Final Report for LNC12-346
Project Information
The overall project goal was to evaluate the potential of agroforestry plantings in the Great Plains to provide bio-based feedstock, income, investment, and carbon sequestration opportunities. An assessment of land capability and landuse indicated that 12.4% of the study area (ND, SD, NE, & KS) would be considered marginal for crop production using criteria developed specifically for this project and that 68% of the identified land is currently used for grazing or hay production. Five focus group meetings with a total of 35 farmers and ranchers responsible for on-farm decisions and a survey of over 450 farm operators were used to obtain feedback on perceptions of and interest in woody feedstock production. The tree growth and biomass estimates component of the project were not completed as planned so improved site- and species- specific estimates of feedstock production potential were not obtained. The sustainability of the tree windbreaks as assessed through soil quality assessment at 8 representative plantings with common soils and tree species of the region indicated that tree establishment generally increased the amount of soil organic carbon (6 of 8 locations) and improved overall soil quality.
The study results indicate considerable interest in the use of trees for biomass production and other concomitant land-use benefits. Sixty-one percent of the farmers and ranchers surveyed expressed some level of interest in producing woody biomass, with 10% of respondents reporting they were “very interested”. There was a broad general interest in the establishment and management of trees for multifunctional outcomes within participants’ farm/ranch systems (environmental and production). Farmers and ranchers noted the potential utilitarian benefits of woody systems largely in the context of utilizing woody systems to enhance profit potential of their existing cropping systems or as a way to expand profit potential through income diversification (e.g., selling biomass). Currently, markets for woody biomass in the Northern Great Plains do not broadly exist. As such, biomass systems developed primarily as a crop would not be highly attractive to profit-oriented farmers/landowners. In the context of integrating trees into agricultural landscapes for conservation reasons (e.g., windbreaks, buffers), biomass production is a complimentary endeavor, particularly as bioenergy markets emerge regionally. In commodity-oriented agricultural landscapes a major roadblock for the adoption of tree-based practices or plantations is decidedly pragmatic; the high (real or perceived) opportunity costs of growing trees relative to typical commodity production.
In order for farmers/ranchers to participate as suppliers of woody biomass, they require additional information in order to assess the reality of the opportunity within the context of their existing agricultural system. Information needs expressed by participants in all focus groups fit into three broad categories (1) technical information relevant to the establishment, growth, harvesting, and marketing of woody biomass, (2) the environmental sustainability of producing biomass on marginal land, and (3) the economic sustainability of producing a biomass crop within their farm system.
Introduction:
The Energy Independence and Security Act established a Renewable Fuel Standard (RFS) mandating 36 billion gallons of biofuels be produced annually in the U.S. by 2022. Of this amount, 44.4% of the RFS is to be based on cellulosic feedstocks. Agroforestry systems have the synergistic power to diversify food, fiber, fuel, and ecosystem service delivery systems as well as to diversify on-farm income streams for farmers and ranchers in the North Central Region (NCR). But to use agroforestry practices to meet the RFS goals requires improved assessment of feedstock supplies, concerted and coordinated engagement from farmer to regional scales, and validation of soil and environmental impacts. One strategy for addressing these important challenges is to utilize regionally appropriate perennial plants, including short-rotation woody species, on marginal agricultural lands. This strategy reduces the impact on food production (i.e., the “food vs. fuel” debate) and is likely to also provide environmental quality benefits to fragile or degraded lands.
Land cover data from 2009 indicates that 53.2% of the four Great Plains states in the NCR is in grass cover (Fig. 1 Final Report Fig 1). Major crops include corn (9.7%), soybean (8.8%), winter wheat (6.2%), and spring wheat (4.4%). These states also have an extended history of agroforestry plantings beginning with the Prairie States Forestry Project (PSFP) of the 1930s when over 210 million trees were planted as windbreaks on approximately 237,000 acres in North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, and Texas (U.S. Forest Service, 1935; Droze, 1977). In recent decades, significant numbers of multi-species riparian buffers have also been planted in the region. The 2009 land cover data indicated that 2.9% of the four state area was now in forest cover. There are distinct advantages of agroforestry plantings as a source of bio-based feedstocks including accessibility, equipment availability for biomass harvesting and transport, and rural roads and cooperatives to facilitate supply logistics. However, there are also important gaps in our knowledge about these systems that must be answered before landowner and community investments in biofuel production are likely to proceed. Accurately quantifying the amount of biomass in trees is vital for investment and business planning decisions, but is currently a vague process. Clarifying what we mean by ‘marginal lands’ and being able to recommend appropriate site characteristics (soil and climate) for future plantings is critical knowledge for environmental sustainability.
One of our overall project goals is to fully integrate human dimensions into the analysis. We completed a comprehensive financial and land-user based socio-economic assessment that compliments field results with full-cost accounting of, and an evaluation of farm operator interest in, potential woody biomass systems established on “marginal” farmland within our study region. Furthermore, we integrate an assessment of land management agency staff perspectives concerning woody biomass systems given their importance in land-use policy and programs and operator decision making. The combined socio-economic approach addresses gaps in understanding the complex factors that impact marginal land availability and opportunities for attracting farm operator commitment towards supplying bioenergy feedstock in regions less suitable for grain ethanol production.
Farm operator decisions regarding woody systems on marginal land are a function of how they weigh financial goals with other land-use goals (e.g., environmental and/or social, family) and the degree to which land-use goals interact to create or mitigate risk (Chouinard et al., 2008). Various constraints on self-efficacy, such as available capital, land tenure, and knowledge, also strongly mediate decision-making (Tyndall, 2009). Furthermore, land-use decisions in agricultural regions are often influenced by the availability of institutional support through technical and financial assistance programs. Land management field agents, such as state Department of Natural Resources, county NRCS, and Cooperative Extension staff, serve as the intermediaries between policy priorities/funding and farmers who wish to adopt new and potentially risky land-use options. It is those individuals in outreach positions who are often the most effective “change-agents” (Rogers, 2003) – individuals who directly disseminate (or otherwise market) new knowledge, land-use practices and alternative means for managing land-use risk (Lemke et al., 2010; Kroeger and Casey, 2007). More specifically, research has shown that a key to farmer adoption of production processes that jointly produce environmental services is the availability of technical support and analysis, working demonstrations, and opportunities to network with other farm operators (Lemke et al., 2010; Petrehn, 2011).
