Toward a Low-Carbon Transportation Future: Part 2

By Tomas Endicott, Processing & Markets Manager

Last week I wrote about carbon intensity and how the GREET model, standardized by the U.S. Department of Energy, quantifies the amount of carbon dioxide (CO2) that is generated when producing different transportation fuels—both fossil fuels and renewable fuels.

Today, let’s talk about factors that contribute to producing low-carbon transportation fuels.

Lifecycle carbon tracks CO2 emissions from feedstock production to combustion.

Carbon dioxide (CO2) emissions are tracked on a lifecycle basis. That is, CO2 is generated at many points in a fuel production pathway: feedstock acquisition, processing, refining, transport. The more carbon efficient each step in a particular fuel production pathway, the lower the carbon intensity of the final fuel. For processing fossil fuels or biofuels, reducing carbon emissions may include using renewable sources of heat and electricity that generate less CO2, such as biogas, wind power and solar power. Acquiring feedstock to produce transportation fuels presents many different pathways, each unique in the lifecycle CO2 emissions it generates.

All feedstocks are not created (carbon) equal.

Fossil fuel feedstocks—crude oil or natural gas—are fairly carbon-consistent no matter what their origin. They all are extracted in enormous volumes from underground. Biofuel feedstocks are incredibly diverse. There are many more variables that contribute to carbon intensity throughout every step of any particular biofuel feedstock production process.

All plants are self-sufficient. Some more than others.

Most plants are photosynthetic. They create hydrocarbons in the form of carbohydrates (i.e starch, sugar, wood) and/or fats (oils) using carbon dioxide (CO2), nutrients, sunlight and water. The plants use these carbohydrates and fats for their own energy, and they “invest” them into their seeds for the next generation. These carbohydrates and fats also are the source of the energy we harvest and convert into biofuels.

All plants also need some amount of nitrogen to grow and thrive. Legumes, like soybeans, alfalfa seed and pongamia seed, are special in that they harness their own nitrogen—the backbone for proteins—through symbiosis with bacteria that live on their roots. These rhizobium bacteria fix elemental nitrogen from the atmosphere and supply it to the plant in a form the plant can use.

Less inputs equals lower carbon intensity.

Non-leguminous plants must derive nitrogen from compounds in the soil. In a natural environment, that source of nitrogen may be composted organic matter or nitrogen compounds deposited in the soil through earthworm activity. Because modern, improved agricultural crops produce such high yields, they require large quantities of commercial fertilizer. Commercial nitrogen fertilizer is synthesized from natural gas, and its production requires significant energy input. As a result, producing commercial nitrogen fertilizer generates carbon dioxide (CO2) emissions, and those emissions are attributed to the lifecycle carbon of the crops that use the nitrogen fertilizer.

Nitrogen is expensive, both in the energy consumed to manufacture and transport it and in the dollars farmers must expend to apply it to their fields. Because nitrogen fertilizers must be applied to non-leguminous crops like corn and canola, producing biofuels from these non-nitrogen-fixing crops is more carbon intensive than producing biofuels from legumes.

By-products provide additional value.

Oilseed crops, like soybeans, canola and pongamia, can provide oil as feedstock for renewable fuels. They also provide another by-product: high-protein meal, which has significant value as livestock feed and as organic fertilizer.

Pongamia seeds are removed from their shells before being processed. These shells are half the weight of the harvested pongamia pods, and they can provide significant biomass to supply renewable, low-carbon heat and power to the pongamia biofuel processing pathway.

Greater yield per acre equals lower carbon intensity.

Because carbon dioxide (CO2) emissions generated while producing crops are spread across the total yield of a particular crop, crops that produce higher yields per acre can be more carbon-efficient. Every trip across a field to till, seed, fertilize, spray or harvest increases CO2 emissions and increases the carbon intensity for a particular crop. Crops with higher yields spread their carbon dioxide (CO2) emissions over larger production.

Growing conditions also affect yield. Logically, crops grown in tropical and sub-tropical environments experience more sunshine and heat, and they have longer growing seasons, so they produce larger yields per acre.

Annual or perennial makes a difference.

Annual crops—those that must be planted every year—require some amount of tillage or application of broad spectrum herbicides (i.e Round-Up) to prepare the seedbed and to minimize weed competition with the cultivated crop. Tillage alone can increase carbon dioxide (CO2) emissions from agricultural fields simply by exposing organic matter in the soil to oxygen, thereby, allowing it to be decomposed aerobically, which generates CO2.
Simply tilling the ground increases carbon dioxide (CO2) emissions from agricultural fields. Photo by Kai Oberhäuser on Unsplash

Perennial crops are established once and produce for many years. They do not require annual tillage. For large trees like pongamia, annual maintenance is low when the tree canopy prevents sunlight from penetrating to the ground, so nothing can grow there.

Although they require a few years to produce their first crop, yields for perennial crops tend to be much higher per acre than yields for annual crops. Whereas the average yield for soybeans in the U.S. is about 2,700 pounds per acre, perennial pongamia trees can produce more than 10,000 pounds of seeds per acre per year at eight years of age and beyond. The average lifespan of a pongamia tree is at least 25 to 30 years.

How many gallons of oils per acre?

For the purpose of biodiesel or bio-jet fuel production, seeds of different crops have different concentrations of oil—their percentage of oil by weight. Whereas soybeans contain only 16%-18% oil by weight, canola seeds contains more than 40% oil by weight and pongamia seeds contain 30% to 40% oil by weight. Considering the combination of per acre yields and the oil concentration in the seeds of a particular crop determines the amount of biodiesel or bio-jet fuel that can be produced by a given cultivated area. Here is a chart demonstrating the amount of oil per acre produced by different oilseed crops.

More yield per acre equals greater carbon efficiency.

