ECONOMIC ANALYSIS OF SMALL SCALE ON-FARM PRODUCTION OF BIODIESEL AND VEGETABLE OIL FOR INDUSTRIAL USE FROM WINTER OILSEED CROPS
ABIMBOLA AKINYA
Department of Agricultural and Environmental Sciences, Tennessee State University, 3500 John A. Merritt Blvd, Nashville Tennessee 37209, USA.
PRABODH ILLUKPITIYA *
Department of Agricultural and Environmental Sciences, Tennessee State University, 3500 John A. Merritt Blvd, Nashville Tennessee 37209, USA.
JASON P. DE KOFF
Department of Agricultural and Environmental Sciences, Tennessee State University, 3500 John A. Merritt Blvd, Nashville Tennessee 37209, USA
*Author to whom correspondence should be addressed.
Abstract
According to the United States Department of Agriculture – Agriculture Research Service (USDA-ARS), the southeastern region of the United States has high prospects of growing a diverse range of bioenergy feedstock including oil seed crops. These oilseed crops can be grown as feedstock for biodiesel production. Specially, winter oilseed crops can be planted during the winter period when most farmers leave their farmlands fallow. The objective of this research was to estimate the overall economic benefits of producing biodiesel and vegetal oil for industrial use, from winter oilseed crops under small scale settings. Based on primary and secondary data sources available, benefit:cost model was used for the analysis. Analysis showed that winter canola and industrial rapeseed production could generate positive net returns under various scenarios. Biodiesel production from winter canola could generate positive net returns but oil production from rapeseed generated a negative net return. Also there was no added revenue from rapeseed meal due to its toxic nature. The analysis on a per volume basis showed that the production cost of biodiesel from winter canola to the producer was between $0.33/l to $0.72/l. Accordingly, net returns could vary from $0.26/l to $0.65/l. The estimated break-even price of winter canola grain varied from $0.12 - $0.16/kg depending on canola yield. For biodiesel production from winter canola, the estimated break-even price was between $0.33/l to $0.72/l. However, for industrial rapeseed, the break-even price of grain and oil was $0.29/kg and $2.42/l, respectively. The benefit:cost ratio also showed that biodiesel production from winter canola was economically feasible, however, oil production from industrial rapeseed was not economically feasible under the yield scenario used for the analysis. However, if the toxicity of rapeseed meal could be solved, industrial rapeseed can be a competitive crop for producing vegetable oil for industrial use. Findings of the study will be useful for the oilseed growers as well as farmers interested in producing on-farm biodiesel.
Keywords: Biodiesel, winter oilseed crops, canola, industrial rapeseed, small farms, seed meal