Post on 14-Jan-2016
description
Department of Economics
Social and Economic Issues of Pyrolysis Processing Systems and Biochar
Pyrolysis and Biochar WorkshopAmes, Iowa
November 30, 2009
Chad HartAssistant Professor/Grain Markets Specialist
chart@iastate.edu515-294-9911
Department of Economics
Crop Productivity
Source: USDA - NASS
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Re
lativ
e Y
ield
(1
97
0 =
1)
Wheat Corn Cotton Soybean
Department of Economics
Crop Productivity Boost from Biochar
0
50
100
150
200
250
300
Co
rn Y
ield
(bu
/acr
e)
0
20
40
60
80
100
120
Wh
ea
t Y
ield
(b
u/a
cre
)
Corn Co+8 Co+25 Wheat Wh+8 Wh+25
Department of Economics
Agricultural Production Costs
Source: USDA, Economic Research Service
Item 2009F 2010F 2009F 2010F 2009F 2010F 2009F 2010F 2009F 2010F
Dollars per planted acreOperating costs: Seed 71.62 77.84 58.08 63.13 14.27 15.51 101.12 109.91 59.51 64.68 Fertilizer 135.86 147.63 22.33 24.27 51.54 56.01 72.63 78.93 110.71 120.30 Chemicals 28.62 29.46 17.61 18.12 10.35 10.66 73.68 75.83 77.66 79.93 Custom operations 11.21 11.61 6.68 6.92 6.97 7.21 27.55 28.53 68.92 71.37 Fuel, lube, and electricity 28.66 33.81 13.82 16.30 17.94 21.16 43.23 51.00 95.83 113.04 Repairs 15.73 16.16 13.08 13.44 13.61 13.98 24.56 25.23 28.84 29.63 Other variable expenses 1/ 0.13 0.14 0.11 0.12 0.34 0.35 108.02 115.88 12.06 12.48 Interest on operating capital 0.44 1.27 0.60 1.72 0.21 0.61 0.68 1.94 0.64 1.85 Total, operating costs 292.27 317.92 132.31 144.02 115.23 125.49 451.47 487.25 454.17 493.28
Allocated overhead: Hired labor 2.44 2.49 2.13 2.18 2.72 2.79 16.78 17.18 20.06 20.54 Unpaid labor 25.82 26.43 17.23 17.65 23.68 24.24 40.13 41.09 45.63 46.72 Capital recovery 79.96 82.59 75.41 77.90 61.74 63.77 85.74 88.56 116.10 119.93 Land 111.58 114.69 98.29 101.03 50.82 52.24 54.73 56.25 145.19 149.24 Taxes and insurance 9.15 9.78 10.64 11.37 9.99 10.67 10.54 11.26 21.26 22.71 General farm overhead 14.55 14.95 14.66 15.06 9.37 9.62 18.21 18.71 25.94 26.65 Total, allocated costs 243.50 250.93 218.36 225.19 158.32 163.33 226.13 233.05 374.18 385.79
Total costs listed 535.77 568.85 350.67 369.21 273.55 288.82 677.60 720.30 828.35 879.07
Corn Soybeans Wheat Cotton Rice
Department of Economics
Change in Economic IncentivesCorn Soybeans Wheat
Yield (bu/acre) 162.9 43.3 44.4
Price ($/bu) 3.55 9.20 4.85
Revenue ($/acre) 578.30 398.36 215.34
Costs ($/acre) 535.77 350.67 273.55
Net ($/acre) 42.53 47.69 -58.21
Current cropping decisions based on grain revenues and costs
Harvest of biomass and reincorporation of biochar could significantly change incentives
•Higher crop yields, lower crop prices•Biomass revenues•Biochar costs•Carbon policy benefits/costs
It’s the creation of a new set of markets.
Department of EconomicsSource: NREL
Price Variations
Department of EconomicsSource: NREL
Department of EconomicsSource: USDA - Census of Ag.
Department of EconomicsSource: USDA - Census of Ag.
Department of EconomicsSource: USDA - Census of Ag.
Department of EconomicsSources: USDA - Census of Ag., ISU - Mike Duffy
Percent of Iowa Farmland by Residence of Owner
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Iowa Resident Non-Iowa Resident
1982 1992 2002 2007
Department of EconomicsSources: USDA - Census of Ag., ISU - Mike Duffy
Percent of Farmland Based on Primary Reason for Owning Land
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Income Investment Family Home, hunting, etc
Department of EconomicsSource: USDA, Agricultural Prices, Oct. 30, 2009
Department of Economics
Portable Biochar Facilities
Source: Biochar Systems
Department of Economics
Government Policies Biomass Crop Assistance Program
To support production of crops for bioenergy and assist with collection, harvest, storage, and transportation of biomass to conversion facilities
Matching payments$1 for each $1 per ton paid by conversion facility, up to $45
per ton, for 2 years
Water Efficiency via Carbon Harvesting and Restoration (WECHAR) BillWould establish loan guarantees and grants for
biochar projects
Department of Economics
Thank you for your time!
Any questions?