Whereas soybeans produce only 55 to 60 gallons of oil per acre annually and canola produces about 120 gallons of oil per acre annually, mature pongamia trees can produce more than 450 gallons of oil per acre every year.

The CO2 generated to harvest an acre of soybeans or to harvest an acre of pongamia seeds are similar. Mature pongamia trees, however, yield almost four times more seed per acre than soybeans, and they yield about eight times the oil for every acre harvested. Now that’s efficiency!

Maximizing transportation efficiency minimizes CO2 emissions.

To achieve maximum carbon efficiency, transportation fuels need to be produced and moved in large volumes. It is most carbon-efficient to move fuels by pipeline, although pipelines are expensive to build and they have other environmental considerations. Moving a million gallons of fuel on a single ocean-going barge is ten times more efficient than hauling the same volume of fuel the same distance in hundreds of tanker truck loads. The efficiency of moving fuel in 25,000-gallon rail cars lies somewhere between the efficiency achieved by barges and the efficiency attributed to tanker trucks. Renewable fuels, like fossil-based fuels, must be produced on a large scale to achieve transportation efficiency.

Going further on a gallon of fuel reduces CO2 emissions too.

The most efficient gallon of fuel is the one that you never use. Producing low-carbon fuels at scale is only half the battle. Reducing consumption of all transportation fuels is the best carbon-reduction strategy for the transportation sector. Electric cars, hybrids and clean diesel technology are all available today, and all are improving with each new model year. In 2012, President Obama established new Corporate Average Fuel Economy (CAFE) standards which will raise the average fuel efficiency for all new cars and trucks in the U.S. to 54.5 miles per gallon by 2025. Impressive! Currently, the CAFE standard is 35.5 miles per gallon.

Carbon-efficient, sustainable biofuel feedstock, high-protein livestock feed and organic fertilizer from the perennial pongamia tree.

The pongamia tree can provide a unique and substantial contribution to the United States’ sustainable, low-carbon biofuel future. It is a nitrogen-fixing, subtropical tree that is native to India, Indonesia and Australia, and it grows well in Florida and in Hawaii. It is both drought resistant and accustomed to Monsoonal rains (TerViva’s pongamia orchards in Florida held their own against the wind, rain and flooding from Hurricane Irma last week). Pongamia can grow on sandy soils, and it is resistant to moderate salinity. It is a perennial tree that is highly productive for both non-edible oil as a feedstock for biofuels and for protein-rich meal for livestock feed and fertilizer.

Imagine our low-carbon transportation future!

TerViva is rolling out pongamia orchards on abandoned citrus land in Florida and on land that formerly grew sugarcane in Hawaii. Imagine a future where 100,000 acres of pongamia trees produce 50 million gallons of biofuel and 340,000 tons of high-protein meal each year. Imagine biomass heat and power produced from a half-million tons of pongamia shells harvested annually. Imagine bio-char from gasified pongamia shells sequestering carbon in the soil for thousands of years—steadily reversing the CO2 increase in the earth’s atmosphere.

Imagine millions of acres of pongamia orchards spread across the sub-tropical areas of Asia, Africa, Mexico and South America providing billions of gallons of biofuel every year. Imagine fuel efficient vehicles that go twice as far on a gallon of fuel so that we consume half the transportation fuel that we do today. With biofuels, electric vehicles and other technologies in the mix, renewable fuels could make up 50% of the total transportation fuel consumption in the U.S. within twenty years.

This is not a pipedream. It is absolutely possible. It is a matter of aspiration, effort and will.

Let’s do it!

Land Sharing vs. Land Sparing: Can We Maximize Yield and Biodiversity?

By Nathan Chan, TerViva Germplasm Development Associate

We often think of the environmental impacts of agriculture being limited to things like pesticides and nutrient runoff polluting waterways (see my colleague’s post for more on this), and methane emissions from livestock contributing to climate change, but one of agriculture’s biggest impacts has been its role as a leading cause in declines in wildlife and natural habitat. That may not resonate with those of us in Europe and the United States, where we’ve had a fairly mature agricultural industry for the past 100+ years (I challenge you to imagine what the West may have looked like before humans), but deforestation to create lands suitable for agriculture in South America and Southeast Asia is directly responsible for the loss of hundreds of thousands of hectares of habitat for thousands of species. This is not a sustainable approach moving forward as we aim to feed 9 billion people worldwide while working to maintain our remaining biodiversity.

Clear cutting and burning rainforests is common in the tropics to create more land for agriculture.

A popular framework for finding a sustainable solution gives us two strategies: “land sharing” and “land sparing”. In land sharing, lower intensity agriculture is practiced in favor of less productive methods that promote more suitable conditions for wildlife resulting in less food produced per acre. In land sparing, farmers practice high intensity agriculture to boost yields, enabling them to forego expansion and leave natural areas “wild”. There are tradeoffs with both approaches — organic “land sharing” farms have on average 30% higher species richness and 50% higher abundance than conventional “land sparing” farms, but produce 20-25% less yield per acre.

In an article examining the tradeoffs of food production and wildlife published by The Breakthrough Institute, Linus Blomqvist puts forward the idea that higher yields, especially in the row crops that use the most land globally, will always result in lower on-farm biodiversity because there are “simple biophysical components of yield growth that there is not much of a way around.” The highly specific management practices farmers must use to get maximum yields from a specific crop preclude the establishment of other plants, which form the basis of a habitat that can sustain wildlife. As evidence, Blomqvist cites declines in farmland bird populations in Europe and America being driven by the loss of habitat and nesting sites in high-intensity agriculture settings – not due to direct mortality from pesticides.

An example of a “land sparing” farm — diverse set of crops, surrounded by potential wildlife habitat.

