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The effects of opportunity costs, supply chain logistics and carbon balances on advanced biofuel production

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  • De Laporte, Aaron
  • Ripplinger, David

Abstract

Changes in crop prices have encouraged farmers to consider alternatives, such as potential advanced bioenergy feedstocks, including energy beets. This paper employs an integrated biophysical, economic and GIS-based transportation model to examine the supply of beet-bioethanol from five sites in North Daktoa. The study finds that beet bioethanol could provide net benefits to farmers and ethanol producers in the state, under current market conditions, but only if the bioethanol plant site is carefully selected. More specifically, a 20,000,000 gallon ethanol plant in Valley City could have net returns of $436,049. This plant would acquire 760,000 tons of beets from around the plant site and further east toward the Red River Valley from 22,682 acres of cropland an average distance of 15.7 miles away. The average yield of the selected cropland is 33.5 tons/ac with average net farm returns of $26.09/acre above opportunity costs. Opportunity and transportation costs can substantially change the attractiveness of croplands for beet production. The current market opportunity presented by beet bioethanol at $1.50/gal ethanol is not particularly attractive, but as ethanol prices increase, this opportunity could become attractive at a number of sites throughout the state.

Suggested Citation

  • De Laporte, Aaron & Ripplinger, David, 2016. "The effects of opportunity costs, supply chain logistics and carbon balances on advanced biofuel production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235852, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235852
    DOI: 10.22004/ag.econ.235852
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    References listed on IDEAS

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    1. Maung, Thein A. & Gustafson, Cole R., 2010. "The Economic Feasibility of Sugarbeet Biofuel Production in Central North Dakota," Agribusiness & Applied Economics Report 95745, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. Baey, Charlotte & Didier, Anne & Lemaire, Sébastien & Maupas, Fabienne & Cournède, Paul-Henry, 2014. "Parametrization of five classical plant growth models applied to sugar beet and comparison of their predictive capacity on root yield and total biomass," Ecological Modelling, Elsevier, vol. 290(C), pages 11-20.
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    More about this item

    Keywords

    Agribusiness; Community/Rural/Urban Development; Crop Production/Industries; Farm Management; Industrial Organization; Production Economics;
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