Agricultural Residues Dr. Tim Smith Associate Professor, CEM & Bio-based Products Director, Forest...
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Transcript of Agricultural Residues Dr. Tim Smith Associate Professor, CEM & Bio-based Products Director, Forest...
Agricultural Residues
Dr. Tim SmithAssociate Professor, CEM & Bio-based ProductsDirector, Forest Products Management Development InstituteUniversity of Minnesota
BP 3503-5503 – Marketing Bio-based Products
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
The Plan for Today
• Discussion of factors increasing biomass resources from agriculture:
– Crop yields and seed ratios
– Collection Technologies and tillage
– Biomass for fuels/products and secondary processing residues
• Ag. Residues in the Global Panels Industry:
– Wood fiber and Ag. Fiber link
– Wood fiber per capita dilemma
– Growth of Plantation Forests
– Crops for industrial use
– Residues…
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Historical Gas/Crude Oil Prices
• Minnesota gas prices down 21% in past month.
• Crude down 14%.
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Historical Gas/Crude Oil Prices
Bush releases oil from the nation's emergency stockpile
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Wood Procurement – Mill Costs (Metering Ag. Fiber in Paper)
Aspen Pulpwood Stumpage: $28.89
Estimated additional Costs:Production/Harvest Cost $35.00Transportation $0.17/mile; plus $6.00/cord
loading
2002-2003 state stumpage sales of Aspen
Statewide Avg. Price per Cord = $28.89
Miles: 50 100 150 250 350 450 550
Transportation: $ 14.50 $ 23.00 $ 31.50 $ 48.50 $ 65.50 $ 82.50 $ 99.50
Total Est. Mill Cost: $ 78.39 $ 86.89 $ 95.39 $ 112.39 $ 129.39 $ 146.39 $ 163.39
Notes: Stumpage value based on Minnesota DNR data; estimated additional costs generated from talk delivered by Bob DeRoche, Wood Procurement, Stora Enso, April 22, 2004, St. Paul, MN.
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Wood Procurement – Price/Ton of dry fiber
• 1.8 tons of oven-dry wood is required to produce a ton of oven-dry pulp, resulting in total fiber costs of $150 to $313.
Assuming that yeilds drop approximately 10% when using agricultural fiber as the feedstock,
• 1.98 tons of oven-dry agricultural fiber is required to produce the same ton of oven-dry pulp, resulting in an estimated target agricultural fiber costs of $78 to $158 per dry ton.
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Wood Procurement – Price/Ton of dry fiber
• Is adequate straw surplus available within reasonable transportation distances to Minnesota pulp mills?
• Can this resources be delivered to Minnesota pulp mills at a price below its highest cost equivalent fiber - $158 per dry ton.
Two Primary Questions
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Minnesota in pretty good shape…
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Agricultural Straw Resource
Million mt
Wheat, barley, oats (100%)a 118.2
Soil conservation (50%) 59.1
Agricultural uses (35%) 41.4
Surplus (15%) 17.7
a Assuming 1 mt of straw for each mt of grain produced
(Bowyer 2001)
Estimated Straw Surplus in North America, 1999
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Agricultural Straw Resource
High Straw Concentration
12
1
2
3
3
44
55
6
6
7
7
8
8
Blandin (UPM-K) 550 59.42
Boise Corp. 970 104.80
Cerainteed 100 10.80
G-P, Duluth 350 37.82
I-P 370 39.98
G-P, Bemidji 100 10.80
Sappi 1150 124.25
Stora-Enso 440 47.54
Annual Pot. Demand 435.41
Equivalent to 485,304 cords of green Aspen.
DailyProd.(tonsd)
15%Fiber
(m tonsd)
≈100 miles
Note: 15% fiber requirement based on Sappi procurement data.
(Bowyer 2001)
$36/ton, + trans.
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Potential Fiber Cost Savings
Ag. FiberCost (dry ton) $110 $130 $150 $170
$60 $5,000,000 $7,000,000 $9,000,000 $11,000,000$70 $4,000,000 $6,000,000 $8,000,000 $10,000,000$80 $3,000,000 $5,000,000 $7,000,000 $9,000,000$90 $2,000,000 $4,000,000 $6,000,000 $8,000,000
Most Expensive Current Wood Fiber Cost (Dry Ton Basis)
• With a metering strategy, the mill doesn’t replace wood fiber at its average cost but at its highest fiber costs.
• For a mill purchasing 100,000 tons of Ag. fiber, annually; potential savings of $2 to $11 million are not out of the question.
• On average, potential savings to the Minnesota Pulp & Paper Industry of $20 million, annually.
Estimated Savings for a Mill purchasing 100,000 tons of Agricultural Fiber
| UNIVERSITY OF MINNESOTA, Department of Bio-based Products
BP 3503-5503: MARKETING BIO-BASED PRODUCTS
© T. M. Smith, 2005
Additional Issues – the short list…
• Straw Storage and preparation
• Additional material handling capital/operations costs
• Impact on the farmer (soil conservation, opportunity costs, etc.)
• Impact on forest resource, price elasticities