She also compared production costs with corn and soybeans, including the cost of switching corn and soybean acres into perennial grasses. Brown, Tristan R. and Robert C. Brown. Regions: 1,2,3,4,5,6. For more information about the study, see the March 12 edition of Cornhusker Economics at www.agecon.unl.edu/Cornhuskereconomics.html.Rapid City Journal, http://dx.doi.org/10.1007/s12155-008-9005-y, www.agecon.unl.edu/Cornhuskereconomics.html, Making carbon trading globally legitimate: the road show has begun. 2013. These analyses indicate that switchgrass would compete successfully with conventional crops on approximately 98% of the 3.9 M ha that would be available at a price of $38.5/Mg ($35/ton) for switchgrass (and identical prices per unit of energy content for the two other crops). When burned, such as in a furnace, Switchgrass produces 7,500 BTU's per pound. contains information regarding any loans that are taken out to establish the switchgrass stand. Fike, R. Ferris, E. Heaton, D.I. There is also an ethanol plant in Upton, Wyo., which produces cellulosic ethanol from wood waste. It has been estimated that switchgrass pellets can be produced and marketed for a price of $150/MT. Switchgrass pellets are only half the cost of conventional fuels for farmers. Nitrogen use in switchgrass grown for bioenergy across the USA. There are other potential markets for switchgrass as an energy crop: Growing switchgrass for biofuel can provide ecosystem services benefits that do not have a direct cash value—at least in today’s marketplace. switchgrass for biomass •Perrin et al., 2008 BioEnergy Research •On-average, farm gate costs (5 yr) were $60 ton-1 ($0.68 per gallon of ethanol delivered). Perrin said. This work is supported by New Technologies for Agriculture Extension grant no. Will switchgrass converted into cellulosic ethanol be price-competitive with corn ethanol? CenUSA Bioenergy is a coordinated research and education effort investigating the creation of a regional system in the Central US for producing advanced transportation fuels from perennial grasses on land that is either unsuitable  or marginal for row crop production. Mayton, J.H. Hong. Liebig, M.A., M.R. Schmer, K.P. Vogel and R.B. Mitchell. Brown, Tristan R., Rajeeva Thilakaratne, Robert C. Brown and Guiping Hu. The breakeven farm-gate price for switchgrass ranged from $56 per ton for the two lowest profitability groups to over $94 per ton for the most profitable producers. Land was marginal cropland that would have qualified for the Conservation Reserve Program. These findings are based on the average heating-oil price from the 2010-2011 heating season, which was $0.90 per liter. The startup loan section (Figure 1.) ton including land costs. Switchgrass for forage and bioenergy: harvest and nitrogen rate effects on biomass yields and nutrient composition. CenUSA is supported by Agriculture and Food Research Initiative Competitive Grant no. 2013.  Impact of Environmental Values on Breakeven Price of Switchgrass. Still, some studies have attempted to put a dollar figure on these values. This tardiness is due to the fact that massive research and development efforts have so far failed to create tested, industrial-scale technology for the difficult process of turning cellulosic materials into biofuels. The Market value of Switchgrass Pellet Switchgrass in particular has attracted attention as a fiber source for bio fuel since it will typically result in lower ash content than other fiber sources. Paper selected for presentation at the Southern Agricultural Eonomics Association Annual Meeting, Orlando, FL, 3-5 Feb., 2013. user the ability to insert the current price per dry ton of switchgrass at the plant gate. Since then, corn ethanol has increased to almost the maximum limit specified by the RFS2, but the cellulosic ethanol mandate is far behind schedule. In these situations, marginal substitution of switchgrass for coal might be cheaper than substitution of other renewable fuels. This is based on research in that region during the past five to ten years. Minnesota Crop Cost and Return Guide for 2011. The height and extensive root system of Switchgrass can cause it to become dominant over time in mixtures with other natives. The study does not include costs to transport the switchgrass to a biorefinery, nor the costs to process it in the biorefinery. However, on land that cannot consistently produce at least 60 bushels per acre or so, according to our calculations, switchgrass could be more profitable. At current prices and technology, switchgrass for cellulosic ethanol is not a strong free market contender in most cases. At an assumed farm-gate price of $55 per dry ton for a mature yield of 7 tons per acre, annual revenue would be $385 per acre per year. Base bids did not differ much, with most being in the $200–$250 per acre range. Six cellulosic biorefineries co-funded by the U.S. Department of Energy also are in the works throughout the U.S. and should be completed over the next few years. Bransby, C.O. This land faction is the same as … Cellulose first must be broken down into starch and sugar before it can be fermented into alcohol. