The biofuels market is set to continue upward, bringing the benefits to your farm.
Biofuels, energy security, biodiesel, ethanol, carbon pipelines, octane ratings — the topics surrounding the renewable fuels conversation go on and on. But taking a step back from the hot topics, how do farmers benefit from getting involved in the biofuels industry?
American farmers have a great opportunity to make the nation more self-sufficient in energy while gaining additional farm income. Biofuels are defined by the U.S. Department of Energy as liquid transportation fuels that substitute petroleum products such as gas or diesel. Ethanol and biodiesel are made from agricultural crops in a process where plant biomass is pretreated, fermented and distilled.
Growth In The Biofuels Industry
Ethanol plants in 2024 brought more than 55,000 jobs to the nation, with an additional 258,000 indirect jobs in sectors of the economy, according to the Renewable Fuels Association. The industry created $28.3 billion in household income and added $53 billion to the nation’s gross domestic product.
Similarly, the biomass-based diesel fuel industry provides $23.2 billion in annual U.S. economic activity and supports more than 75,00 jobs. Clean Fuels Alliance America, the U.S. trade association representing the biodiesel, renewable diesel, and sustainable aviation fuel (SAF) market, expects biomass-based diesel fuel usage to exceed 6 billion gallons by 2030 in ground, air, marine, rail, and heating oil applications.
On the soybean side, multiple soybean crush facilities have opened in recent years in the Midwest. Here, soybeans are extruded and pressed to remove crude oil, leaving soybean hulls and soybean meal.
This process leaves nothing wasted, as the hull and meal are used for livestock feed, while the soybean oil is turned into renewable diesel fuel and also can be used for the food industry.
The North Dakota Soybean Council says that before these crushing plants, only about 4% of North Dakota soybeans had been used in the state, instead being exported through ports in the Pacific Northwest. Now, these facilities also bring additional year-round markets for local farmers.
Biodiesel also works for the U.S. and rural economies, where production supports animal agriculture. Increased demand for soybean oil increases the supply of soybean meal, used to make animal feed, and the increased supply leads to lower feed prices for livestock producers.
But what do farmers think about using and raising biofuel crops on their operation?
The Farmer’s Take
“What drew me to the industry was the people and their passion for what it does for the ag industry, for rural economies and for the environment,” says Ryan Pederson, a farmer from Rollette, N.D., and a board member with Clean Fuels Alliance America and the North Dakota Soybean Council. “As I worked with these folks, I started to like the fuel and realized all the good things it did for us as well.”
Pederson says his farm is proof that using biofuels can save costs, no matter what you run. “I have a case tractor with an Ambac engine, a John Deere tractor with a John Deere engine, John Deere with a Cummins engine, an ACO tractor with a CAT engine, and a Claas combine with a Mercedes engine,” he explains.
Pederson is a veteran user of biodiesel. He has been using this fuel since 2012 on his canola and soybean operation. Producers are the first step of the process of decarbonization through biodiesel.
Keeping machinery running and working in tip-top shape is a priority on Pederson’s and other farms. “Our farm started slow with biofuels, but we’ve committed, and there is still a ways to go,” Pederson says. When biodiesel first hit the market, it was met with skepticism. Now, with over a decade of research, it has found a place on farms and in industrial transportation.
“I had the opportunity to be on the BQ-9000 commission, and it made me realize how devoted this industry is to ensure that they get the high-quality fuel,” Pederson says. “The folks on that commission spent so much time and effort making sure that the system was in place to ensure that the fuel that came out of those BQ-9000 plants would never have the problems that could allow the service manager from the local dealer to blame it on biodiesel.”
Scott McPheeters, a farmer from Gothenburg, Neb., and vice chairman of the Nebraska Ethanol Board, represents the fifth generation on his family farm. He now is in business with his two sons and their wives. “We produce more corn now,” he says. “We’re better. We’re more efficient. We produce more and more corn every year with less and less land.”
McPheeters says that leads to a healthy planet and contributes to economic sustainability for farmers. While crop rotation is a vital part of weed and disease management, some producers might find corn more profitable than soybeans in the biofuels market. “Soybeans can make 60 to 70 bushels an acre, and corn can produce three times that amount,” McPheeters says. “So, if you plant an acre of corn rather than an acre of soybeans, production and profits might be multiplied by three.”
However, there still is room to grow in the biofuels markets. “How many of us have diesel cars? Can you go to any filling station and buy diesel to fill up?” McPheeters says. “No. It’s just a whole different market, and it will expand, but it isn’t as readily applicable, as you can have gasoline with ethanol right now.”
One place for ethanol in this expanding market is in E15 fuels. The Environmental Protection Agency defines E15 as a gasoline blended with 10.5% to 15% ethanol. With no requirements to sell E15, this fuel bend is available in 31 states at just over 3,000 stations and can be used in flex-fuel vehicles or conventional vehicles newer than 2001.
“In a nutshell, farmers have some work to do with biofuels, carbon scores and opportunities that are presented,” McPheeters says.
“In agriculture, the challenge we had was the anecdotal stories about why the fuel doesn’t work,” Pederson says. “We had a neighbor in the next county who uses biodiesel and had some fuel problems and couldn’t get that quarter of corn planted. Come to find out, he didn’t put enough fuel in the tractor, so he ran out. It has nothing to do with the biodiesel.”
Put the data and the stats to work on your farm. Whether using or producing biofuels, consult with mentors and experts in the industry to gain benefits, be it carbon incentives or added premiums, for your crop from the biodiesel industry.
Originally shared by FarmProgress. Edited for clarity and purpose.