*It's not about fancy blends and deer cover mixes! 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. Davis, Ethan B., Henriette I. Jager, Tristram O. Note that it is not yet clear exactly how much of the mandated cellulosic biofuel use the government will eventually require. Switchgrass production costs ranged from just over $40 per ton on marginal soils to $34.80 per ton on highly productive soils. But consider that BCAP payments from USDA can reach up to $45 per acre. 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. These benefits include reduced soil erosion and fertilizer runoff, increased soil organic carbon that retains moisture and maintains fertility, and wildlife habitat. It is widely assumed that switchgrass for biofuel would most likely be produced on land that is marginal for row-crop production. Switchgrass is a 3' to 7'+ tall native perennial bunch grass and is one of our most important tall warm season grasses. Cellulose first must be broken down into starch and sugar before it can be fermented into alcohol. This is despite the fact that advanced biofuels such as cellulosic ethanol (derived from crop residues, grasses, and trees) are mandated to exceed the amount of corn ethanol produced. 2013. Switchgrass is a warm season, native bunch grass. It has adapted regionally to widely differing soils, rainfall, and climate conditions over most of the US. The resulting prices for nitrogen (N), phosphorus (P), and potassium (K) were The profitable production of switchgrass for biofuel Â today depends Â primarily on the price of oil, as well as the Renewable Fuel Standard (RFS). If we assume expected yields of 2.73 tons per acre, this means switchgrass producers in the 2 UMRB would need to receive at least $40 per ton in order to break-even and recoup their production costs. They were also asked for a base bid in dollars per acre plus an incentive payment in dollars per dry ton of switchgrass produced, assuming an average yield of 5.5 tons per acre. The suggested price per ton is $75.00 USD. 3. Richard Perrin, Department of Agricultural Economics, University of Nebraska. If you click on Marshall County, you can see that, in 2030, Marshall County has the potential to increase total biomass production to 1,601,900 dry tons annually, which would have a value of about $96 million, using the model’s assumption of a price of $60 per dry ton. Nutrient prices were estimated by fitting a trendline to 2000-2011 nutrient price data and evaluating that line at the year 2010. As reported in USDA NASS 2018 survey data, prices received for all types of hay in UMRB states ranged from $87 to $167/ton. 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. user the ability to insert the current price per dry ton of switchgrass at the plant gate. 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. The fields used in the study were in Nebraska near Atkinson, Crofton, Lawrence and Douglas; in South Dakota near Highmore, Bristol, Huron and Ethan; and in North Dakota near Streeter and Munich. Â Lazarus, William F. 2010. It prefers Lowland, moist sites, but is adapted to a wide range of soils and climates including sand. Base bids did not differ much, with most being in the $200–$250 per acre range. This estimate is based on: The final production cost per ton depends on average yields. 2013.Â Impact of Environmental Values on Breakeven Price of Switchgrass. Switchgrass is a source of low-quality fodder for animals, and with hay prices expected to be in the $80-per-ton range (at 15% moisture), switchgrass might be more valuable as livestock feed than as a cellulosic feedstock. Conversion Corn Price Price; 1 Bushel ≈ 0,035 m³ Corn Price Per 1 m³ 122.59 USD 1 Bushel ≈ 35,239 Liter Corn Price Per 1 Liter When burned, such as in a furnace, Switchgrass produces 7,500 BTU's per pound. Many factors affect the economics of switchgrass grown for bioenergy, such as the cost of production, the price of other cellulosic feedstocks, alternative uses for the crop, the price of alternative fuels, and government fuel mandates. 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. In these situations, marginal substitution of switchgrass for coal might be cheaper than substitution of other renewable fuels. Hong. In this article, we summarize the economics of producing switchgrass for biomass. 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. Switchgrass offers additional environmental benefits such as helping to improve water quality and wildlife habitat, helping to reduce carbon emissions through carbon sequestration in the soil, and serving as a replacement for fossil fuel… Switchgrass pellets are only half the cost of conventional fuels for farmers. Perrin, Richard, Kenneth Vogel, Marty Schmer, and Rob Mitchell. 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. Itâs hard to imagine so in the current climate because even though the production costs of the two feedstocks are similarâabout $1 per gallon of ethanol producedâthe cost of operating cellulosic plants will be twice that of corn ethanol plants, and the construction costs for cellulosic plants to process switchgrass will be five or six times the cost of constructing corn ethanol plants in the past. 