Comparative Profitability

These perennial biofuel crops are evaluated on a 10-year replanting cycle. The grass crops take 2 to 3 years to reach mature biomass yields, and poplar grows for the full 10 years with only one harvest. During this establishment period, input costs (especially for weed control) are relatively high. We convert all costs over a 10-year period to an annual amortized basis so that profitability can be compared with that of continuous corn. Table 2 presents the per-acre annualized net return to land, labor and management, assuming biomass prices at $30/ton, $60/ton and $90/ton. Shaded cells indicate where annualized expenses exceed annual revenues.

Table 2. Annualized net return to land, labor and management ($/acre).

Crop System

$30/ton

$60/ton

$90/ton

Corn + Stover

83

126

169

Switchgrass

-63

34

131

Grass Mix

-32

53

138

Native Prairie

-76

-25

25

Misc - costly rhiz

-1048

-811

-574

Misc - cheap rhiz

-71

166

403

Poplar

-147

-36

75

When the price of biomass is low, corn is the only crop that covers its variable production costs. However, revenues for crops with higher biomass yields increase more rapidly than revenues for crops with low input costs. Stover is not a major contributor to overall revenue from a complete corn system (grain + stover) if grain sells for $3.50 per bushel, so corn revenue also increases slowly as biomass prices rise. When biomass prices reach $60 per ton, miscanthus with cheap rhizomes becomes the stand-out crop, with net revenues surpassing those of all other crops, including corn. At $90 per ton, the net revenue of miscanthus with cheap rhizomes hits an impressive $403 per acre. At such a high price for biomass, switchgrass net revenues almost match those of the corn system, but each crop nets only about one-third the income from miscanthus with cheap rhizomes. Rhizome costs are such a major factor that miscanthus with costly rhizomes is the worst performer at each biomass price examined.


Land and management costs are assumed equal across all crops and are not included in the analysis.
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