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Seaboard Corp. Message Board

  • westforkcreek westforkcreek Mar 8, 2006 9:35 AM Flag

    biodiesel fuel production

    From the annual report ...

    "The Pork segment is currently planning to expand its processed meats capabilities by constructing a separate further processing plant, primarily for bacon and sausage processing, at an approximate cost of $40.0 million. Construction of this facility is expected to begin during 2006 and to be completed in 2007 with approximately $29.3 million to be spent in 2006. In addition, the Pork segment is pursuing the construction of a processing plant to utilize by-products from its Guymon processing plant to produce biodiesel which will be marketed to third parties. This plant will be completed in 2007 and its estimated to cost $18.5 million with approximately $11.1 million to be spent in 2006. Triumph Foods has the option to participate in up to fifty percent of this project and is in the process of reviewing its
    participation."

    I found this paragraph, from the annual report, interesting. Not heavy on facts, but it does give a little hint about plans for further diversity.

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    • I don't think I was too far off with my $2 est. I could try to do a little research. South Bend In has a prosessing plant (20 yo). I'll let you know what i find out there.
      s

    • sllide I appreciate your insite
      s

    • Slide,
      Thanks, I wish I wasn't already so overweighted with this stock. I did manage to average down, although it sure felt like the "falling knife" for a while. I'm looking to reduce my position a little if we approach 1800. Will hold the rest for 3000 or until my granddaughter goes to college (she'll be three in July).

    • Kripm,

      Firstly, the weekly chart looks great. MACD hist is a bearish divergence, and it's about to break into the positive. This last week's action was strong.

      Today closed at the resistance set by the high of 1/20/06. After breaking this resistance, the next resistance is at 1684; set by the high on 12/23/05. So we have two resistance points to get through before approaching the 1840 level.

      Now, draw a trend line through the close of 02/13/06 and the close of 03/06/06. Note, that we are staying above this line. All indicators show that the stock is extremely bullish right now. I think it could break 1550 resistance next week.

      It looks like we may test the 1800 level by the second week of April. That's usually the time period that this stock corrects. My crystal ball just doesn't see out that far.

      slide

    • <<I think there is a lot of surplus capacity out there that would come to market, if the demand was there to turn it into fuel.>>

      The only reason that there's not more surplus is the government program(s) that pays farmers not to raise corn.

      That one has always made me shake my head with incredulity.

    • Don't forget that marginal corn is sold as feed corn, including for hogs and chickens.
      It would seem that you need pretty good corn to make ethanol since it involves converting sugar to alcohol, especially since the best we can do with present methods still results in arguably net negative energy benefits.

      Slide-what do you make of the resistance at the $1550 level ? Do you see us dropping back a bit before makin another run ? I was hoping that institutional rebalancing of their portfolios in favor of commodity stocks would provide the impetus to get us above a 1550 close. At least in the short term, I see that as either the top of the present trading range or the bottom of a new one. Any thoughts ?

    • Mrscience,

      I would agree that the corn they use would be of lower quality, but are you certain about the prices? Several bushels for $2?

      But, ... I would be in agreement that the cost to convert it to ethanol is fairly expensive. It would be great to be able to see some honest numbers here, but there is just too much vested ($$$$) interest. The universities want more research dollars, so they highly exagerate the percentage yields and returns. Like the drug companies (remember Vioxx), the real test data is likely buried somewhere in Nevada.

      Do you know of anyone where is producing ethanol, from corn, and making a decent profit? I know that ADM is doing this, and their stock has gone up. However, is there any real/accurate information on their profit, as a function of this profit center only?

      slide

    • Mrscience,

      I don't follow IPOs. Most of my corporate experiences gave me a very negative slant towards them. IPOs are usually a means for the initial investors to get (cash) out (i.e. a "liquidity event", as they call it). Some businesses of course, are honest and straight-forward .... looking for cash to grow more quickly to the next phase.

      I only invest in stocks (companies) with at least a couple quarters of growth and earnings; and never invest in a company with negative earnings. I know you didn't ask for the additional information. Just my three cents.

      slide

    • Slide I also meant to ask you: what sight do you suggest I monitor to keep abreast of upcoming IPOs?

    • Here is my addition to the biodiesel discusion. You may be paying 2 bucks for 3 ears, thats good quality food corn. The corn that goes to the processing plants is lower quality and in extremely huge quantities. $2 will get you several bushels. Yet it is true, sorta, that ethanol from corn is more expensive (and will always be) more expensive than gasoline from crude oil. This is mostly because we have to accelerate the evolution of corn into an 'oil' in just a few seconds as opposed to the natural evolution of vegitation turning into 'oil' in 350,000,000 years. that short cut in time costs money as well as efficiency. The neat thing about the corn conversion is its renewable. we have a source that we really don't have to worry about running out. Also from the polical arena, if the world could lose its dependency on crude oil, from the Middle East, that could have an effect on reducing the petro-dollar financing on all those war clouds out there. I agree America needs to be gone, I didn't write this for any polical disc.

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