Nebraska Farmers Help Heat Up Interest In Bioheat

They're promoting Bioheat in the Northeast; it is more environmentally that standard heating oil and its use will benefit the soybean market.

Published on: May 3, 2012

By Greg Anderson

Why would a Nebraska farmer like Greg Anderson of Newman Grove be willing to invest more than $1 million soybean checkoff funds in helping Bioheat succeed in the Northeast? 

He and other Nebraska soybean producers went to Boston this spring to wave the Bioheat flag. "We recognize the tremendous potential it holds for both our industries," Anderson says. "We're passionate about Bioheat because we have a proud history of backing innovative ideas that lead to success. In fact, soybean farmers established the biodiesel industry itself in the U.S. 20 years ago. Biodiesel is the fuel that today is blended with transportation diesel, or with oilheat to create Bioheat."

Nebraska Farmers Help Heat up Interest in Bioheat
Nebraska Farmers Help Heat up Interest in Bioheat

Anderson says producers want to grow the Bioheat business into a market that lessens U.S. dependence on foreign oil, creates jobs here at home and keeps the domestic energy supply safe and secure. "We're not going to replace diesel fuel completely in the U.S., but we can make a big difference."

It turns out oilheat dealers and farmers share many likenesses. "First and foremost, we both are family businesses, and small businesses. I'm a fifth generation farmer. My farm has been in same family for 139 years. Also, we are a commodity. We're sensitive to weather and sympathize with your struggles with unpredictable weather," Anderson says.

He adds, "We've discovered that the relationship between soybean farmers and oilheat dealers is truly mutually beneficial. Our investment with you has paid dividends in this first year. I've seen it firsthand."

Bioheat is a tremendous market for biodiesel, according to Anderson. Just 5% biodiesel in the oilheat market equates to 350,000 gallons of biodiesel a year. To put that into perspective, last year the biodiesel industry produced 1.1 billion gallons of biodiesel.

And we know Bioheat's biodiesel volume potential will grow as the blend level grows. 

Biodiesel growth is a good thing for soybean farmers. More biodiesel means more favorable prices for soybean oil, which is one of the renewable resources that biodiesel can be made from, he says. This is one way biodiesel helps invest in American jobs, rather than sending our money overseas.  

Soybean oil traditionally has dragged down the value of the soybean, which is primarily grown for its meal. This is an important point for oilheat dealers to understand, in case their customers ask about biodiesel's impact on food prices. The reality is that soybeans are not just for tofu and soy milk smoothies. Soybean meal is fed to livestock, which then enters our food supply in the form of meat and dairy.  There's not as much demand for soybean oil, and we can only use so much of it for salad dressing.

 "We have millions of pounds of oil that need to be used in industrial uses. Biodiesel increases the value of the oil, which raises farm income to the tune of tens of thousands of dollars of additional income," Anderson says. "However, it lowers the cost of the meal, which means biodiesel production has a net positive effect on food prices."

Farmers have the means, the technologies, the efficiencies and the production capacity to provide food, fiber and fuel for our country, Anderson contends. The American farm is constantly evolving and advancing. We have unbelievable technological advances in modern agriculture today that would blow your mind. A farmer can take care of hundreds of acres by himself that 50 years ago would have taken many hand laborers to tend.  Every year, farmers are able to produce more and more crops on less land, and with fewer inputs like fertilizer. 

Anderson farms near Newman Grove and is a member of the Nebraska Soybean Board and the National Biodiesel Board