Harvest Down Fertilizer Up

The Crop Report Said Yields Lower Than Expected

Was it the weather? Probably… And all the work I’ve done here on the temperature series and the long term climate cycles argue for these lower yields to be a tradable feature for some years to come.

OK, today we had a crop report that showed lower than expected harvests in corn, soybeans. This caught many professional traders off guard, and prices spiked. One floor broker said that, given the small number of contracts traded before they halted trading ‘limit up’, he expects this trade has more room to run. So do I.

Ag Hedge Trade 5 day

Ag Hedge Trade 5 day

DBA  -  Agriculture Basket
TSN  -  Tyson Foods - Chickens
CALM -  Cal-Main - Eggs
SAFM -  Sanderson Farms - Chickens
MON  -  Monsanto - seeds and fertilizers
MOS  -  Mosaic  - fertilizers
IPI  -  Intripid Potash - fertilizer
JJG  -  Grain ETF 
AGU  -  Agrium - fertilizers
DE   -  John Deer - tractors

A beautiful example of a natural hedge. Today it was announced that crop yields are way off from expectations. Grains (DBA / JJG) both rose fast. Over 10% for JJG. At the same time, folks who buy grains, like the chicken and egg growers, plunged.

The expectation that farmers would be getting great prices, so would buy new equipment, and that the yield being down means more fertilizers and better seeds (and the cash to buy them in the hands of farmers) sent the ‘inputs’ makers up too.

Commodities often trade with “limits”. They can only move so far in a day before trading is halted. We were hard limit up on not many contracts. The grain price rises have more to go.

I’d also expect that the folks who turn grains into meat will continue to have issues.

Live Charts

Here is a live 10 day hourly trading chart and a 1 year daily chart for longer term holdings. The 10 day chart has the same stocks as the above chart, the 1 year chart has a different set.

Grains, Chickens, and "Inputs"

Grains, Chickens, and "Inputs"

The One Year Daily chart. I’ve added SFD SmithField Hams a hog farmer (which plunged 6.73% today)

SFD SmithField vs SAFM Sanderson Farms and other Ag Commodities

SFD SmithField vs SAFM Sanderson Farms and other Ag Commodities

SFD  -  SmithField Hams
SAFM -  Sanderson Farms - Chickens
Jo   -  Coffee ETF
SGG  -  Sugar ETF
BAL  -  Cotton ETF
DBA  -  Ag Commodity ETF
NIB  -  Cocoa ETF

So it looks like time to swap from Latte to Mocha or hot chocolate… Only cocoa is dropping.

The Fed has announced they want inflation, probably a lot of it. At least 2% and maybe 3%. Couple that with a low crop yield, and commodities are all running higher. (I’ve added some precious metals positions today including some Platinum, that is lagging silver and gold right now, so lets me enter the trade ‘late’ with some insurance. It ought to catch up as industrial demands rise, and has less risk of a ‘plunge’ from folks leaving the gold trade. PPLT is a physical metal ETF.)

A few years back, when home prices were reaching unattainable levels and oil was blowing up to $120/bbl, we were told that there was no inflation as we were not making any more money to pay those bills.

Now we are being told there is no inflation at present because those same home prices are dropping. Never mind that the Chinese Yuan has appreciated against the dollar, so just about every manufactured good is going up in price as they are all pretty much made in China… but also we are to ignore that rubber prices are up (so tires have risen) and now all the “soft commodities” are going to make food and clothing costs rise.

When do we get to the part where wages inflate?…

OK, I’ve got a mortgage, so inflation is reducing it’s cost apace with reducing my cash holdings value (another natural hedge…) so I’m not losing net. But I still don’t like this “Heads we win, tails you lose” on the inflation statistics parts…

Despite the chart (that looks extended) I’m buying the commodities run ( I started with some metals and I’ll be adding “softs” Monday or Tuesday, among others.) To buy an extended run, you ‘scale in’ a little at a time (so an immediate reversal does not cause much loss) and over time add stop loss orders behind the positions (so a reversal doesn’t get much time to work against you and consume the smaller later gains of a late entry.) Basically, more paranoia about a possible big reversal, and more behaviours defending against it. But Fed action and economic recovery will be a several year story. There is a lot of time for an inflation trade to run. So…

I expect that this crop trend will continue for a long while, too. Solar output is down and it’s getting colder and wetter year over year. Plants produce less with less warmth and sunshine. So we can expect less production, higher prices, and money that is worth less (with stuff worth more).