References.
Chouinard, H.H., Paterson, T., Wandschneider, P.R., and Ohler, A.M. 2008. Will farmers trade profits for stewardship? Heterogeneous motivations for farm practice selection. Land Economics. 8(1):66-82.
Droze, W.H. 1977. Trees, Prairies, and People – A History of Tree Planting in the Plains States. Texas Woman’s University, Denton.
Lemke, A.M., Lindenbaum, T.T., Perry, W.L., Herbert, M.E., Tear, T.H., and Herkert, J.R. 2010. Effects of outreach on the awareness and adoption of conservation practices by farmers in two agricultural watersheds of the Mackinaw River, Illinois. Journal of Soil and Water Conservation 65:304-315.
Petrehn, M.R. 2011. (unpublished MS Thesis) Beef, Birds or Both? The Social Landscape of Grazing Management in an Iowa Bird Conservation Area. MS Thesis, Graduate Program in Sustainable Agriculture, Iowa State University. Spring 2011.
Rogers, E.M. 2003. Diffusion of Innovations. 5th Ed. Free Press, New York. 551 pp.
Tyndall, J.C. 2009. Characterizing pork producer demand for shelterbelts to mitigate odor: an Iowa case study. Agroforestry Systems. 77(3):205-221.
U.S. Forest Service. 1935. Possibilities of Shelterbelt Planting in the Plains Region. Lake States Forest Experiment Station Special Publication. 201 pp.
The overall project goal is to evaluate the potential of agroforestry plantings in the Great Plains to provide bio-based feedstock, income, investment, and carbon sequestration opportunities.
Specific project objectives are: 1) To identify farm operator and land management professional perceptions of agroforestry plantings on marginal lands as a practice for woody biomass production for bioenergy and obstacles for greater adoption of this practice, 2) develop a field-level financial appraisal to identify the potential profitability of various “marginal land woody systems”, 3) utilize an available land productivity interpretation tool to quantify the extent and distribution of marginal agricultural lands in the study area, 4) test and refine current tree biomass estimation equations to improve biomass estimates for trees in agroforestry plantings, and 5) measure soil organic carbon content beneath existing agroforestry plantings and compare with model predictions to enable regional estimates of potential carbon sequestration with agroforestry practices.
Cooperators
Research
Identification of Marginal Agricultural Lands. One overriding principle of this study is to avoid using lands normally used for growing food for growing fuel. Thus, lands that are marginal for food production yet are still fairly productive were identified. Two tools were used to appraise the soils of the region. First, the National Commodity Crop Productivity Index (NCCPI), a method developed by NRCS soil scientists to array the soils of the United States on the basis of their capacity to foster crop production, was used to locate productive soils. This model uses the soil survey database (SSURGO) to compare soil, climate, and landscape characteristics for each soil against an estimated relationship of these attributes to yield. The model produces ratings that are more or less independent of how the soils should be managed. The scale ranges from 0 to 1.0, with 1.0 being the most productive. A rating below 0.4 is considered “marginal” in terms of productivity.
Second, the Land Capability Classification (LCC) system, which is used by the NRCS to group soils in terms of their similarity for management to avoid soil health degradation when growing commonly cultivated crops, was used to identify soils that are “marginal” with respect to the risks and costs involved when managing these soils. It uses soil properties, landscape features, and climatic characteristics to determine the hazards and limitations that restrict the soil for crop production that range from I (slight limitations) to VIII (cannot be used for commercial plant production). Each class includes many kinds of soils that are similar only with respect to the degree of limitation for agricultural purposes. Soils in LCC class IV and higher are considered “marginal” for management purposes. Generalizations about the suitability of certain crops, projected yields, or expected profit margins cannot be made based on the land capability classification alone.
Focus Groups on Land Use. We conducted five focus groups total, one per state in Kansas, Nebraska, and North Dakota, and two in South Dakota between August 6, 2013 and April 10, 2014. Participants included individuals who were responsible for on-farm decision-making. Farmers and ranchers were queried on the conditions that constitute marginality relative to their land base and associated management strategies within their farm system, allowing their self-determined definitions to provide context for subsequent discussion. We then explored farmer and rancher knowledge, attitudes, and beliefs associated with agroforestry in general, and woody biomass specifically.
Farm Operator Survey. The target population for this component consisted of farmers and ranchers in four states in the Northern Great Plains region: Kansas, Nebraska, North Dakota and South Dakota. The sample frame consisted of a list of farmers and ranchers purchased from Survey Sampling International (SSI). The main sample included 1,600 farmers/ranchers (400 from each state) with a replicate sample of 400 (100 from each state), for a total sample of 2000. The SSI sampling frame is compiled primarily from records of government farm program participants obtained from the USDA National Agricultural Statistics Service and Farm Services Agency. Data collection was facilitated by Iowa State University’s Survey and Behavioral Research Services (SBRS). Data collection took place from January 20, 2014 through March 12, 2014. The project received approval prior to data collection from the Iowa State University Institutional Review Board (IRB).
