/2/06

Question asked on 11/30/2006 at 07:30 AM :: Comments to date: 0

Category: commodities

Sugar has retreated.
Sugar is coming back.
Time to start buying Sugar in the options.
Continued.

The answer to: "Sugar? (9/12/06)"

Question asked on 09/12/2006 at 06:23 AM :: Comments to date: 0

Category: commodities

It is starting to be harvest time.
Seasonly it is time to watch for a bottom in corn through November.
It has broken to new lows and bounced back.
Dec still has a premium.
Ethanol plants are buying future production.
Continued.

The answer to: "Corn (9/10/06)"

Question asked on 09/10/2006 at 06:13 AM :: Comments to date: 0

Category: commodities

I always wondered what the efficiencey of making etanol versus selling ethanol.
How much energy (BTU's) does it take to generate ethanol BTU's.
Ten years ago the general public thought it took more energy to produce a gallon of ethanol energy than that gallon of ethanol delivered. Thus this was called a negative energy balance.
Many studies, over the years, have resulted in a wide range of answers to the question of ethanol's energy balance, often depending on who financed the study. The general results are (continued)

The answer to: "What is the value of Ethanol? (7/5/06)"

Question asked on 07/05/2006 at 06:33 AM

Category: agricluture

Why would the US go to ethanol? Dependency on oil. OIl will continue to stay high relative to its past price history.
You can argue all you want about the relative inefficiency of corn-based ethanol versus sugar or cellulose, but the fact remains the U.S. has made its choice. According to The New York Times, 'Despite continuing doubts about whether the fuel provides a genuine energy saving, at least 39 new ethanol plants are
expected to be completed over the next 9-12 months, projects that will push
the United States past Brazil as the world's largest ethanol producer. (continued)

The answer to: "Ethanol for the US (6/30/06)"

Question asked on 06/30/2006 at 05:59 AM