From a previous and related posting on making smoke...
"as GlueGuy mentions - It is a combination of factors. One more is:
Low emissions engines ironically will tend to produce more visible smoke at start up. This is due to higher injection pressures (cleaner burn when everything is warm, but almost "puts out the fire" when the engine is cold) and retared injection timing (reduces NOx, but leads to incomplete combustion when the engine is cold). Currently off-highway engines do not need to meet the same tough emissions standards of on-highway engines. Starting in 2006 (and phased in after that based on engine HP) off-highway emissions standards will be much more like on-highway (The EPA term is "Tier III").
One more thing about white smoke at startup - In moderation, it's not really anything to be concerned about... As long as it goes away as the engine gets warm. If an engine makes white smoke in operating conditions, then there is something wrong. In extremely cold climates, the intake air can be soooo cold that this is a problem. Generally, by re-diverting the intake air to use underhood (and slightly warmed) air, this problem is gone (There is a thread in this section on "warm intake air")
Blue smoke is burned oil. Also, at low levels not a huge issue on a cold engine, but it should go away almost right away on newer engines. Older diesel engines are generally designed around a slight continued consumption of oil (The stated oil consumption on 1965 Cat 977 is 1 gallon in 8 hours of use).
While we're on smoke - Black is partially burned fuel. Many people think of black smoke as a sign that a diesel is really putting out the power... However, it is really a sign that there is too much fuel for the amount of oxygen in the cylinder... And it's just wasted. "