Even in the most organic, ecologically friendly, “land sharing” farm one can imagine, any decision to increase yields would result in higher-intensity practices that would in turn decrease the farm’s ability to support wildlife. If higher yields per acre on an organic farm decrease on-farm habitat quality, than the only way to increase yield while maintaining habitat quality is to use more land. In the West, more land probably means acquiring farmland or uncultivated land from a neighbor.  However, in South America, Asia, or Africa expanding croplands often takes place at the expense of natural habitats like forests. Any gains in on-farm biodiversity may be offset entirely by the loss of natural habitats.

Multiple combines and tractors with grain carts harvested a large field of corn outside New Haven, Ky.

As we try to feed a human population of 9 billion-plus people, agricultural land will expand and will undoubtedly come at the expense of wildlife and natural habitats. The question we face is how to minimize that impact. Land sharing and land sparing underscore the idea that there is a tradeoff between food production and biodiversity: increasing one will invariably decrease the other. Fortunately, there are ways in which we can try to mitigate that trade off. Embracing GM technologies like Bt enables crops to produce their own insecticide (that is safe for human consumption) and reduce the need for spraying pesticides allowing non-target species to thrive. Incorporating staples of organic or agroecological farming like crop rotations and cover crops make it difficult for a single pest species to persist from year to year further reducing pesticide loads.

There is no correct answer to the land sharing vs. land sparing debate. Both ideas have their merits and embracing one or the other is better than nothing. The growth of the global human population will continue and it will be at the expense of the natural world, but through the discussion and implementation of ideas like land sparing and land sharing, and the incorporation of new crop technologies and agronomic practices we can hopefully reduce that negative impact.

Author’s Note: The idea behind this blogpost came largely from the previously mentioned article published by The Breakthrough Institute, Food Production and Wildlife on Farmland. I encourage you to read it if you are interested in this topic. 

Fixing Nitrogen, Waste

By William Kusch

irina-sorokina-253176footprint grass

Figure 1: What is your nitrogen footprint?

You may be familiar with the concept of carbon footprint, but when was the last time you measured your nitrogen footprint? If you are like me, up until very recently, the answer to that question would be: “huh?”.

I got to thinking about the topic when I read an article[1] that National Public Radio (NPR) published, profiling research on life cycle analysis (LCA) of producing a loaf of bread. The article concluded that 66% of greenhouse gas emissions were not from transportation, or baking, but from growing the wheat itself.  Further, “of the environmental impacts … 40% is attributable just to the use of ammonium nitrate fertilizers alone.”

Intrigued, I read on, re-read my colleague’s excellent blog post on animal and livestock nutrition, then clicked my way to a related article[2], also on NPR that dove deeper than greenhouse gas emissions. This story looked specifically at the nitrogen pollution linked to agriculture, with an emphasis on meat production. This piece outlined some agricultural sources and forms of this significant pollutant:

  • Gaseous emissions of nitrogen oxides (NOx) from livestock
  • Release of N2O, and NOx from soil microbes
  • Runoff from excess fertilizer applied to farm fields.

Well, you may say, so what? Isn’t most of the air we breathe nitrogen anyway?  While it is true that a large majority of the atmosphere is nitrogen, it comes in the form of inert N2. N2 is far different from N2O and NOx , two recognized pollutants. Here are a couple of the potential implications from the release and accumulation of N2O and/or NOx:

  • WK gulf mexico

    Figure 2: Image depicting marine dead zone in Gulf of Mexico

    Marine dead zones, such as the famous one in the Gulf of Mexico, where most ocean life has died due to lack of oxygen[3]

  • If concentration is elevated in drinking water, can lead to potentially fatal blue baby syndrome, other negative health impacts[4]
  • Emissions of NOx can lead to the hazardous type of ozone that remains near ground level. This type of ozone can trigger health problems, especially for children and the elderly[5].

Given that agriculture is one of the biggest contributors to nitrogen pollution, and also that no one is going to stop eating in order to stop polluting, what can people do to reduce their nitrogen footprint? Fortunately there are some simple, and effective options to pare the amount of nitrogen pollution associated with our daily activities:

  • Average Americans “eat about 1.4 lbs of protein per week, 2/3 of which come from meat and dairy. …you could cut your nitrogen footprint by more than 40% just by reducing your total protein intake to 0.8 lbs, the amount recommended by the USDA and the National Academy of Sciences”.
  • Get creative with your spending power: think about ways you could change one meal a week from animal protein to one that is centered around plant protein such as that from chickpeas, or assorted beans.
  • Throw away less of your food: an estimate from Natural Resources Defense Council[6] indicates that America wastes ~40% of our food by throwing it in the garbage prematurely, or unnecessarily.
  • Encourage your legislators to support agricultural land conservation efforts, especially in areas where plants filter fertilizer runoff before it enters the local watershed.
  • Consider a more fuel efficient, or electric vehicle when choosing your next set of wheels: while agriculture is the largest source of N2O, transportation also accounts for a large share of NOx[7].
WK orchard

Figure 3: Nitrogen-fixing pongamia trees in TerViva’s Hawaii orchard

At TerViva, we’re doing our part to mitigate this global nitrogen problem as well. We are growing orchards of pongamia: oilseed-producing trees that are legumes and harness the power of symbiotic bacteria to capture nitrogen from the atmosphere. This ability to provide nitrogen for itself allows pongamia to be cultivated using significantly fewer costly inputs relative to most conventional crops, like nitrogen fertilizers. After we harvest the seeds, we crush the crop in an oilseed press, yielding oil and seed cake. The oil serves as an excellent feedstock for biofuel. The seed cake is high in protein and we have discovered how to convert the pongamia protein into animal feed. In addition to feeding livestock, pongamia seed cake can also be used as a fertilizer[8]; we know this because people have been using pongamia cake as fertilizer in Southern and Southeast Asia for many hundreds of years. The reason this anecdote is relevant here, is that modern scientific techniques have recently been brought to bear, analyzing and quantifying the value of pongamia seed cake as fertilizer. In fact, in addition to demonstrating the value of pongamia products as fertilizer, recently published research shows that if pongamia seed cake is used as a fertilizer, there are compounds in the fertilizer that prevent nitrogen pollution from happening in the first place when farmers apply fertilizer to their fields [9].

