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Potential Of Canola In Michigan

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  • Adhikari, Bishwa B.
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    Abstract

    This study consists of four different aspects of canola in Michigan with special emphasis on northern Michigan. The economic feasibility of canola as an alternative cash crop, potential canola growing area, feasibility of establishing canola processing plant(s) in northern Michigan and the canola marketing situation in Michigan were appraised. Secondary data, previous research results, key informant interviews, informal visits, expert opinions and survey data were used to study these aspects of canola. Review of past agronomic research results showed that canola can successfully be grown in various part of Michigan, including northern Michigan. Break-even analysis of canola with other alternative crops like wheat, corn, oats and soybeans suggested that canola can be more profitable than these crops whereas it cannot compete with kidney beans, dry beans and potatoes. Key informant surveys revealed that out of 598,000 acres of cultivated land in Northern Michigan, approximately 10,000 acres would be shifted to growing canola immediately, under the assumption of no marketing problems. The area would be sufficient for supplying canola to run two small to medium scale processing plants at full capacity. The economic feasibility of establishing canola processing plants has been evaluated in depth. Net present value (NPV) and internal rates (IRR) of return of proposed operations are encouraging. Various possible scenarios have been analyzed and it is concluded that canola processing has potential, particularly in northern Michigan. The case studies with grain elevators showed that canola handling might be profitable and that there is good potential for canola in Michigan. The major bottleneck in this sector is the lack of processing facilities in Michigan. Farmers are presently reluctant to grow canola due to perceived difficulties in marketing. Grain elevators are not handling canola at present time because of the very small volume of production. All of the respondents believed that the development of canola processing plant(s) or a strong marketing chain is necessary to stimulate the canola sub-sector in Michigan.

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    File URL: http://purl.umn.edu/11051
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    Bibliographic Info

    Paper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Graduate Research Masters Degree Plan B Papers with number 11051.

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    Date of creation: 1996
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    Handle: RePEc:ags:midagr:11051

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    Web page: http://www.aec.msu.edu/agecon/
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    Keywords: Crop Production/Industries;

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