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Trialing and Adoption of Oilseed in the Wheat Belt

Abstract

Oilseed crop production is a relatively new field for farmers in the United States. Therefore, it is important to research factors that could help this field grow, especially as a means to become more energy independent. By conducting a mailed survey sent to 11 states and analyzing data using linear and logit regression models, we are able to get a better idea of what incentivizes farmers to adopt oilseed crops. The marginal effects of our research show how much a farmer makes annually has an impact on his adoption. Trends show the more a farmer makes a year, the more he is willing to trial and will more likely continue to grow oilseed crops. This could be because these farmers feel financially secure and do not have as high of risk if the adoption did not go well for them. Crushing facilities positively affect the oilseed industry too. In fact, farmers are much more likely to continue oilseed production if there is a local crushing facility. It is likely this trend occurs due to low transportation costs and high demand for the crop in the area. There is strong evidence that leads us to conclude farmers are more likely to start planting oilseed crops for agronomic purposes, even more so than economic. This trend may occur mainly because farmers want a rotational crop. This information can provide useful for understanding farmers perceptions about oilseeds in order to get a more targeted group to adopt oilseeds. If this can be achieved, there is hope for a supply chain to be created and the aviation industry and Navy to meet their energy goals.

Introduction

In recent years, high petroleum prices coupled with climate change concerns have lead to the research and development of renewable fuels. The United States Navy and commercial airline industries want to 'go green' and need a renewable form of bio-jet fuel. Oilseed crops are a potential answer. However, a mass scale supply chain must be created in order to produce enough bio-jet fuel for the airline industry and Navy's needs. The bio-jet fuel must be produced at a competitive price with petroleum-based fuel. In order for this to occur, farmers must adopt oilseed crops. Below is a breakdown of the project:

  • United States Navy and Commercial Airline Industry Green Initiatives-The commercial airline industry wants a 50% decrease in carbon emissions by 2050 (Milmo 2009). The United States navy wants to run on 50% renewable resources by 2020 (Woody 2012).
  • Oilseed Crops and Supply Chain-Oilseed crops such as rapeseed, camelina and canola can be converted into bio-jet fuels. These can be used as drop-in fuels, which can be combined with diesel without any modifications to the engine (Woody 2012). However, a mass scale supply chain needs to be created in order to have enough bio-jet fuel to meet demand.
  • Analysis of Oilseed Crop Trialing and Adoption-This project focuses on analyzing factors that affect a farmers' willingness to trial and continue to grow oilseed crops.
  • Purpose

    The purpose of this project focuses on farmers and their perceptions on oilseed crops to help create a supply chain for the bio-jet fuel industry. Particularly, this research focuses on the trialing and adoption of oilseed crops and what motivates farmers to trial and adopt potentially new oilseed crops on their farm.

    Objectives

  • Determining what factors affect how many acres of oilseed crops a farmer is willing to trial their first year.
  • Determining what factors influence farmers to continue to grow a crop after trialing, leading to the eventual adoption of the crop.

  • Data

  • Data was colleted from states in the western United States, predominantly in the Wheat Belt, including: California, Colorado, Kansas, Montana, Nebreska, Oklahoma, Oregon, South Dakota, Texas and Washington.
  • 10,000 mail surveys were sent out to farmers to collect data on oilseed adoption. A total of 970 responded, giving a response rate of around 10%.
  • Responses from 143 individuals who adopted and trialed oilseeds were examined. Producers had trialed either canola, flax, crambe, safflower, sunflower oil, rapeseed, or sesame.
  • In order to determine what factors affect oilseed trialing and adoption, statistical analysis was used. The dependent variables include: Number of acres trialed and whether a farmer still plants oilseed crops. Independent variables include: age, education, farm experience, risk behavior, sales from farming operations, household income, crop trialing decade, percentage of rented land, technology, crop segregation, crushing facilities, off farm income, crop failure, and planting for agronomic and/or economic reasons.

    The table below provides summary statistics on factors we believed could have had a significant effect on oilseed production.

    Table 1-Summary Statistics for Dependent and Independent Variables for Sample of Farmers

    summary

    Methods

    Linear Regression

    The linear regression model was used to explain what factors affect the number of acres a farmer trials in the first year of oilseed production. This model is given by:

    regress

    The betas provide the marginal effects for each X. Y is the dependent variable, acres planted in the first year. The X's are all independent variables (Age, education, behavior, etc.), while alpha represents the constant.

    Logit Regression

    The logit model was used to assess factors influencing if farmers still planted the oilseed crop trialed. This model was used because the dependent variable is binary, meaning the dependent variable, yi, (which is if a farmer planted again) is indicated by either '0' (did not plant again) or '1' (planted again). This model is given by:

    regress2

    The independent variables (age, education, behavior, etc.) are denoted by X, while the betas show the marginal effects for X.