Capital stock and land tend to increase in value with inflation, as does the stock of companies with durable competitive advantage as they can raise prices. That will likely be my central thesis going forward.

Then there is the “pin action” as those winner companies buy things. So farmers with higher prices for their grain (the ones who have grain to sell…) will be out buying new equipment, while their neighbors will be looking to more fertilizer and better seeds to get them back into high yield country.

Expect higher food prices to crimp the style of restaurants, but especially those with poor pricing power, as the consumer stays home more and goes out less. Avoid the folks who must buy those higher priced commodities but can not pass on the cost.

And as a global economic recovery gets going, expect metals and oils to rise first. As China continues to “win”, expect them to buy more expensive foods and more food. This will continue to push ag up over the years. So forget GM, it’s John Deere that will sell equipment.


About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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14 Responses to Harvest Down Fertilizer Up

  1. Jerry Franke says:

    I enjoy the diversity of your posts!

    On topic – having grown up on a wheat/cattle farm, I can’t restrain myself from daily checking agricultural commodity prices. One my observations is that there is a clear correlation between grain prices and the spread between feeder cattle and live cattle. It is unusual that the spread exceeds 20 cents (during low feed costs) and just as unusual that it is less than 3 cents (during high feed costs).

    Today the spread dropped to 9 cents from a 12 cent spread yesterday. The spread before the recent run-up in feed prices was near 20 cents. This action is similar to what we saw two years ago when grains skyrocketed. The spread then went as low as 3.5 cents.

    I don’t trade commodities but would suggest that the time to enter this spread trade is when the spread is at or near historical extemes. The current volatility could wipe you out in one day even if you were right about the future direction of the spread.

    This is clearly a weather trade. Regional weather extremes in the major grain growing areas in the world are closely watched by traders.

  2. Luís says:

    Hi there Michael. One of the blogs I follow is Eric deCarbonnel’s Market Sceptics (if you don’t mind the bog whoring).

    Essentially, de Carbonnel has been adverting for the present grains run up on the basis that USDA’s estimates were no where near real production when considering all the bad weather related losses since 2009. Certainly the world market is much large, but globally a gentle downward trend in grain production has been present for a few years. Interestingly now USDA has found 300 million bushels of corn:


    Maybe they think they can make corn out of thin air like the Fed.

    Another important factor pushing grains up is the agro-fuel folly – a scheme where governments pay farmers to transform oil and gas into alcohol and french fry oil.


  3. E.M.Smith says:

    @Luis: Looks like an interesting link (if a bit emotional).

    I use, but never fully trust, government statistics. Too much motivation to be sloppy or cheat and too little competence behind them most of the time.

    On agro-fuels: While I love the idea of biomass fuels, using the grain to get them is a bit silly. I’d rather they grew wood at 50 Tons / acre and did a gasification FT synthesis. (But really it ought to be left up to markets – without subsidies – to make those decisions…)

    At any rate, when you have more variable water supply and cooler temperatures on average (but with the ‘lava lamp’ world making them more variable and with some areas above expected heat) coupled with lower sun shine levels…. I see no choice but for yields to fall. And prices to rise.

    Reminds me a lot of the 1950’s and early 1960’s when we had much more variable weather and much more ‘crop failure’ in various locations.

    So the FDA guys will be running computer models predicting grain production based on a PDO state that is now long gone; and might, maybe, get it fixed just in time for the PDO to swap again…

    And I’ll be looking at the anemic corn plants in my back yard and thinking “Hmpf… not as good as last year; but somethings wrong with yields this year”. Yes, I planted a half dozen corn plants ( I do each year) and they did OK, but didn’t make nearly as much corn as prior years. Something is up… ( I don’t know if that ‘system’ of prediction would work in other states. California with irrigation based agriculture is much more stable than, say, rain fed ag in Oklahoma. I’m not going to be sensitive to things like rainfall, but will measure sun and heat better. Fertilizer is a constant level of “bunny poo” and doesn’t change much ;-) Oh, and we don’t really “do” bugs out here… at least not like in Texas where you can get 10 lbs per square foot of air column in bugs in the summer…

    Oh, and a minor? factor: There are reports of China turning a load of dollars into corn as they move up the ‘food chain’ from buying our pork products to producing their own in larger quantity. Check out the chart for “HOGS” a Chinese hog farmer… Risky and a bit ‘parabolic’ at present, but China is moving down the production chain to corn from US Hogs, and that means growing more HOGS in China..

