Developing Community Based Oilseed Industry in Montana

Project Overview

OW11-326
Project Type: Professional + Producer
Funds awarded in 2011: $49,830.00
Projected End Date: 12/31/2012
Region: Western
State: Montana
Principal Investigator:
Taylor Lyon
Bio-Energy Center
Co-Investigators:
Dr. Nestor Soriano, Jr.
Lead Research Scientist

Information Products

Project Overview (Fact Sheet)

Commodities

  • Agronomic: canola, safflower, wheat

Practices

  • Crop Production: crop rotation, organic fertilizers
  • Education and Training: demonstration, farmer to farmer, networking, technical assistance
  • Energy: bioenergy and biofuels
  • Farm Business Management: cooperatives, feasibility study, value added
  • Sustainable Communities: local and regional food systems, new business opportunities

    Abstract:

    The intent of this project was to demonstrate how biodiesel and straight vegetable oil (svo) can be economically viable sources of energy for agricultural operations by way of adding value to safflower and canola oilseeds. Originally, six north-central Montana farmers were contracted by the Bio-Energy Center at Montana State University-Northern (BEC) to grow 130,000 lbs of combined canola and safflower oilseeds on a total 165 acres. This was estimated to produce 5,645 gallons of culinary grade vegetable oil destined to be sold to regional restaurant establishments as fryer oil, and 97,000 lbs of high protein oilseed meal destined as livestock feed. Once the culinary oil was exhausted and recycled, it would produce an estimated 3,120 gallons of combined biodiesel and svo to be returned to the farmers who grew the oilseeds. This amount would represent a ten percent displacement of the farmer’s petroleum diesel fuel use.

    The project was initially designed to model a cooperative type business structure, where the BEC would provide the facilities and equipment for all oilseed crushing, culinary oil packaging, and biodiesel and svo production activities. The contracted farmers would serve as the producing members of the theoretical co-op with the strict role of growing the oilseeds and using the biodiesel in their farming equipment.

    However, as the project progressed, a key opportunity steered the project in a different, but unique, beneficial and eventually successful direction. The opportunity presented itself in the form of a business venture being pursued by one of the project partners, Dr. Bob Quinn of Quinn Farm & Ranch (QFR). Dr. Quinn was, independently of this project, crushing safflower oilseed on his farm, refining it into culinary oil and leasing the oil to local restaurants for use in their fryers. Once the oil was exhausted, Dr. Quinn then collected and filtered the oil for use as fuel for Quinn Farm and Ranch farming equipment. Consequently a partnership was created between the BEC and The Oil Barn, the newly created business venture of Dr. Quinn. The Oil Barn was contracted to carry out a portion of project activities, including crushing the entirety of safflower contracted by the BEC with QFR, processing and delivering culinary grade safflower vegetable oil and refining the exhausted fryer oil into svo for use in QFR farming equipment.

    Unfortunately, because The Oil Barn is a certified organic processor and located on the grounds of QFR, an organic farm, The Oil Barn was not willing to accept and process the genetically modified canola (Round-Up Ready Canola) that was contracted through this project. Therefore, the only oilseed used in this project was safflower and the number of farmers contracted was reduced from six contracts (three canola contracts and three safflower contracts) to just three safflower contracts.

    Partnership with The Oil Barn allowed the project to model real-world economics and increased the number of entities exposed to the project’s two main products, culinary grade safflower oil and biodiesel. In addition to the restaurants/organizations using safflower oil processed by the BEC, The Oil Barn was able to engage an additional three restaurants/organizations, one being the University of Montana in Missoula via UM’s Farm-to-College program. This not only greatly expanded the number of people using safflower cooking oil, but it significantly increased the geographic scope of the project.

    In addition to The Oil Barn securing a regional demand for safflower cooking oil, they also secured a market for safflower oilseed meal. All meal produced through the project was sold to Golden Harvest Seeds, a local (within 15 miles) swine and cattle operation. Oilseed meal generated at the BEC was distributed to local cattle research operations, cattle feedlots or hobby farmers for goat feed and/or as a soil amendment.

    Introduction

    Despite the growth in Montana’s biodiesel use, there remains only one commercial biodiesel producer in the entire state and a handful of backyard producers. In fact, more than 90% of biodiesel consumed in Montana is produced outside the state. The relatively higher cost of biodiesel in Montana is primarily attributed to feedstock availability and cost, transportation, public acceptance, and lack of technical support to farmers on oilseed pressing and biodiesel production. This project aimed to develop a closed loop, community-based oilseed industry to promote the local production and use of biodiesel in Montana. The Bio-Energy Center (BEC) partnered with The Oil Barn and three local producers of safflower oilseed. The safflower seed was processed into culinary vegetable oil at both The Oil Barn and the BEC and “leased” to a total of nine dining establishments throughout north-central and western Montana. Upon exhaustion of culinary oil, it was collected and pre-treated and processed into biodiesel or straight vegetable oil (svo) to be used as an alternative fuel. The fuel was then distributed back to the growers of the safflower oilseed, thus completing the loop. Prior to this project, safflower grown in Montana was destined to be birdfeed or to be processed into culinary oil outside the state. The public-private partnership between The Oil Barn and the BEC exhibited how safflower does not need to leave the state as a commodity, but rather can be processed into a value-added agricultural product that is good for humans, the land and the environment.

    Project objectives:

    1. Model a community-based oilseed industry that will include culinary, waste oil, biodiesel, meal and possibly glycerin generated from biodiesel production.

    2. Contract a total of 165 acres of canola and safflower distributed amongst four (4) conventional oilseed producers and two (2) certified organic oilseed producers at 15 – 38 acres per producer.

    3. Press and process 76,305 lbs of non-organic oilseed and 53,333 lbs of certified organic oilseed (canola and safflower) into culinary grade oil, using minimal chemical treatment.

    4. Promote local markets for culinary oil and certified organic oil in Montana by supplying the culinary oil needs of three (3) food services and restaurants in Havre totaling to 3,250 gallons of oil.

    5. Develop strategies for marketing Montana-made culinary oils through undergraduate projects.

    6. Promote local meal markets in Montana totaling 40,000 lbs of organic and 57,228 lbs of non-organic meal in feed and fertilizer applications.

    7. Demonstrate the logistics involved in collecting waste oil from local food services and restaurants.

    8. Investigate the appropriate pre-treatment of waste oil to make it suitable as a straight fuel and for biodiesel production.

    9. Produce a total of 2,807 gallons of biodiesel at MSU-Northern’s Biodiesel Pilot Plant.

    10. Pilot the local distribution of svo and biodiesel totaling 3,407 gallons to six (6) local farms for their agricultural operations that will meet 10% of each farm’s total diesel fuel consumption.

    11. Conduct a feasibility study on the economics of community-based oilseed industry that will encompass culinary, waste oil, biodiesel, meal and possibly glycerin generated from biodiesel processing.

    12. Increase public awareness of a closed loop food and energy production by integrating this project with Alternative Energy Resources Organization’s (AERO) farm and energy tours.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.