Oilseed for aviation fuel | Contracts offer $12.50 per bushel plus $40 per acre new crop incentive
Promoters of a new oilseed insist growers won’t experience the same payment problems that occurred with camelina.
Agrisoma Biosciences Inc. and Paterson Grain have entered into a long-term partnership for the commercial contracting and distribution of carinata. The crop will be marketed under the brand name Resonance.
Paterson has contracted about 6,000 acres of the crop with about 40 growers for 2012. It will be the first commercial acreage of the industrial oilseed.
Farmers have been stung before when rolling the dice on a new oil-seed. Some growers who planted camelina a couple of years ago under contract had trouble getting paid for what they harvested.
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But that won’t be the case with carinata said Patrick Crampton, vice-president of business and product development with Agrisoma.
“You’re not going to get into an overproduction situation. There’s a big demand for this, so it’s a crop that’s going to have some stability of pricing,” he said.
Once the jet biofuel industry takes off he anticipates there will be demand for millions of acres of carinata.
North American airlines flying to Europe need a jet biofuel to meet the European Union’s looming carbon tax regulations.
The U.S. air force and U.S. navy have established a goal for half of their fuel to come from biofuel sources by 2020.
That’s why Crampton thinks carinata has the potential to be a core oilseed in rotations in some of the more challenging farming areas of southern Saskatchewan and Alberta.
Another thing that should give growers peace of mind is knowing that carinata has the backing of Paterson, an established western Canadian grain company.
Crampton said Paterson was a logical choice for a marketing partner.
“They’ve got a strength in identity preserved contracting and are well positioned in our target geography,” he said.
The marketing program will initially be focused on three of Paterson’s high throughput grain terminals located in Dunmore, Alta., Swift Current, Sask. and Assiniboia, Sask.
“Not only does Resonance represent an excellent new crop opportunity for growers by giving them a viable alternative for their rotation and enhancing their incomes but also allows growers to participate in the flourishing bioenergy sector,” said Keith Bruch, vice-president of operations for Paterson Global Foods.
Kevin Hursh intends to plant about 100 acres of carinata on his farm near Cabri, Sask. in 2012.
Part of the enticement was being on the ground floor of a new crop but he has a vested interest in carinata because he is executive director of the Saskatchewan Mustard Development Commission, which invested money in the development of the crop.
“I probably wouldn’t have grown it if I didn’t think it could provide a competitive return,” said Hursh.
Producers signed contracts in January at Crop Production Week for $12.50 per bushel plus a $40 per acre new crop incentive. It was a competitive offering back then.
“With canola prices surging upward in recent times, canola still probably might pencil out better at the end of the day,” said Hursh.
But he likes that he will be able to straight combine carinata versus swathing canola and that he doesn’t have to be as concerned about contamination from wild mustard, stinkweed and canola seed as he does when he grows mustard.
His biggest concern is that the Resonance seed multiplied in Chile over the winter makes it back to Canada in time for seeding.
Crampton said some of the 50 acres of seed that was planted in 2011 has been crushed and converted into jet biofuel that will be used in an upcoming test flight.
The initial product offering is a conventional crop that yields about 15 to 20 percent more than oriental mustard checks. Agrisoma is developing a stacked trait genetically modified version of the crop that will offer growers better yields and other agronomic advantages. It could be rolled out in three or four years.
Agrisoma has two people on staff to help growers with any agronomic challenges they may encounter during the growing season.
A toll processor will crush the 2012 carinata production but if the anticipated demand materializes, Agrisoma will be searching for a partner to build a dedicated crushing facility in the brown soil zone region of Saskatchewan or Alberta.
