Developing Community Based Oilseed Industry in Montana

View the project final report

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

Montana's annual biodiesel consumption had increased dramatically from about 70,000 gallons between 2004 and 2006 to 0.3M gallons in 2007 and 0.8 to 0.9 M gallons during the last three years. Despite the growth in Montana's biodiesel use, there remains a sole commercial biodiesel producer in the entire state accompanied by a few other backyard producers. With a maximum annual production capacity of 275,000 gallons, Earl Fisher Biofuels in Chester, MT is only producing 36% of its capacity at 100,000 gallons/year. This suggests that most of the biodiesel being consumed in Montana comes from producers outside the state. Biodiesel is currently selling in Montana at $3.87 to $6.25/gallon. The relatively higher cost of biodiesel in Montana is primarily attributed to feedstock cost and availability, transportation, lack of market, public acceptance and lack of farmers' technical know-how on oilseed pressing and biodiesel production. This project aims at developing a closed loop, community-based oilseed industry to promote the local production and consumption of biodiesel in Montana. This will be accomplished through the integration of culinary oil, biodiesel, oilseed meal and possibly glycerin industries. The Bio-Energy Center is partnering with six (6) local producers in Montana to demonstrate community-based oilseed industry for food and fuel production. The Bio-Energy Center is contracting a total of 165 combined acres of safflower and canola production distributed among the six producers, at 15 to 38 acres of land per producer. This will generate an estimated 130,000 lbs of oilseeds which will be pressed and processed in the Oilseed Pressing Facility at the Bio-Energy Center. The Center will press the seeds to produce culinary grade oil, which will be sold to MSU-Northern Cafeteria and two other local restaurants located in Havre (China Garden and Murphy’s Bar). It is estimated that a total of 97,000 lbs of meal, valued at $15,000, will be generated and will provide another revenue stream for the project. The used oil will be collected and pre-treated to make it suitable for biodiesel production. A majority of the used oil will be processed into biodiesel at the MSU-Northern Biodiesel Pilot Plant, while some of it will be provided to Quinn’s Farm without processing into biodiesel. The Quinn’s Farm is using straight vegetable oil (SVO) as fuel using a tractor equipped with an SVO Conversion system that allows the use of SVO in diesel engines. All biodiesel and SVO produced at the Center will be utilized on the farms for their operations. A total of 3,120 gallons of biodiesel and SVO will be produced throughout the duration of this project that will substitute 10% of the total diesel fuel use for each farm. This project will model community-based oilseed pressing and biodiesel facilities owned by producers themselves through a cooperative or other forms for co-ownership schemes. Another component of the project is to conduct a feasibility study on the economics of the model and to address other issues and challenges facing the community-based oilseed industry in Montana. The Bio-Energy Center, in partnership with an MSU-N professor, will access the students in the Advanced Marketing Applications Class to conduct undergraduate projects involving actual marketing strategies for the Montana-made culinary oils. The Bio-Energy Center is also partnering with Alternative Energy Resources Organization (AERO) to allow the inclusion of this project in AERO's Energy and Farm Tours and increase the general public and other producers' awareness of integrated food and energy production. The farm tours are a good venue for developing the project's evaluation tools through surveys and database development, which will provide vital information to producers who are willing to adopt the model we demonstrate in this project. Montana remains as one of the very few states in the continental U.S. where a million gallon scale biodiesel plant is non-existent. A market is yet to be developed in Montana that will support such scale. However, considering the transportation challenges faced by producers and farmers in Montana, community-based oilseed industries distributed throughout the state as clusters may prove to be more feasible. Fuels that are grown, produced and consumed locally will significantly make the current price of biodiesel more competitive, while diversifying Montana agriculture by promoting the development of energy crops. Moreover, by venturing to culinary grade oil prior to biodiesel production, the value of the oil itself will increase, resulting in reduced biodiesel feedstock cost. Depending on their nutritional value (e.g. organic, 0% trans fat, virgin oil, levels of omega-3, etc.), culinary grade oils receive a higher price than biodiesel at $3 to $8 a gallon. Moreover, waste oil disposal presents additional costs to food services and restaurants in Montana at about $35/barrel. Overall, the project will spur economic development in rural Montana that will directly impact producers and farmers. We anticipate the development of several community-based industries including organic and non-organic culinary oil, biodiesel, meal and possibly glycerin. It will promote the use of alternative fuel by making it more cost competitive in the market. It will also provide a healthier farming environment, considering the reduced emissions generated by using biodiesel compared to conventional diesel fuel.

1. Model a community-based oilseed industry that will include culinary, waste oil, biodiesel, meal and possibly glycerin generated from biodiesel production. (03/11 - 03/13)

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. (03/11)

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. (10/11 10/12)

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 totalling to 3,250 gallons of oil. (10/1 -10/12)

5. Develop strategies for marketing Montana-made culinary oils through undergraduate projects. (Spring 2012)

6. Promote local meal markets in Montana totalling to 40,000 lbs of organic and 57,228 lbs of non-organic meal in feed and fertilizer applications. (10/11 - 10/12)

7. Demonstrate the logistics involved in collecting waste oil from local food services and restaurants. (10/11-10/12)

8. Investigate the appropriate pre-treatment of waste oil to make it suitable as a straight fuel and for biodiesel production. (10/11-10/12)

9. Produce a total of 2,807 gallons of biodiesel at MSU-Northern's Biodiesel Pilot Plant. (10/11 - 10/12)

10. Pilot the local distribution of SVO and biodiesel totalling 3,407 gallons to six (6) local farms for their agricultural operations that will meet 10% of each farm's total diesel fuel consumption. (10/11- 10/12)

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. (12/12 - 03/13)

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. (Summer 2011, Fall 2011, Spring 2012)