November 5, 2010

Camelina:  an Annual Cover Crop Under 40 CFR Part 80 Subpart M

In 40 CFR Part 80, Regulation of Fuels and Fuel Additives, EPA has
designated applicable D codes for use in generating RINs dependent on
feedstock and fuel pathway.  Included as a feedstock are annual cover
crops which are defined as:

“Annual cover crop means an annual crop, planted as a rotation between
primary planted crops, or between trees and vines in orchards and
vineyards, typically to protect soil from erosion and to improve the
soil between periods of regular crops.”

Camelina sativa (camelina) is a flowering plant in the family
Brassicaceae which includes mustard, cabbage, rapeseed, broccoli,
cauliflower, kale, and brussels sprouts. It is native to Northern Europe
and Central Asia and has been grown there for at least 3,000 years.
Camelina is tolerant of low rainfall and needs little nitrogen to
flourish; it can be grown on marginal agricultural lands and does not
compete with, but is a complement to food crops especially dryland wheat
cropping systems. Crop oil yields are double those of soybeans, and it
may be used as a rotation crop for wheat fields to increase the health
of the soil. It is cold tolerant and its oil is more resistant to cold
temperatures than other oils. 

Camelina fits the definition of annual cover crop that EPA has put forth
in 40 CFR Part 80 Subpart M and therefore fuel derived from camelina
should qualify for the applicable D codes to generate RINS.  Additional
information on camelina and its attributes is below.

How does camelina fit the definition of an annual cover crop?

 What is the general geographic and agronomic fit for camelina
production?

What nutrients are needed for camelina production?

What are the economics of camelina farming compared to wheat farming and
what is the probability that camelina will take away wheat production?

What is the energy required for camelina production?

Are modifications to existing processing technologies necessary to
process camelina?

Is camelina food?

How does camelina fit the definition of an annual cover crop?

Camelina is an advanced generation biofuel feedstock targeted as a cover
crop complement to dryland food production acres, especially cereals in
the Great Plains. As per the definition above, camelina is:

An annual crop; 

Is planted in rotation with dryland wheat – the primary crop; 

Protects the soil from erosion as these geographic areas are prone to
wind and rain erosion; and,

Improves the soil between periods as it provides organic matter to
improve soil tilth.

In addition, camelina has the following additional attributes:

Camelina is capable of being planted very early in the season when soil
temperatures are much cooler than other potential crops.  As a result,
the camelina germinates rapidly and shades/chokes out the subsequent
weed germination.

Because it is a 90-110 day crop.  Camelina complements spring wheat
practices by being planted, and harvested earlier than the spring cereal
crop. Cropping and growing practices in farming communities vary widely
based on local conditions, and the same would be true for camelina. 
Camelina would be planted as a cover crop to improve land that is
currently left fallow, so its incorporation into a rotation would be
influenced, at least partly, by on-farm conditions, such as a need for
pest control, desire to improve soil tilth and related needs. The below
examples, however, capture a relatively ordinary wheat rotation that is
common throughout the Northern Great Plains, and a standard
wheat/camelina rotation.

In a standard wheat rotation system, winter wheat is planted during the
fall (Year 0), usually in October or November, and is harvested the next
summer, in mid-August of Year 1. After harvest, that strip of land is
left fallow  for the remainder of Year 1, until the spring of Year 2 (as
no-till farming becomes more common, wheat stubble is left standing and
treated with chemicals; hence the term “chemfallow”).  Depending on
farm-specific conditions such as moisture and nutrient levels as well as
the broader farm-wide rotation pattern, that strip of land may either be
seeded with spring wheat in March/April of Year 2, or remain fallow for
an entire 12-month period, until winter wheat planting in the fall of
Year 2. If spring wheat were planted, after August harvest in Year 2,
that strip would then be fallow for an entire 12-month period, August
Year 2-August Year 3.  In fall of Year 3, winter wheat would be seeded
and the rotation begins again. 

In a camelina/wheat rotation system, winter wheat is planted during the
fall, as above, and harvested in mid-August of Year 1. That ground would
remain fallow until spring of Year 2, at which point camelina would be
seeded in March or April and harvested in August. That ground would
remain fallow again until spring of Year 3, at which point spring wheat
would be planted. After spring wheat harvest in August of Year 3, winter
wheat would be seeded in October, beginning the rotation again. Note
that, based on moisture conditions in various regions of the country, a
camelina/wheat rotation might require a full year of fallow land. For
example, after the spring wheat harvest in August Year 3, a 12-month
fallow period may be needed before beginning the rotation in the fall of
Year 4, with winter wheat planting.

