prices to business plans across the industry. Yet this assumption may prove to be incorrect. There is a strong


track record of soft commodity prices tracking oil prices (see graphs below) yet recent high oil prices have led to innovation in oil extraction methods, with fracking offering real potential to extract more oil. Indeed, many commentators expect the USA to become energy


independent through the use of fracking and other new technologies by 2016/17. What impact could this have on global feed and dairy prices? Well


it could be significant. The USA biofuels mandate - the Renewable Fuel Standard (RFS)


regulations – were created in 2005, and established the first renewable fuel volume mandate in the United States. The original RFS program (RFS1) required 7.5 billion gallons of renewable fuel to be blended into gasoline by 2012, whilst a revised programme (RFS2) increased the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022. The USA introduced these regulations to help it achieve significant


reductions in greenhouse gas emissions, reduce imported petroleum and encourage the development and expansion of the renewable fuels sector. Yet since 2005 things have changed. No one needs reminding about the global economic meltdown


and the impact this has had. Soft commodity prices have shot up, adding inflationary pressure that politicians would rather avoid, whilst agriculture has suffered due to increased costs of production and extreme weather. So, if new technology means that the USA could become energy


independent, the agriculture sector is recovering, and politicians want to avoid food inflation, who’s to say that the US government won’t relax its biofuels legislation? And additional supplies of oil should result in an easing of the oil price. If this set of circumstances were to occur, the consequences would


be far reaching. The volume of agricultural commodities supplied on to world markets by the USA would increase as crops were diverted away from biofuel production. Global costs of production would decrease due to easing oil prices. The dynamics of the market would shift, resulting in lower commodity prices. Politicians would smile at lower food inflation and consumers would feel less pain in their already stretched pockets. Ultimately, this is ‘crystal ball gazing’ of course. But this scenario


could happen and that fact alone makes it worth considering. The automatic assumption that commodity prices will carry on rising doesn’t necessarily stand scrutiny any more. Whilst it seems likely that the fundamentals of growing world population and GDP mean that the trend for prices will, in the long run be an upward curve, we cannot assume that it will always be a smooth upward curve! Equally, the assumption that agricultural commodities will always


be in short supply isn’t necessarily so. The only thing that we can be certain of is uncertainty. And the way to deal with that uncertainty is to ensure that businesses are run with low cost structures, high efficiency and with risk management strategies in place to minimise the impact of volatility on business returns.


PAGE 58 JANUARY/FEBRUARY 2014 FEED COMPOUNDER


FEEDPRINT: INSIGHT INTO GHG EMISSIONS OF THE FEED PRODUCTION AND UTILIZATION CHAIN Theun Vellinga1


and Hans Blonk2


1Wageningen Livestock Research, Lelystad, the Netherlands 2Blonk Consultants, Gouda, the Netherlands


Corresponding author: Theun Vellinga, PO Box 65, 8200 AB, Lelystad, the Netherlands, Email: theun.vellinga@wur.nl


The contribution of feed to the total emissions of livestock products is about 35% for ruminants and 70% for monogastrics. For this reason, the feed related industry wants to increase insight into emissions and explore mitigation options. A database and calculation tool have been developed to cover


all feed materials used in the Netherlands, sourced from different continents. To perform a cradle to farm gate LCA, this is combined with nutritional and farm models. The database is unique and contains new approaches in data collection and allocation methods. Transparency and wide acceptance are key words for industrial stakeholders, because identification of mitigation options is considered a pre competitive issue. Due to a lack of good quality data, new methods have been developed to improve allocation procedures in industrial processing, to estimate the application of N from animal manure, to calculate the GHG emission of grass, to calculate GHG emissions related to land use change and to calculate uncertainty. A distribution type and range has been attributed to all data and emission factors. Monte Carlo simulation is used to gain insight in the overall uncertainty. Emissions from enteric fermentation are based on a dynamic


rumen simulation model, providing specific emission factors per feed material. A strong stakeholder involvement has been realized via working


groups with industrial stakeholders and appeared to work in two directions. Researchers received feedback on data and methods, stakeholders became aware of the complexity of LCA and the related data requirements. The calculation tool FeedPrint shows a breakdown of all feed


materials and compound feed, showing emissions in all phases of the feed production chain. In the cultivation phase, nitrogen inputs from synthetic fertilizer


and animal manure play a very important role in the level of GHG emissions, mainly from nitrous oxide emissions at production (only synthetic fertilizer) and application. After cultivation, the main source of GHG emissions is CO2,


coming from the use of energy in processing, transport and grinding, mixing and pelleting in compound feed production. In compound feeds, CO2 is the largest fraction of GHG emissions. In general, GHG emissions from transport are limited, especially in the case of transport by inland ship or sea ship. Drying wet co-products from food and beverage industry, from biofuel production and drying grass and forages, is a very energy


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