Determining Switchgrass Breakeven Prices in a Landscape Design System

Sabrinna Soldavini, Purdue University

Abstract

Due to natural variability, some areas of a field are more productive, and produce higher yields than others. Precision agriculture technologies allow producers to identify areas of their fields that are low or non-profitable for cash crop production. If these parts of the field, unprofitable for row crop production could be converted to a bioenergy crop through a subfield management strategy (landscape design), there may be potential gains to farmer revenue and biomass availability. Switchgrass has widely been considered as a potential energy crop to be produced onto marginal lands due its ability to thrive in marginal conditions. Previous studies have looked at switchgrass production and breakeven costs, but have not looked at how production costs may change when produced in a landscape design situation. Incorporating changes in harvest costs ($ ac-1) which may arise due to decreased harvest field efficiencies in a landscape design system, this paper determines the switchgrass breakeven prices ($ ton-1) which equate producers’ net revenues in a base case (all corn) and landscape design case. We look at the case of a general, 100 acre field with 15 acres converted to switchgrass production, as well as 11 fields in Central Iowa where unprofitable subfields are assumed to be converted to switchgrass production, and the remaining portion of the field remains producing corn. We find a range of switchgrass breakeven prices of $166.82 – $193.89 ton-1, with an average of $173.05 ton-1 when land costs of $266 ac -1 are included, and a range of $107.38– $134.46 ton -1 with an average of $113.61 ton-1 when no land costs are considered. A stochastic analysis to obtain a distribution of switchgrass breakeven prices ($ ton-1) under uncertainty is performed for the general field, producing distributions of switchgrass breakeven prices of $61.62 – $297.26 ton-1 and $109.00 – $408.75 ton-1 with and without land costs, and averages of $121.08 ton-1 and $191.73 ton-1 respectively.

Degree

M.S.

Advisors

Tyner, Purdue University.

Subject Area

Alternative Energy|Environmental economics|Agricultural economics

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