  4. E.M.Smith says:

    @Jerry Franke: Interesting observation! Where do you pick up those price spreads?

    Yeah, the dynamic between feed costs and animals kept is an interesting one. Hadn’t thought of using it the way you suggest, but it makes a lot of sense.

    FWIW, my “method” generally does not let me enter a trade in the direction of the trend on high volatility. As you pointed out, the volatility collapse can be horrific to option prices (and most of the commodity ETFs work using options or futures contracts). So I watch for a direction, then wait for an ‘entry’ as prices retrace to the moving averages. (And typically on large spikes like the ones we just saw, the market maker was ‘caught out’ and had to sell / buy to make a market so juiced the prices high enough they knew they could ‘cover’ at a profit in a day or two when prices back off.) So I watch for that “market maker recovery” day, and trade with the market maker on that day.

    Buying a one day spike up on the second day is generally a losing trade, and buying a parabolic run away from the Simple Moving Averages is generally a losing trade (though you can do it if you use a very short time horizon and a lot of protective measures against the eventual / inevitable retrace to the moving averages… so ‘day trade’ with the spike but be out at the very first signs of reversal and NEVER ride it back down.) Cotton looks like that kind of spike to me, so I’m not going to buy it unless I learn a heck of a lot more about cotton… A mixed grain ETF on a ‘dip’ after a shock is about as ambitious as I get. Wasn’t willing to buy the news spike, and not willing to buy the day after until there is a market maker cover / dip.

  5. Luís says:

    I’d rather they grew wood at 50 Tons / acre and did a gasification FT synthesis

    Hi again Michael. You provide yourself a very interesting example of why the market by itself won’t solve the present energy crisis. Certainly that liquids synthesized from wood will have higher EROEI than corn – a forest grows pretty much by itself with hardly any energy input. The problem is: a forest takes a load of time to grow; even maritime pines take about 20 years to mature. The market will never make tress grow faster :)

    There may also be an issue with scalability but I don’t have data for that. The US is a very large place,so it certainly can produce relevant amounts of biomass. For places like Japan or Europe it’s a different story.

  6. E.M.Smith says:


    Well, your comment shows you have some “perspective” to work off. First off, there is no ‘energy crisis’ to solve.

    So NO source of energy can ‘solve’ a crisis that isn’t there.

    We’re up to our eyeballs (and then some) in energy sources. See:



    Now there may be a minor shortage of dirt cheap liquid motor fuels, but that is largely the result of government policy being horridly brain dead along with OPEC being clueful on how to manipulate and control oil supply.

    Many times I’ve posted my favorite simple “fix” to that issue. Put a tariff on oil at the US border that is ($80 – Landed Price) for non-North American oil. (Leave Canada and Mexico inside the zero tariff zone). This puts a price FLOOR under oil at $80 and lets OPEC do whatever it wants, they can’t crash the oil price. Since there are dozens of supplies of “oil products” at the $80 price point, this gives them a guarantee against OPEC predatory pricing, so they can get loans and do projects to provide that source of “oil products”. You would see so much development of everything from tar sands to algae and coal to liquids it would make your head spin. To accelerate it even more, you could give it a ‘free ride’ for 10 years on any domestic fuel taxes for new projects (though I’m not fond of that particular finesse.)

    So GIVEN that there is no energy crisis, some of the rest becomes much more clear.

    EROEI is a silly and broken metric. Yeah, wood has more, but so what? What really matters is the FORM of the energy, not some net net net energy gain figure. We throw away about 1/3 the energy in a bbl of oil making it into products. About 1/2 of energy in coal does not make it to your end use.

    I think it becomes clear why it doesn’t matter when you look at a related problem. The “Protein Return On Protein Invested”. We take soybeans and corn (with about 38% protein in soy and 10% protein in corn See: http://www.ag.ndsu.edu/pubs/ansci/beef/as1238w.htm and http://www.northernfeedandbean.com/dairy2.htm ) so call it 20% for a dry mix; and feed it to cattle.

    A chicken will turn about 3 pounds of feed into 1 lb of chicken. A cow will turn about 10 pounds of feed into 1 lb of beef.

    So we take about 2 lbs of protein and turn it into 1 lb of steak (or 2 pounds of protein and turn it into 3 1/3 lbs of chicken).