As fallow acreage is a primary target, camelina as a cover crop replaces
at least two chemical treatments to remove weeds.

What is the general geographic and agronomic fit for camelina
production?

Research conducted since 1997 regarding camelina production in the
United States indicates that the best production fit for the crop is
likely to be as a complement to dryland wheat production systems (McVay
and Lamb, 2008;. Wheeler and Guillen-Portal, 2007, unpublished document;
Ehrensing and Guy, 2008) There are several reasons for this conclusion:

 Economic.  Camelina represents an additional cash crop for dryland
wheat farmers who may not have alternative choices due to marginal
climatic and soil conditions in their production area, by allowing those
producers to grow a dedicated energy feedstock in lieu of idling land. 

Economic.  Camelina production utilizes the same equipment necessary to
plant and harvest wheat, so it is not necessary to make significant
capital investment for a wheat farmer to cultivate camelina while the
utilization of the equipment can be amortized against additional
revenues.

Agronomic.  Crop rotation is an essential practice as it allows the
pest/disease cycles to be broken, moisture to be captured, and soil
tilth improved for subsequent crop production.  When an alternative crop
is not available, as in the targeted dryland wheat production acres for
camelina, the rotation is to fallow ground.  Typically in current
production schemes this means that the ground remains as wheat stubble
for a crop season with at least two herbicide applications to kill weeds
that germinate. Farmer’s decisions to rotate from wheat production are
based on a number of factors and include considerations around the
previously mentioned agronomic as well as economic drivers.  In much of
the targeted production area for camelina, where the rotational decision
is commonly fallow (no viable alternative crop), we expect that one of
three rotation scenarios will apply:  1) wheat-fallow-camelina-wheat; 2)
wheat-wheat-fallow-camelina; 3) wheat-wheat-camelina-fallow.  Rotational
choices such as these provide an additional crop within a 4-season
cycle, allowing for up to 40% more revenue in the period from acreage
that is frequently subject to drought, high heat, and other stressors
that make generating revenue challenging. Other rotational minor crops
currently available in the target region include lentils (Lens
culinaris), flax (Linum spp.), peas (Pissum spp.), garbanzo (Cicer
arietinum), and millet (Pennisettum spp.), although the total acreage
devoted to these minor crops is comparatively very small, all of them
together comprising no more than half a million acres of the annually
available rotational acreage in dryland wheat production (estimated to
be up to 20-22 million acres).

Camelina as a complement to dryland wheat production, and a substitute
for fallow land fits generally into the highlighted areas in the map
below. 

The acreage potential for camelina is best calculated using the
following from the USDA Agricultural projections:

Wheat plantings to be relatively stable over the next decade. Wheat
plantings are projected to rise to 61.0 million acres in 2011 because of
1) additional land becoming available from expiring CRP contracts and 2)
incentives provided by high expected net returns (expected farm price
times projected yield minus variable costs). The projected farm price is
above the loan rate for the entire projection period, so loan benefits
do not enter into net returns or influence plantings. Plantings are
expected to fall off slightly toward the end of the decade as land is
switched away from wheat to more profitable crops.

 

As you can see in the chart, the acreage projections during the next
decade for wheat are approximately 60 million acres of production. 
Further USDA and wheat state cooperative extension reports through 2008
indicate that 83% of that production is under non-irrigated, dryland
conditions, and of the resulting 50 million acres at least 45 % are
estimated to follow a wheat/fallow rotation. The remaining 55%,
typically in somewhat better agronomic climate and soils, follow a
continuous crop rotation (wheat/barley/wheat; wheat/lentils/wheat, etc.)
  The resulting 22 million acres are therefore the prime target for
camelina production and fall into the previously illustrated geography.
Of those 22 million acres where there is an opportunity to grow
camelina, only about a third, or 9 million acres, have the appropriate
climate, soil profile, and  market access to be economically desirable.

 A commercially viable renewable diesel facility would produce about 75
million gallons of advanced biofuel annually. Approximately 38 million
bushels of camelina per year would be necessary to support that
facility.  Assuming 33 bushels/acre yield, on average, approximately 1.1
million acres of cropland would be necessary for a single facility.  
However, renewable diesel facilities, like other advanced biofuel
facilities, will likely choose to use multiple feedstocks to mitigate
risk.

What nutrients are needed for camelina production?

Camelina nutrient and moisture requirements are minimal, significantly
less than wheat or other oilseeds.  As a result, supplemental nutrients
are low, soil moisture is managed and required production costs are low.
Some application of nitrogen and phosphate improves yields.  We advise
farmers to apply 25 pounds of nitrogen per acre and 15 pounds of
phosphate per acre.

