Rising Demand for Biofuels: The Potential of Winter Oilseeds

By Jacob Lionberger and Joe Janzen

Note: This article was written by University of Illinois Agricultural and Consumer Economics M.S. student Jacob Lionberger and edited by Joe Janzen. It is part of a series of expert articles created by graduate students in Prof. Janzen’s ACE 527 class on advanced agricultural price analysis this fall.

Introduction

The U.S. biodiesel and renewable diesel sectors have experienced notable growth in recent years, driven by an increasing demand for biomass-based diesel (BBD) fuels. The prospect for future policies and production levels remains robust, suggesting a critical need for feedstocks like vegetable oils and animal fats to sustain this momentum.

Current Feedstock Landscape

As illustrated in a recent analysis, soybean oil emerges as the leading feedstock in U.S. biofuels production, comprising a significant share of the overall mix. Other feedstocks, such as corn oil, canola oil, and various waste oils, also play roles, albeit smaller ones. The changing U.S. policy landscape may potentially limit the use of foreign feedstocks, leading to a higher reliance on domestic sources.

Increasing Domestic Oil Production

The surge in BBD production necessitates that the U.S. bolsters its domestic vegetable oil supply. While increasing soybean oil production is one approach, the current limitations regarding cropland availability suggest that growers must explore alternative crops to meet this growing demand.

Winter Oilseeds: A Viable Solution

This article explores the potential of winter oilseed crops as an innovative solution to meet the biofuels feedstock demand. Winter oilseeds, such as CoverCress and winter canola, can be cultivated on fields that typically remain idle during the winter months. These crops could be particularly beneficial in the central Corn Belt, offering a sustainable path forward without significantly impacting corn and soybean yields.

CoverCress: A Promising Novel Crop

Developed from domesticated field pennycress, CoverCress is gaining traction as a viable oilseed crop. Its late-fall planting and spring harvest schedule fit well into existing farming practices, allowing producers to maximize their productivity.

Emerging Market for Winter Canola

Winter canola is another promising crop that has recently begun to make headway in the central Corn Belt, thanks to partnerships aimed at fostering its growth among farmers. This crop’s characteristics make it a suitable candidate for addressing emerging oil needs.

Advantages of Winter Oilseeds

One significant benefit of winter oilseeds is their high oil content, outpacing that of traditional soybean oil. Comparing yields, CoverCress can produce about 500 pounds of oil per acre due to its 33% oil content, while winter canola could yield up to 1,100 pounds of oil per acre.

Current Acreage and Future Outlook

Despite their potential, winter oilseed acreage in the central Corn Belt remains relatively low. Projections suggest CoverCress could reach 300,000 acres by 2030, while long-term goals hint at a target of up to 3 million acres. While these figures are modest compared to the vast soybean acreage, they still represent an important step in enhancing U.S. oil output.

Profitability Considerations

Farm profitability is pivotal to the adoption of winter oilseeds. Initial calculations indicate that these crops can enhance per-acre revenues and produce favorable financial returns over direct costs. Nonetheless, various logistical challenges and management practices must be navigated to ensure successful production.

Supply Chain and Market Dynamics

One of the critical challenges facing winter oilseed production is the limited processing capacity and infrastructure. As production scales up, enhanced transportation and delivery systems will be necessary, and effective partnerships between producers and processors will be vital to success.

Conclusion

The expansion of BBD production is directly correlated with the escalating demand for vegetable oils. With traditional crop acreage limitations expected to persist, winter oilseeds like CoverCress and winter canola have the potential to play a crucial role in addressing future feedstock shortages. However, a comprehensive understanding of the associated agronomic, economic, and logistical hurdles is necessary to realize their full potential.

This article was initially published on Farmdoc.

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