Russell Banks is a farmer. He is a worker in the industry that once dominated Sussex County but since has begun to succumb to development — especially in the county’s coastal region, where farm acres as far inland as Dagsboro go for more than $30,000.
Still, each spring, Banks lines about 200 acres of field near Millville with soybeans, Delaware’s No. 1 agricultural crop. Last year, Delaware farmers grew just less than 200,000 acres of soybeans, harvested 4,732,000 bushels and sold most of the production to Perdue for nearly $5.50 a bushel. That number has since risen to about $6 a bushel.
Perdue officials crush the soybeans and come up with two products: chicken feed to be used in Perdue farms, and soybean oil, which has been mostly left unused on the Delmarva Peninsula — until now.
When the Mid-Atlantic Biodiesel Plant opens sometime between mid-June and mid-July, it will buy 6 million gallons of Delmarva-produced soybean oil from Perdue per year to make Biodiesel, an environmentally-friendly fuel, which can be produced wholly from products harvested in the Delmarva region.
“If you have more market for your product, it’s a good thing,” said Banks, who harvested about 4,000 bushels of soybeans last year and sold most indirectly to Perdue.
Marty Ross, a Delaware farmer and former chairman of the Delaware Soybean Board, started looking into the prospect of producing Biodiesel in 1999. In 2003, he formally incorporated as the Mid Atlantic Biodiesel Company LLC and started raising money to build the Mid Atlantic Biodiesel Plant. It will be the first plant of its kind in the mid-Atlantic region. Delaware companies selling Biodiesel have had to import the fuel from the Midwest and Florida.
Ross’ goal is to use all of the oil produced on the peninsula to produce the fuel at the Clayton plant. The 6 million gallons a year used in Clayton will only accomplish about 20 percent of that goal, Ross said.
“Right now, we’ve got a lot of excess oil,” said Ross. “Once we get to full utilization of the oil, we would add 30 cents a bushel.”
Michael Scuse, Delaware’s Secretary of Agriculture, agreed with that assessment.
“As demand increases, producers should see and increase in the commodities,” Scuse said. “It’s not going to happen overnight, but it is going to happen.”
Increasing the value 30 cents on the regional market for soybeans in 2005 would have added about $1.4 million to the Delaware production of the crop; and that’s in a low-yield year. Banks said that yielding 60 bushels per acre is not out of the question. If that was the case, those 30 cents could add $3.2 million to the Delaware market.
Delaware farmers would likely plant more soybeans if the crop yielded such a profit, the state’s Chief Agricultural Planner Michael McGrath said. That would add even more value to the production. But Dagsboro farmer Eric Albright — who runs the C.P. Townsend Farm — isn’t buying that argument, although such a turn would be beneficial to his business.
“I don’t expect it to affect us at all,” said Albright of the plant and the increased interest in soybeans. Albright planted soybeans on about 350 acres of the Townsend farm last year, and expects to do the same this year, with a bushel yield of about 30-40 per acre. “I’d be surprised,” he said.
Ross thinks that five years down the road — when more businessmen on the peninsula become interested in Biodiesel production and help him reach “full utilization” — Albright will be pleasantly surprised.
“It should add value to the soybeans, and it can’t hurt the industry of agriculture,” Ross said. “Every little bit of help is beneficial. Everybody complains about urban sprawl. The only way to resolve that is to make agriculture more profitable.”
McGrath said that Delaware loses 5,000 to 10,000 acres of farmland every year to development. And according to him and to Census information, it’s safe to say that more than half of that land lost is in Sussex County.
In a study performed in 2002 by the U.S. Census Bureau, more than 1,300 of Delaware’s almost 2,400 farms were located in Sussex County. But that farmland continues to disappear as developers offer astronomical amounts of money to build the next residential neighborhood. An 18.5-acre farm is currently on the market in Dagsboro for about $37,000 an acre, meaning the land that nourishes Banks’ soybeans each year could sell for about $7.4 million.
From 2002 to 2005, Delaware has lost 100 farms and 20,000 acres of farmland because of such development potential. Since 1990, the state has lost 600 farms and 80,000 acres. Anyone who has lived in the area for an extended period of time likely knows where most of that land is going.
McGrath agreed with Ross, saying that adding value to the crops and the industry of agriculture as a whole is the only way to curb the development trend.
“It’s good for farmers at the bottom line,” McGrath said. “When you increase net farm income, that essentially makes the land and the whole business of farming more valuable.”
The real question for Sussex County is, though, “Is any of that enough to offset the development value of land? It will be interesting to see,” McGrath said.