March 8, 2021

So many reasons to believe in the value of Camelina

By Barney Bernstein, Senior Associate

Among the vast cropland of northern Montana, last August hundreds of acres that usually sit idle through the summer yielded more than 1,300 pounds per acre of camelina. 

Camelina is a relatively unknown crop proving to be a high-value alternative to fallow rotations in Montana and other western and midwestern drylands. An ancient oilseed crop, first introduced in the state 10+ years ago as a component for biodiesel for defense contracts, camelina thrives in less-than-ideal climates and moisture levels.

Steve McIntosh is among a handful of curious and hopeful growers giving camelina a shot in their crop rotations.

McIntosh has a successful and progressive specialty crop operation near Havre, MT, where his dad started farming in 1950. McIntosh joined him in 1975, married his wife, Wanda, in 1980 and they’ve been farming together ever since. They’ve grown wheat and barley from the beginning, then brought in peas and lentils in the 1990s. In the last five years they added mustard and in 2019, camelina.

“We like to put peas and lentils on summer fallow then re-crop back to winter wheat. Same with mustard. Now we added camelina on summer fallow, trying to get a better yield. What we raised in 2019, we seeded in 2020 with peas. We’ve been very pleased with our yields.”

So, what is this mystery crop?

Camelina is an oilseed similar to canola, though you won’t see it in vegetable oil for food use. Camelina is almost exclusively a bio-fuels crop, originating thousands of years ago in Europe and Central Asia and making its way to U.S. fields in recent years.

Most camelina harvested in the United States goes to California. The harvested grain is aggregated and shipped to the San Joaquin Valley where it’s crushed to be converted into renewable diesel. Camelina has the lowest carbon intensity score of any diesel feedstock and the highest financial returns for any feedstock for renewable diesel. So what’s not to love?

Growers in various regions have dabbled in growing camelina but never had anyone show them the right way to grow it. Camelina is not one of those crops passed on by the generation before, and needless to say it’s not necessarily an easy sell. Several groups have touted the benefits, but until now no one has offered growers good agronomic guidance or marketing support.

Today, Sustainable Oils is leading the charge to establish a track record of success for camelina and create a rewarding market for growers. They first invested in the germplasm and more technical sides of the business, then they bought a refinery to produce renewable diesel. The missing piece was bridging the gap with growers to effectively communicate the benefits of the crop and help manage the commercial aspects of building a market for a new crop. They reached out and partnered with Entira to take it to market.

“I believe it was six years ago, there was an informational meeting on camelina in town,” McIntosh said. “They said all we had to do was top dress it—otherwise we didn’t have to put down any chemicals, and we didn’t have to fertilize it. I walked away not interested because that sounded too good to be true.”

And “too good to be true” was probably correct. McIntosh said, “Ahead of the 2019 season, we were introduced to a more realistic approach that did include chemicals and fertilizer. We had to follow their guidance and they guaranteed us a certain amount of money whether we cut a crop or not. They sounded like really intelligent, realistic businessmen, and I liked the way they assumed the risk—I thought if they were willing to take the risk it must be an alright crop.”

This fall, Sustainable Oils and Entira wrapped up year two of a shared-risk program designed to educate growers—including Steve McIntosh—on the benefits of camelina as an addition to their crop rotation and how to grow it effectively. We also taught them what was necessary for planning and harvesting to ensure they produced a good crop and were able to get it in a bin.

Slow and Steady Wins

During the first year of our trial with the McIntoshes, Mike Karst and I traveled to Montana to take a look after the crop was seeded. At first glance it looked good, but when we got into the field we found significant insect damage.

“That first year I was really disappointed in how our camelina performed and thought we had failed at raising this crop, but Mike and Barney were pleased,” McIntosh said. “They saw it from a totally different perspective…originally they had the understanding that bugs—army cutworms and wireworms—were not going to bother this crop. They actually were happy to find that out that wasn’t true, because now we know what chemicals are needed to make this crop successful in the years to come. Finding problems is necessary because then they can be addressed earlier in the process. I think that’s a unique and good way of approaching a new crop.”

Three different growers planted about 500 acres total in that first year, and camelina acreage has been slowly increasing ever since. McIntosh himself planted close to 500 acres in 2020.

“We had no insect issues this year—we learned from previous years what worked and we scouted the fields better.”

Sharing Risk

Growers’ risk in taking on a largely unknown crop was one of the biggest hurdles to adoption; and we needed growers on board to build a case with RMA (Risk Management Agency) to make the crop insurance yield targets realistic. Getting decent crop insurance coverage necessitated better data, and that required a multi-year effort.