Windbreak Tree Biomass. NOTE: DR. RICK HALL PASSED AWAY IN SEPTEMBER 2016. THIS SECTION OF THE REPORT IS INCOMPLETE AS IT ONLY INCLUDES THE PROGRESS HE HAD MADE ON THE TREE BIOMASS ANALYSIS AT THE TIME OF HIS DEATH. Eight tree windbreak sites were identified and sampled in the summer of 2015. Table 1 Final Report Table 1 summarizes the general site characteristics. Selection of sampling sites was accomplished through a combination of identifying areas with extensive historical tree windbreak plantings and discussions with local soil and water conservation district, Natural Resources Conservation Service (NRCS), and state forestry agency personnel. Only then were landowners contacted and permission requested for site access.
Of the eight windbreak sites used in the main project, the owner of two sites would not allow any trees to be cut at all. Another three sites had significant limitations on what was available. One site owner placed a limit of 3 ash trees as all that could be harvested, which is not enough for producing a reliable regression equation. Another site under the management of the U.S. Forest Service had old Ponderosa Pine and would have allowed only limited removals to thin the windbreak, meaning only poor quality trees could be destructively analyzed.
On July 21-23, 2015 Dr. Hall made a trip to visit the four remaining sites with possibilities for fitting the study criteria. One site had an impressive osage orange windbreak that was over 90 years old. On further inspection it was obvious that some of the trees were re-sprouts of the original planting. It was also clear that most of the trees were too big and two armed with thorns to handle with detailed measurements of branches and bole. Two sites in Nebraska had red cedar windbreaks where essentially all the trees were available for harvest. The older site at the Mead Farm was a multispecies windbreak that also included Austrian Pine and Green Ash. It was starting to breakup and every tree seemed to have its own unique form and surrounding competition or lack thereof.
Fortunately, a 20+ year old red cedar site near Stromsburg was entirely available for harvest. The remaining site at Marquette, KS has a number of Angiosperm tree species that are about 29 years old. The most promising and somewhat unique species is a cultivar of a hybrid red x silver maple (Acer freemanii). As a cultivar it has less phenotypic variation and should yield a good regression equation to predict biomass. It also has commercial value as an ornamental tree, so a windbreak owner could plant it on a closer spacing and thin by removing trees with a large mechanical tree spade. That might cover the cost of establishing the windbreak. The current plan is to harvest trees from that stand in March, 2016.
The Stromsburg red cedar windbreak consisted of two rows running east-west. The row to the south had significant damage from heavy equipment and the storage of round bales close to the tree boles. The north row was in much better shape and we were able to harvest 18 trees and separate the material in stem segments, live and dead branches, and stem “cookies” for image analysis of stem form. The image analysis and dry weight determinations have not been completed, awaiting equipment availability. The samples are in cold storage.
Tree Windbreak Effects on Soil Properties. After site selection, four expeditions were organized to collect soil samples at both sites in each state during the same visit in the summer of 2015. At each site a soil pit to a depth of ~5’ was dug by hand or with a backhoe inside the tree planting and in the adjacent cropped area, which included cultivated fields, alfalfa, grass hay or pasture. Soil samples were collected from the three walls of the soil pit and from two hand auger holes adjacent to each pit. Figure 2 Final Report Fig 2 shows examples of the soil pits and an NRCS soil scientist with student assistants describing the soil profile.
Over 600 soil samples were collected for analysis. Samples were transported back to Ames and processed for the different analytical procedures. Analyses completed include total, organic, and inorganic soil carbon, total nitrogen, pH, soil texture, particulate organic matter, stable carbon isotopic signature (13C), water stable aggregates, saturated hydraulic conductivity (3 sites only), and bulk density.
Identification of Marginal Agricultural Lands. The use of soils that are marginal for crop production purposes yet deemed suitable for tree growth were delineated for the four states of interest. The distribution of soils that are placed into non-irrigated LCC classes IV, V, VI, and VII, are susceptible to erosion (subclass e), and have an NCCPI value between 0.25 and 0.75 were delineated and are shown in Fig. 3 Final Report Fig 3. This assessment indicated that 12.4% of the study area would be considered marginal using these criteria and that 68% of the identified land is currently used for grazing or hay.
Focus Groups on Land Use. In total, 35 farmers and ranchers participated in the focus groups. There are three interrelated ways that NGP farmers and ranchers perceive marginal agricultural land, including biophysical factors (such as slope, poor yields), economic/management drivers of marginality, and marginality relative to other land-use options. Overall, there is a broad general interest in the establishment and management of trees for multifunctional outcomes within participants’ farm/ranch systems (environmental and production). Farmers and ranchers noted the potential utilitarian benefits of woody systems largely in the context of utilizing woody systems to enhance profit potential of their existing cropping systems or as a way to expand profit potential through income diversification (e.g., selling biomass). They additionally noted environmental and cultural benefits offered by trees (e.g., water quality benefits, habitat, carbon storage, etc.). Participants within the South Dakota and Kansas focus groups noted the biophysical difficulty of growing trees within the western portion of their states as a major barrier to utilizing trees for biomass or any purpose within their farm/ranch system. Conversely, farmers and ranchers in all focus groups noted problems resulting from undersireable “weed trees”.
Participants generally had two orientations towards interest in supplying biomass; some farmers expressing that their interest in a multifunctional system is tempered by financial need, while others noted a deliberate weighing of perceived trade-offs between financial benefits and non-monetary benefits afforded by woody systems. Participants in Kansas reflected positive attitudes towards the use of government programs to achieve farm system goals, while discussions in Nebraska, South Dakota, and North Dakota resulted in a rich discussion regarding the often-negative consequences of participating in a government program. Some of the reluctance was tied to a general aversion to government programs. Reasons cited ranged from general mistrust of the government, the quantity of paperwork and other “red tape” associated with state and federal government programs; to more systemic consequences such as exploring who ultimately benefits from land enrolled in a conservation program. Interestingly, it was noted that various incentive programs might well encourage innovation in the context of land use, thereby facilitating adoption of woody biomass.
