Evaluation of Breakeven Farm-gate Switchgrass Prices in South Central North Dakota-Summary
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.
|Date of creation:||Aug 2008|
|Contact details of provider:|| Postal: PO Box 5636, Fargo, ND 58105-5636|
Phone: (701) 231-7441
Web page: http://www.ext.nodak.edu/homepages/aedept/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:nddaae:42253. 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.