    Results

    Table 2 shows the factors that affect number of acres of oilseed crops a farmer trials. The statistically significant data in this table shows that at a 95% level of confidence (meaning there is 95% certainty the independent variable has an affect on the dependent variable) , the more sales a farmer has each year, the more likely they will trial more acres of land in the first year. This could be because a farmer feels he has more income freed up to allow him/her to experiment with when trialing. The other factors in the table are not statistically significant, indicating there is not a high enough level of certainty given to determine their impacts on how many acres are trialed the first year.

    Table 2-Factors Affecting How Many Acres of an Oilseed Crop a Farmer Trials.

    Table

    Table 3 shows the factors that affect farmers' decisions to continue planting oilseed crops after trialing. The statistically significant data in this table shows at a 95% level of confidence, farmers are more likely to plant again if they believe they receive agronomic benefits. These agronomic benefits were: rotational crop, less yield volatility, offered herbicide resistance, higher yielding and drought tolerant. It is possible that the agronomic affects are so strong because farmers who planted these oilseed crops were looking for just as much or more of an agronomic benefit from these crops than they were for economic means. Also, at the 99% confidence level, farmers are more likely to plant again if a crushing facility is nearby. This could be because farmers have an easily accessible source to transport their oilseed and there is a high demand in the area. Also, it is possible contracts were readily available to these farmers with a nearby crushing facility, which was an added incentive for them to grow these crops too. The other factors in the table are not statistically significant, indicating there is not a high enough level of certainty given to determine their impacts on planting again.

    Table 3-Factors that Affect Farmers' Decisions to Continue Planting an Oilseed Crop After Trialing.

    Table

    Conclusions

  • Farmers' perceptions on oilseed adoption are key in determining which farmers would be willing to produce oilseed crops.
  • Demand exists, but supply is uncertain. Oilseeds may provide an option to provide a sustainable source of bio-jet fuel for the industry.
  • More research and extension should be done if mass scale oilseed production is going to become a reality.
  • References

    • Milmo, D. Airlines vow to halve carbon emissions by 2050. (2009, September 21). The Guardian. Last accessed June 26, 2014 from http://www.theguardian.com/environment/2009/sep/21/airlines-carbon-emissions-cut
    • Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F., Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture. 46. P. 1407-1424. Last accessed June 12, 2014 from http://www.academia.edu/592683/Understanding_and_Promoting_Adoption_of_Conservation_Practices_by_Rural_Landholders>
    • Raymer, P.W. (2002). Canola: An Emerging Oilseed Crop. Trends in new crops and new users. P122-126. Last accessed June 9, 2013 from http://www.hort.purdue.edu/newcrop/ncnu02/v5-t
    • Steiner, J.J., Lewis, K.C., Baumes, H.S., Brown, N.L. (2012). Springer Science+Business Media, LLC. 4(4). Last accessed June 11, 2014 from http://link.springer.com/article/10.1007/s12155-012-9187-1#page-1
    • Villamil, M.B., Alexander, M., Silvis, A.H., Gray, Michael, E. (2012). Producer perceptions and information needs regarding their adoption of bioenergy crops. Renewable and Sustainable Energy Reviews. 16. Last accessed June 7, 2014 from http://www.sciencedirect.com/science/article/pii/S136403211200216X
    • Wilson, W.W., Dahl, B. (2010, July). Contracting for Canola in the Great Plains States. Agribusiness and Applied Economics Report No. 663. Last accessed June 9, 2014 from: http://ageconsearch.umn.edu/bitstream/95751/2/AAE663.pdf
    • Woody, T. The Navy's Great Green Fleet Strikes back. (2012, July 19). Last accessed June 26, 2014 from http://www.forbes.com/sites/toddwoody/2012/07/19/the-navys-great-green-fleet-strikes-back/

    About Me

      Description Hello there! My name is Katherine Reed and I am from Hamilton, Missouri, which is a small town about an hour northeast of Kansas City. This upcoming fall, I will be a junior at the University of Missouri-Columbia majoring in Agribusiness Management with a minor in International Agriculture. Through an environmental economics course I took my freshman year, I gained more interest in sustainability issues, and as fate would have it, I saw this opportunity to be an undergraduate researcher for the Kansas State Bioenergy Research Experience for Undergraduates (REU) program and decided to apply. I was ecstatic when I heard I had been accepted into the program. I have really enjoyed working with Dr. Bergtold on the crop adoption process and have gotten a taste of what the field of research really looks like.

      Contact Information

      E-mail: klr8t6@mail.missouri.edu

      Phone: (660) 973-4458

    Acknowledgements

    Dr. Jason Bergtold: Professor, Agricultural Economics, Kansas State University

    Keith Rutlin: Educational Programs Administrator, Center for Sustainable Energy, Kansas State University

    This material is based upon work supported by National Science Foundation Grant: REU Site: Summer Academy in Sustainable Bioenergy; NSF Award No.: SMA-1359082, awarded to Kansas State University.

    NSF bioenergy