Growing, Processing, and Selling Omega-9 Canola Oil

View the project final report

• 2011 annual report

Commodities

• Agronomic: canola

Practices

• Crop Production: food product quality/safety
• Education and Training: demonstration, on-farm/ranch research
• Farm Business Management: budgets/cost and returns, marketing management, e-commerce, farm-to-institution, agricultural finance, market study, value added
• Sustainable Communities: new business opportunities

The problem we are addressing is finding a local value-added market for the canola grown. Farmers are hesitant to grow a crop that can only be marketed to a distant market in another country. Currently there are no canola processing facilities in Michigan and our canola has to be shipped to Windsor, Ontario. The canola meal left over from the pressing process is then shipped back to Michigan for dairy feed. This problem is compounded by the fact that we have low acres in canola production so there is little incentive for anyone to start a processing plant. It is difficult to increase the acres because farmers see the transportation expense and the distant market, and are hesitant to plant a new crop with these drawbacks. The solution we want to research builds on our 2-year relationship with Dow AgroSciences (DAS) in growing Omega-9 canola – a value-added specialty canola. Many people in the industry believe that Omega-9 canola oil, because of its high monounsaturated fat (the most healthy fat) and low saturated fat, will become an oil of choice for consumers in the future. The closest processing plant for Omega-9 canola is in Enderlin, North Dakota. Transporting canola seed to Enderlin (900 miles) may be cost prohibitive. Our solution is to research and test a strategy to grow, process, and market Omega-9 oil in Michigan. We propose to do a test run on 1,500 pounds of canola seed, which we can get mechanically pressed in Michigan, yielding between 50 and 60 gallons of canola oil. This oil will then need to be refined to meet industry standards, bottled, and sold at farmer markets, through a website, and to small, local food processors. A Michigan certified kitchen would be rented for processing and bottling. Plastic bottles will be purchased, and labels that reflect the health benefits will be designed and printed. The goals for this are: Goal 1: To use a mechanical press to extract the oil from 1,500 pounds of Omega-9 canola seed. Goal 2: To refine the Omega-9 oil to commercially acceptable standards. Goal 3: To bottle the oil in one-quart plastic bottles. Goal 4: To design a label that incorporates “grown locally” and healthy oil information. Goal 5: To test market to 3 small food processors. Goal 6: To select one farm market to test retailing the product. Goal 7: To work with two farmers to grow Omega-9 canola in 2011. Goal 8: To develop and maintain a website to promote Omega-9 oil, inform the public of its health benefits, and provide information to farmers. Goal 9: To disseminate the information learned.

Introduction:

FARM DESCRIPTION AND PROJECT BACKGROUND
B and B Farms is located in central, northern Michigan about mid-way between Lake Michigan and Lake Huron. Our soils consist of glacial till, primarily sandy, sandy loam, and clay loam types.

B and B Farms has been a family operation for almost 100 years, originally starting with 40 acres of land and progressing to the current 540 acres. There has been a succession of farming changes from a general small farm, to a dairy farm, and today to a largely crop oriented farm operation.

In 2011 we grew 100 acres of canola, 26 acres of Sudan grass, 70 acres of alfalfa hay, and we had about 150 acres in cattle pasture. The remainder of our land is taken up by trees, river and wetlands. Our cropping system consists of growing canola one year, then rotating with another crop such as Sudan grass or alfalfa. This rotation will migrate toward using corn and wheat in the future.

Bonnie and Dan Blackledge and their two daughters, Carissa and Hayley do most of the farming.

The Blackledge Family has traditionally been very progressive, and sustainability has typically been part of the farming operation. Throughout the history of the farm this included crop rotation, using alfalfa as a key cover crop. In the 1960’s much of the land was tiled with clay tile to manage the excess water. In the 1970’s a manure management system was built, including a retaining pond. In the 1980’s Dan Blackledge received the Clare County Soil Conservation Service “Farm Cooperator” of the year award. Today our cropping systems include crop rotation, soil testing, grassed waterways, and attention to maintaining the sustainable farming systems from the past. In 2012 we have been selected as one of the farms in the Clare/Gladwin District for the Conservation Reserve Program for management projects on the West Branch River which flows through the property.

GOALS:
Goal 1: To use a mechanical press to extract the oil from 1,500 pounds of Omega-9 canola seed.
Goal 2: To refine the Omega-9 oil to commercially acceptable standards.
Goal 3: To bottle the oil in one-quart plastic bottles.
Goal 4: To design a label that incorporates “grown locally” and healthy oil information.
Goal 5: To test market to 3 small food processors.
Goal 6: To select one farm market to test retailing the product.
Goal 7: To work with two farmers to grow Omega-9 canola in 2011.
Goal 8: To develop and maintain a website to promote Omega-9 oil, inform the public of its health benefits, and provide information to farmers.
Goal 9: To disseminate the information learned.

PROCESS
The origins of this project go back about five years to research jointly conducted by B and B Farms and Michigan State University, to see if canola could be successfully grown in Michigan and if it could be processed into biodiesel. We were able to prove that it could be grown, but the economic feasibility of processing it into biodiesel was not good. That project wound down, and B and B Farms continued experimenting with growing the crop, but on a reduced basis as there didn’t seem to be a good market.