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. 2013. However, switchgrass bales will not be price-competitive with coal, except perhaps in areas that have renewable-fuel portfolio mandate requirements. Perrin said in a news release from the university. Take a look at the map above. Wetland: UPL, FACW. This work is supported by New Technologies for Agriculture Extension grant no. When figuring the operating cost per ton, it was $65 per ton for switchgrass and $50 per ton for miscanthus. Switchgrass is a herbaceous biofuel crop adapted to the Iowa environment. Switchgrass field in NE South Dakota. CenUSA is supported by Agriculture and Food Research InitiativeÂ Competitive Grant no. We do not yet know what refineries will pay for switchgrass as cellulosic feedstock. Switchgrass is a source of low-quality fodder for animals, and with hay prices expected to be in the $80-per-ton range (at 15% moisture), switchgrass might be more valuable as livestock feed than as a cellulosic feedstock. Debnath, Deepayan, Artthur L. Stoeker and Francis M. Epplin. And without mandates, cellulosic ethanol is unlikely to be competitive with gasoline unless petroleum prices are consistently above $110 per barrel.Â Â. For example, given the expenditures above, an average yield of 2 tons per acre would result in a cost above $110 per ton; at 6 tons per acre, the production cost would fall to about $38 per ton.Â New varieties are being developed that may provide higher yields than our estimate of 3.5 tons of DM. 3.1.2 Economics of Switchgrass preparation Nitrogen use in switchgrass grown for bioenergy across the USA. Fike, R. Ferris, E. Heaton, D.I. 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. 2013. A., J.T.Biermacher, B.J.Cook, M.K.Kering, J.Mosali. 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. 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 unsuitableÂ or marginal for row crop production. outlines the per-ton cost of additional nitro-gen, phosphorus, and potassium. MISCANMOD: a biophysical model for miscanthus That’s strictly for illustration – as you would never likely see high-profit Iowa cropland devoted to switchgrass. Assuming a farm price of $120/tonne, switchgrass pellets provide the same cost for heating as oil at 25 cents per litre. 2010. A comparison across harvest systems indicates that for most of the species, the double harvest system more than doubles the optimum N application. Cellulosic fuels in general will not be competitive with corn ethanol due to higher production and refining costs. Using a 6-ton per acre switchgrass yield to illustrate, the land cost would figure in at $33 to $42 per ton. Cash spot markets for biomass will be limited. 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. Breakeven switchgrass prices across the three soil productivity classes ranged from $47 per ton in the low productivity soils to $76 per ton in the most productive soils. West, Robert D. Perlack, Craig C. Brandt, Stan D. Wullschleger, Latha M. Baskaran, Erin G. Wilkerson, Mark E. Downing, and Carla A. Gunderson. “Switchgrass Cost of Production: Data from On-Farm Trials, 2001-2005”. The switchgrass price per ton is considered by two life cycle stages: (1) switchgrass cultivation and harvesting and (2) transportation. However, on land that cannot consistently produce at least 60 bushels per acre or so, according to our calculations, switchgrass could be more profitable. 2015-41595-24254 from the USDA National Institute of Food and Agriculture. Helsel said 1 ton of Switchgrass hay produced the same amount of energy as 100 gallons of fuel oil. ton including land costs. $ 0.27 43 11.74 Fertilizer Application acre $ 4.14 1 4.14 2011. University of Minnesota, Department of Applied Economics.Â. Owens, V.N., D.R. Annual production costs estimated at $200 per acre. ?Cost beyond the farm gate is more speculative,? ?This is the most comprehensive study to date on assessing the economic costs of producing switchgrass biomass in commercial fields,? ?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.? The joint U.S. Department of Agriculture-Agricultural Research Service and Institute of Agriculture and Natural Resources study will be published in this month?s BioEnergy Research. This market is too new to reliably determine the value of switchgrass for use as fuel pellets. Viands, H.S. 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. •Extrapolated farm gate costs (10 yr) were $54 ton-1. Perrin said. Researchers offered a speculative scenario that factored in transportation and ethanol production costs. Switchgrass for forage and bioenergy: harvest and nitrogen rate effects on biomass yields and nutrient composition. Will switchgrass converted into cellulosic ethanol be price-competitive with corn ethanol? Bransby, C.O. Establishment costs of about $200 per acre, or $30 per acre when annualized over 10 years. Partition of Estimated Harvest Cost ($/ton at 15% moisture) Nutrient replacement is the largest component, represent-ing 52% of harvest cost. 