Since RMA bases crop insurance rates on historical yields, the data available from years of growing camelina with little-to-no guidance was a gross underestimation of the crop’s true potential. Camelina yields over the past decade have been no higher than 800 pounds per acre, making it an unviable crop that’s not worthy of the risk.

We needed to prove to RMA what we knew camelina was capable of yielding, which was 1,000-2,000 pounds to the acre if growers are taught how to grow and harvest correctly. And we demonstrated this successfully during field trials. Yields like that have the potential to give growers significant profit in years they would have lost money to fallow. In Kansas, we’ve found it’s even possible to harvest by mid-June and still plant sorghum. In Montana, a wheat camelina rotation can add $40 per acre of profit over variable cost in each year of the rotation.

The shared risk component of this program was so critical to its success. We had to prove we were willing to stand by our word that this crop would make growers money. Over the last two years Sustainable Oils took on the payment risk—even if growers missed yield goals in a given year - Sustainable Oils covered the minimum payment, which keeps growers whole and provides some profitability per acre. Going forward, growers wanted to have more upside potential.  Since our yields have consistently been above 1,200 lbs. per acre, we now offer the growers a much higher variable payment in exchange for a reduced guaranteed payment. With average yields, growers earn about the same as in the past. But with higher yields they can do much better. And Sustainable Oils does much better because we get more grain.

We knew as time went on growers would want to capture all the benefits of higher yields, so the shared risk is a relatively short, 1-3 year option. Over time, more risk shifts to the grower but so does greater revenue potential—and that’s what they want. By the third year, after we’ve had multiple consecutive years of higher yields, RMA will have enough data to get their insurable yield to a point that farmers can buy crop insurance at a rate that makes sense. And farmers will have experience to know that they can count on camelina providing the yields we, and they, expect.

If both sides win, it’s easy to sell. If it’s about me winning and not you, there’s no long-term potential. The grower must benefit to make it a sustainable business model.

Now that the crop rotation is getting established, McIntosh sees the potential for camelina to be financially rewarding.

As for his overall impression of camelina as a crop, McIntosh is pleased with it. He likes that camelina is a deep-rooted crop, similar to mustard, and believes it will help break up the hard pan without mechanical tillage. “I’m all no-till so that makes me happy.”

He said, “Some years farming is not a lot of fun, and I always say it needs to either be profitable or fun—preferably both. I see camelina as another avenue to improve our bottom line. And it is fun to grow.”

Reasons to Believe in Camelina

Our success with camelina hinged on giving growers reasons to believe in the crop’s potential as a reasonable business venture. Through this program we’ve brought a new opportunity to fruition for growers—and, by absorbing most of the risk to get them started, we have given growers a solution with high reward prospects.

Here are the rules of thumb Entira follows to give growers reasons to believe:

Present a real solution to a real challenge

Our approach is to work with the growers to address the limiting factors they may encounter. We don’t take a gamble by trying something and seeing if it sticks. Just like we did that first year on McIntosh’s farm with the insect infestation—we vet it, we put it into practice, we vet it some more, and then we show results. Finding a crop that grows well in marginal conditions is not enough. We have added an educational component so the crop could reach its potential and growers could reap the most benefit.

Communicate effectively in ways that resonate with growers

We are committed to working side-by-side with growers to educate and guide them. In return, they educate us on what makes camelina production more efficient and more productive.  It’s an interactive relationship.  We work together on everything from agronomy to marketing. If there is poor understanding about the product or the objective, we invest the time and resources to educate our growers. If we can help them see how the solution works to their advantage, they have a reason to believe we know what we’re talking about and understand their pain. They in turn help us to understand how best manage camelina in their unique situations and with their equipment. It’s a great learning relationship for both parties. And it ensures we can provide the best management practices possible.

Never promise what we can’t deliver

Entira has a hard and fast rule against overpromising results that cannot be attained. We’re upfront about the risks and the threats to watch for, and fortunately for growers, the shared risk mitigates many of the factors that could threaten their success.

The camelina program will expand this year—the focus now is on western Kansas, eastern Colorado and Montana, and ultimately, we see expansion into western Oklahoma, Idaho, Oregon and Washington. If our trials are successful in Kansas with winter planting, creating a double crop opportunity, then we will look at implementing that more broadly; and the acreage potential could be much higher.

We’re proud of this success story on how to introduce a new business following an approach centered on shared risk and education. It reinforces our belief that it’s far more effective to align with partners who share your vision and want to bring value to their customers vs. blowing it out to everyone and hoping it sells itself.

If you want to learn more about camelina or how to craft programs that give growers reasons to believe, contact me at 919-830-6527 or bbernstein@entira.net.