GRAIN TRADE & MARKET DEVELOPMENT COMMITTEE NOTES
OCPA SEMI-ANNUAL MEETING
Ontario Corn Producers’ Association
September 9, 2008

Grain Trade & Marketing Development Policy Committee

Ethanol Update
Integrated Grain Processors Co-operative (IGPC)
Congratulations to IGPC on the completion of the first farmer-owned ethanol plant in Ontario. IGPC provided many tours through the plant, including a tour for OCPA directors and staff in July.

IGPC started buying corn in August 2008 and are working through the process of bringing the plant into operation. They expect to be operating and producing ethanol by the end of September.

FarmTech Energy Corporation
FarmTech Energy Corporation and FarmTech Growers Co-op announced in April 2008 that plans were underway for a 210 million litre dry mill ethanol plant at the industrial Port of Oshawa. A federal government report prepared by the Honourable David Crombie was released on September 2, 2008. The report recommends a mixed-use waterfront in Oshawa with industrial, residential, retail and recreational users. The report also recommends that the ethanol plant proposal as well as a rail spur line be addressed.

Suncor Energy
Suncor Energy announced July 18, 2008 that the capacity of the St. Clair Ethanol Plant would be doubled to 400 million litres per year. It is expected that the expansion will be completed by September 2009.

Bill C-33 Update
Bill C-33 which is an act to amend the Canadian Environmental Protection Act, 1999 was introduced to the House of Commons in December 2007 and received Royal Assent on June 26, 2008.

This Bill amends the Canadian Environmental Protection Act, 1999 with respect to provisions for the regulations of fuels. It establishes minimum levels of biofuel content in gasoline, diesel fuel and heating oil to be implemented within three to five years; 5 percent average renewable content in gasoline by 2010 and 2 percent average renewable content in diesel and heating oil by 2012.

During the time this Bill was debated and passed, there were discussions and debates about food versus fuel that took place in the media, in the House of Commons and in the Senate.

Supply & Demand Report
OCPA has resurrected the monthly Supply & Demand Report for grain corn. This report is available on OCPA’s website at www.ontariocorn.org.

Gibson’s Finest Whiskey to be Produced at Hiram Walker & Sons
Gibson’s announced in late August that the company was moving its Gibson’s Finest Whiskey production from Quebec to Hiram Walker & Sons in Windsor. It was stated by Gibson’s that all grains used in the production of Gibson’s whisky will be from local farmers and suppliers.

WTO Update
There are really two steps to the WTO process; first there is the need to agree on a set of modalities. Second, a new schedule of commitments to the existing tariff schedule. As a refresher, the Doha round started working on the modalities in 2001.

On July 29, 2008, the talks on the Doha round of global trade negotiations broke up in Geneva without an agreement on modalities. Earlier in the month, there were 12 highly political issues left to resolve. As a result, an informal meeting of the ministers was held from July 21 to 29th in an effort to conclude this round. A group of seven (United States, European Union, Brazil, Japan, China, India and Australia) was formed in an attempt to close the gaps among the key members. Ultimately, it really came down the issue of Special Safeguard Mechanisms, which is a right for developing countries to raise tariffs to protect their farmers against a surge of imports. This triggered a deadlock between the US, India and China; the US wanted the safeguard to be set relatively high whereas India and China wanted the safeguard set low.

The next steps are unclear. Obviously, the members need to close the gaps in negotiation positions. At the same time there are other pressures including the upcoming U.S. presidential election, the dynamics in the European Union with France serving as chair, and the election cycles in other countries such as India. Bottom line is that the issues are not of a technical nature anymore; they are political.

Direct Buy Programs
On-line direct buy programs are available through Casco and GreenField Ethanol. Current bids are posted on their websites which provides producers with a marketing tool to monitor current price and basis offers and future pricing opportunities.

For more information, check the following websites:
Casco – Sell Your Corn – www.sellyourcorn.ca
GreenField Ethanol – Ontario Buy Direct Program – www.greenfieldethanol.com