In order for farmers/ranchers to participate as suppliers of woody biomass, they require additional information in order to assess the reality of the opportunity within the context of their existing agricultural system. Information needs expressed by participants in all focus groups fit into three broad categories (1) technical information relevant to the establishment, growth, harvesting, and marketing of woody biomass, (2) the environmental sustainability of producing biomass on marginal land, and (3) the economic sustainability of producing a biomass crop within their farm system.
Farm Operator Survey. A total of 454 interviews were completed with farmers and ranchers in the sample. Response rates are as follows: Kansas 32%, Nebraska 33%, North Dakota 27%, and South Dakota 31% with an overall response rate of 31%. Observations were stratified based on state and farm operation type as classified by the North American Industry Classification System (NAICS) and were weighted based upon each stratum’s sampling probability; calculated using estimated strata population size and adjusted based upon non-response rates. Along with descriptive statistics and group analysis, an ordered probit regression was used to examine influential factors on a farmer’s level of interest in growing and selling woody biomass.
Overall there appears to be considerable interest within the NGP region in the use of trees for biomass production and other concomitant land-use benefits. Sixty-one percent of the farmers and ranchers surveyed expressed some level of interest in producing woody biomass, with 10% of respondents reporting they were “very interested”. Part-time farmers in our survey were more likely to be interested in woody biomass production as were younger farmers. Farmers who had completed college were more likely to be interested in woody biomass production. Farm size was influential with producers in charge of larger farms, being more interested in producing bioenergy crops (particularly those producers specializing in wheat production); though as the amount of cropland dedicated to corn production increased, interest in bioenergy tree systems is reduced perhaps due to higher opportunity costs associated with higher quality farmland often utilized for corn production in the region. Land tenure was also a factor with those who rent more farmland then they own expressing a higher interest in woody biomass (though it is not known if there is an interest in using rented land for woody biomass production). Farmers and ranchers who reported more resource concerns (e.g., water based, wind, streambank erosion) on their land and/or have what they believe to be a significant amount of marginal land were more likely to report a higher interest in establishing woody biomass systems on their farms. Farmers and ranchers who reported a higher willingness to accept “risk” (self-defined) also have increased interest in producing biomass compared to those who self-reported as less willing to take on risk.
As factors that may well mitigate various types of risk, farmers who believe that a woody biomass system would be compatible with their existing farm/ranch production systems and who rank the importance of various tree related benefits (particularly if they believe that trees bring or enhance recreational opportunities and carbon) have a higher interest level in producing woody biomass. Unsurprisingly, farmers and ranchers who more strongly agree that woody biomass markets will expand and that demand for biomass use will increase greatly over the next few years expressed a higher level of interest. Likewise, respondents who are comfortable with the periodic revenue timeframe involved with short rotation woody systems are more interested. Finally it was shown that direct experience with woody biomass (e.g., for livestock use, firewood production) or who have planted trees for conservation incrementally increases interest in woody biomass as an energy crop.
While broad general interest in woody biomass appears strong enough to be suggestive of latent market capacity at least in the context of woody materials being a niche feedstock, there was a fairly low overall knowledge base regarding woody biomass systems (production and marketing) as well as limited collective direct experience in managing trees for biomass (for any purpose). In order for farmers to be more comfortable in entering emergent biomass markets a number of policy-oriented actions would be facilatory:
- Technical information highlighting ways biomass plantings can be targeted to fit within and compliment existing environmental and production goals.
- Continued expansion of regional policy tools such as the USDA’s Biomass Crop Assistance Program which is designed to incentivize a system of tree establishment for biomass production.
- Additional environmental subsidies and emerging markets for ecosystem services have been noted for their potential role in supplementing low market prices for perennial feedstocks, such as through payments for carbon storage and sequestration.
- Finally, programmatic efforts to improve farmer self-efficacy through technical assistance, outreach conferences, and field-based workshops.
Windbreak Tree Biomass. NOTE: DR. RICK HALL PASSED AWAY IN SEPTEMBER 2016. THIS SECTION OF THE REPORT IS INCOMPLETE AS IT ONLY INCLUDES THE PROGRESS HE HAD MADE ON THE TREE BIOMASS ANALYSIS AT THE TIME OF HIS DEATH.
Table 2 Final Report Table 2 shows averages and standard deviations for height and fresh weights of the stems from the trees harvested at the Stromsburg site. The windbreak owner wanted high stumps left to make it easier for the total removal he had planned. We left a 65 cm stump that is included in the height column. A conservative estimate for the un-harvested biomass in the stump was determined from the average weight for the next 65 cm of stem; that amounts to 14.8 + 3.5 kg of fresh weight. The rot resistance of red cedar accounts for the large amount of dead branches that would still be a part of the harvestable biomass and their drier status would be an advantage if the wood is used in direct combustion or pyrolysis systems.
Tree Windbreak Effects on Soil Properties. Soil organic carbon (SOC) was the primary focus of the soil sampling and analysis although several other parameters were measured including bulk density, saturated hydraulic conductivity (3 locations), particle size distribution, water stable aggregates, particulate organic matter, pH in water and KCl, total nitrogen, inorganic carbon, and stable carbon isotopic signature (13C). The additional parameters are included to provide a more complete interpretation of tree planting effects and of the overall soil health. The sampling sites were selected to be representative of marginal soils and typical tree plantings of the area. Due to the wide geographic distribution, the soils and tree species sampled are both quite diverse (Table 1), which makes broad interpretation of the soil analytical results challenging. Nonetheless, some consistent trends were apparent.
