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, an Omaha, Nebraska-based agribusiness, 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 United States capacity in 2020 was just 2.6 billion gallons.
As I am on the road, talking one-on-one with farmers about planting canola this coming 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.
Scoular is well-positioned to help farmers grow canola. We’re a $10-plus billion global agribusiness with 1,400 employees and 78 facilities, most of them west of the Mississippi River. We have earned the reputation with producers of honoring our contracts.
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%. 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.
So how does canola fit in? Canola is valued in the renewable fuels sector because of its high oil content. It yields 40% oil vs. 20% 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 sorghum.
To support farmers, we’re partnering with Kansas State University to provide best growing practices. Growers can plant canola this coming September and harvest in 2024 in time to bring to the Goodland plant in fall 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.
We look forward to talking to farmers about opportunities for growing canola, now and in the future. Scoular is committed to providing the resources, reassurance, and revenue potential to help central Plains farmers succeed.
Ed Prosser is senior vice president for emerging businesses at Scoular and lives in Omaha.
