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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: elmatador who wrote (67072)	8/7/2005 12:08:37 PM
From: Slagle	Read Replies (2) of 74559

elmatador Re: "ethanol" Before you get too carried away with the idea that ethanol may save us why don't you do a little back of the envelope calculation and see if it washes. And I suggest you use bio-diesel from soybeans, mainly because the calculation is easier and "cleaner" with fewer imponderables and variables. A really good beanfield in Brazil (or the USA) might yield two barrels of soybean oil per acre, with the average field maybe 60% of that. With soy beans you don't need any nitrogen ferterlizer because soybeans are a legume and fixes its own nitrogen from the atmosphere. Sugar cane is not a legume and must have some source of nitrogen, with natural gas being the main source used here in the USA. Now it could be that with Brazilian sugar cane you are just planting the cane on really rich virgin soils and then moving on to a new field when the yields drop. That is not sustainable. You must have a source of nitrogen and chemical ferterlizer requires fossil fuel. With beans the only thing you need is phosphate and this can be mined. Some soils don't even require phosphate. I think Brazil gets much of her phosphate from Florida. With soybeans you do it all with machinery, no need for ANY hand labor at all. A friend who farmed several thousands acres of soybeans tells me the amount of diesel oil needed to plant harvest and combine a crop would only be a very few gallons per acre. And with bio-diesel from soybean oil there is no fermentation needed or any energy comsuming distallation; just press the oil from the beans in the standard manner. The expressed oil has an energy content of 128,000 BTU per gallon and opposed to 130,500 for #2 diesel. Soybean oil can be burned directly in a diesel engine as extensive tests in Thailand have shown with palm oil. You can plant soybeans on the same ground over and over for years with little or no damage to the soil, as soybeans can be "no-tilled" requireing no plowing. You cannot "no-till" corn or sugarcane, so you will have topsoil loss over the years from erosion. But here is the rub; in the US we only have 63 million acres of land producing beans now and there is an apparent need for all these beans. There is just not any vast amount of new land available, and I bet it is the same story in Brazil. Even if ALL the 63 million acres went to bio-diesel production (and at the optomistic rate of two barrels per acre) that less than one weeks worth of oil for the USA at the current rate of oil consumption. And that is way better than you would do in practice. I bet that it will be the same for Brazil; even if you planted all the cropland in soybeans it still would not be enough to make a real difference. Slagle

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