How profitable is switchgrass in Illinois, U.S.A. An economic definition of marginal land

Authors: NAMOI, NICTOR - University Of Illinois; Archer, David; ROSENSTOCK, TODD - World Agroforestry Center; JANG, CHUNHWA - University Of Illinois; LIN, CHEN-HSIEN - University Of Illinois; BOE, ARVID - South Dakota State University; LEE, D.K. - University Of Illinois

Submitted to: Grassland Research
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 6/15/2022
Publication Date: 6/15/2022
Citation: Namoi, N., Archer, D.W., Rosenstock, T.S., Jang, C., Lin, C., Boe, A., Lee, D. 2022. How profitable is switchgrass in Illinois, U.S.A. An economic definition of marginal land. Grassland Research. 1(2):111-122. https://doi.org/10.1002/glr2.12017.
DOI: https://doi.org/10.1002/glr2.12017

Interpretive Summary: Decisions on converting land from an existing crop to bioenergy crops are critical for sustainable production of both food and fuels. However, clear criteria to identify land that can be more profitable than growing existing crops is needed. This study seeks to identify land that is “economically marginal”, and thus suited for growing switchgrass. In this case study of an Illinois agricultural field, the profitability of switchgrass, with farmgate prices of $40, $60, or $80 per ton, was compared to corn and soybean. Further, the study also evaluated the profitability of switchgrass based on corn-based yield estimates from the Soil Productivity Index (SPI). Based on a dry-matter yield of 4.7 ton per acre, switchgrass can compete with soybeans only at the high price of $80 per ton, but depending on location, can compete with corn at $60 per ton. Across Illinois, at $80 per ton, all Illinois land with SPI less than 100 and 95% of land under SPI class C (SPI 100-116) is profitable under switchgrass. Switchgrass may not be profitable relative to corn grown in the SPI class A (SPI > 133) and only 7% of Class B (SPI 117-132). These results are useful to crop producers, policy makers, and bioenergy businesses in identifying areas where switchgrass production could be economically viable.

Technical Abstract: Decisions regarding conversion of land from an existing crop to bioenergy crops are critical for sustainable production of both food and fuels. This study seeks to establish criteria for delineating land as “economically marginal”, and thus suited for growing switchgrass. In this case study of an Illinois agricultural field, the profitability of switchgrass, with farmgate prices of $44, $66, or $88 Mg-1, was compared to corn and soybean crop prices. Further, the study also evaluates the profitability of switchgrass when replacing corn-based yield estimates from the Soil Productivity Index (SPI). Based on a dry-matter yield of 10.45 Mg ha-1, switchgrass can compete with soybeans only at the high price of $88 Mg-1, but depending on location, can compete with corn at $66 Mg-1. Across Illinois, at $88 Mg-1, all Illinois land with SPI <100 and 95% of land under SPI class C (SPI 100-116) is profitable under switchgrass. Switchgrass may not be profitable relative to corn grown in the SPI class A (SPI > 133) and only 7% of Class B (SPI 117-132). Further studies need to be conducted to identify how much land can be converted to switchgrass without harming corn production.