If it made economic sense then they would be producing as we speak. Unfortunate the production costs, including energy and feedstock, far outweigh the margin (at the moment). In line with this as soon as oil prices increase food prices follow thus destroying any margin that may have been realized.
It stands to reason one year ago that bio fuels may have been an excellent source of extra fuel, however at the moment it doesn’t look good.
Agriculture is part of an elastic economy, that said, drought, technology and an increase in arable land all change the price of feedstock. Therefore if production is up then more food is brought onto the market and thus it will be cheaper. This is about the only hope….as far as I can see.
I’m not trying to be a nay sayer I’m just pointing out the cold hard facts.
In addition to this, why would they purchase up stream assets? What is the point of investing in to a farm upstream only to turn the produce into a product that produces less profit compared to selling the raw material directly onto the open market.
We will see, I do not know what happens behind the boardrooms doors, I do know that I am eagerly awaiting some news about what is happening.
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