Through this idea of considering our Nitrogen Footprint, we at TerViva are exploring ways that we can provide renewable, plant-based energy and protein to society, while at the same time preventing and mitigating some of the issues that arise from the modern lifestyles that afford us comfort and convenience.











Climate Changes Role in the Syrian Uprising

Happy 2016! This is a recent post that Adam put up on

By: Adam Hanbury-Brown

Three years before Syria’s uprising in 2011, the country experienced the worst drought in recorded history. This unprecedented dry weather caused dramatic crop failure and livestock mortality in regions heavily dependent on agriculture. The drought was so severe that one and a half million Syrian farmers were forced to relocate to the outskirts of large cities– constituting a wave of internally displaced people who would later experience further hardships and civil unrest.


Rebels aim their weapons during a training exercise outside Idlib

A recent study published in the Proceedings of the National Academy of Sciences (PNAS) shows that the Syrian drought was most likely exacerbated by human-caused climate change, and that these extreme weather events will be two to three times more likely in the future. The authors of this paper, Colin P. Kelly of UC Santa Barbara, Shahrzad Mohtadi of Columbia University, and their colleagues, insightfully connect the dots between human-driven climate change, the recent drought, and the Syrian uprising in March, 2011. They tease apart complex climate factors to show that climate change likely had a strong impact on the drought. Most importantly, this study serves as a reminder that climate change doesn’t need to kill directly to cause suffering. It only needs to be the tightening vice around our preexisting vulnerabilities: geopolitical instability, unsustainable agricultural policies, and disparities in wealth.


Syrian refugee tent city

Vulnerable. That is best way to describe Syrian agriculture as the drought descended in 2006. Unsustainable agricultural policies under Hafez al-Assad (1971-2000) led to the depletion of Syrian groundwater prior to the drought. If managed more sustainably this might have ameliorated the water shortages. On top of that, the country had not yet fully recovered from the drought of the 1990s.

As the drought continued to displace farmers, internal refugees came to constitute twenty percent of Syria’s total urban population. Prices of wheat, rice, and feed doubled and this only served to exacerbate resource constraints in urban areas. Bashar al-Assad ignored the growing issues of overcrowding, poor infrastructure, unemployment, and crime- all factors that contributed to the unrest that led to the civil war.


Syrian sheep in a parched landscape

In order to understand climate change’s role in the drought, and subsequently the uprising, the authors analyzed long term trends in precipitation and temperature. Essentially, Syria is getting hotter and drier in accordance with the pattern predicted by increasing greenhouse gas. Seven of the eleven years between 1998 and 2009 received less rainfall than the 1901-2008 normal. The authors also point out that “three of the four most severe multi-year droughts have occurred in the last 25 years”– the era of most intense human impact on climate. Climate change is believed to be increasing sea-surface pressure in the eastern Mediterranean which is suppressing westerly winds that typically bring rain to Syria.  More alarming is that the authors cite a study which, “using a high-resolution model able to resolve the complex orography of the region concluded that the FC [Fertile Cresecent], as such, is likely to disappear by the end of the 21st century as a result of anthropogenic climate change.” It is deeply depressing that civilization will likely destroy its own birthplace.


Anasazi Village

If connecting the dots between the Syrian crisis and climate change still seems like a leap of faith, just return to Jared Diamond’s book, Collapse, (which incidentally was published in 2005– the year before the Syrian drought started). Diamond’s account of the fall of the Anasazi Empire in the southwest of the United States around 1120 AD is an uncannily similar story. The Anasazi were a people accustomed to living in a dry landscape. Their agricultural practices worked for a period of time, but just like the Syrians, they employed techniques that lowered groundwater levels-leaving them vulnerable to drought. Before the Anasazi groundwater issue came to a head, their civilization prospered, and a ruling elite developed in city centers. Goods and food flowed in to the centers from the agrarian periphery. In 1117 AD the Anasazi experienced a severe drought that is believed to have led to severe strain on the agricultural system. Around the same time, walls and other fortifications were erected around the city centers– marking a period of civil unrest and warfare. It is believed that the farmers, forced to abandon their land, no longer tolerated the ruling elite, and the civilization fell into disarray. Archaeologists found scalped skulls and unburied bodies in the grand houses of the ruling elite from this time.

The similarities between the Anasazi and the Syrian crisis are clear. What’s different about the Syrian crisis today is that the weather events are no longer just forces of nature. Humans are exacerbating the climatic pressures that we have seen play a role in civil unrest and warfare. The 2011 drought in Russia caused a spike in food prices- a major cause of the Egyptian uprising. Recent reporting on Russia’s current drought notes that “it’s among the worst ever recorded”– words that feel surprisingly familiar when it comes to weather events these days. Let’s hope history doesn’t repeat itself… but surely it will.
Citation of the Original Scientific Article:

Kelley, C. P., Mohtadi, S., Cane, M. A., Seager, R., & Kushnir, Y. (2015). Climate change in the Fertile Crescent and implications of the recent Syrian drought. Proceedings of the National Academy of Sciences , 112 (11 ), 3241–3246.