    But those meats are ‘wet weight’. How much of that raw meat is protein? About 20%


    So we get about 1/5 lb of protein in that steak and about 2/3 lb of protein in that chicken. Our PROPI is 1/10 for the beef and 1/3 for the chicken (we could have shortcut the math by noticing that that protein percent at 20 matched for both meat and feed).

    So are we unable to feed chickens and beef because the PROPI is less than unity? Nope. Why? Because we want beef and fried chicken more than we want tortillas.

    Similarly, we can lift oil with nuclear driven electric pumps because we want oil more than Uranium. We have a large loss of energy in turning coal into electricity. Does the negative “EROEI” of making electricity prevent us from doing it? Nope.

    So as long as ANY source of energy is a net gain, we can chose to throw some of it away in a negative EROEI to improve the FORM of the energy. And we do so every day with most of our energy supplies.

    So while EROEI is an amusing number, it is of little practical value and of no economic importance.

    To your main point:

    “Trees grow slowly” with a 20 year minimum time to get a return. Nope. It may take 20 – 25 years to get a LUMBER crop, as you need large stem sizes, but not for gross tonnage.

    For tonnage, you want to crop faster. The paper companies have learned this, so most of them run on a 5 year or shorter cropping cycle. Our ancestors new this and ran “coppice” operations (where once a stem is cut, you come back each year and cut off the ‘poles’ that sprout from the stump).


    You get most of the increase in growth rate by year 2. So you could start your coppice in year 3 or so if desired. Frankly, it takes longer to get fruit orchards established, yet we grow lots of fruit. (Avocados are about 7 years to start bearing, for example).


    Total acres required is higher than I’d like. IIRC, it’s about a 100 mile wide stripe from coast to coast of the USA to provide all motor fuel needs. I’d rather use algae as it’s about 10 x as productive and cuts it down to a 10 miles wide stripe (or about the width used for major highways coast to coast… very ‘doable’. India is planting the right of way of railroads with biomass and making enough fuel to power the rails… Since they must maintain the right of way anyway, it’s not a net increase in land used or worked.) But if you consider how much land we use for oil production and coal mines, it’s not all that impossible to do.

    I think it would be fascinating to figure out how much tonnage could be grown just on the freeway shoulders and right of way coast to coast… though clearly you get more in Montana and Kansas than in Arizona.

    Also, FWIW, I figured that I can grow enough tons of wood on my home lot (a small one about 1/8 acre) to fuel my cars. So if pressed, we could just change from lawns to trees and fuel our suburbs. (Instead of hauling all our lawn clippings and leaves off to the landfill).

    For Japan and Europe: Yup, trees don’t cut it ;-) But Algae has a shot at a significant mitigation and those rail road rights of way have potential that is under used. And remember that you can grow algae in salt water. So a bunch of salt water algae facilities built in the Sahara could power all of Europe and Japan without much effort at all. (Yes, some cost, but no tech breakthrough needed and with fuel prices about like the excessive priced already charged in Europe).

    All very fixable, and very doable, and with an easy way for markets to give the proper signals to make it all happen.

    OK, with all that said:

    You are absolutely correct that “markets can not fix” this. For the simple reason that they are not ‘free and open’ nor competitive. OPEC brings “monopoly power’ to the party (or ‘oligopoly power’ if you like) and that breaks the competitive market processes. We need to restore the market before it can work properly. To do that requires getting the government largely out of the way, then putting a ‘countervailing tariff’ on OPEC oil to remove the ability of their price fixing and collusion from being able to crash the market and put the alternatives out of business.

    But that is not an indictment of markets. It is only an indictment of “monopoly practices”, and that is a known issue with markets (and illegal in most markets in the USA) so not exactly a surprise.

    What is very clear, though, is that adding the US Government as an inept regulator that makes non-sense rules and can’t hold a consistent thought for more than one election cycle does NOT improve the market nor does it constrain OPEC’s monopoly power. It just makes things worse. (Remember MTBE? How about that biofuels mandate? Going for 15% ethanol AKA “dissolves light metals in cars not designed for it and runs crappy in the cold”… and how about the Methanol push of the late ’80s? The “E-Cars” fad of today? It’s a long and sad list of screwing around with fuels and screwing up markets.)

    And thus my “fix”. A flex tariff that constrains OPEC and get the Government out of the market. Then a competitive and fee market would “fix” our “energy supply issues” (that are NOT a shortage nor a crisis).

