Agrisoma Biosciences-PGF Biofuels | PGF has exclusive rights to distribute carinata variety and arrange producer contracts
Agrisoma Biosciences has reached a new agreement with PGF Biofuels Inc. that gives PGF exclusive rights to distribute Resonance carinata and arrange production contracts with growers in North America and Australia.
PGF is a wholly owned subsidiary of Paterson Global Foods, a Winnipeg based company that also owns Paterson Grain and operates 40 grain handling facilities in Western Canada, including nine inland terminals.
Carinata, also known as Ethiopian mustard, is a non-food industrial oilseed crop that is used to produce biofuel for the aviation industry.
Last year, Agrisoma contracted more than 6,600 acres of the oilseed with more than 40 growers across southern Saskatchewan and Alberta.
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Growers contracted in 2012 re-ceived $12.50 per bushel and an additional incentive of $40 per acre for each acre under production.
In 2013, the company is hoping to contract more production, potentially as much as 20,000 acres in Western Canada.
Most of the production will take place in southern Saskatchewan and southern Alberta in areas served by Paterson’s grain handling network.
The $40 per acre producer incentive will not be offered this year, said Paterson’s Ken Mudry.
Instead, grower contracts will pay $500 per tonne on the first 0.33 tonnes per acre. The remaining production will be contracted at $60 below November canola.
Production last year varied from region to region and grower to grower, said Agrisoma president Steve Fabijanski.
Recorded yields varied from 10 bushels per acre up to 42 bu. under ideal conditions.
Fabijanski said this year’s yields should be more consistent, given that growers are becoming more familiar with the crop.
“A lot of it was a learning curve for growers (in 2012),” he said. “It’s a new crop, it was a new introduction and new practices. But I think generally that people who grew it were pretty pleased with it last year.”
Paterson also assisted in distribution and contract production last year.
Fabijanski said the new agreement gives Paterson broader territory rights and additional responsibilities.
Under the agreement announced April 3, Paterson will manage seed distribution, contract production, collection, processing and sales.
Agrisoma will be paid a royalty on sales generated from Resonance carinata, which will vary depending on the nature of the end products sold.
Fabijanski described the PGF agreement as an exciting opportunity that will allow the two companies to take advantage of new opportunities that are emerging in the biofuel sector.
“They (Paterson) have been at the forefront of the grain handling business for more than a century and are leaders in seed sales, relationships with farmers, logistics, transportation, elevation and the sale of grain,” Fabijanski said.
“I think that they are the right guys for this crop and what we are doing, so we’re pretty pleased to be working with them on a long-term basis.”
Last year, the National Research Council conducted tests on aviation biofuel made from 100 percent carinata.
Tests conducted on a jet engine showed increased fuel efficiency, a 50 percent reduction in aerosol emissions and no negative impact on engine performance.
Resonance carinata has been specifically developed for production on semi-arid land such as the brown soil zone regions of southern Saskatchewan and Alberta.
Last year, carinata production was insured under the Saskatchewan Crop Insurance Corporation’s diversification option available for crops and varieties that are not insurable under core multi-peril crop insurance.