Other Citations, Russian drought “worst ever recorded” quote:
Photo Credit
Farmer feeling ground (featured image): Reuters,
Syrian Training: flikr, Freedom house
Refugees: flikr,  EC/ECHO
Refugee tents: flikr, Fabio Pena
Sheep: Green Prophet,
Anasazi: pixabay

Grazing the Steaks

The imagery of cattle on 747, flying 2500 miles across the Pacific ocean took me by surprise –and wasn’t an idea I ever thought I would have to entertain until I began exploring the market potential for pongamia seed cake as a cattle protein supplement in Hawaii.

content cattle

Very content cattle (replacement heifers) on a intensive rotational grazing system at Ponoholo Ranch on the Big Island, with sweeping views of the coastline and Pacific Ocean

Through this pursuit, I discovered that approximately 75 percent of the cattle raised in Hawaii are shipped, by either plane or boat (via “cowtainers” or “floating feedyards”), for finishing and processing on the mainland. This practice began taking place after a large-scale processing plant closed down in 1990, causing the only large capacity feedlot to follow suit.  In another article, I explain that this practice not only decreases Hawaii’s market share of the industry from 30 percent to less than 10 percent, but also bears down on the islands’ food security and self-sufficiency — a looming issue for Hawaii. Nonetheless, it turns out, shipping cattle live to the mainland for finishing and processing is more economical for ranchers than purchasing feed to finish them here. A big issue is that the cost of feed (protein) is nearly double the price paid by ranchers on the mainland. Thus, with limited local feed options, in addition to veterinary care, branding, processing, and grading services, finishing and marketing the product on the mainland becomes more profitable.

cow calf operations

Cattle production chart depicts each phase of production and relative nutrients. Cow-Calf phase in yellow is what primarily takes place in Hawaii.

The scenario described is exactly why local feed solutions are currently in vogue in Hawaii.  In fact, a variety of industry stakeholders are interested in locally produced livestock feed, especially those derived from biofuel co-products, in effort to bolster Hawaii’s food-security and self-sufficiency, as well as the economic pay-off. With this considered, Pongamia is not only high-performing biofuel but also a potential solution to a eminent food security issue here in Hawaii.

Knowing all this, the seemingly manifest subject-matter of cattle supplementation in Hawaii quickly became a quandary through the market research process. First, Hawaii’s cattle inventory (including calves) is 135,000 head. With only one 950 head capacity feedlot in Maui, most of the weaned calves that are finished in Hawaii (a little over 8,000 head) are almost entirely forage-finished. These cattle are locally marketed as “grass-fed,” which doesn’t necessarily mean that can’t be given supplements but it is indeed a murky market to evaluate. However, most of Hawaii’s beef cattle industry consist of cow-calf operations, which takes place over a year before the finishing (feedlot) phase, as illustrated in the chart below. This is key as supplementation is the most critical during the cow-calf phase, given the mother cow’s high nutritional needs during pregnancy and lactation. With approximately 80,000 mother cows requiring 2-3 lbs of protein a day, this particular market could range from about 2,500 tons of pongamia potential, if only half of the mother cows received the supplement for 365 days, up to 8,000 tons of pongamia potential if all 80,000 mother cows receive the supplement for 365 days.

hawaii climateFor an even more critical look, a majority (about 80 percent) of the cow-calf operations are on the Big Island, where you’ll find one of the most productive (and jaw dropping picturesque) grazing lands in the U.S. Moreover, what you might find surprising, is that the Big Island is home to three of the top 25 largest cow-calf operations namely, Parker (#9) , Ponoholo (#21), and Kahua Ranch (#23). These three ranches (all neighbors – pictured below) make up a quarter of Hawaii’s protein supplement market. Parker ranch alone has approximately 10,000 mother cows over 130,000 acres, in 4-5 climate zones that can be observed from a pu’u (mound) from just up the ranch headquarters. These microclimates, along with the mountainous topography and multifarious winds are certainly factors these ranches take into consideration when choosing to supplement. Parker Ranch, for instance, finds it important to look at the season and time of year, as the nutrients in the forage is dependent on this.parker ranch Ponoholo, on the other hand, over 11,000 acres and three climate zones, prides itself on being a low-cost ranch, that is able to practice intensive rotational grazing which maximizes nutritional opportunities for the cattle, thereby reducing damage to the land through erosion and overgrazing. Given this, Ponoholo would likely forgo protein supplementation even in the event of drought, where they find it best to simply reduce their herd size. Right next to Ponoholo, Kahua Ranch would, however, consider using a protein supplement especially during drought to maintain cow-herd numbers. This illustrates the complexity and case-by-case nature of the cattle protein supplement market Hawaii. Nonetheless, even the ranches that rarely supplement their cattle, are still behind the idea using of pongamia seed cake as a protein supplement — especially in a drought situation, which one rancher explained could be the difference between life or death for a cattle herd.

Nitasha Baker

RISE/EEx- TerViva Business Development Fellow

Cool (coffee) beans

juan valdezMy wife and I spent some time in Colombia recently and the highlight of the trip (there were many) was visiting a coffee plantation in Salento, a town 300km east of Bogota. I grew up seeing the Juan Valdez commercials on TV but never appreciated the rich history of coffee or the differences in varieties and growing regions.

First discovered around the 11th century in Ethiopia, coffee is considered native to the tropics. Legend has it that goats in Ethiopia were seen mounting each other after eating the fruits of the coffee tree. Humans were intrigued and coffee spread quickly throughout the world! Now we drink over 500 billion cups of coffee every year.