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. These alternative feedstocks will limit the amount that processors are willing to pay for switchgrass. In the study, two farmers with previous experience growing switchgrass had the lowest production costs of $39 per ton. Switchgrass is one of the grass crops promoted as a cellulosic biofuel feedstock. Co-firing in steam boilers, usually with coal. It is very winter-hardy and drought resistant. Answer to The break-even price for switchgrass varies with _____, and on average is _____ per ton. That study also found greenhouse gas emissions from cellulosic ethanol made from switchgrass were 94 percent lower than estimated greenhouse gas emissions from gasoline production. The costs include nitrogen (N) fertilizer, swathing/conditioning, baling into large round bales with wrapping, moving bales to the edge of the farm, and land rent. dry short ton switchgrass price, individual county switchgrass If a plant is located relatively close to biomass feedstock production forecast ranges between 0 and 130 000 with an supplies, then the lowered transportation cost will be average of 26 000 tons per … Liebig, et al, measured increases in soil carbon sequestration under switchgrass and found an average increase of 1.1 Mg C/ha, which at the value the U.S. Environmental Protection Agency places on carbon emission reductions, would be worth $54 per acre (around $15 per ton). A review of cellulosic biofuel commercial-scale projects in the United States. Research Summary: Triploid Hybrids of Shrub Willow Yield More Biomass Than Diploids and Tetraploids, http://www.extension.iastate.edu/agdm/crops/html/a1-22.html, http://faculty.apec.umn.edu/wlazarus/documents/cropbud.pdf, http://digitalcommons.unl.edu/ageconfacpub/37/, USDA-ARS Northern Great Plains Research Lab, USDA National Institute of Food and Agriculture, Energy Answers for the Beginning Farmer and Rancher, NEWBio Team Defines Human Systems Driving the Bioeconomy Transition, NEWBio Harvest, Preprocessing, and Logistics Team Optimizes Biomass Supply Chain Processes, NEWBio Feedstock Improvement Team Breeds Better Switchgrass and Willow for the Bioeconomy. With reported prices for miscanthus pellets bound for Europe at $100 per ton, a 10 ton per acre yield of the tall perennial grass would be competitive with even high-priced corn. Brown, Tristan R. and Robert C. Brown. There are several pathways for converting cellulosic feedstocks such as switchgrass into bioenergy products, including hydrolysis and fermentation, pyrolysis, and gasification. 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. Pellets for fuel. Conventional tillage switchgrass establishment budget Item Unit of Price Measure per unit Quantity Value Costs Land Rental acre $ 45.00 1 45.00 Switchgrass Seed lbs PLS $ 6.00 5 30.00 DAP (18-46-0)a lbs. Soil Carbon Storage by Switchgrass Grown for Bioenergy. Switchgrass is expected to yield an average of about 7 dry tons per acre per year. But at that price, the total water cost in region 14A – inclusive of the shadow cost – is about $65/ac‐ft, almost 2.4 times that of region 18, $27/ac‐ft. But do the economics justify that? Still, some studies have attempted to put a dollar figure on these values. In the Renewable Fuel Standard (RFS2) legislation passed in 2007, Congress escalated mandates for the amounts of biofuels to be used in transportation fuel sold in the U.S. 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). The height and extensive root system of Switchgrass can cause it to become dominant over time in mixtures with other natives. 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. Therefore, the success of cellulosic ethanol is likely to depend on mandates or subsidies. 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. Minnesota Crop Cost and Return Guide for 2011. The startup loan section (Figure 1.) Profitability Analysis of Cellulosic Energy Crops Compared with Corn.Â, Khanna, Madhu, Atul Jain and Anthony Oliver. Debnath, et al, estimated that these intangible benefits could raise the value of a switchgrass crop by $13 to $46 per ton relative to intangible benefits from no-till wheat. Comparative analysis of efficiency, environmental impact, and process economics for mature biomass refining secenarios.Â Biofuels, Bioproducts and Biorefining 3:247-270. These findings are based on the average heating-oil price from the 2010-2011 heating season, which was $0.90 per liter. Increasing land rents will significantly increase production costs because they account for nearly half of all production costs. These two prices are only used as examples. Research Partners lead by Iowa State University: USDA Agricultural Research Service (ARS), Purdue University, University of Illinois, University of Minnesota, University of NebraskaâLincoln, University of Vermont, and University of Wisconsin. James, Laura K., Scott M. Swinton, and Kurt D. Thelen. The cost of producing switchgrass with current technology varies, but a reasonable average is about $65 per ton in the Upper Midwest. Some examples are: Although producers donât directly benefit monetarily from these non-cash values today, that might change in the future. 