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Switchgrass as an Income Stabilizing Crop for Cow-calf Producers Impacted by Drought

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  • Lutes, Jennifer
  • Popp, Michael

Abstract

Cow-calf producers in Arkansas experience annual fluctuations in their farm returns and are increasingly scrutinized for their role in climate change. Increasing farm efficiency can increase farm returns and either increase or decrease net greenhouse gas emissions, but often these practices also increase income risk. Diversifying enterprise choices, the addition of switchgrass production grown on converted pasture land, in this case, is thought to lower income risk by providing a drought hardy crop while at the same time a supply of lignocellulosic biomass for potential bio-refineries. Adopting rotational grazing, compared to a baseline of continuous grazing, frees pasture acreage to either increase beef output or to the production of a dedicated energy crop. The objectives are to determine what switchgrass price is needed to be income neutral and whether adoption of switchgrass does in fact impact income risk without affecting feed or food supply. Decision support software, the Forage and Cattle Planner (FORCAP), is used to compare financial returns, along with GHG emissions, across multiple farm management strategies. The study reveals that the addition of switchgrass production, when compared to increased beef production, offers lower income risk but the needed switchgrass price to break even is higher than the price needed to compete with the least intensive continuous grazing option and lowest stocking rate. Net GHG emissions implications of changes are quite small.

Suggested Citation

  • Lutes, Jennifer & Popp, Michael, 2015. "Switchgrass as an Income Stabilizing Crop for Cow-calf Producers Impacted by Drought," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205416, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea15:205416
    DOI: 10.22004/ag.econ.205416
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    File URL: http://ageconsearch.umn.edu/record/205416/files/Switchgrass%20as%20a%20Drought%20Risk%20Mitigator.pdf
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    References listed on IDEAS

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    1. Popp, Michael P. & Hogan, Robert J., Jr., 2007. "Assessment of two alternative switchgrass harvest and transport methods," Biofuels, Food and Feed Tradeoffs Conference, April 12-13, 2007, St, Louis, Missouri 48774, Farm Foundation.
    2. Marie Walsh & Daniel de la Torre Ugarte & Hosein Shapouri & Stephen Slinsky, 2003. "Bioenergy Crop Production in the United States: Potential Quantities, Land Use Changes, and Economic Impacts on the Agricultural Sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 313-333, April.
    3. Ian J. Bonner & Kara G. Cafferty & David J. Muth & Mark D. Tomer & David E. James & Sarah A. Porter & Douglas L. Karlen, 2014. "Opportunities for Energy Crop Production Based on Subfield Scale Distribution of Profitability," Energies, MDPI, Open Access Journal, vol. 7(10), pages 1-18, October.
    4. Doye, Damona & Popp, Michael & West, Chuck, 2008. "Controlled versus Continuous Calving Seasons in the South: What’s at Stake?," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2008, pages 1-14.
    5. Wang, Tong & Park, Seong C. & Bevers, Stan & Teague, Richard & Cho, Jaesung, 2013. "Factors Affecting Cow-Calf Herd Performance and Greenhouse Gas Emissions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), pages 1-22.
    6. Sharp, Benjamin E. & Miller, Shelie A., 2014. "Estimating maximum land use change potential from a regional biofuel industry," Energy Policy, Elsevier, vol. 65(C), pages 261-269.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agricultural Finance; Land Economics/Use; Production Economics; Resource /Energy Economics and Policy;

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