September 7, 2006

Increased biofuel production would reduce EU reliance on soymeal
 

The trend towards using more food crops for biofuels would impact on European agricultural markets and reduce its reliance on US and South American soymeal, John Townend of Arkady Feed UK Ltd said Wednesday (Sep 6).

Townend said increased use of rapeseed oil to make biodiesel, for example, would leave abundant supplies of rapeseed meal. This in turn could cut use of US and South American soymeal in Europe.

Arkady Feed is a unit of Toepfer International, which is 80 percent owned by American agribusiness giant Archer Daniels Midland.

Townend said increased use of crops such as wheat to produce ethanol had the potential to reduce the European Union's grain surplus.

If so, there may even be a day when grain prices may be determined by the demand for energy rather than the demand for food as the world comes to depend increasingly on food crops as its energy source.

For example, Britain aims to make 5 percent of its motor fuel supply coming from renewable sources by 2010, a lofty goal which would have required a 20-fold increase in biofuel use from present levels, he said. 

However, Peter Kendall, president of Britain's National Farmers Union, said the impact of biofuels on agricultural prices may be overestimated.

Kendall noted the price for the rapeseed was now half of that several years ago. He also noted that energy could also be produced from many other farm by-products such as waste straw and effluents.