Figure 4 Final Report Fig 4 presents the SOC stocks to 1.25 m depth for the crop and tree soils at all 8 locations. Numerical values above the bars indicate differences between the tree and crop soils with green values indicating greater SOC beneath the trees. Error bars indicate 1 standard error from the mean of the soil pit and two auger samples. SOC stocks beneath the tree planting were on average 2.9 kg m-2 greater than the adjacent pastures, hay or row crop fields. However, 2 sites had lower SOC beneath tree plantings and the differences ranged from +10.5 to -5.0 kg m-2. Some of this variation can be attributed to site history, site management, and age of trees. Cultivation between tree rows for weed control during the first several years after planting can result in redistribution of organic matter rich topsoil (i.e. mounding in the tree rows) that complicates soil sampling procedures. Another explanation can be related to sample site selection. The same procedures were used at all locations, however, the Mead site showed an unexpected lower SOC content beneath the windbreak. NRCS soil scientists describing the tree and crop pits at this location mapped the soils as two different series even though the crop pit was only 65' from the tree windbreak. Thus, spatial variation in soil properties in spite of a visually uniform soil surface may have produced anomalous results at this location.
Some sites offer special perspectives on tree planting effects. Data are from the McPherson site compare SOC beneath an osage orange hedgerow (Tree) with the adjacent row crop field (Crop) on a Ladysmith silty clay loam soil. This site is unique as the hedgerow was planted into virgin prairie, thus the soil has never been cultivated. There is a dramatic difference in SOC that can be attributed to loss of soil organic matter during over a century of small grain and row crop production. The landowner, due to concern for what he felt was the loss of soil quality, stopped tilling this field three years ago and now practices no-tillage on his farm. The data suggest that ~ ½ of the original SOC through the entire soil profile has been lost due to cropping and cultivation.
The Marquette and Corsica East sites were both single fields that were simultaneously planted to trees or grass during the same year. At Marquette, the differences in SOC stock between the black locust trees and reconstructed prairie were insignificant 29 years after planting. By contrast, at the Corsica East site, SOC stocks below the honey locust were significantly lower that the alfalfa/grass hay field 15 years after planting. Soil disturbance during tree planting is known to reduce SOC and young trees do not have significant biomass in their early years to support restoration of or increasing the amount of SOC. Low rainfall at Corsica may also result in slower tree growth that produced fewer roots and less litterfall for decomposition and transformation into SOC.
Farmers and ranchers can use findings of this project to more accurately assess the income and conservation benefits and risks for investing in renovation (selective tree harvesting and replanting) of existing tree plantings or in new agroforestry plantings. Conservation professionals will be able to make recommendations based on local data that supports innovatively designed land uses for income and conservation that are not solely dependent on government payments. Rural development and industry leaders assessing investment opportunities for future energy needs will benefit from regional analysis of perennial-based cellulosic feedstock potential.
Feedback on agroforestry adoption barriers and opportunities from the survey and focus groups were used to adapt the biomass, soil organic carbon, and economic components of the project to address concerns or interests raised. Such feedback is instrumental in prioritizing activities and developing effective outreach materials that resource professionals want and can use. In addition to disseminating information back to project stakeholders and participants, we continue to engage associated groups such as the Association for Temperate Agroforestry, MidAmerica Agroforestry Working Group, the National Agroforestry Center, and the Leopold Center for Sustainable Agriculture.
Economic Analysis
Financial Analysis of Potential Profitability. A financial analysis was performed to assess baseline cost and various breakeven parameters for woody biomass systems established in the US Northern Great Plains region. Specifically we have estimated potential profitability of various marginal land woody systems via the following steps: (i) constructed capital budgets for hypothetical biomass systems over a range of expected rotation ages; (ii) calculated annualized costs across systems; and (iii) calculated breakeven prices and required yield for woody systems relative to regionally available “opportunity options” (accounting for mutually exclusive opportunity costs in land use). Below we present a case-study financial analysis of the potential for biomass systems in the Northern Great Plains.
Capital Budgets for Hypothetical Biomass Systems. Woody biomass crop establishment and management scenarios were used to define capital budgets and determine potential cashflows. These scenarios were developed based on recent biomass related research and expert recommendations for the region (James et al. 2010; Manatt et al. 2013; Hall pers. comm. 2016). Woody biomass production data from the region (e.g., Geyer 1989; Geyer 2006) were consulted for assessment verification. Standard discounted cashflow analysis was used to determine the present value costs of establishing and harvesting short rotation woody crop system.
In general, total costs for biomass systems designed for the Northern Great Plains are highly variable and site specific. Costs are strongly influenced by climate/environmental conditions that mediate site preparation need and establishment requirements (e.g., weed pressure, fertilization) (Geyer 1993), density of plantings, availability of regionally appropriate nursery stock, and opportunity costs. Still, there are consistently six main categories of expenses associated with biomass production: 1) Site prep costs; 2) tree stock and establishment costs; 3) long-term maintenance costs; 4) harvesting and basic storage costs; 5) land rent (opportunity costs); and 6) any post final-rotation land disbursement costs. For this assessment cost and return data was collected from recent regional custom rate data sources and transaction evidence surveys. Exploratory biomass prices were guided by the USDA Biomass Crop Assistance Program (BCAP) payments and regional markets for pulpwood and variously scaled from that baseline.
In this analysis the total present value cost varies by rotation and total planning horizon, discount rate used as well as with the opportunity cost of land. Regional land rent for 1) non-irrigated crop-land, and 2) pasture was used as the proxy for foregone opportunity. The baseline scenario presented here involves five, three-year rotations (justified based on general yield expectations as per Geyer 1989 and Geyer 2006). The average total present value cost of a short rotation woody biomass system established and managed on row-crop land across a 15-yr period using a real 4% discount rate is $5,414 per acre or annualized, $487 per acre per year; established on pasture land, the total present value cost at 4% is $4,947 per acre or $445 per acre per year. Because a significant amount of the total cost is upfront, different rotation ages (e.g., a four year rotation over 20 years) do not appreciably change the total present value costs of establishing a woody biomass system. Table 3 Table 3 displays the present value costs of this woody biomass scenario (involving five, three-year rotations) across a range of discount rates.