  7. bruce says:

    you speak clear enough I believe you could reach a large part of the population.
    Since I don’t think B.O. will put you in as energy czar you will have to run for office.
    Either that or find a puppet you could pull the strings on.

  8. Jerry Franke says:

    @E.M.Smith: “@Jerry Franke: Interesting observation! Where do you pick up those price spreads?”

    I use Bloomberg’s Commodity Futures page. Unfortunately, they do not post the leading month in their quotes. Since I am not a trader it works for me as a quick look at market trends.

    To better illustrate my point, I should have cited the CME price charts for the October contracts for Feeder Cattle vs Live Cattle. There one can compare the July 1 spread of 21.5 cents vs the Oct 8 spread of 12 cents. In that span of time the grains have appreciated over 30%.

    Although weather extremes in the principal growing regions are a great influence on the price of grain, it will not be lost on your readers that the value of the dollar is also a factor to be considered. Movement in the value of the dollar has a small but direct influence (due to the beef export trade) on live cattle prices. Feeder cattle will move in parallel as long as grain prices are stable.

    Simply put, grain prices dramatically affect the spread between live cattle and feeder cattle. Feedlot operators know exactly how much grain and fodder is needed to add a pound of weight to their animals. As grain prices rise their margin of profit on each animal will be reduced unless they pay less for the feeders. Both grain and cattle futures hedging is a vital component in large scale feedlot operations.

    A short explanation is due for those not familiar with the difference between feeder cattle and live cattle. A feeder is a young animal usually weighing 500 to 700 lbs. Live cattle (sometimes called fat cattle) are at a mature weight of usually 1500 to 1800 lbs. You could think of live cattle as “soon to be dead” or “soon to be people food” cattle.

  9. E.M.Smith says:

    @Bruce: Thanks for the vote of confidence! I can’t run for office. I “have issues”. First off, I’m fundamentally honest. I can construct a decent lie if pushed into it with no other alternative, but it’s a very draining process and not natural for me. So I’d get tired and stop lying about a week into any campaign and that would be lethal to any election hopes.

    The last thing that any political process could survive is an honest person who is afflicted with a moral compass.

    So at best, I can stand on the sidelines and “carp” about things.

    BTW, that same “moral compass” problem would prevent me from “pulling the strings” on anyone else. I can act as an honest and accurate advisor ( I don’t “intimidate worth a damn” so folks can’t corrupt me. I’ll never get rich off a bribe nor fold to a person who “has the goods” on me – real or fabricated. I’d call a press conference and present a full dossier on myself and them along with photos first. I’d enjoy watching them have their head explode that someone would play tapes of the attempted blackmail or bribe session, even if terminal to my own hopes, rather than knuckle under. Yes, I’m THAT kind of person. Death before dishonor. And I mean it.) So if anyone wants a person who will always give them “the straight dope”, I’m their guy. But nobody wants that. They want someone who will tell them they look good in plaid and that they are much smarter than average with an I.Q. of 90… and that the answer to the problems of the country is for them to have more power… Nobody want’s to hear “That problem can not be solved.” nor “The best thing to do is to do nothing.” Yet most of the time that is the truth.

    We would be a much better nation with a monetary system that was NOT managed (i.e. a stable currency no matter what; be it gold, silver, copper, nickel, zinc, or even just paper that was of fixed size.) Similarly, we would be much better off if we did NOT have “stimulus” nor a “minimum wage” nor most of 90%+ of the things the government does. But nobody wants to know that. (For minimum wage: All it does is to prevent folks from getting a job. There is a “clearing wage” and to the extent the “minimum” is above that, all it means is that someone does NOT get hired. If I can’t break even on a person, I don’t hire them. If I can set a wage where I DO break even or better, I’ll hire them even if all they can do is make one hamburger per hour. Then it’s up to them to decide if that wage is “worth it” for them.)

    Why in the world is the Federal Government involved in education at all? My spouse is credentialed for a “one room school house”. That means she can run a K-12 school all on her own, not even a principal (and forget a district supervisor and all the fluff, and screw the Federal Dept Of Education). So where does all the money go? To all that overhead outside the classroom. So I’d be for complete abolition of all Federal AND State departments of education (and probably even the school district level). Send all the money strait to the classroom and crendential teachers for K-12 one room and be done.

    No way that’s going to get me elected to anything… Nobody gets a payoff, a government job, nor a big retirement package. Not even folks in the street working for their re-election.

