Is the energy crunch good for agriculture?
November 19, 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.
In spite of difficult conditions last season in regions where corn and soybeans
are grown in western Canada, western field editor, Bruce Barker has been in
contact with the suppliers of seed for those two crops, which are being considered
by more producers each year. We have also included features on corn production
research and field techniques in this Early Winter issue. -30-
Peter Darbishire, Editor