A market for the seed was developed with ADM in Windsor, Ontario, and the canola seed was trucked to Windsor. Trucking was expensive, but canola could still be grown for a profit. During this time our research showed that a market could exist in processing the seed for food grade oil. At this point the SARE grant was written to see if we could prove success in that endeavor. The goal was to have a processor crush the canola, and B and B Farms would be on each end of that, as a grower – so we had control of the source and quality, and as a marketer so we could explore different markets and find the profitable ones.

One processor was located and arrangements were discussed with him, but before the project got started it became apparent that he was not likely to provide us with a product, or if he did it might not be of the quality we needed to have. At that point, the SARE budget was revised and we were able to use some of the funds to buy a new press. The press cost about $8,000 of which 25 percent was paid by the SARE grant and 75 percent by B and B Farms.

Pressing oil has proven to be a long and difficult task. Sometimes the press would work and sometimes it wouldn’t. Sometimes we would get a half gallon of oil per hour and sometimes we would get over a gallon per hour. The commercial kitchen in which we rented space was an hour and a half away. Also, seventy-pound bags of canola seed are hard to handle – our plans were to press out 71 of them. We were persistent in pursuing our goal and seem to have overcome most of the problems that arose.

Below is some data from our experience:
• 5,000 pounds of canola were set aside from our shipments in 2011.
• 25 pounds of canola seed will make about 1 gallon of canola oil.
• Canola oil weights about 7.5 pounds per gallon.
• Our goal was to produce 1 gallon of canola oil per hour.
• 30 percent is a good oil yield. Our highest measured amount was 36 percent.

PEOPLE
Farmers who were involved with the project are:
• RJ and Jon Shooks, Shooks Farm Company, Central Lake, Michigan
• Jim Schooley, Schooley Farms, Evart, Michigan
• Gary Wemple, Tustin, Michigan
• Darrel Chilcote, Corunna, Michigan
• Don Ruegsegger, Sears, Michigan
• Glen Paradis, Kewadin, Michigan

Each of these farmers grew canola for at least two years, attended the Field Days, and experimented with different canola varieties. They were all involved in the growing cycle, but not in the oil processing operation. Several meetings have been held with RJ and Jon Shooks on oil processing, and information was shared on a regular basis on project plans, grant progress, and opportunities for future involvement in processing canola seed into oil and marketing it in Northern Michigan.

Business people who have been involved include Bruce Goodman, an attorney with Varnum, LLC; Joe Colyn, CEO of Originz; Jim Padilla, Managing Partner of TPC; Scott Decker, CEO of Alternative Energy Solutions; Bill Goedert, owner of Dip Sensations; and Greg Northrup, partner in Sustainable Partners LLC. Each of these people has been actively engaged in helping the project in some way. Additionally Dow AgroSciences managers, John Kalthoff and David Booher have been involved in working with us on growing Nexera canola in both Clearfield and Roundup Ready varieties. While originally Nexera canola was a focal point for the project because of its healthy oil profile, Dow has declined to license B and B Farms as a processor for its patented Nexera varieties for retail sale. This does not affect the project, with the exception that we are using other varieties instead of Nexera, still with the excellent oil profile of 7 percent saturated fat, 21 percent polyunsaturated fat, and 72 percent monounsaturated fat.

The largest group of people who have helped with the project are from Michigan State University. As mentioned previously, B and B Farms began growing canola in conjunction with MSU five years ago in an attempt to start a canola oil based biofuels industry in the state. Dennis Miller, a professor in the chemical engineering department at MSU was instrumental in getting this going and has remained involved throughout providing advice and guidance. Today he is our “champion” at MSU and makes sure we stay connected at the correct levels within the University. He also does our chemical analysis, and helps make sure the information we use is correct.

Agricultural Extension Agent Jerry Lindquist has provided the practical growing information that B and B Farms used from the beginning. Jerry helped coordinate a trip to canola growers in Ontario, Canada in the early days of the project so we could learn correct growing practices. He also ran fertility trials for us to calibrate nutrient levels that maximized yields based on economic inputs. Jerry has hosted many meetings and has worked hard to help us disseminate information including contacts with TV and radio stations.

In the MSU Crops and Soils Department, Professor Russ Freed has created many contacts with seed companies, fertilizer companies, and markets. He also coordinated all our variety tests, and has been invaluable in interpreting our results to other farmers across Michigan. Russ and Jerry are the educators that we rely on for current genetic, nutrient, variety, marketing, and other information, and for our connection to other farmers.

As B and B Farms started working on the SARE grant and began making plans for processing oil, the MSU Product Center became an important part of our team, providing expertise in food processing and food marketing. One of their facilities, The Starting Block, is the licensed commercial kitchen where we process our oil. Most of what B and B Farms has learned about the “food business” has come from our interactions with them and their assistance in getting our two Michigan Department of Agriculture licenses – Food Processor and Food Warehouse. They have helped steer us through the regulatory issues on everything from the label to marketing.