Two new massive ethanol plants have yet to produce a drop of fuel for commercial consumption, but one of them is already affecting prairie grain markets.
Husky Energy has been contracting with growers since spring in an attempt to secure the 350,000 tonnes of feed wheat it will need annually to run its 225 million litre facility in Minnedosa, Man.
As of last week, the company was paying $5.87 per bushel for eligible feed wheat delivered to the plant during January through March 2008, and $6 per bu. for April and May delivery.
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The president of Terra Grain Fuels, a 150 million litre plant under construction in Belle Plaine, Sask., declined to do an interview. But according to a document on the company’s website, the plant will require 408,000 tonnes of feed wheat a year.
Terra Grain is offering both fixed priced and basis contracts for 2008. Each delivery period is for three months. Contracts are available for the October 2008 to July 2009 time frame in 5,000 bu. increments for ethanol-friendly varieties of wheat.
Husky is looking for Canadian western soft, Canadian prairie spring red, Canadian prairie spring white and red winter wheat varieties. The major requirements are that the wheat is less than 15 percent moisture content, has a minimum test weight of 58 pounds per bu., a maximum count of one part per million vomitoxin and no mould.
