Richard Perrin, Professor, Agricultural Economics, University of Nebraska
Kenneth Vogel, Research Geneticist; Marty Schmer, Research Technologist;
and Rob Mitchell, Rangeland Scientist, USDA-ARS, Lincoln, NE.
|Figure 1. Location of cooperator sites.|
Switchgrass (Panicum virgatum) a native prairie grass, has been identified by the U.. Department of Energy (DOE) as a potential biomass energy crop. Since switchgrass has not been grown previously as a commercial biomass energy crop, the costs associated with production of energy from switchgrass have been estimated from small plot and laboratory data. To examine these costs at the field scale and to identify successful management techniques, we have contracted with eleven producers to grow the crop under commercial conditions. The cooperators' fields range from 15 to 23 acres, and are located from southern Nebraska to northern North Dakota (Figure 1). Here we report some of what we have learned during the first three years of the six-year project.
What is a biomass energy crop, and what is it worth?
Biomass such as grasses, cornstalks, and trees (often called feedstocks), can be converted into energy in a number of ways. Direct burning of switchgrass is under experimentation in a coal-fired electricity plant near Ottumwa, Iowa, with the grass constituting less than five percent of the energy. Other technologies at various stages of development involve conversion of biomass into liquid or gaseous forms, including ethanol, that can be used alone or in combination with other fuels in boilers, turbines, or internal combustion engines.
What is this biomass worth? The conversion technology is still being developed so the following estimates may improve. The National Renewable Energy Laboratory, DOE, is conducting biomass conversion research and is using corn stover as a model feedstock. They estimate that current technology can produce ethanol for $1.07/gallon from corn stover costing $30/ton. Conversion costs for switchgrass would be similar. Nebraskans who heat their homes with natural gas are paying about $120 for the amount of energy in a dry ton of switchgrass. But this is energy that is delivered directly to the consumer. To make a comparison to switchgrass, one must subtract an amount to cover the costs of transporting switchgrass to a processing plant, the processing costs, and the cost of getting the resulting fuel to the user. On the other hand, coal is delivered in the Midwest for about $20/ton, and from this price one must at minimum deduct transportation costs from farm to plant, which might be about $5-10/ton.
What DOES it cost to produce a ton of switchgrass?
Because conditions vary across space and time, production costs per ton will vary. Charts 1, 2 and 3 depict the range of experience to date on the eleven cooperators' fields. First-year costs ranged from $40 to $160/acre, averaging $75. Only four of the eleven fields produced enough biomass to harvest at the end of the first year, and they averaged only 1.24 tons/acre. The high establishment costs for some producers were due to multiple tillage operations and multiple applications of herbicides for weed control. The resulting cost per ton of biomass on these four fields ranged from $50 to $150, not including land costs but including all harvest expenses.
First-year results are not very meaningful for perennial crops, especially for those in which first-year yields are low or non-existent. One way to consider the cost of production is to cumulate the costs through time, and divide that number by the cumulative yield through time, which is what we show in Chart 3. As one would expect, the cost declines to about $60/ton of biomass, once the large establishment costs are offset by yields that rise in later years. The first-year numbers in Chart 3 are based only on the four fields on which first year harvests were obtained. Drought conditions in the Central and Northern Plains during this study reduced both establishment year and post-establishment year yields.
What have we learned to date? First, successfully establishing a stand the first year is critical. The first-year harvest on the best two of these eleven fields was about 2.25 tons/acre, and these yields occurred on the two fields with the highest establishment expenses ($127 and $160/acre). By the second year on these two fields, cumulative production cost had fallen to $31/ton and $37/ton, the lowest of the eleven sites. Thus, although successful establishment is sensitive to weather, it is clearly important to establish good seedbeds and to control weeds in the first year, even though these are expensive operations. The very high maximum cumulative cost per ton (Chart 3) is due to a failure to obtain adequate stands on one field in two consecutive years. We think this failure can be attributed to high soil pH. Based on recently-completed research, we believe that establishment costs can be reduced to $40/acre or less by no-till planting of switchgrass followed by a pre-emergence application of Paramount® herbicide in combination with atrazine or an equivalent herbicide.
Second, we have learned that with good establishment practices and reasonably good weather, yields of 2.5 to 4.5 ton/acre are achievable by the second year of the crop, incurring non-land costs for as little as $30 to $40/ton. Cumulative production cost per ton under these good management conditions may continue to fall to levels of $20-$30/ton. Land costs may be as little as $10/ton for non-tillable land or as much as $30/ton on marginal row-crop land.
We believe that total production costs of $30/ton for switchgrass biomass will be achievable by Great Plains producers with good establishment techniques on land that is of marginal value for row-crops. As we learn more about cost-effective establishment practices, many producers will be able to achieve this level of production cost efficiency. For biomass energy markets, transportation costs from farm to processing plants are likely to add another $10/ton for the average producer. The potential for switchgrass as a competitive alternative for Midwest farmers thus depends on these factors and the success of the experimental technologies being developed for biomass-to-energy conversion.