What are the economics of camelina farming compared to wheat farming and
what is the probability that camelina will take away wheat production?

The scenario of an open market of camelina competing for acres currently
targeted for cereal production is unlikely.  There are three basic
reasons why:

Cereal markets (wheat, barley especially) represent the opportunity for
much higher return than camelina because there is a significant open
market opportunity for farmers to take advantage of market fluctuations.
 These market fluctuations can mean huge upside for the farmers, as in
2007 and 2008 when wheat prices spiked to over $10/ bushel at times.
Farmers have the opportunity to grow cereals with or without production
contracts.  Conversely, camelina markets as biofuel feedstock sources
will be virtually 100% contracted acres.   

Integrated companies with access to biofuel outlets will have economic
incentive to both maintain and lower commodity values to reduce economic
risk and increase predictability of the resulting biofuel.  As such,
camelina is priced such that farmers have economic incentive to plant it
instead of leaving the acres fallow, but would not replace acres
scheduled for wheat rotation with camelina.

Farmers utilize Federal crop insurance for cereal production.  To
maintain their insurance base, farmers must plant annually a specified
percentage of that basis.  Therefore there is a strong incentive not to
plant more than 25% of the cereal crop insurance base for fear of losing
that important risk tool in subsequent years.   Producers must plant at
least 75% of their maximum potential crop acres with the primary crop
– wheat, for example – to maintain the maximum available crop
insurance.  This leaves only 25% of the crop land, which would
ordinarily remain fallow, for planting of camelina.   There is no
similar crop insurance in place for camelina.

A cost comparison of the value to farmer per acre of camelina versus
wheat is below. These cost comparisons are based on Sustainable Oils
production contracts, local seed (agents for Sustainable Oils’ seeds)
who also supply chemicals and fertilizers, farmers accounts provided to
Sustainable Oils, and Chicago Board of Trade wheat quotes.   As one
would expect from a cover crop, the cost per acre to produce camelina is
about 1/3 lower than it is to produce wheat.  The average annual yield
per acre has been trending up but is still less than 800 pounds. 
Camelina contracts are paying $0.145 per pound so the expected revenue
per acre is $116, netting the farmer $13.24 per acre.  Wheat contracts
are currently around $5.35 per acre (with yields around 40 bushels per
acre), netting the farmer almost 5x more economic value per wheat acre
than camelina acre.

Camelina yields are expected to improve significantly over the next 5
years.  As this happens, contractors will lower the price paid per pound
in order to gain some of the economic value of creating higher yielding
germplasm, down to about $0.125 per pound.  Even if camelina yields
would increase 50%, to 1200 pounds per acre, the net value to farmers
would still be less ($47.24 per acre – not including extra costs
associated with harvesting and hauling the extra materials) than what is
expected for wheat acreage.

Finally, wheat prices on the open market are relatively volatile.  As
mentioned above, in 2007 and 2008 average wheat prices in Montana for
all types of wheat were $7.14/bu and $6.55/bu respectively (USDA),
although prices spiked much higher than that in different months.  In
these exceptional years, wheat farmers are capable of more than doubling
their net profit.

Camelina Total Production Cost



Wheat

Inputs	Rates	Cost	Cost

Herbicides	 	 	 

Glysophate (Fall)	16 oz. ( $0.39/oz)	$7.00 	$14.00 

Glysophate (Spring)	16 oz. ( $0.39/oz)	$7.00 

	Post	12 oz ( $0.67/oz)	$8.00 

	Seed	 	 	 

Camelina seed	4 pds./acre	$5.76 	$9.00 

Fertilizer	 	 	 

Nitrogen Fertilizer	25 pds ( $1/pd)	$25.00 	$90.00 

Phosphate Fertilizer	15 pds ( $1/pd)	$15.00 

	 	 	 	 

Sub-Total	 	$67.76 	$113.00 

Logistics	 	 	 

Planting Trip	 	$10.00 	$10.00 

Harvest& Hauling	 	$25.00 	$25.00 

Total Cost	 	$102.76 	$148.00 

Total Revenue at avg prod/current pricing	$116.00 	$214.00 

Return	$13.24 	$66.00 



Another scenario that could occur is that oil prices spike, causing
contractors to pay more for camelina while wheat prices drop.  However,
looking at the price of wheat and oil futures contracts during the last
5 years it is apparent that that is an unlikely scenario as wheat and
oil prices are highly correlated.

Wheat Futures Versus Oil Futures 2004-2009

What is the energy required for camelina production?

