National Assessment of Promising Areas: National Overview

Two major trends are evident from a national perspective. First, in the near term (yr 2000 yields), switchgrass is a lower cost feedstock than either hybrid poplar or willow in all regions except the Northeast where willow feedstock is competitive with switchgrass¹ (Figs. 1 and 2).² The cost difference is on the order of $10 to $20 per ton. This is because switchgrass yields are expected to be slightly higher and its production costs are lower. It should be noted that this cost difference is probably exaggerated because a single rotation length was assumed for hybrid poplar. This tends to artificially raise prices in areas with low hybrid poplar yields. From an economic standpoint low yields should be associated with longer rotations so the cost of harvest, which is fairly constant on a per acre basis, can be better distributed.

	Fig. 1. Switchgrass farmgate prices ($/dry ton) assuming median yields (as depicted in the ORECCL database).
	Fig. 2. Short Rotation Woody Crop farmgate prices ($/dry ton) assuming median yields (as depicted in the ORECCL database).

Second, the Southeast, Delta, Appalachian, Southern Plains and the most northerly Northern Plains states have the lowest-cost farmgate prices, and they are for switchgrass. If the ORECCL yields of 4 to 5 dry tons of switchgrass can be achieved routinely in these regions, then significant acreages (40 million acres) should be able to support switchgrass production at a farmgate price of under $35/dry ton and still offer the farmer a return to lands and management comparable or better than those of conventional crops (Figs. 3 and 4). Whether such yields can be routinely achieved in the Plains states is very uncertain however due to the lack of field data (in the North) and fairly large year to year climatic variation across the region as a whole. Such yields (and better) have been routinely achieved in research plots in the South (Alabama, Tennessee, Virginia), where climatic variability is less.

	Fig. 3. Estimated returns to land and management ($/acre/year) based on cash rents for cropland and farmland value (as depicted in the ORECCL database).
	Fig. 4. Cropland acreage suitable for switchgrass production (as depicted in the ORECCL database).

The ORIBAS analyses show broad ranges (>$10) for delivered switchgrass marginal prices in the central Midwest (IA, MN, MO, and NE) and narrow ranges (~$5) in the southern states and the Dakotas. The distribution of delivered prices for those states with broad ranges are quite skewed with most facilities at the higher switchgrass price end. The states with narrower ranges also had a more even distribution of prices. Tennessee was the only state for which the geographic distribution of the small switchgrass demand facilities was different from that of the large demand facilities.

1 Future assessments using revised willow production costs will probably not show willow as cost competitive with switchgrass even in the northeast.

2 Figs. 1-4 are derived directly from the ORECCL database and contain no data from the ORIBAS analyses.