Comparative economic analysis of on-farm biodiesel production from soybean and sunflower under small scale setting
Soybean and sunflower are the major summer crops that can be used as feedstock to produce biodiesel. The objective of this study is to advance research to provide knowledge needed for the feasible way of adaptation of oilseed crops for biodiesel and bio-based product market. This study investigates the comparative economic analysis with technical and economic feasibility of producing biodiesel and by-products from soybean and sunflower at a farm scale (i.e annual capacity of less than 1,500 gallons) at three different production stages namely; seed, oil and seed meal, and biodiesel production. 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 investment evaluation criteria include Net Present Value (NPV), Benefit-Cost Ratios (BCR), Internal Rates of Return (IRR) and Payback Period (PP). Secondary data obtained from various sources were used 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 ($6.23 and $1.25/gallon of biodiesel produced from soybean and sunflower respectively) and current selling price of biodiesel ($3.32/gallon), the estimated net return of producing biodiesel from soybean ranges between -$0.47 - $1.08/gallon and that of from sunflower ranges from -$1 - $0.95/gallon respectively. The estimated IRR and PP was 3% and 2.5 years for biodiesel production from both of the oilseed crops. The results after this analysis proved that producing biodiesel from sunflower is competent enough with that of soybean and it is clear that sunflower could be used as prominent biodiesel feedstock. From break-even analysis, after considering the price fetched by seed meal ($6.23 and $1.25/gallon of biodiesel produced from soybean and sunflower), the break-even price for the soybean biodiesel was $2.74/gallon and $2.71/gallon, in case of sunflower. According to Monti Carlo simulation, the true average for sunflower and soybean seed production was $95 & -$41/acre yr -1. The average profit generated across random samples for biodiesel production from sunflower was $21/acre yr-1 and that of soybean was $11/acre yr-1.
"Comparative economic analysis of on-farm biodiesel production from soybean and sunflower under small scale setting"
ETD Collection for Tennessee State University.