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture. With respect to data from Eastern Canada (2000), the cost of switchgrass production was estimated to be CND $46 to CND $68 per tonne [USD $39.89 to USD $61.72 per ton; with 1 tonne = 1.1023113 (short) U.S. tons] delivered to a pellet plant. experience with switchgrass grows and new ethanol-friendly cultivars are developed. In this article, we summarize the economics of producing switchgrass for biomass. These costs include seeding, chemicals, land rent, and reseeding as needed. Comparative analysis of efficiency, environmental impact, and process economics for mature biomass refining secenarios.  Biofuels, Bioproducts and Biorefining 3:247-270. At a yield of 3.5 tons of dry matter (DM) per acre (a reasonable expectation in much of the Upper Midwest), this brings total cost at the farm gate to about $65 per ton of DM. All switchgrass grown for biomass is likely to be grown under contract with biorefineries because these plants will require a steady supply of large amounts of feedstock.Â, The economics of switchgrass for bioenergy are influenced not only by feedstock prices and production costs, but also by competing uses and products. Costs of production per ton are found to decline as yield increases; a four-fold increase in switchgrass yield would reduce per unit costs by more than half while Bullard estimated that a 50% increase in the yield of miscanthus could reduce per unit costs by about 25% . 2007. Soil Carbon Storage by Switchgrass Grown for Bioenergy. The on-farm cost of producing switchgrass for cellulosic ethanol averages about $60 per ton, according to a new study by a University of Nebraska-Lincoln agricultural economist and others. Establishment costs of about $200 per acre, or $30 per acre when annualized over 10 years. Switchgrass field in NE South Dakota. In this analysis, the switchgrass is grown in a circular field, which has a land fraction of 0.441 of a field. In the study, two farmers with previous experience growing switchgrass had the lowest production costs of $39 per ton. 2013. However the RFS2 and the price of petroleum have the greatest potential impact on the economic prospects for growing switchgrass, and these two factors can certainly change the economic balance in favor of switchgrass for bioenergy. 2011. These two prices are only used as examples. Cellulosic fuels in general will not be competitive with corn ethanol due to higher production and refining costs. The profitable production of switchgrass for biofuel  today depends  primarily on the price of oil, as well as the Renewable Fuel Standard (RFS). The five farmers with the lowest costs had production costs of less than $50 per ton, which should be achievable by other farmers as they gain production experience, Perrin said. •Extrapolated farm gate costs (10 yr) were $54 ton-1. At the switchgrass price of $54/ton, the shadow price of land is about $6/acre in region 18, and is almost zero in region 14A. It has adapted regionally to widely differing soils, rainfall, and climate conditions over most of the US. 2011. Given budgeted costs for a pyrolytic biorefinery that produces half gasoline/half diesel, the price of oil must reach the vicinity of $110 per barrel in order to allow a switchgrass-based refinery to pay farm gate prices at or above current production costs. 2015-41595-24254 from the USDA National Institute of Food and Agriculture. Laser, Mark, Eric Larson, Bruce Dale, Michael Wang, Nathanael Greene and Lee Lynd. Some examples are: Although producers don’t directly benefit monetarily from these non-cash values today, that might change in the future. At a minimum, they will have to pay at least its value as livestock feed, which is expected to be about $95 per ton of DM (equivalent to $83 per ton of 15%-moisture hay). One-time switchgrass establishment costs are amortized at an interest rate of 8% over the Table 1. Assuming a farm price of $120/tonne, switchgrass pellets provide the same cost for heating as oil at 25 cents per litre. West, Robert D. Perlack, Craig C. Brandt, Stan D. Wullschleger, Latha M. Baskaran, Erin G. Wilkerson, Mark E. Downing, and Carla A. Gunderson. Research Partners lead by Iowa State University: USDA Agricultural Research Service (ARS), Purdue University, University of Illinois, University of Minnesota, University of Nebraska–Lincoln, University of Vermont, and University of Wisconsin. Profitability Analysis of Cellulosic Energy Crops Compared with Corn.