    I’m about getting rid of power, not accumulating it. Not politic at all.

  10. Bruce Ryan says:

    seems like you just expressed a winning platform… for about 51% of the population. 0% of the players.
    Somehow we do need to get there, the alternative is not good.

  11. P.G. Sharrow says:

    I wish you would not state that biomass production is yearly 50 tons per acre. In good field production 10 tons per acre per year is a better figure. This is dry weight in poplar, eucalyptus as well as switchgrass. The rest of your feed stuffs to animal production is close enough. Most good operators will get as good or better conversions. Cost to pound production is more important then effecientcy of pounds to pound conversion.

    I like your ethics, once long ago I was in politics. I don’t know which was worse, being accused of taking bribes or the fact no one ever offered one. ;-) It was a lot easier to work behind the screen then in front of it.
    ” It’s a lot easier to get things done if you are not concerned about who gets the credit.” pg

  12. P.G. Sharrow says:

    I read once, about 10 years ago, that If you eradicated the state department of education, you would free up 6 billion dollars. I remember when there was no state or federal departments of education. No professional administrators and California had the best education system in the country. Too bad Sacramento had to fix it. In the mid 1950s there was a big push to consolidate the local districts into Unified School Districts and bring in professionals to run them in a more effecient manner. They did build a lot of big fancy campuses with grand admin buildings. Schools went from a lead teacher ( principal), with one secratary and a hand full of teachers to an administrator with assistances and secrataries. Students on the other hand went from the most valued product to a commodity to be processed in volume at the least cost per head. The unions and politicans have colluded to create this wreck. pg

  13. E.M.Smith says:
    Year When Cut	 Yield Per Acre Dry Wood (lb.)
    First cut	 Second cut	First cut	Second cut	Total
    1960	 1965	 120,382	 41,536	 161,918
    1961	 1966	 116,311	 37,278	 153,589
    1962	 1967	 119,271	 89,848	 209,119
    1963	 1968	 82,950	 58,721	 141,671
    Average	.	109,729	56,846	166,575

    So 200,000 divided by 2000 is 100 tons per acre, dry wood.

    Yes, you are right, I ought to stop using 50 tons per acre… and start using 100 tons. ;-)

    (though that is after a 5 year regrowth, so really about 40 wet tons or 20 dry tons / year. In footnotes it lists “The yield of dry wood varied from 17 to 54 tons per acre, depending on the species.”)



    you will find a table that shows in the 2nd year of growth, E. Grandis produces 63 tons / acre (wet).

    Yes, low end grass is about 1 ton. High end special circumstances bamboo and E. Gradis is over 50 tons. Most trees are about 10 to 30 tons.

    So take that spectrum from 1 to 63. If you would rather use 1/10 or 1/3 of the range, go ahead. But please do realize that 50 tons / acre is possible (wet). And since wood is harvested wet I usually talk about how much can be grown and harvested in wet tons; but product I tend to quote as dry tons, since that is the product as used. That can be confusing, but it more accurately reflects the facts on the ground (and in the truck loadings…) Given that, to say one can grow 50 tons / acre is accurate. To say the typical dry yield of biomass was 50 tons / acre / year is not accurate. For E. Grandis it’s more like 30 tons dry / year with mulching and fertilizer in years 2 and beyond. For selected well tended bamboo, 50 dry tons / acre / year is possible, so accurate, even if a bit of ‘sellers puff’ is in the figure as it is an edge case. If it makes you feel better, think of them as “aspirational tons” ;-)

    Oh, and nice to have the confirmation of similar experiences / observations about the school system…

  14. P.G. Sharrow says:

    As a farmer I had to deal with real production and cost per ton produced on real land. Trees are generally grown on class 3 or worse land as class 1 & 2 land is used for food production. Research plantations are generally the best land in the area with no soil or water limits, and high labor imputs. Trees require at least 15 to 20 inches of water a year for acceptable growth, a very limiting factor in the western states.
    To sell biomass in California you are paid about $50.00 per ton delivered to the utilization plant, net dry weight. It must be gathered and hauled, costs are on gross weight. Over 50 miles haul will equal less then zero net income to the land.
    While I have seen many promoters sell ” Aspirational production” I have never been able to do it. :-( must be a mental defect.
    You are very correct in that CO2 is generally the most limited plant nutreint in most cases of field production. pg

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