With regard to establishment, the single most costly element is the cost of planting stock. Based on field trials from Kansas (e.g., Geyer 1989; Geyer 2006), this cost assessment assumed that fast growing, high yielding species such as Silver maple (Acer saccharinum), Populous sp. (hybrid), Siberian elm (Ulmus pumila), and Black locust (Robinia pseudoacacia) would be representative of likely species utilized in this context, yet also suitable for conservation purposes such as field windbreaks. Based on current regional nursery prices, a mid-level initial density (4’ x 4’; 2,723 seedlings per acre) would cost a little over $3,000 per acre. This represents between 56% and 65% of the total present value costs (depending on the cost scenarios presented in Table 3). Management largely entails harvesting and initial material hauling (for temporary onsite storage). As such, harvesting per rotation age using a forage harvester is the largest management cost at just over $200 per acre per rotation (times the total number of rotations). This represents between 12% and 15% of total present value costs. Annual land rent averages about 12% of total cost (for row-crop land) and about 5% for pasture land. Itemized establishment, management and harvest costs are summarized in Table 4 Final Report Table 4 .
Breakeven Prices and Required Yield for Short Rotation Woody Biomass Systems. Markets do not broadly exist for woody biomass as an energy feedstock, therefore any specific assumed price needs to be contextualized. As noted in Kells and Swinton (2014), in order for biomass crops to become attractive as a way to expand a farmers/landowners land use portfolio, biomass crops should generate net income equal to or greater than the current land use option (e.g., crops or rent) plus cover the costs of the new cropping system. To determine the price at which woody biomass from a short rotation system would become profitable, a baseline breakeven price and yield was calculated. In a biomass context, breakeven occurs at the biomass price point and required yield necessary for the biomass to cover its direct costs of production, and also the opportunity cost of land use (which in this case study is foregone land rent). We applied the methodology utilized by James et al. (2010) to determine general breakeven biomass prices relative to potential yields in a case study 3-year rotation across a 15-year planning horizon.
Net revenues were estimated across a range of potential yields, biomass prices, and production costs (mediated by differing opportunity costs of land) to determine various profit divides (Table 5 Final Report Table 5 displays example profitability levels across a range of yields, prices, and production costs). In general, at higher yield levels, profit occurs at lower prices and vice versa. For example, when low opportunity costs are involved, a woody biomass system could breakeven or be profitable (covering/exceeding the costs of the woody system and the opportunity cost) at prices as low as $20 per dry ton per acre, yet yields would have to exceed 21 tons per acre per rotation. At yields of 9 to 18 tons per acre per rotation, biomass prices would have to be at least $35 per dry ton.
Gross revenue potential is a function of market pricing and expected yields. As noted just above, biomass markets do not broadly exist in this region. Nevertheless, there are some reference prices for low value wood materials. Regional pulpwood stumpage for example runs about $40 per ton (based on a composite of hardwood species; MN DNR, 2015). The Northern Great Plains also has BCAP project sites (in Kansas). The BCAP program will price match for biomass material up to $45 per ton; though it should be recognized this is a subsidized market with limited entry. So in short, the prices displayed in Table 5 are within a range of theoretically available prices for woody materials.
In terms of yield potential, throughout the Great Plains region there is strong bio-physical potential for woody biomass production, though yields will vary considerably across suitable species due to regional differences in precipitation (timing and quantity) as well as length of periods between storms and number of frost-free days in spring (Geyer 1993). Because of this, theoretical biomass yield potential is higher in the eastern parts of Northern Great Plains States (Geyer 1993). Nevertheless, woody biomass trials in the Central Great Plains suggest high potential tonnage across a variety of hardwood species, e.g., annual yield of 1.78 -7.57 oven-dry weight tons per acre resulted after several cuts for Acer spp., Ulnus spp., Populous spp., Robinia, and Catalpa (Geyer 2006). Other trials featuring states in the NGP demonstrated Populous spp., yields as high as 5 tons per acre per year by age 7 years (Netzer et al. 2002). Perlack et al. (2011) as part of a national biomass inventory, also note significant potential of woody crops in the NGP, yet they also note generally lower yield potential and incrementally higher production costs relative to other regions. It should be noted that total yield across a particular planning horizon is further mediated by coppicing dynamics and mortality issues, both of which will vary from site to site (Geyer 1989).
General Note on Woody Biomass Investment Risk and Financial Viability in the Northern Great Plains Region. At the moment, markets for woody biomass in the Northern Great Plains do not broadly exist. As such, biomass systems developed primarily as a crop would not be attractive to profit oriented farmers/landowners. Yet in the context of integrating trees into agricultural landscapes for conservation reasons (e.g., windbreaks, buffers), biomass production is a complimentary endeavor, particularly as bioenergy markets emerge regionally.
In commodity-oriented agricultural landscapes a major roadblock for the adoption of tree-based practices or plantations is decidedly pragmatic; the high (real or perceived) opportunity costs of growing trees relative to typical commodity production (e.g., Secchi et al. 2008; James et al. 2010; Manatt et al. 2013). Thus, in regions where there are comparatively lower land values the potential for expanded integration of trees into the farming landscape appears stronger (Gelfand et al. 2013). At field scales in particular, using trees in marginal land areas (e.g. land which produces lower crop yields relative to other cropped land or poses particular management challenges and typically has lower land-use opportunity costs) may offer a wide variety of direct environmental and commodity benefits to agricultural systems (Goerndt and Mize 2008; Gelfand et al. 2013; Milbrandt et al. 2014).
