Corn or switchgrass? Land optimization for bioenergy and feedstock production in Nebraska

Authors: AFI, MAROUA - University Of Nebraska; PARSON, JAY - University Of Nebraska; Ramirez, Salvador; REDFEARN, DAREN - University Of Nebraska; Schmer, Marty; Jin, Virginia; Mitchell, Robert - Rob

Submitted to: Meeting Abstract
Publication Type: Abstract Only
Publication Acceptance Date: 2/16/2024
Publication Date: N/A
Citation: N/A

Interpretive Summary:

Technical Abstract: The increasing global demand for energy has urged efforts to investigate sustainable alternatives to traditional fossil fuel-based energy sources. One promising solution lies in the utilization of renewable energy derived from biomass feedstocks such as switchgrass. Switchgrass is a native perennial grass species that is abundant in North America, it has various environmental and socio-economic advantages. It is grown in different climatic conditions across the United States, with minimal requirements of inputs, such as fertilizers, and it displays high resilience to common pests and diseases. Switchgrass is a versatile and resilient crop which makes is an appealing alternative for biomass used in bioenergy production. Corn may be preferred over switchgrass due to its familiarity, established market demand, higher yield potential, existing infrastructure, and lower risk. The primary objective of this paper is to investigate the optimal allocation of land between corn and switchgrass production for bioenergy and livestock feed in Nebraska. We aim to estimate the output elasticities to understand the effect of changes in input prices or quantities on the desired output. Additionally, we aim to calculate inputs elasticities to identify possible substitution and complementarities between different inputs. Overall, this research aims to provide valuable insights into the optimal land use strategies for sustainable agriculture and bioenergy production. The methodology that we will use in this study, is based on a cost minimization approach. The cost minimization problem will be presented by a cost function. For purposes of estimation, we choose a translog cost function. We will use empirical data on input prices, output prices, and production quantities from current and past field trials in Eastern and Western Nebraska. Inputs are land, capital, and labor. We expect that our analysis will provide an understanding of the optimal allocation of resources between corn and switchgrass production for bioenergy and livestock feed. The estimated output elasticities of land, labor, and capital will indicate how corn and switchgrass production responds to changes in input quantities, which will determine the optimal resource allocation decisions. Additionally, the input elasticities will reveal the degree of input substitution or complementarity in the production process, that will result in efficiency enhancements. Moreover, the cross-partial elasticities will explain input substitution patterns, facilitating strategic planning for resource utilization. Ultimately, the derived marginal costs will enhance informed decision-making about production strategies and pricing.