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Canada Hog, Ethanol Industries Seen Battling For Wheat

by 5m Editor
8 May 2006, at 12:00am

WINNIPEG - A battle between Canada's hog industry and Canada's growing ethanol sector for high-starch, low-protein wheats is expected to heat up beginning in the calendar-year 2006-07 (August/July) crop year, according to an industry source.

"The coming on line of two large ethanol-producing facilities will likely result in some battling for the same type of wheat," said Glenn Lennox, a wheat analyst with the Market Analysis Branch of Agriculture and Agri-Food Canada.

He said both the domestic hog industry and the ethanol sector prefer to use Canada Prairie Spring or winter wheats, but will also use a No. 3 Canada Western Red Spring wheat.

Production of CPS wheat in Western Canada during the 2005-06 season totaled 1.42 million metric tons while winter wheat output in Western Canada came in at 469,000 tons, Lennox said.

Canada's total industrial wheat usage during 2004-05 (August/July) was 135,000 metric tons, of which the bulk was used in the ethanol industry, Lennox said. A small amount would have also been used for the industrial starch market, he said.

During 2005-06 industrial wheat usage was pegged by Ag Canada at 160,000 tons, of which at least 130,000 was seen being used only for the ethanol sector. However, in 2006-07 with the anticipated coming on line of the two new ethanol plants in Western Canada, industrial wheat usage initially will jump to just over 400,000 metric tons, of which the majority will be for the ethanol sector, Lennox said.

Canada's hog sector was believed to consume between 3.0 million to 4.0 million tons of all types of wheat on a yearly basis, Lennox said. No specific breakdown was available on how much CPS or winter wheat was fed to the hog sector.

Source: Dow Jones Newswires

5m Editor