There are a number of other unique risk related aspects of woody biomass systems that need to be considered relative to the notion of financial viability. Woody biomass would be considered a durable asset and subject to technological risk (e.g., limited gains from higher yielding varieties), opportunity risk (e.g., rising land rents), and costly reversibility (Song et al. 2011). There is also inherent establishment risk, natural mortality, unanticipated pests, pathogens, and environmental conditions (e.g., flooding) along with the often-periodic nature of revenue that can challenge emerging biomass systems (e.g., James et al. 2010; McConnell and Burger 2011). The perceived compatibility of woody biomass production within a farm system has been noted as being an important component in boosting farmer interest (Strong et al. 2006). One view of compatibility is that the land base is bio-physically suitable for growing trees (based on available water, slope positions, soil types, etc.). Another is that woody biomass can fit into existing farm systems (e.g., compatible with existing cropping patterns, labor and equipment) (e.g., Zamora 2015).
The costs of establishing and managing woody biomass systems in light of limited market outlets also pose distinct risk factors. Yet research has noted where cost reduction is likely particularly in the context of expanded investment in the development of woody biomass systems. As noted in Perlack et al. (1986), significant costs savings (e.g., 30 to 40%) would likely correspond with improvements in both regional genetics, harvesting equipment, and general expansion of a supporting infrastructure necessary for biomass handling, transportation and storage.
Broadly speaking, policy serves as a driver of renewable energy production and could operate to incentivize woody biomass research and development as well as end use demand within the NGP. One inroad to this end could be through State designated Renewable Portfolio Standards (RFPs) or through State level renewable energy goals. State RFP standards are legislated requirements that schedule specified targets for retail electricity sales from renewable sources; renewable portfolio goals on the other hand are not legally binding but provide a framework for variously incentivizing the fulfillment of said goal (DSIRE 2013). At present, 17% of the total electricity produced in South Dakota (measured in BTU) comes from biomass (it is not known what % if any is from woody material), 12% in Nebraska, and 3% in either North Dakota and Kansas (USEIA 2013). Guo et al. (2012) ranked North Dakota 13th, Kansas 25th, South Dakota 31st, and Nebraska 41st in terms of US state wood utilization policies, focusing on financial (e.g., tax incentives, subsidies and grants, financing and contracting) and non-financial incentives (e.g., rules and regulations, education and consultation). Demonstrating a relatively developed woody biomass policy structure for North Dakota, yet lagging support for wood biomass utilization in the other represented states.
More directly related to development of local/regional biomass markets, the Federal USDA Biomass Crop Assistance Program (BCAP) is designed to address supply issues presented for industry entities seeking to establish a regional bioenergy production facility (USDA FSA 2011). Within USDA approved “project areas”, BCAP facilitates a cooperative hub of feedstock producers (e.g., farmers, forestland owners) and a biomass end-use facility via contracts that involve structured payments and technical support. There are three forms of assistance provided through BCAP, which are designed to mitigate different types of risk for both feedstock producers and the facilities receiving the materials (Song et al. (2011). Within the boundaries of a multi-year contract (e.g., 5 years for perennial herbaceous materials), establishment and annual maintenance payments are intended to assist farm operators with the costs of establishing new crops, covering opportunity cost of forgone revenue as well as additional risk associated with shifting land use to a new crop. Additional assistance is provided for two years to offset the costs of materials transportation to a bioenergy processing facility.
Currently there are two BCAP production areas within the Northern Great Plains that are producing switchgrass (USDA FSA 2011). BCAP could serve as a framework for subsequent policy development that supports utilization of woody biomass as well as a diversity of additional perennial bioenergy crops within the NGP.
References.
Gelfand, I., Sahajpal, R., Zhang, X., Izaurralde, R. C., Gross, K. L., and Robertson, G. P. 2013. Sustainable bioenergy production from marginal lands in the US Midwest. Nature, 493:514-517.
Geyer, W. A. (1989). Biomass yield potential of short-rotation hardwoods in the Great Plains. Biomass, 20(3-4), 167-175.
Geyer, W. A. (1993). Influence of environmental factors on woody biomass productivity in the Central Great Plains, USA. Biomass and Bioenergy, 4(5), 333-337.
Geyer, W. A. (2006). Biomass production in the Central Great Plains USA under various coppice regimes. Biomass and Bioenergy, 30(8), 778-783.
Goerndt, M. E., & Mize, C. (2008). Short-rotation woody biomass as a crop on marginal lands in Iowa. Northern Journal of Applied Forestry, 25(2), 82-86.
Guo, Z., Hodges, D.G., and Young, T. 2012. Woody biomass utilization policies: State rankings for the U.S. Forest Policy and Economics 21:54-61.
Ibendahl, G. 2016. Custom Rate Comparison for 2016. AgManager. Kansas State University Department of Agricultural Economics (Publication: GI 2016.1).
James, L. K., Swinton, S. M., & Thelen, K. D. (2010). Profitability analysis of cellulosic energy crops compared with corn. Agronomy Journal, 102(2), 675-687.
Kells, B. J., & Swinton, S. M. (2014). Profitability of cellulosic biomass production in the northern Great Lakes region. Agronomy Journal, 106(2), 397-406.
Manatt R.K., Hallam A., Schulte L.A., Heaton E.A., Gunther T.P. 2013. Farm-scale costs and returns for second generation bioenergy cropping systems in the US corn belt. Environmental Research Letters. 8: 035037.
McConnell, M., and Burger, L.W. 2011. Precision conservation: a geospatial decision support tool for optimizing conservation and profitability in agricultural landscapes. Journal of Soil and Water Conservation 66:347-354.
Minnesota Department of Natural Resources (MNDNR). 2015 Minnesota Public Stumpage Price Review and Price Indices. Forestry Division. Available at: http://files.dnr.state.mn.us/forestry/timber_sales/stumpage/stumpage-review-report-2015.pdf
Netzer, D.A.; Tolsted, D.N.; Ostry, M. E.; Isebrands, J. G.; Riemenschneider, D.E.; Ward, K.T. (2002) Growth, yield, and disease resistance of 7- to 12-year-old poplar clones in the north central United States. Gen. Tech. Rep. NC-229. St. Paul, MN: U.S. Department of Agriculture, Forest Service, North Central Research Station. 31 p.
