Is the energy crunch good for agriculture?
November 13, 2007 By Peter Darbishire
Is the energy crunch good for agriculture? While the first reaction is probably
driven by the prospect of higher fuel prices and fertilizer costs, resulting
in a negative answer, a few more days pondering the situation might yield a
different response (or perhaps I'm searching for a silver lining in the cloud?).
The biggest driver of commodity prices for crops is demand. Higher energy costs
present agriculture with a new opportunity because now grains and oilseed crops
are viable alternatives to fuel energy markets with ethanol and biodiesel, and
bio-products for industrial products like plastics. This is, perhaps, most critical
to the US, where per-capita energy use is among the highest in the world and
where 'energy security' is a very political issue.
Importantly, this 'second' use of crops, beyond the 'first' use of producing
food and feed, should result in upward pressure on farm commodities and land
prices. Surely this has to bring agricultural production back, at least a little,
to a more realistic economic business.
Higher input costs, especially fuel and fertilizer, mean they will be used
even more judiciously. This is certain to make things like subsurface drainage
all the more important. Drainage has time-proven benefits: greater yields, lower
fuel requirements and more efficient use of fertilizers. It is surely the most
important investment a farmer can make in his land.
Top Crop Manager begins 2006 with this 'focus on soybeans' issue. Field
editor, Ralph Pearce has written a series of stories that highlight the health
and wealth of this important crop, from plant breeding to food-grade markets,
covering insect pests, diseases and weed management topics. Other contributors
provide insight into tillage, agronomy and farm management.
Look for the 'focus on corn' issue in early February and the Season Ready issue
in March. Make sure of your copies by returning the 'Reader Response' form included
with this issue.
Peter Darbishire, Editor