Advanced Search
MyIDEAS: Login to save this paper or follow this series

Evaluation of Breakeven Farm-gate Switchgrass Prices in South Central North Dakota

Contents:

Author Info

  • Bangsund, Dean A.
  • DeVuyst, Eric A.
  • Leistritz, F. Larry

Abstract

Switchgrass, a warm-season perennial grass, native to the region, has received considerable interest for its potential role as a dedicated feedstock for cellulosic-based bio-fuels. This research examined the farm-gate price needed for switchgrass to provide per-acre net returns equal to those obtained from traditional crops in south central North Dakota. Future production costs for switchgrass and net returns from traditional crops were estimated for three soil productivity classes and also were developed to reflect the historical revenue and cost patterns associated with producers who are typically more or less profitable (i.e., average net return per acre) than regional averages. Prices were calculated using an annualized equivalent analysis of switchgrass production costs and net returns from traditional crops from 2008 through 2017. Switchgrass production costs ranged from just over $40 per ton on marginal soils to $34.80 per ton on highly productive soils. 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. Production costs for low-profit producers were estimated at $47 per ton, compared to the regional average of $37.50 per ton. Switchgrass production costs for the remaining profitability groups ranged from about $33.50 per ton to about $36.75 per ton. 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. A key economic criterion influencing the breakeven price for switchgrass will be the foregone net revenue from displaced traditional crops. On marginal soils, just under one-third of the breakeven price was derived from the level of foregone net returns from traditional crops; whereas, over 80 percent of the breakeven price was derived from the level of foregone net returns from traditional crops on the most productive soils. As net returns from traditional crops decreased, the more that breakeven switchgrass prices approached production costs for switchgrass. Under current conditions of high input costs, escalating transportation costs, and given the increases in net returns from traditional crops, switchgrass, as a feedstock to a cellulosic ethanol plant, will be more expensive than previously estimated.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://purl.umn.edu/37845
Download Restriction: no

Bibliographic Info

Paper provided by North Dakota State University, Department of Agribusiness and Applied Economics in its series Agribusiness & Applied Economics Report with number 37845.

as in new window
Length:
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:ags:nddaae:37845

Contact details of provider:
Postal: PO Box 5636, Fargo, ND 58105-5636
Phone: (701) 231-7441
Email:
Web page: http://www.ext.nodak.edu/homepages/aedept/
More information through EDIRC

Related research

Keywords: switchgrass; production costs; farm-gate price; North Dakota; soil productivity; Agribusiness; Crop Production/Industries; Production Economics;

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lynes, Melissa K. & Bergtold, Jason S. & Williams, Jeffery R. & Fewell, Jason E., 2012. "Determining Farmers’ Willingness-To-Grow Cellulosic Biofuel Feedstocks on Agricultural Land," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124777, Agricultural and Applied Economics Association.
  2. Fewell, Jason E. & Bergtold, Jason S. & Williams, Jeffery R., 2011. "Farmers’ Willingness to Grow Switchgrass as a Cellulosic Bioenergy Crop: A Stated Choice Approach," 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta, Canada 109776, Western Agricultural Economics Association.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ags:nddaae:37845. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.