US processors shift toward higher-oil-content crops amid growing biofuel demand

Growing biofuel demand in the United States is encouraging processors to expand their use of oilseeds with higher oil content, particularly canola, camelina, and sunflower seed. According to Devin Mogler, President and CEO of the National Oilseed Processors Association (NOPA), changing crushing economics are creating new opportunities for alternative feedstocks. Soybeans will remain the primary crop for US processors, although interest in other oilseeds is gradually increasing.

The main driver of this shift is the rising value of vegetable oils amid the expansion of the biofuel industry. According to Mogler, oil accounts for only about 20% of soybean weight but currently represents approximately 50% of its total value. This change in the relative value of oil and meal is primarily linked to government biofuel policies, which are stimulating demand for vegetable oils as fuel feedstocks.

Under these conditions, processors are increasingly focusing on crops with higher oil content. Canola, camelina, and sunflower seed typically contain around 40% oil, almost twice the corresponding level in soybeans. As a result, these crops can provide a higher oil yield per ton of processed feedstock, making them more attractive to facilities supplying the biofuel sector.

The US oilseed processing industry is already adapting its production capacity to changing market conditions. According to the NOPA CEO, most processing plants built over the past five years are flexible facilities capable of handling different oilseeds. They are primarily designed to crush soybeans but can also process alternative crops. Feedstock selection will depend on regional production conditions, crop availability, and farmers’ interest in growing alternative oilseeds.

Another potential incentive for diversifying oilseed production is the expected finalization of the rules governing the 45Z Clean Fuel Production Tax Credit in November. The new regulations are expected to recognize alternative oilseeds as low-carbon biofuel feedstocks. NOPA anticipates that greater clarity regarding government incentives will further increase interest among processors and farmers in canola, camelina, and sunflower seed, expanding the feedstock base of the US biofuel industry.

Tags: oilseeds, rapeseed, USA, biofuel, sunflower seeds