U.S. farmers planted a record number of canola acres in 2022. But with a potential boom in renewable diesel coming, Dan Marquardt believes those acres have nowhere to go but up.

“This renewable diesel expansion is going to be a big plus,” says the Bottineau, N.D., farmer and president of the Northern Canola Growers Association. “EPA is predicting we’re going to be up to 2.95 billion gallons of renewable diesel just from canola by 2025. Last year, we raised 1.76 million acres in North Dakota, and we’re hoping those acres might push to 2 million this year alone.”

Marquardt’s farm, around 10 miles south of the Canadian-U.S. border, is near the epicenter of current crush capacity, as well as some planned renewable diesel expansion. But the growing demand for low-carbon feedstocks is attracting attention across the Corn Belt.

“If the new goal is to grow more oil per acre, let’s consider canola,” says Brian Caldbeck of Caldbeck Consulting and Rubisco Seeds in Philpot, Ky. “Canola as an oilseed has 40% to 45% oil — twice the oil in soybeans — and that changes the dynamics on how much money you can make per acre.”

Caldbeck believes greater oil demand will make canola attractive, even on farms far from processors.

Farmers can cash in on higher oil demand with canola followed by double-crop soybeans. “If you’ve got the canola yields of 50 bushels per acre, as well as the soybean yield of 50 or more bushels per acre, the amount of oil you can produce in one year is significant,” says Kentucky crop consultant Brian Caldbeck. Credit: Mike Wilson

“When the canola markets got hot a few years ago, the logistics to ship it to the crushers up in North Dakota worked — even from as far away as Oklahoma and southern Kansas, with a $2 to $3 additional cost per bushel by rail or truck,” he says.

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The Irishman has helped U.S. farmers improve crop profitability since he emigrated to Kentucky in 2004, first working on spring wheat and then canola as the biodiesel industry began to grow. Back then, the Gulf War was pushing crude oil toward $150 per barrel.

Compelling benefits

Several factors are falling into place to support canola. In December, EPA gave the OK for the oilseed to be used as a feedstock for renewable diesel. And while North Dakota leads all states in canola production, it is all planted in spring. In the South and Midsouth, winter canola can be planted in September and harvested in June, followed by a potential double crop.

“If you’ve got canola yields of 50 bushels per acre followed by a soybean yield of 50 or more bushels per acre, the amount of oil you can produce in one year is significant,” Caldbeck says.

Winter canola has another benefit: carbon.

“We have this crop growing over the winter, sequestering carbon and nutrients from the earlier corn crop we planted. In addition, it’s an excellent crop to efficiently utilize the abundant supply of poultry litter in this poultry-dense region. Then you can double-crop those beans behind it,” he notes. “From a carbon sequestration perspective, it’s a winner.”

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Marquardt agrees. “EPA came out with a ruling that canola as a feedstock will reduce greenhouse gas as much as 67%,” he says. “That’s a huge and important figure for anyone who is environmentally minded.”

According to the USDA Natural Resources Conservation Service, canola and wheat are not considered a cover crop if they are taken to harvest, but Caldbeck believes those rules should be reviewed.

“Most cover crops are destroyed in March, so they provide little value in terms of carbon or biomass residue,” he explains. “With canola, 70% of the biomass stays in the field after harvest. It has a very tight carbon-nitrogen ratio, so it breaks down quickly.

“And I believe that’s what really gives the double-cropped soybeans that follow their yield boost. The fertility from the canola actually becomes available for that soybean crop in August. Wheat straw takes longer to break down.”

Winter canola also has a better carbon intensity number compared to spring canola because of its longer growth cycle and added double-crop potential.

“The crushers in the North who crush some 20 million acres of spring canola are aware of this carbon intensity number, and it’s changing the game. So they’re looking for more winter canola just for that reason,” Caldbeck says. “We’ve had multiple calls from processors in the last 12 to 24 months. Some processors will look at the carbon intensity advantage of winter canola and try to take it to the renewable fuel industry, hopefully, to pass a premium back to the grower.”

Yield bump

Many Corn Belt farmers tried canola years ago and couldn’t make it pay. Those same growers might be surprised to learn that canola yields have vastly improved, for a number of reasons.

“What changed it for us in the past 15 to 20 years was the yield bump we got from hybridization of canola,” Caldbeck says. “Today, it has better shatter tolerance and less winterkill. And instead of making 40 bushels per acre, some growers around here are seeing 55 to 60, even 70 bushels per acre. With the oil dynamics and double-crop capacity in play, that’s a comparative advantage over other options.”

Other advantages include:

What will spur more acreage? For starters, simply seeing the listing of canola prices at elevators would be a good first step, at least for farmers outside North Dakota.

“The farmer will take note when canola prices are written on those boards at the elevators every day,” Caldbeck concludes. “The crushing companies hold the key.”