Synthesis Agri-Food Insights
July 28, 2009 Volume 1, Issue 2
Helping you understand agriculture's challenges and
opportunities by analyzing the issues and sharing their insights - the Synthesis consulting team Rob Hannam, Mary Lou McCutcheon, Julien DenTandt, Peter Hannam and Heidi
Dancho.
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The opportunity of bio-materials
Farmers can help the economy and the environment by taking
advantage of the new opportunities offered by bio-materials.
And it's essential
for growers who hope to have a prosperous future growing soybeans, says a
soybean industry leader.
"Canadian growers can't be profitable or progressive if we
just grow soybeans to compete with other, lower cost of production areas," says
Peter Hannam, President of Woodrill Farms near Guelph, Ontario
and a member of the Synthesis consulting team. "But bio-materials provide an
additional opportunity that also helps the economy and the environment."
The global increase in demand for soy protein, both for food
products and for animal feed, means there is also an increase in the amount of available
soybean oil, which can be used to make a variety of products currently made
from a petroleum base. These are called bio-materials and include products like
car parts, which are already being used by some automobile manufacturers.
Developing a market for bio-materials can boost the economy,
says Hannam. Products like fibre glass or polyurethane pellets are currently
imported but could be replaced with ones produced by farms and businesses. Many
small, local companies are ideally suited to working with new products,
creating jobs in the community but also assuring the agricultural sector of new
income.
Environmentally, bio-materials are also a winner. As a
renewable resource, they reduce our dependence on fossil fuels and their
manufacturing processes are cleaner, safer and more efficient than what is
currently in use.
"For every kilogram of plastic produced from petroleum, 3.5
kg of carbon dioxide is added to the atmosphere. In making one kilogram of
plastic from soybean oil, two kilograms of carbon dioxide are removed from the
atmosphere," says Hannam. "This means we're actually reducing greenhouse gases
through bio-materials, so there is no debate about the environmental benefits."
Although Hannam sees the automotive sector - bumpers, foams
and other car parts - as the most immediate bio-materials market, there are
also emerging opportunities for products like paper, insulation, plastics,
building materials and fabrics.
The challenge, though, is the establishment of processing
facilities for these new opportunities. Companies are generally reluctant to
make large scale investments in processing infrastructure until new products
are proven in the marketplace.
And that can often be difficult to do until a
product is mass-produced. The answer, believes Hannam, lies in partnerships and
market development.
"We need to develop our markets first using existing oils
and then develop and grow specialty varieties to help add stability to our
markets," says Hannam, adding "Nothing inspires farmers more than specialty
markets, and people see the potential here to benefit both our economy and our
environment."
Insights - So what
does this all mean?
Shift away
from commodity-thinking: farmers need to think about the markets for their
crops before planting them. The real value lies in carefully targeting your
market and growing for specific needs.
Smaller
acreages: as these new opportunities evolve, we will see smaller acreages
of crops grown for very specific purposes. Ontario
and Quebec,
with their smaller land bases, are particularly suited for this evolution.
Develop
the market first: Farmers are quick to respond and will if there is an
incentive to do so. The onus is on the industry to develop the market for
bio-materials first - even if it is necessary to transport in the inputs and raw
materials at first to meet demand.
Growing
pains, then stability: the supply, demand and infrastructure of new
industries rarely come together at the same time and maximum profitability
won't be realized until all the pieces are in place.
An
enormous opportunity: There is great opportunity for agriculture and the
manufacturing sector to join forces to create new jobs and new income streams,
as well as making a positive environmental difference.
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Sincerely,
Rob, Mary Lou, Peter, Julien and Heidi
Synthesis Agri-Food Consulting
"Our Passion is Problem Solving"
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Glossary
Bio-products -
anything made from current living organisms, including plants, animals and fungi, instead of petroleum. Mostly refers to bio-materials and bio-chemicals, but
some interpret it to also include bio-fuels.
Biofuels - alternative fuels made from renewable resources,
such as ethanol or bio-diesel.
Biodiesel - a diesel alternative made from plant oils, like
soybeans, canola or used cooking oils.
Bio-materials - products that are made from crops instead of
petroleum, such as car parts, paper or clothing.
Bio-chemicals - chemical products, such as paints, soaps and paint
removers, that are made from plant materials.
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