While there are hundreds of varieties of coffee, the most popular species are arabica and robusta. Most people prefer arabica for its taste and medium/high acidity and body. However, arabica generally has lower yields and less caffeine than robusta, so robusta has gained in popularity (at least with producers). Robusta coffee is easier to grow, can be grown at lower altitudes and is supposedly less vulnerable to pests and weather conditions. Supermarket and instant coffee is typically robusta while Starbucks and higher end coffee is arabica.

coffee treeSome interesting coffee facts:
  • Coffee is harvested in the rain because seeds ripen during the rainy season.
  • Coffee comes with sugar inside the beans. You have to ferment the sugar away before roasting. Otherwise, the sugar will make the coffee more bitter as it cooks the coffee too quickly.
  • 9 months from flower to cherries. Once picked, no coffee cherries will grow on that branch. 
  • Coffee beans with the parchment layer are planted. Do-You-Make-This-Mistake-When-Brewing-Coffee-ftrOnce you remove the parchment skin, seeds will not germinateinto trees
  • Typically, two beans of same size are found in each red cherry. Sometimes, one seed will be much larger. These larger seeds are ‘pea berries’ which are very expensive.
  • Skin of coffee beans are used as fertilizer.

Brazil is the biggest coffee producing country in the world, growing both arabica and robusta. Vietnam and Indonesia are number two and three, producing almost exclusively robusta. That brings us to Colombia, which, until recently, was number three but has fallen to fourth place (more on this later).

Colombian farmers produce 100% arabica coffee, considered some of the best in the world. Colombian coffee is cultivated along the three different mountain ranges of the Andes as well as in the Sierra Nevada of Santa Martaas. Colombian growers are small producers; the national average is 1.8 hectares per farm and only 5% of producers hold more than 5 hectares in coffee. There are about 500,000 active coffee producers in Colombia.

Colombia has a number of competitive advantages that make growing coffee profitable.

  1. Soil: Has rich volcanic soil with low ph levels.
  2. Rain: Extremely important in coffee cultivation. Colombia has two significant rainy seasons every year in the center of the country: April to May, and October to November. Colombia benefits from the Atlantic and Pacific oceans, the Amazon and the inter-Andean valleys.
  3. Geography: High elevations above 3,000 feet going up to 6,000 feet provide ideal growing conditions for the coffee tree. Cooler mountain temperatures provide a slower growth cycle, which prolongs bean development, creates more complex sugars and better flavor.
  4. Labor and supporting infrastructure: It is important to pick the seeds at the right time to get the best taste; hand picking is ideal. Colombia has developed an ecosystem that develops and protects the farmer. The Colombian Coffee Growers Federation (FNC) provides farmers a minimum price, technical assistance, scientific research and even health care. It was FNC who created the Juan Valdez character in 1959 to market Colombian coffee. There is a terrific post on Knowledge @ Wharton that discusses more the FNC in more depth. As the folks at Wharton point out, the FNC has done much to push R&D in coffee through a 66 person research center that focuses on quality optimization, environmental protection and agricultural disease control.

CMYK básicoDespite these advantages, an interesting fight has been quietly brewing amongst Colombian growers because output has been falling over the years due to heavy rains, coffee rust disease and a stronger Colombian Peso. Large coffee growers favor introducing robusta because of higher yields and lower production costs (more money). Smaller producers are loathe to introduce a lesser quality coffee bean and want to stick with Arabica. At the same time, they struggle to make good margins because of the many middlemen in the system.

One of the problems seems to be that large buyers like Nestle prefer to work with large producers due to simplicity and consistency of product (no variance batch to batch). This means that large producers are usually growing one variety to keep taste consistent over time.  This type of monoculture planting has its own issues, but importantly the small coffee farmers who grow diverse varieties don’t get the benefit because coffee is graded on size only, not taste or other factors. A big debate is happening now in Colombia. Will money win?

From a pricing perspective, there is no distinction between coffee varietes. High quality arabica beans net the same price as lower quality ones. What if this wasn’t the case, and farmers could get a higher price for better varieties? This is the question that small farmers like Don Eduardo of The Plantation House in Salento is asking. His novel solution is to sell directly to buyers by allowing people to purchase specific rows of coffee trees, which are then picked and sent directly to their home cutting out the middle men and garnering a higher price for better arabica varieties. Time will tell if this model can work, but I hope this spirit of innovation is fostered so Colombia remains a high quality place to grow coffee. I know my mornings will appreciate it.

By: Sudhir Rani
CFO of TerViva, Inc.

An Oilseed Crop for Florida’s Lost Citrus Acreage

Diseased abandoned citrus acreage in Florida

Diseased abandoned citrus acreage in Florida

While the United States is the most efficient agricultural producer on the planet, it also is home to one of the greatest agricultural disasters on earth. Few people outside of the state of Florida realize that the 150 year old citrus industry could be on the brink of collapse in as little as two years, according to some industry observers. Citrus contributes $9 billion in revenues to the state and employs 76,000 people. A series of severe freezes back in the 1980’s drove the majority of the citrus industry from the northern half of Florida to the southern half of the state – generally from Orlando southward.

Ten years ago, in its heyday, the state produced about 240 million boxes of fruit. As of the most recent USDA crop report, that number has declined to as low as 104 million boxes. And that rate of decline is not linear, it is accelerating. Estimates are that as production declines to 80 million boxes, most of the remaining processing plants will begin to shut down. After that, citrus in Florida could remain only as a niche crop.The cause is a pinhead-sized insect that transmits a bacterial infection to citrus trees and slowly chokes off the flow of water and nutrients from the roots to the leaves. Not only have scientists been unable to come up with a viable cure, they haven’t even been able to culture it in the lab.

Infected trees can take years before the first symptoms appear. By then the tree has already lost a great part of its root mass. The best strategy growers have is to just keep the progress of the disease at bay by feeding it repeated heavy doses of pesticides and fertilizers. It used to cost growers close to $500 per acre for these sprays. Today, those cost are exceeding $2000/acre! These high costs with declining yields are squeezing the life out of the growers’ profit margins. And it’s not doing much to help the long-term health of the soils, either. Imagine if an incurable disease wiped out corn and soybeans in Illinois and you’ll get an idea of the magnitude of the impact to the state.