Camelina production requires minimal energy inputs.  As stated above,
current guidance to farmers is that they apply 25 pounds per acre of
nitrogen and $15 pounds per acre of phosphate. The additional energy
input is diesel for the farming equipment.  Compared to other
feedstocks, the amount of diesel used to plant and harvest camelina
should be the same or less because of the high ratio of seed to biomass
for the plant.

Are modifications to existing processing technologies necessary to
process camelina?

Commercial camelina production has been in place for several years.  An
advantage of camelina production is that the planting and harvesting
equipment used for wheat can be used for camelina and that the existing
crushing, extraction and processing infrastructure is suitable for
camelina.  No modifications to these technologies are necessary.

Is camelina food?

Camelina is most properly understood as a cover crop that complements
existing food crops, such as wheat.  Growing camelina exclusively as a
dedicated energy feedstock, therefore, does not create a “food vs.
fuel” scenario, as camelina has no role in the food chain and only a
small role in the feed chain. 

The US Food and Drug Administration (FDA) is responsible for approving
food additives.  There are different routes for this, including being
accepted as GRAS – generally recognized as safe – or going through a
premarket approval process.  Camelina has not received GRAS designation
from the FDA nor has any organization petitioned for it or started a
full approval process. Assuming canola would be the likely predicate
crop for the route to GRAS status by the FDA, it is useful to look at
its history to determine what camelina producers would need to do to
achieve the same status.  Canola was specifically developed in Canada to
provide Canada with a cold tolerant, healthy oilseed crop.  Rapeseed was
the initial crop that was bred to get rid of the anti-nutritional
components of erucic acid and glucosinolates.  The allowable levels of
those two components in canola are less than 2% erucic acid and fewer
than 30 micromoles/ gram glucosinolate.  (Camelina varieties typically
contain over 2% and as much as 4% erucic acid  while glucosinolate
levels vary but can be as high as 36 micromoles/gram.)  Canola, with the
support of the Canadian government and strong trade groups dedicated to
its development, received GRAS status after submission of a lengthy
petition which detailed years of animal and human studies.  It is highly
unlikely that camelina will achieve the same status because (a) there is
not a market need for another cold-tolerant oilseed as canola is a
superior crop with attractive health benefits (b) camelina has an
inferior profile compared to canola because of its erucic acid and
glucosinolate profile (c) the trade groups developing camelina are
focused on it as a energy crop, and (d) camelina oil has an off-odor and
taste and therefore is not a desirable food.  Camelina is not poisonous,
however, and on-line searches may reveal examples of camelina oil being
used in recipes, as one would also find recipes for pennycress,
dandelions and other plants that are not regarded as “food.”

While camelina is not considered food for direct human consumption,
camelina has the potential to add to the food supply because its meal
can be used in some animal feeds.  Camelina meal accounts for ~62% of
the seed (after the oil has been extracted) and while the FDA has
approved its use in beef cattle and broiler hens it is only as a small
percentage of the total ration (10% and 2% respectively).

Summary

Camelina has tremendous potential as a near-term feedstock that can
contribute to reducing our nation’s carbon footprint and increase our
domestic energy supply.  Many of the advantages of camelina are derived
through its use as an annual cover crop, grown by farmers in rotation
with dryland cereal acres.  Camelina provides some economic benefit for
the farmer, protects the soil, and helps reduce the pest cycle.  We
respectfully request that the EPA confirm that camelina is included in
the existing definition of  “annual cover crop” under 40 CFR Part
80, Regulation of Fuels and Fuel Additives.

For further information, please contact Scott Johnson at  HYPERLINK
"mailto:scott.johnson@susoils.com" scott.johnson@susoils.com  or
Margaret McCormick at mmccormick@targetedgrowth.com.

Example A: Ordinary wheat (winter wheat/spring wheat) rotation

 	Jan	Feb 	Mar	April	May	June	July	Aug	Sept	Oct	Nov 	Dec

Year 0	 	 	 	 	 	 	 	 	 	WW Planting	 	 

Year 1	 	 	 	 	 	 	 	WW Harvest	 	 	 	 

Year 2	 	 	 	SW Planting	 	 	 	SW Harvest	 	 	 	 

Year 3	 	 	 	 	 	 	 	 	 	WW Planting	 	 















Example B: Wheat/camelina rotation

 	Jan	Feb 	Mar	April	May	June	July	Aug	Sept	Oct	Nov 	Dec

Year 0	 	 	 	 	 	 	 	 	 	WW Planting	 	 

Year 1	 	 	 	 	 	 	 	WW Harvest	 	 	 	 

Year 2	 	 	 	C Planting	 	 	 	C Harvest	 	 	 	 

Year 3	 	 	 	SW Planting	 	 	 	SW Harvest	 	WW Planting	 	 



