As exciting as the explosion of the renewable diesel industry is for agriculture, an executive with CHS Inc. said during the DTN Ag Summit on Monday that the math doesn’t add up for supplying enough feedstocks to fuel the growth.
Gary Halvorson, CHS Inc. senior vice president of enterprise customer development, said change is inevitable in agriculture, and renewable diesel in particular and renewable energy, in general, are going to continue to influence cropping decisions.
“Obviously, tomorrow is not the same as today or yesterday, and we’re all going to have to do more to invite ourselves to change,” he said.
“Outsides markets will continue to have an outsized influence in agriculture. It’s more about what’s going on around the world than it is here at home.”
Halvorson said the expansion of soybean crush capacity and the growth of renewable diesel will play a role in perhaps changing farmers’ cropping decisions.
If the renewable diesel expansion is to be fully realized, he said, more farmers will need to move corn acres to soybeans.
New construction announcements about soybean crush facilities and renewable diesel plants have been popping up for the past two years, increasing demand for soybean oil and charting a path for change in crop acres in the decades to come.
“If we’re going to use more renewable diesel fuel, we have to grow disproportionately more soybeans in the U.S. because we need about 9 million more acres to fuel the new soybean crush plants of soybeans,” Halvorson said.
“If all the states that are proposing an LCFS (low-carbon fuel standard) like California did or Washington’s talking about, there’s just no way that the U.S. farmer would grow enough soybeans to fuel that demand to create enough renewable diesel.”
For example, if New York and Florida switched from diesel to renewable diesel, he said, “We would consume nearly all the acres that can be farmed; they’d all switch to soybeans in the U.S. So, the math doesn’t work.”
U.S. farmers in 2022 planted 89.9 million acres of corn and 88.3 million acres of soybeans.
Halvorson said that because it takes a while to build a new crushing plant, the change in crop demand will be gradual.
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