To be sure, tens of millions of research dollars are being thrown at the greening problem at the state level, federal level, and even worldwide. One of the most promising solutions is inserting a spinach gene into the citrus which makes the tree quite resistant to the deadly bacteria. However, this veers into the genetically modified world and risks considerable consumer backlash over GMO food. There is a wasp that preys on these insects, but that is considered too little too late for Florida.

The Headwinds against Florida Citrus

Even if a cure is found, growers still face other headwinds. Annual consumer sales of orange juice (the main product from Florida citrus) in the US have declined from about 5 gallons per person in 2000 to about 3 gallons currently.   High prices, recession, alternative energy drinks, concerns about sugar and obesity have all contributed to eroding the demand side of the consumer equation. It could be difficult to reverse those trends.

Citrus groves that once sold for $18,000 per acre now sit barren, weed-infested, and end up looking like the above picture. They sell for close to $3000 per acre. Not only has millions of dollars of landowners’ wealth evaporated, but also have the state’s tax revenues.

The Problem With Alternative Crops

Some growers are replacing their lost citrus by planting peaches and blueberries. However, those crops are expensive, labor intensive, and can have intense price competition from other states when their harvest comes to market. Planting only a few thousand acres could swamp the marketplace with over-supply and crush prices. Stated differently, if there was a viable alternative crop to grow, there wouldn’t be over 125,000 acres of abandoned citrus land.

Arguably, the only agricultural industry with deep enough demand to accommodate the tens of thousands of acres of dead and dying citrus land is the oilseed industry where the worldwide demand for oil and protein is huge and growing. Currently, the oilseed demand is being met primarily by soy, and to a lesser degree by cottonseed, canola, and other minor (by comparison) row crops like flaxseed, safflower, etc.

So why haven’t some of these row crops filled in the void in these lost groves? There are two major problems in the soils in the southern half of the state. While the Florida is blessed with a long growing season and generous rainfall, the soils where citrus is grown are extremely sandy with a hard clay layer underneath.   This sand layer makes it difficult for them to hold nutrients. During the rainy season which runs from June to October, the almost daily rainfall flushes fertilizers and other nutrients out of the soil. The other problem is the field configurations. Citrus cannot tolerate its roots standing in water for long periods of time so the great majority of the groves were “bedded-up” when the groves were initially set up. Top soils were pushed into raised beds with a furrow in between to remove water in heavy rain events. Over the years, soil compaction occurred while in this configuration. Attempts to simply grade the raised beds flat for row crops still resulted in a wavy topography (once the soils settled) which created drainage issues. Some tried deep-disking this sand and the underlying clay layer in an attempt to blend the two into a sandy loam-like consistency, but the result was a mud bog that seemed to never drain properly.

Ground Rules for any Successful Replacement Crop

Any time that a new crop is introduced into a local geography, it has to meet some fundamental tests if it is to have any hope for viability. For example:

  • Hardiness. Does this new crop fit the climate?
  • Does it fit within the growers’ existing infrastructure?
  • Is it easy to grow and harvest?
  • Can growers generally utilize their existing body of agronomic knowledge?
  • Does it minimize labor requirements/costs?
  • Is it profitable enough to make it compelling versus alternatives?
  • Can growers use their existing machinery or at least need minimal new machinery?
  • Does it require high CAPEX to process?
  • Are there readily available downstream markets?

However, there is one beam of hope in this sea of gloom that has shown great promise for current citrus landowners and extraordinary opportunities for agriculture investors – and checks off on all challenges listed above.


A young company called TerViva has been working for several years with an oilseed tree crop called pongamia. Pongamia is an oilseed tree that is native to Australia and India. It is adapted to tropical and subtropical climates.  In the US, we already know that the tree thrives in Florida.  It was introduced back in the 1920’s when it was planted as an ornamental.  Many mature pongamia trees can be observed in southern Florida on both coasts along freeways, in neighborhoods, and in state parks and shopping centers.

Conceptually, growing pongamia is like growing soybeans on trees. The tree yields a generous harvest of nuts (which is why it fell out of favor as an ornamental) whose seed properties are similar to soybeans.  It has a high tolerance to salt and cold tolerance is similar to citrus so it is geographically suited to the same sites where citrus grew.

What’s the advantage for pongamia over soybeans? Pongamia’s per acre yields of oil are 6x greater than that of soybeans on prime Iowa farmland, plus it can grow on a footprint where soybeans generally cannot!

One of the first things growers notice about this tree crop is that it drops right in to the existing citrus field architecture. Some growers have literally planted it between the old citrus stumps.

Pongamia is very much like any orchard tree crop. The tree must first get established. It will begin to flower around year 3-4, and it should be commercially harvestable around year 4-5. Then the tree can produce for over 50 years.

There is also a strong ecological theme with pongamia.   This tree is a legume so it fixes nitrogen in the soil and enriches it.  To date, no pesticides have been used- or needed – in any geography TerViva has planted – Florida, Texas, or Hawaii. Insects and deer really do not care the leaves that much.


Mature pongamia acreage in Florida (photo courtesy of Paul Family operation near LaBelle)

Mature pongamia acreage in Florida (photo courtesy of Paul Family operation near LaBelle)

Growing – Harvesting – Processing – End Markets        

  • Harvesting can be mechanically done with a nut tree shaker. This is how pecans, almonds, pistachios and other nuts are harvested. Mechanical shakers also minimize the cost and challenges of dealing with manual migrant labor that is necessary for most orchard crops.
  • Processing after the harvest is all low-tech and low CAPEX; the seeds are shelled with a peanut sheller, and the seeds (about the size of lima beans) are crushed with a soybean crusher.
  • The End Markets are a separate discussion, and that’s where this gets interesting. Like soy, there are two end markets for pongamia: the oil and the seedcake.

