Paper presented at BioEnergy '98: Expanding Bioenergy Partnerships, Madison, Wisconsin, October 4-8, 1998.

ABSTRACT

The objectives of this study were to determine (a) whether there had been any change in the interest among Alabama farmers between 1994 and 1997 in growing switchgrass for energy, and (b) whether the Black Belt region of Alabama was more suitable than the rest of the state for establishment of energy plants that would be supplied with switchgrass. A survey showed that farmers would be prepared to plant an average of 103 ha (254 acres) of switchgrass if an average profit/ha of $254 ($103/acre) could be achieved. However, 75% indicated that they would plant switchgrass if a profit of up to $247/ha ($100/acre) could be achieved. A total of 83% indicated willingness to consider signing long-term contracts, and 70% indicated that they would not expect government assistance to plant switchgrass if it was profitable. Results suggest that interest among Alabama farmers in growing switchgrass for energy may have increased slightly since 1994, and that the Black Belt region is probably more suitable for the development of bioenergy plants than the rest of the state, because of greater interest among farmers in growing switchgrass and lower profit expectations.

Keywords: switchgrass, economics, dedicated energy crop, energy feedstocks.

INTRODUCTION AND BACKGROUND

Location of a suitable site is a crucially important step in the planning and installation of new bioenergy plants, because many factors which will determine the success of these plants are site-related. In 1994, Sladden and Bransby (1995) conducted a survey among farmers in Alabama to determine the general potential for growing switchgrass for energy in the state. Subsequently, Graham et al. (1996) used a computer model to identify suitable sites for bioenergy plants in Alabama. However, this model assumed that switchgrass would replace annual rowcrops, and not perennial grassland that is currently used for grazing and hay. In contrast, Sladden and Bransby (1996) argued that switchgrass would more likely replace perennial grassland than rowcrops, because of the lower economic returns associated with grassland enterprises: $170/ha ($69/acre) for beef production from pastures, compared to $272/ha ($110/acre) for rowcrops, as projected by farmers in the survey.

Another incentive for the work described in this report was change in the agricultural sector that had occurred since the 1994 survey. In particular, a large number of Conservation Reserve Program (CRP) contracts had expired, and some were not renewed. In addition, profitability in the beef industry had declined sharply, a national survey of beef producers showing that nearly 50% of cow-calf operations were not profitable in 1996, compared to only 15% in 1994.

With this information in mind, the objectives of this study were (a) to determine whether there had been any change in the interest of farmers between 1994 and 1997 to grow switchgrass as an energy crop, and (b) to determine whether the Black Belt region of Alabama was more suitable than the rest of the state for establishment of bioenergy plants that would be supplied with switchgrass. The Black Belt is a 12-county region that runs east-west just south of the center of the state (Fig. 1). It is characterized by heavy clay (in many cases dark colored), prairie soils which are not suitable for annual cropping. Much of the original vegetation was grassland, partly because the high pH of certain soil types common to the region does not support prolific growth of trees. The 12-county region contains 44% of the CRP land in the state: 6,119 ha (15,113 acres)/county, compared to 2,504 (6,184 acres)/county for the rest of the state. It is also one of the most impoverished regions in the nation, thus generating particular local and national interest in its need for economic development.

Figure 1: A Map Showing the Black Belt Region in Alabama

PROCEDURE

A survey form was mailed in December 1998 to a leader group of Alabama Farmer’s Federation members using the same mailing list that had been used in the previous survey. These leaders were chosen in preference to a sample that is representative of the full range of farmers in Alabama because it is usually leaders that play the most important role in adoption and development of new practices. Survey forms with a one-page explanation of the potential future of energy crops were mailed with self-addressed and stamped return envelopes. The form appears as Table 1. There was about a 20% response to the survey, and approximately half of these respondents indicated that they were not interested in growing switchgrass, or were no longer farming. This resulted in 49 useful survey forms from the 12 Black Belt counties, and 140 from the 54 counties in the rest of the state.

