posted on Tuesday, April 24, 2012
I recently attended a Biomass Crop Workshop in Creston, IA. I was interested in attending for two reasons. First, our team has developed an application for biomass mapping that takes into account land stewardship and economic factors for converting land use to production of biomass energy crops. Second, I think there is a land use tug of war brewing, which is being driven by competition for land that can be diverted from row crop production or the Conservation Reserve Program (CRP) to either grazing lands or energy crop production.
There are 6.5 million CRP acres expiring in September 2012. The application and signup period for renewal of existing CRP acres just expired. We don't know yet how many acres have been approved for re-enrollment.
Some of the land owners may have decided to put the land back into row crop production. Even with current prices for corn and soybeans that may not be the most profitable decision, since this land is considered "marginal" or it would not have qualified for CRP.
Our nation's beef industry is currently experiencing a low inventory of feeder cattle. The drought in the southern U.S. and diversion to other land uses has reduced the amount of pastureland available to support the cow/calf herds needed for replacement feeders. The nation's cattle feeders are hoping some of the expiring CRP acres can be converted to pastureland for this purpose.
Those who attended the biomass crop workshop learned that there are a growing number of successful biomass conversion facilities. Currently, the focus is on pellets for co-firing in thermal energy applications. However, there is a growing interest in biomass conversion into advanced biofuels. The acres coming out of CRP are generally best suited for raising biomass energy crops because the energy crops tend to provide similar erosion control capability as well as seasonal cover for wildlife.
Switching to the production of energy crops can be expensive. Initial planting costs can be high and the crop typically doesn't reach full production until the third year. Currently there is some financial assistance available through the Biomass Conversion Assistance Program (BCAP). One of the challenges landowners face is making sure they have all of the facts necessary to make a decision that will maximize the productivity of their land while meeting their goals for land stewardship, lifestyle, and income.
In a typical tug of war there is a mud hole waiting for the "losers". In this tug of war the "loser" just switches to the other end of the rope and becomes a winner. I think the biomass industry and the beef industry are closely watching and hoping they can win some of these acres.