Paul Saccani wrote:
>On Wed, 16 Apr 2008 19:10:42 +1000, John_H <john4721@[EMAIL PROTECTED]
> wrote:
>>Paul Saccani wrote:
>>>On Tue, 15 Apr 2008 18:38:28 +1000, John_H <john4721@[EMAIL PROTECTED]
> wrote:
>>>>
>>>>But do you seriously think you can buy vegetable oil cheaper than
>>>>diesel?
>>>>
>>>>As an example... current quote (today's price) for sunflower seed is
>>>>$745 a tonne ex farm. It yields around 40% oil.
>>>>
>>>>Factor in the cost of cru****ng and distribution and it's gonna cost a
>>>>****load more per litre than diesel... which is probably why those who
>>>>grow the stuff don't bother either. (The price is also on par with
>>>>other oilseeds of similar oil content.)
>>>
>>>And yet Canola farmers in WA, who get excise free Diesel find it
>>>economic to divert part of their crop to produce biodiesel for their
>>>farm machinery.
>>
>>Some farmers aren't very good at arithmetic!
>
>But most are, as are these ones.
The arithmetic is pretty simple. Based on sunflower (because I'm
familiar with the commodity)... today's contract price for mono
sunflower is $755 per tonne (ex GST), on a 40% oil basis (ie the price
is adjusted according to the oil content).
Which makes the oil worth $1887.50 per tonne in the shell (before
cru****ng). Assuming an SG of 0.8, that works out as $1.51 per litre
(ex GST). Since the end use is the same (cooking oil and margarine)
I'd expect canola pricing to be similar.
Where I am, last month's price for bulk diesel was 94.6¢ per litre
delivered on farm (less excise, less GST).
>
>>Apparently there's also a significant number who don't bother to claim
>>the excise rebate either -- they find it too complicated. :)
>
>Yet these farmers find themselves around $250,000 per year ahead,
>compared with selling the oil and buying excise free diesel.
What, for the whole state of WA? :)
The logic is equally simple. The farming operation I'm involved with
spent 2.5% of its gross income on diesel fuel for the last financial
year. Farm size is around 4,000ha with 1500ha under crop (I've got no
idea how that compares with WA farms).
That's $25,000 on fuel for each $1M of income. Thus a _total_ fuel
bill of $250,000 (irrespective of the amount saved) would indicate a
farm income of at least a billion dollars (and pigs might fly)!
And yes, I do know of a few farmers who make biodiesel from waste
cooking oil. Most of them would be considered as having only
marginally viable farms, lots of unpaid time, a free supply of waste
oil, plus the shed space for the biodiesel plant (ie their overhead
costs are next to zilch). Those who sell it commercially (some do),
at prices comparable with conventional diesel, don't seem to be
getting particularly wealthy either.
The option for running straight vegetable oil has always been there
(I've been fully aware of it for nigh on thirty years) but the sums
have never stacked up.
--
John H
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