Â, Khanna, Madhu, Atul Jain and Anthony Oliver. The Energy Independence and Security Act of 2007 mandates the use of 100 million gallons of cellulosic biofuel by 2010, possibly more than will be produced, Perrin said. A comparison across harvest systems indicates that for most of the species, the double harvest system more than doubles the optimum N application. 3. 2009. *It's not about fancy blends and deer cover mixes! The Upton plant is operated by an affiliate of KL Process Design Group LLC of Rapid City. The switchgrass price per ton is considered by two life cycle stages: (1) switchgrass cultivation and harvesting and (2) transportation. These alternative feedstocks will limit the amount that processors are willing to pay for switchgrass. Eleven bids were received and five were accepted. The study, which contracted 10 farmers in Nebraska, North Dakota and South Dakota to commercially grow switchgrass for five years, starting in 2000 and 2001, gives a real-life look to farmers interested in growing and contracting switchgrass, according to Richard Perrin, the UNL agricultural economist who was the primary economic analyst for the study. This estimate is based on: The final production cost per ton depends on average yields. There are several pathways for converting cellulosic feedstocks such as switchgrass into bioenergy products, including hydrolysis and fermentation, pyrolysis, and gasification. Generally, on marginal cropland that can produce corn at yields higher than 60 to 70 bushels per acre, corn is likely to be more profitable. Switchgrass is a warm season, native bunch grass. If the RFS2 mandate is fully enforced, refiners might pay $150 per ton or more if corn stover (a cheaper cellulosic feedstock) is not available. Increasing land rents will significantly increase production costs because they account for nearly half of all production costs. Owens, V.N., D.R. Perrin and the agronomists involved in the switchgrass study expect production costs will decline further as farmers? University of Minnesota, Department of Applied Economics.Â. Transportation is a tradeoff to capital costs. The cost of producing switchgrass with current technology varies, but a reasonable average is about $65 per ton in the Upper Midwest. Davis, Ethan B., Henriette I. Jager, Tristram O. Perrin, Richard, Kenneth Vogel, Marty Schmer, and Rob Mitchell. ?Currently, there is not an exact figure available on how much it actually costs to produce ethanol from switchgrass because that industry is not really born yet.? $ 0.27 43 11.74 Fertilizer Application acre $ 4.14 1 4.14 Partition of Estimated Harvest Cost ($/ton at 15% moisture) Nutrient replacement is the largest component, represent-ing 52% of harvest cost. Switchgrass production costs ranged from just over $40 per ton on marginal soils to $34.80 per ton on highly productive soils. It is widely assumed that switchgrass for biofuel would most likely be produced on land that is marginal for row-crop production. Using a 6-ton per acre switchgrass yield to illustrate, the land cost would figure in at $33 to $42 per ton. In Eastern Canada, heating oil is selling at 50 cents per litre and natural gas prices are continuing to rise. Switchgrass production costs for the remaining profitability groups ranged from about $33.50 per ton to about $36.75 per ton. Researchers offered a speculative scenario that factored in transportation and ethanol production costs. outlines the per-ton cost of additional nitro-gen, phosphorus, and potassium. A., J.T.Biermacher, B.J.Cook, M.K.Kering, J.Mosali. In addition to producing advanced biofuels, the proposed system will improve the sustainability of existing cropping systems by reducing agricultural runoff of nutrients in soil and increasing carbon sequestration. Pellets for fuel. A number of cellulosic ethanol plants are in operation, including one in York, Neb., but most are pilot-scale plants. And without mandates, cellulosic ethanol is unlikely to be competitive with gasoline unless petroleum prices are consistently above $110 per barrel. Â. Estimating production cost at $50 per ton and assuming a conversion efficiency of 80 to 90 gallons per ton, the cost of switchgrass feedstock delivered to the refinery would be equivalent to 58 cents to 66 cents per gallon of ethanol. According to the team’s calculations, heating with switchgrass pellets would continue to be less expensive even if switchgrass production costs rose 200 percent and the price of fuel oil dropped 70 percent. 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