Agriculture: The New Disruptive Technology

As I mentioned in a previous post, while I was at eHelp my offsite time was focused on researching Energy, Internet Communication Technology (ICT), and beginning in 2004, Agriculture as emerging sectors.

After working intensely with supporting the then-new RoboDemo community, I decided that eLearning and Blended Learning were killer apps which couldn’t be ignored.

So my grand NorCal plan evolved. Take active duty, soon to retire military vets and train them in a California industry - vineyard management. Vets2Vines was born. And now Ag is the new hot trend. Like I could have planned it any better.

Here I am, positioned with both Renewable Energy and 40 acres of prime, irrigation subsidized Northern California property. The agriculture boom is still on - MarketWatch

As oil flirts with $120 a barrel and corn shoots up over $6 a bushel, it’s clear that demand is real for both commodities, and yet there’s also a bit of froth in those prices as well. How much of it is speculation?

…I have been hearing for three years that corn price couldn’t possibly go any higher. I heard that argument at $2.50, $3, $4.50 and $5. Now here at $6.20, the same bearish absolutes are being spouted from all over the place and my indicators tell me that it’s simply not true.

How much is that in real dollars?

The average bushel to acre breakdown is 183:1. Math says this year will be $7.50 per bushel. That’s a little under $50k for the property. Only half to a quarter what winegrapes would bring.

Then again I don’t have to string all those wires and posts for the vines. And wait 4 years with stranded costs while the vines grow. And do forward contracting to lock in the client. Lowers risk if you make money year 1 instead of year 4. 

Ethanol is what’s got farmers all excited. And the market’s guaranteed.

It doesn’t have to come from corn, either.

Sugar is the New Oil

Sugar beets were Solano County’s prime source of cash crops twenty years ago. According to a recent National Geographic I read, Brazil’s ethanol comes primarily from sugar cane. Sugar beets, sugar cane… Jimmy Smits says it best: Sugar is the New Oil.

From the USDA:

The estimated ethanol production costs using sugarcane, sugar beets, raw sugar, and refined sugar as a feedstocks are more than twice the production cost of converting corn into ethanol.

While it is more profitable to produce ethanol from corn in the United States, the price of ethanol is determined by the price of gasoline and other factors, rather than the cost of producing ethanol from corn.

With recent spot market prices for ethanol near $4 per gallon, it is profitable to produce ethanol from sugarcane and sugar beets, raw sugar, and refined sugar.

Umm. So According to this article, with gas now at $4 a gallon we’re now able to produce ethanol at just about the same cost.

Well, technically the really really cost efficient way would be producing ethanol from molasses produced as a byproduct of the processing of the sugar beets, with HFCS being the other product.

If you build it… they will come…

I’ve already got people stopping by my place to ask me when they can build one just like it. Super simple, not a lot of framing, and near-zero energy footprint.

Funny how a little thing like renewable energy can get people jazzed up now that fuel is through the roof. 51% of our energy still comes from coal, but you know… California’s transmission grid is SuX0r.

I just realized, that as I was penning my Worst Day Ever post about how tough it is to be an entrepreneur (I hate that word)…

…That this little project of mine which has appreciating decently 5% year after year BEFORE the price of corn went through the roof.

Residential units are depreciated 20% in Solano County and here I sit, on a gold mine.

I just realized that all the pain and toil I’ve put into the past year is really really going to pay off. All I have to do is enjoy the view after I finish the next project.

Oh, and the cost of energy?

I’m pretty relaxed about that as well. The six windmills and interconnect I’m going to put in as a micro-wind farm has me kicking back on that matter as well.

Not to mention that my SIP constructed home is 60% more efficient than the best standard stick construction home.

Ask me about Hubbert’s Peak, and I’ll show you my (proven) concepts for hydrogen electrolysis from water. Oh yeah, electrolysis for free since the wind power is up.

“The fundamental question from today’s perspective is how to produce hydrogen,” said Andreas Schafer, a research associate at the Massachusetts Institute of Technology’s Center for Technology, Policy and Industrial Development.

Umm. Well, according to our calcs that great resource called WIND. D’oooh!

Hydrogen used how?

To run your turbocharged vehicle. Just like a NOX canister you can force H2 into your engine’s combustion cycle.

It gets you about 25% more fuel, according to several sources. More on that later. That’s what my brother’s working on. We’ll be selling them after we find a good manufacturer.

It’s nice to have options.