RESULTS AND DISCUSSION

Land Tenure

In the Black Belt respondents operated 34% more land than those in the rest of the state, and there was greater land ownership and less rental of land (Table 2). The estimated land rental rate in the rest of the state was $35.82/ha ($14.50/acre)/year, (or 73%) higher than in the Black Belt. This is probably partly due to the low suitability of the Black Belt for annual row cropping.

Hay Production

In the previous survey it was established that a large proportion of respondents owned hay making equipment, but no information was obtained on how much hay was made, or on the estimated yields and costs of hay making. Clearly, this information would be a useful guide for comparison with projected costs of switchgrass production.

A little over 60% of the land managers indicated that they made hay. On average, those who made hay produced an estimated 296 Mg (326 tons) per year. They estimated that their average yield was 7.9 Mg/ha (3.5 tons/acre) /year, and their average cost was $34.34/Mg ($31.22/ton), while estimated cost of custom hay production was $25.39/Mg ($23.08/ton). These figures were relatively consistent between the Black Belt and the rest of the state.

CRP Land

There are a total of 167,733 ha (414,300 acres) of CRP land in Alabama, of which 44% is in the Black Belt. About half of this is planted to trees, and the other half to grass. Survey results on CRP land clearly reflected the known concentration of this program in the Black Belt region. Some 25% of respondents in the Black Belt indicated that they had an average of 100 ha (250 acres) in the program, while corresponding figures for the rest of the state were only 16% of respondents with an average of 32 ha (80 acres) in the program. If these data are used together with the number of counties to project the distribution of CRP land in the state, it is estimated that 52% of CRP land in the state is in the Black Belt. This slight over-estimation may be due to the fact that counties in the Black Belt are larger than the average county in the rest of the state. However, this relatively small discrepancy between the estimates and the known figures for CRP land suggest that results from this survey are probably fairly reliable, despite the relatively small sample size.

Farmer Expectations and Projections

On average, respondents indicated that they would need a net profit of $254/ha ($103/acre) /year to justify planting switchgrass for energy. This figure was $25/ha ($10/ac) higher than that specified in 1994, and $74.10/ha ($30/ac) /year lower for the Black Belt than for the rest of the state (Table 3). If this profit could be achieved, land managers indicated that they would consider planting an average of 103 ha (254 acres) of switchgrass, which is 64% more than the 63 ha (155 acres) indicated in the 1994 survey.

Despite the difference between the Black Belt and the rest of the state in the average profit specified to justify planting switchgrass, there was no difference in the proportion of respondents who would be willing to plant it if a profit of $100 or less was possible (about 75%). However, within this profit interval the distribution differed, with a greater proportion of producers in the Black Belt (41%) being prepared to plant it if a profit of $124/ha ($50/acre) /year could be achieved, compared to the rest of the state (29%). Based on data in Table 3 it might appear that this could be related to the greater number of producers in the Black Belt who intended replacing grassland instead of rowcrops with switchgrass. However, when this was examined within each region, there was no difference in the profit specified to justify planting switchgrass for those who planned to replace rowcrops compared to those who planned to replace grassland.

On average, 83% of the land managers indicated that they would be willing to consider signing long-term contracts, and 70% indicated that they would not expect government assistance if the crop was profitable.

CONCLUSIONS

Results from this survey suggest that there may be a little more interest in planting switchgrass for energy than there was in 1994. Within the state of Alabama the Black Belt appears to be more suitable than the rest of the state for bioenergy development because of a relatively greater interest among farmers, and lower profit expectations.

REFERENCES

1. Graham, R.L., W. Liu, H.I. Jager, B.C. English, C.E. Noon and M.J. Daly. 1996. A regional-scale GIS-based modeling system for evaluating the potential costs and supplies of biomass from biomass crops. Proc. 7 th National Bioenergy Conf.: 444- 450. September 15-20, Nashville, TN.

2. Sladden, S.E., and D.I. Bransby.. 1995. Responses of Alabama farmers to a survey on growing switchgrass for energy. Proc. 2 nd Biomass Conference of the Americas: 1309-1313. August 21-24, Portland, OR.