Is it economically feasible for farmers to grow their own fuel? A study of Camelina sativa produced in the western United States as an on-farm biofuel

This paper models the economic feasibility of growing the oilseed crop Camelina sativa (camelina) in the western United States to produce value-added protein feed supplement and an SVO-based biofuel. Modeled in eastern Colorado, this study demonstrates that camelina can be grown profitably both as a commodity and as an energy biofuel. These findings, along with the stochastic crop rotation budget and profitability sensitivity analysis, reflect unique contributions to the literature. The study's stochastic break-even analysis demonstrates a 0.51 probability of growing camelina profitably when diesel prices reach 1.15 $ L-1. Results also show that the sale of camelina meal has the greatest impact on profitability. Yet once the price of diesel fuel exceeds 0.90 $ L-1, the farmer generates more revenue from the ability to offset diesel fuel purchases than the revenues generated from the sale of camelina meal. A risk analysis using second degree stochastic dominance demonstrates that a risk-averse farmer would choose to grow camelina if the price of diesel equals or exceeds 1.31 $ L-1. The article concludes that camelina can offset on-farm diesel use, making it economically feasible for farmers to grow their own fuel. As a result, camelina production may increase farm income, diversify rural economic development, and contribute to the attainment of energy policy goals. (C) 2013 Elsevier Ltd. All rights reserved.