Energy Farming

Though the traditional forms of agriculture, crop and animal farming aren’t the only farm sectors anymore.

Feedstock farming – growing varying cellulosic, non-food material such as miscanthus and switchgrass, which is then fermented for conversion to biomass pellets and fuel – is emerging as a new industry market.

Biomass comprises several types of herbaceous grasses that are converted into fuel using special processing equipment. Pellets are a byproduct of the conversion and can be used as livestock feed and to generate electricity.

Farmers receive a price based upon each feedstock’s net-energy value and moisture content. According to, 1 ton of pellets contains as much energy as 190 gallons of propane.

The Biomass Crop Assistance Program (BCAP), instituted in the 2008 Farm Bill, was designed to stimulate new crops for renewable energy feedstocks. It demonstrates the importance of this emerging ag market.

“Farmers are the foundation to drive [the new biomass energy] technology — not technology driving farmers,” said Steve Flick, president of Show Me Energy’s (the first U.S. producer-owned biomass cooperative) board of directors.

The Biomass Crop Assistance Program (BCAP), administered by the Farm Service Agency, provides financial assistance to owners and operators of agricultural and non-industrial private forest land who wish to establish, produce, and deliver biomass feedstocks. BCAP provides two categories of assistance:
  • Matching payments may be available for the delivery of eligible material to qualified biomass conversion facilities by eligible material owners. Qualified biomass conversion facilities produce heat, power, biobased products, or advanced biofuels from biomass feedstocks.
  • Establishment and annual payments may be available to certain producers who enter into contracts with the Commodity Credit Corporation (CCC) to produce eligible biomass crops on contract acres within BCAP project areas.
BCAP-qualified producers are eligible to receive up to 75 percent of the cost of establishing and planting biomass crops within a BCAP project area. The USDA provides annual payments to compensate for lost opportunity costs until these crops are established and provides financial assistance for the collection, harvest, storage and transportation of biomass crops by matching the amounts paid to producers by the biomass conversion facility, up to $45/dry ton.

Not only does feedstock farming impact the farmer, it significantly impacts the entire economics of the business supply chain. Biomass conversions creates hundreds of direct and ancillary jobs in rural economies.

“Hauling massive amounts of feedstock long distances has a tremendous effect on the economy,” said Steve Carter, director of Iowa State University’s Research Park in Ames.

Some farmers are participating in feedstock farming to power their own equipment. This may become an increasing trend as oil prices continue to escalate.

A farmer interviewed for a recent Herald-Review story, said that he’s found using 1 ton of biomass pellets to cost $165, compared to 149 gallons of propane for $387.40 and 101 gallons of fuel oil for $383.80.

In Ohio, Aloterra Energy develops biomass conversion facilities by handling both feedstock development and its conversion to fuel using advanced biofuel production. One biomass conversion facility is currently in operation in Conneaut, Ohio, and the company is in the process of expanding its network of farmers for energy-crop production.

As fuel and other energy costs continue to increase, so too will the interest in feedstock farming. It will be interesting to witness how farmers react to this emerging new-income opportunity.

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