The Economic Viability of Cellulosic Biomass Production On Marginal Land in the Northern Great Lakes Region.

Producing bioenergy feedstocks on non-crop land can largely avoid the food price feedbacks of biomass production on cropland.  The U.S. northern tier grassland-to-forest ecotone offers large areas of marginal land that is not currently cropped.  In this ecological transition zone, the relative profitability of grassy versus woody sources of energy biomass is little studied.  This paper reports an exploratory investment analysis of cellulosic biomass production in the northern Great Lakes region.  It compares two short-rotation tree crops, willow and hybrid poplar, and switchgrass (a native prairie grass) to conventional mixed hay.  Because biomass markets are not yet well developed, this study calculates threshold prices and yields at which biomass crops become at least as profitable as mixed grass hay.  At 2010-2012 prices, none of the cellulosic crops are competitive with the hay baseline system.  The breakeven price of energy biomass ranges from $90-100 per oven-dry Mg^-1, with willow having a higher breakeven price than either switchgrass or poplar.  Breakeven yields are much more variable, due to the high cost of harvesting woody biomass.  At 2010-12 prices, necessary biomass yield increases range from 3.5 fold for switchgrass and willow to over 27 fold for poplar.  While the ratio of input costs to revenue remains relatively constant between the northern and southern Great Lakes regions, the opportunity cost of land increases more quickly than biomass profitability as production moves south into agricultural areas, implying an economic comparative advantage on the marginal land of the northern tier of the Great Lakes region.