Canada's Hidden Land Resource

VANCOUVER - Dec 29/06 - SNS -- Biofuels have changed the raw fundamentals of international grain markets and their impact will continue to intensify as new plants come on stream around the world and the percentage of ethanol and vegetable oil used in fuels rises.

Some believe this will push corn prices above U.S. $4 per bushel on several occasions during the coming decade, reflecting intense competition for North American land resources between corn and soybeans in the United States and Ontario.

Demand for offgrade wheat and canola will also rise in western Canada, but the region has massive reserves of agricultural land which can be brought into use, something which will also influence future specialty crop area.

Summerfallow, which remains a key part of traditional western Canadian farming practices, totalled 10.71 million acres in 2006. Few Manitoba farmers still adhere to this land management practice, but in Saskatchewan there were 7.85 million acres in summerfallow and in Alberta 2.425 million.

Competition across the full range of commodities for land is raising gross revenue opportunities for western Canadian farmers. Even so, suggesting land will move from summerfallow and into specialty crops, grains and oilseeds is not appreciated by those trying to build long positions in the belief output of some commodities will fall short of market requirements in 2007-08.

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