Several oilseed crops used in industrial applications are surrounded in controversy. Soybeans should be for feeding people, not trucks. Palm oil production is coming at the expense of the rain forests which have caused a huge backlash from environmental groups and consumers. Chemically, pongamia oil is practically a first cousin to soybean oil, but it has some bitter flavenoids, so it is not edible. Its utility is for broad industrial applications that currently utilize soybean oil and palm oil. Industry loves soy and palm oil because these seeds contain rich long-chain carbon compounds which are high in energy content and can be separated into compounds such as oleic acid, palmitic acid, linoleic acid and others. These plant-based compounds are used in soaps, detergents, lubricants, cosmetics (like Oil of Olay), surfactants, inks, paint binders, and even plastics. In fact, a whopping 60% of the pongamia oil is oleic acid, compared to soybean with 24%.  Oleic acid is so valued that Monsanto has created a new GM version of soybeans called Visitive, just to increase the oleic acid content.

Pure pongamia oil being used in crop spraying

Pure pongamia oil being used in crop spraying

The oil also has known biopesticide properties. There is a recent study on this where it was more effective than DDT.   There is a body of literature on the use of a 50/50 mix of neem oil and pongamia oil as an exceptionally effective biopesticide. Early evidence also has shown pongamia oil could be an effective substitute for “435 mineral oil” that growers mix with many of their crop sprays.

As a jet fuel, the Department of Defense and the airline industry have a strong interest in fuel refined from plant oils called biojet fuel. It is 7% lighter than conventional jet fuel so a plane can fly farther or carry larger payloads. But most importantly, it burns considerably cooler than fossil-based jet fuel which means longer engine life and lower maintenance costs.

The deepest market, however, is to simply refine the oil into diesel. When that long-chain carbon compound in the oil is combusted, it releases a lot of energy. (Ethanol is only a C 6:1 compound that releases much less energy when combusted. This is why it is such a poor fuel for performance and mileage.) Currently, about 80% of biodiesel is produced from soy oil. Refiners are hungry for feedstocks for their refineries. No matter what you think about renewable fuels, they are going to be around for a long time. Both political parties are even in favor of them. Additionally, most countries around the planet have aggressive mandates for renewable fuels. It is important to emphasize that the biodiesel market is the base case scenario and con turn a fine profit at that.

The remaining seedcake can be used as a high protein animal feed. It has about a 27% protein content which is quite high. Tests are currently being conducted with Texas A&M as an animal feed. So far Phase 1 livestock feed tests have been quite positive, and Phase 2 testing is now being done. The next step is submitting the results for regulatory approval. Livestock and poultry feeders are always in the hunt for protein to blend in their feeds. Animal feed is quite the growth market in China, by the way.

Separately, the seedcake can also be used as a high-nitrogen (4%N) organic fertilizer. Nitrogen has become a very expensive crop input in recent years. Additionally, as a fertilizer, it is also reported to have great nematocidal and nitrification properties in the soil.


Once mechanically harvested, all that remains is to shell the pods and (just like soybeans) crush the seeds into oil and seedcake. A facility for shelling and crushing is not a large capital expense; perhaps $1MM-$2MM would suffice for a crushing facility that could service about a 75-mile radius. Several municipalities have indicated that the state has generous economic development funds for these small rural communities for economic development for these facilities.

Expected Returns                                                                                                                                                      

The other downstream markets (mentioned above) are fun to talk about and are very high-value markets, but the point is that simply selling this oil to refiners to make into fuel can be deliriously profitable. …Certainly more profitable than most traditional agricultural row crop commodities. We can produce oil for about $1.60/gallon. There is broad demand for good virgin oils for biodiesel refining that generally are in the vicinity of about $3.50/gal. There are a couple of small refineries in south Florida, and major biofuel refineries nearby in Georgia, Louisiana, and Texas.

In any new endeavor, risk must be commensurate with returns. TerViva conservatively believes a grower can make >20% 8-year IRR growing pongamia assuming the base case of just selling the oil to the biodiesel refiners. Stated differently, net income to growers who already own land is estimated to be about $800-$1200/acre with some fairly conservative yield assumptions – about 400 gallons of oil per acre and about 2.25 tons of seedcake.

Pongamia seeds are available on the internet, but the problem with propagating from seed if that you don’t know what you are going to end up with because the tree is an out-crosser (you don’t know who the other parent is.)   No serious grower is going to make the capital investment to start a grove and find out five years later that his genetics are no good. Growers want uniformity at harvest time as well consistency on other traits like oil content in the seed, gross yield, as well as other desirable traits. TerViva propagates their young trees clonally from a licensed library of highly selected mother stock from science groups in Australia and India who have documented their research over meaningful time periods. In other words, TerViva’s science team wants as close as possible to 100% probability that these trees are replicas of the mother.

Establishment costs per acre are close to citrus – about $2000-$3000/acre. However, annual input costs are a fraction of citrus amounting to primarily weed maintenance.  

Indeed pongamia is a new crop. There is always uncertainty in agriculture. However, based on how the trial sites that TerViva has established throughout southern Florida have performed over the past few years make it feel like a pretty high-probability bet. The trees have grown astonishing well. The oilseed industry is big, globally, and it is not going to go away. There’s a great chance that this $3000 land will be productive $13,000 land again. It is quite rare to observe a massive agricultural transition of this scope in our lifetimes. And for it to happen in a US geography may be unprecedented. For farmland investors facing low returns on conventional row crop farmland, or sovereign risk in South America, or infrastructure and transportation risk in Eastern Europe or Africa, investing in this oilseed crop in Florida looks like a slow pitch over the plate.

Tom Schenk is Director of Business Development at TerViva. For more information:   : 509 251 2565