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Comparative economic analysis of on-farm biodiesel production

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  • Adhikari, Suraj
  • Illukpitiya, Prabodh
  • Fisseha, Tegegne
  • Enefiok, Ekanem

Abstract

Soybean and sunflower are the major oilseeds crops that can be used as feedstock to produce biodiesel. This study investigates the comparative economic analysis of producing biodiesel from selected oilseed crops. The objective of this study is to advance research to provide knowledge needed for the feasible way of adaptation of oilseed crops for small scale on-farm production of biodiesel. The equipment, capital, acreage, and production costs needed for feedstock production, harvesting, and processing of these oilseed crops were identified and considered for the analysis. The annualized net revenue from the biodiesel production was calculated considering 15 years time period. After considering a price of seed meal and current selling price of biodiesel, the estimated range of net return of producing biodiesel from soybean and sunflower ranges from -$0.47 to $1.08/gallon and -$1 to $0.95/gallon respectively. The break-even price for the soybean biodiesel was $2.74/gallon and $2.71/gallon for sunflower. According to Monti Carlo simulation, the average profit generated across random samples for biodiesel production from sunflower and soybean was $21 and 11 /acre yr-1 respectively. The production of on-farm biodiesel from summer oilseed crops can be feasible however there need to be a government subsidy for small farmers.

Suggested Citation

  • Adhikari, Suraj & Illukpitiya, Prabodh & Fisseha, Tegegne & Enefiok, Ekanem, 2017. "Comparative economic analysis of on-farm biodiesel production," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252766, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea17:252766
    DOI: 10.22004/ag.econ.252766
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