Renewable fuels markets provide new opportunities for canola and soybean farmers

May 16, 2023

Recent developments point to a bright future for farmers who plant canola in Kansas and Oklahoma.

Central Plains growers have an unprecedented opportunity to get on the renewable fuels bandwagon that has been so lucrative for Iowa and Illinois farmers. And Scoular is leading the way.

We recently announced that we’re converting a Goodland, Kansas, facility into an oilseed crush plant that can process soy and canola. The plant is projected to begin operations in fall 2024 and will process 11 million bushels of oilseeds a year.

Our plant is expected to generate greater value for farmers who grow canola in the region by feeding into the demand for vegetable oil. Canola grown in the region will be crushed at the new plant and used to make renewable diesel. The renewable diesel markets are expected to reach 6 billion gallons by 2025, according to the International Energy Agency. The U.S. capacity in 2020 was just 2.6 billion gallons.

Renewables industry fuels canola interest

As I am on the road, talking one-on-one with farmers about planting canola next fall, I hear plenty of questions: How much will you pay? Is there new seed technology available? Where will I deliver the canola?

As a lifelong producer, I understand the concerns. I was raised on a Pawnee County, Kansas, farm and drive there from Omaha every month. I know first-hand the challenges of growing crops in the region, particularly when it comes to the weather.

Today I am developing the new crush project for Scoular by talking to farmers about the benefits of growing canola. We’re a $9 billion global agribusiness with 1,400 employees and 78 facilities, most of them west of the Mississippi River. We trade more than a billion bushels of grain annually and have earned the reputation with producers of honoring our contracts.

As a company, we’re making a significant investment in the Goodland facility because we see such great potential. Nine expanded or converted renewable diesel facilities are coming online this year, according to farmdocdaily from the University of Illinois at Urbana-Champaign. “Four new plants in 2024 matches the entire capacity projected to begin operation in 2023,” farmdocdaily reported in March.

The rapid growth has been driven by federal and state policies, including tax incentives and low carbon fuel standards in California and other states. United Nations and corporate goals are pushing to cut carbon dioxide emissions dramatically by 2050.

Renewable diesel and sustainable aviation fuel reduce carbon dioxide emissions by up to 80 percent. In addition, they are chemically equivalent to petroleum diesel and have no blending limit and can be dropped into existing engines and equipment.

The airline industry has taken notice. In February, United Airlines and other companies started a $100 million venture capital fund to invest in sustainable aviation fuel, the New York Times reported. Boeing has also reported it was doubling its use of sustainable fuel this year.

Scoular, K-State partnering to help farmers grow canola

So how does canola fit in? Canola is valued in the renewable fuels sector because of its high oil content. It yields 40 percent oil vs. 20 percent from soybeans.

Scoular will be able to price Central Plains canola in a relative value to vegetable oil. The value comes from its oil yield, not the value of wheat or milo.

To support farmers, we’re partnering with Kansas State University to provide best growing practices. Improved seed genetics and management practices developed over 30 years at K-State are expected to ease one frustration of growing canola: winterkill.

Our trusted advisors at K-State’s Department of Agronomy have tailored planting date, seeding rate and crop residue management recommendations to improve canola production. K-State also has studied variety performance data to better understand the meteorological variables that cause winterkill. Together, this information will help growers make informed decisions.

Growers can plant canola this coming September and harvest in 2024 in time to bring to the Goodland plant in October 2024. 

In the meantime, Scoular plans to work with refiners in California and Wyoming. We’ll also partner with local grain companies to provide harvest time delivery points for local farmers.

I look forward to talking to farmers about opportunities for growing canola. Please feel free to attend an upcoming meeting or contact us for more information. Scoular is committed to providing the resources, reassurance, and revenue potential to help Central Plains farmers succeed.

Picture of Ed Prosser

Ed Prosser

Senior Vice President of Emerging Businesses