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The Economics of Anaerobic Digester Operation on a Minnesota Dairy Farm


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  • William F. Lazarus
  • Margaretha Rudstrom


Anaerobic digesters for livestock operations are receiving attention for energy production and odor control. A farm-based digester went into operation in September 1999, on an 800-cow dairy farm in Minnesota. The goals of this paper are to analyze the contribution that a digester system can make to dairy farm profitability, and to demonstrate the impact of government and utility subsidies on profitability. Results indicate that the current selling price of electricity is not sufficient to justify building an anaerobic digester in most cases unless there is a subsidy or significant nonenergy market benefits. Copyright 2007, Oxford University Press.

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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal Review of Agricultural Economics.

Volume (Year): 29 (2007)
Issue (Month): 2 ()
Pages: 349-364

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Handle: RePEc:oup:revage:v:29:y:2007:i:2:p:349-364

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Cited by:
  1. Key, Nigel D. & Sneeringer, Stacy E., 2012. "Carbon Emissions, Renewable Electricity, and Profits: Comparing Policies to Promote Anaerobic Digesters on Dairies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(2), August.
  2. Gloy, Brent A., 2010. "Carbon Dioxide Offsets from Anaerobic Digestion of Dairy Waste," Working Papers 126750, Cornell University, Department of Applied Economics and Management.
  3. Denley, Jonathan & Herndon, Cary W., Jr., 2008. "Financial Analysis of Implementing an Anaerobic Digester and Free Stall Barn System on a Mississippi Dairy Farm," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6786, Southern Agricultural Economics Association.
  4. DeVuyst, Eric A. & Pryor, Scott W. & Lardy, Greg & Eide, Wallace & Wiederholt, Ron, 2011. "Cattle, ethanol, and biogas: Does closing the loop make economic sense?," Agricultural Systems, Elsevier, vol. 104(8), pages 609-614, October.
  5. Bachewe, Fantu & Lazarus, William F. & Goodrich, Philip & Drewitz, Matt & Balk, Becky, 2008. "Review of the Literature on the Economics of Central Anaerobic Digesters," Staff Papers 44116, University of Minnesota, Department of Applied Economics.
  6. Eidman, Vernon R., 2005. "Agriculture's Role in Energy Production: Current Levels and Future Prospects," Energy from Agriculture, Energy from Agriculture: New Technologies, Innovative Programs and Success Stories, December 14-15, 2005, St. Louis, Missouri 7628, Farm Foundation.
  7. Thompson, Ethan & Wang, Qingbin & Li, Minghao, 2013. "Anaerobic digester systems (ADS) for multiple dairy farms: A GIS analysis for optimal site selection," Energy Policy, Elsevier, vol. 61(C), pages 114-124.
  8. Megan Swindal & Gilbert Gillespie & Rick Welsh, 2010. "Community digester operations and dairy farmer perspectives," Agriculture and Human Values, Springer, vol. 27(4), pages 461-474, December.


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