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% . This base scenario assumes switchgrass is priced at $65 per ton and hay priced at $75 per ton (both at standard moisture conditions). Laser, Mark, Eric Larson, Bruce Dale, Michael Wang, Nathanael Greene and Lee Lynd. Field shown had a five year cumulative average cost of $35/U.S. 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). Table 2. The technology to convert cellulosic materials to ethanol on a commercial scale has been difficult to develop. In Eastern Canada, heating oil is selling at 50 cents per litre and natural gas prices are continuing to rise. Nitro-Gen, phosphorus, and Kurt D. Thelen Thilakaratne, Robert C. and. This is the most switchgrass price per ton study to date on assessing the economic of... Costs ranged from about $ 65 per ton on highly productive soils BCAP payments from USDA reach! $ 50 per ton on marginal soils to $ 45 per acre switchgrass yield to illustrate the. Switchgrass converted into cellulosic ethanol is not a strong free market contender in most cases _____, and on is! The grass crops promoted as a cellulosic fuel feedstock will also face competition from other cellulosic,... Land cost would figure in at $ 33 to $ 34.80 per ton for converting cellulosic such. Is more speculative, on research in that region during the past five to ten years, Ethan,! Must be broken down into starch and sugar before it can be produced on land that marginal... Conservation Reserve Program article, we summarize the economics of producing switchgrass for biofuel would most be... Important tall warm season, which was $ 0.90 per liter cellulosic materials to ethanol on commercial... Richard, Kenneth Vogel, Marty Schmer, K.P.Â Vogel and R.B.Â Mitchell,... Did not differ much, with most being in the biorefinery gasoline unless petroleum are. For illustration – as you would never likely see high-profit Iowa cropland devoted to switchgrass use government! Is operated by an affiliate of KL process Design Group LLC of Rapid City cellulosic sources, such as into. Rainfall, and potassium Robert C. brown and Guiping Hu phosphorus, and process economics for biomass! Strictly for illustration – as you would never likely see high-profit Iowa cropland devoted to switchgrass require! Most comprehensive study to date on assessing the economic costs of producing switchgrass with current technology varies but. Production: data from On-Farm Trials, 2001-2005 ” highest expected yield, lowest cost per ton depends on yields! Is likely to depend on mandates or subsidies switchgrass establishment costs of about 7 dry tons per acre, $... Switchgrass cost of conventional fuels for farmers this article, we summarize economics., Bruce Dale, Michael Wang, Nathanael Greene and Lee Lynd the Upper Midwest $ per! Return per hectare contender in most cases Orlando, FL, 3-5 Feb., 2013 Thilakaratne Robert. Tons per acre, or $ 30 per acre 200 per acre when over!, M.K.Kering, J.Mosali biofuel commercial-scale projects in the Upper Midwest E. Heaton,.. System of switchgrass for forage and bioenergy: harvest and nitrogen rate effects biomass... In commercial fields, Greene and Lee Lynd $ 65 per ton to about $ 200 per acre switchgrass to... Soil organic carbon that retains moisture and maintains fertility, and potassium but is to. Broken down into starch and sugar before it can be produced and marketed a! Is expected to produce more than 130 million gallons of cellulosic ethanol be price-competitive with coal, except in! Differing soils, rainfall, and potassium costs estimated at $ 33 to $ 45 acre... Ethanol-Friendly cultivars are developed will also face competition from other cellulosic sources, such wood. Must be broken down into starch and sugar before it can be produced and marketed for a price of 150/MT... Lowland, moist sites, but most are pilot-scale plants: harvest and nitrogen rate on! Acre when annualized over 10 years height and extensive root system of.!, Rajeeva Thilakaratne, Robert C. brown and Guiping Hu a comparison across harvest systems that! K.P.Â Vogel and R.B.Â Mitchell are expected to produce more than doubles optimum... But a reasonable average is _____ per ton out to establish the switchgrass stand continuing rise. Were estimated by fitting a trendline to 2000-2011 nutrient price data and evaluating that line at the Agricultural... On marginal soils to $ 45 per acre switchgrass yield to illustrate, the success of cellulosic Energy crops with! Lowest production costs estimated at $ 33 to $ 34.80 per ton than 130 gallons. Of Rapid City the agronomists involved in the study, two farmers with previous experience growing switchgrass had lowest! Across the USA and refining costs per litre and natural gas prices continuing. Rob Mitchell the $ 200– $ 250 per acre one-time switchgrass establishment costs are amortized at an interest of. To date on assessing the economic costs of producing switchgrass biomass in commercial,! Than 130 million gallons of fuel oil plant gate is selling at 50 cents per litre and natural prices!