North Dakota Department of Trust Lands. 2016. 2016 County Rents and Values North Dakota. Available at: https://land.nd.gov/surface/rentsurvey.aspx
Perlack, R. D., Eaton, L. M., Turhollow Jr, A. F., Langholtz, M. H., Brandt, C. C., Downing, M. E., ... & Nelson, R. G. (2011). US billion-ton update: biomass supply for a bioenergy and bioproducts industry.
Perlack, R. D., Ranney, J. W., Barron, W. F., Cushman, J. H., & Trimble, J. L. (1986). Short-rotation intensive culture for the production of energy feedstocks in the US: a review of experimental results and remaining obstacles to commercialization. Biomass, 9(2), 145-159.
Plastina. A. and Johanns. 2016. 2016 iowa Farm Custome Rate Survey. Ag Decision Maker. Iowa State University Extension & Outreach. FM 1698 Revised March 2016.
Secchi, S., Tyndall, J.C., Schulte, L., and Asbjornsen, H. 2008. High Crop Prices and Conservation: Raising the Stakes. Journal of Soil and Water Conservation 63:68-75.
Song, F., Zhao, J., and Swinton, S. M. 2011. Switching to perennial energy crops under uncertainty and costly reversibility. American Journal of Agricultural Economics 93:768-783.
Strong, N., and Jacobsen, M.G. 2006. A case for consumer-driven extension programming: agroforestry adoption potential in Pennsylvania. Agroforestry Systems 68:43-52.
Taylor, M. 2016. Kansas County-Level Cash Rents for Non-Irrigated Cropland. Kansas State University. AgManager. Kansas State University Department of Agricultural Economics (Publication: AM ‐ MRT ‐‐ 2016.1).
U.S. Energy Information Administration (USEIA). 2013. Cellulosic biofuels begin to flow but in lower volumes than foreseen by statutory targets. http://www.eia.gov/todayinenergy/detail.cfm?id=10131
Zamora, D. 2015. Planting Willow. Woody Crops Factsheet Series 6. University of Minnesota Extension.
Farmer Adoption
This study did not measure or survey farmer adoption of agroforestry practices. There is a pressing need for data on the distribution of agroforestry practices as neither the Census of Agriculture by the National Agricultural Statistics Service nor the Forest Inventory and Analysis of the U.S. Forest Service currently capture data on the extent and distribution of these practices.
Educational & Outreach Activities
Participation Summary:
Research Presentations
Hand, A., & Tyndall, J., Knoot T. (2012, August). Agroforestry in the U.S. Great Plains: Exploring opportunities for bioenergy on marginal farm land. Poster presented at the International Conference on Agricultural Biodiversity and Sustainability, Sapporo, Japan.
Hand, A. & Tyndall, J. (2014, April). A qualitative examination of agricultural producer interest in agroforestry for renewable energy production. Poster presented at the Iowa State University Graduate Program in Sustainable Agriculture Spring Symposium, Ames, Iowa.
Hand, A. & Tyndall, J. (2014, June). US Great Plains Agroforestry: Examining Agricultural Producer Interest in Woody Systems for Bioenergy Feedstock Production. Presentation at the International Symposium on Society and Resource Management, Hannover, Germany.
Hand, A. & Tyndall, J. (2014, July). “There's no instant gratification with trees”: A qualitative overview of agricultural producer interest in agroforestry for renewable energy production. Poster presented at the International Association of students in Agriculture and related Sciences (IAAS) World Congress, Ames, Iowa.
Sauer, T. J. (2015, May). Agroforestry for climate-smart agriculture. 14th North American Agroforestry Conference. Ames, Iowa. [Keynote Address]
Khaleel, A., Sauer, T.J., and Tyndall, J.C. (2016, November). Changes in soil properties following tree windbreak planting in the U.S. Great Plains. Society of American Foresters National Convention, Madison, Wisconsin.
Sauer, T.J., Khaleel, A., Hernandez Ramirez, G., Anderson, K.A., Evans, B., Howe, L., Labenz, T., Latta, C., Tyndall, J., and Richter, J. (2016, November). Profile soil organic matter content beneath tree windbreaks in the U.S. Great Plains. ASA, CSSA, and SSSA International Annual Meetings. Phoenix, Arizona.
Khaleel, A., Sauer, T.J. and Tyndall, J.C. (2017, February). Soil organic carbon dynamics of tree windbreaks in the U.S. Great Plains. Soil Health Conference, Ames, IA. [Note: Won Best Poster Award.]
Manuscripts
Hand, A., Bowman, T., Tyndall J.C. Influences on farmer and rancher interest in supplying woody biomass in the US Northern Great Plains. Submitted to Agroforestry Systems
Khaleel, A. Sauer, T.J., and Tyndall, J.C. Soil properties as affected by tree windbreak plantings in the U.S. Great Plains. In preparation.
Khaleel, A. Sauer, T.J., and Tyndall, J.C. Soil organic carbon storage and dynamics beneath windbreak plantings in the U.S. Great Plains. In preparation.
MS Theses
Hand, A. 2014. A mixed-methods exploration of farmer and rancher interest in supplying woody biomass in the U.S. Northern Great Plains. M.S. Thesis. Iowa State University.
Khaleel, A. 2017. Carbon sequestration potential of tree windbreaks on agricultural lands of the U.S. Great Plains. M.S. Thesis. Iowa State University.
Project Outcomes
Areas needing additional study
In order for farmers/ranchers to participate as suppliers of woody biomass, they require additional information in order to assess the reality of the opportunity within the context of their existing agricultural system. Information needs expressed by participants in all focus groups fit into three broad categories (1) technical information relevant to the establishment, growth, harvesting, and marketing of woody biomass, (2) the environmental sustainability of producing biomass on marginal land, and (3) the economic sustainability of producing a biomass crop within their farm system.