Economic Feasibility of Sweet Sorghum and Biomass Sorghum for Biofuels Production in two Texas Regions

Authors:Stephen Amosson William RooneyTexas AgriLife Extension Service Texas AgriLife Research6500 Amarillo Blvd. West 2474 TAMUAmarillo, Texas 79106 College Station, Texas 77843806-677-5600 979-845-3041samosson@ag.tamu.edu wlr@tamu.eduPrimary Author Co-author

Jnaneshwar Girase Jake BeckerTexas AgriLife Extension Service Texas AgriLife Research6500 Amarillo Blvd. West 6500 Amarillo Blvd. WestAmarillo, Texas 79106 Amarillo, Texas 79106806-677-5600 806-677-5600JRGirase@ag.tamu.edu jdbecker@ag.tamu.eduCo-author Co-author

Bridget Guerrero Dustin BordenTexas AgriLife Extension Service Texas A&M University1102 East FM 1294 2474 TAMULubbock, Texas 79403 College Station, Texas 77843806-746-4020 979-845-3041blguerrero@ag.tamu.edu dborden@tamu.eduCo-author, Presenter Co-author

Seong Park Payne BurksTexas AgriLife Research Texas A&M UniversityPO Box 1658 2474 TAMUVernon, Texas 76385-8361 College Station, Texas 77843940-552-9941 979-845-3041SCPark@ag.tamu.edu payne11@tamu.eduCo-author Co-author

Brent BeanTexas AgriLife Extension Service6500 Amarillo Blvd. WestAmarillo, Texas 79106806-677-5600bbean@ag.tamu.eduCo-author

Abstract (50 words)

Cost of production in Texas for two promising crops, sweet sorghum and biomass sorghum for use in biofuel production are identified. Sensitivity analyses performed suggest sweet sorghum may have a cost advantage. However, the feasibility of each crop can vary considerably by type and location of the processing plant.

Proposal (750 words)

Problem Statement

Large-scale commercial production of cellulosic ethanol continues to be a slow process in the biofuel industry. The renewable fuels standard (RFS) set forth by Congress calls for the production of 36 billion gallons of renewable fuels by 2022 to partially offset the United States’ dependence on fossil fuels. Of this production, 15 billion gallons are to come from conventional biofuel derived from starch-rich crops (corn and sorghum). The remaining 21 billion gallons of biofuels are expected to come from a combination of undifferentiated advanced biofuel (5 billion gallons) and cellulosic biofuel (16 billion gallons) (Renewable Fuels Association, 2008). As starch based ethanol production approaches its RFS limit (15 billion gallons), the focus of future renewable fuel production is changing to advanced and cellulosic fuel production.

Potential cellulosic ethanol production is one way producers in Texas may be able to financially benefit from the RFS. Currently, no cellulosic facilities exist in Texas. However, evaluating the costs associated with the production of different types of crops at the field level may aid this developing industry in the selection of the best potential biomass crop depending on the type and location of the processing plant being considered. Thus, the focus of this study is the economic evaluation of two promising crops for use in advanced and cellulosic fuel production, sweet sorghum and high-biomass sorghum, for two regions in Texas. These crops are especially suited to the semiarid climate of Texas and can be grown either dryland or under limited irrigation. The specific objectives include: 1) Develop enterprise budgets for sweet sorghum and high-biomass sorghum produced under limited irrigation and dryland conditions; and 2) Evaluate the cost of production for various yield and ethanol conversion levels.

Data and Methods

The two study regions in Texas included the Texas High Plains and College Station Regions. Research trials were conducted in 2009 and 2010 to evaluate the production potential of sweet sorghum and high-biomass sorghum production in both regions. Scientists were asked to identify the Best Management Practices (BMPs) for growing these crops including farming operations performed. Enterprise budgets were constructed utilizing the BMPs identified. A three-year average of prices was utilized to evaluate direct expenses and dampen volatility caused by annual market fluctuations. Texas AgriLife Extension Budgets were used to estimate the fixed and variable costs of farming operations performed. A sensitivity analysis was also performed to account for yield variation between years and different mill extraction efficiencies.

Results and Implications

The economic analysis indicates a total cost per acre to produce sweet sorghum under limited irrigation (10 acre-inches) in the Texas High Plains of $706.67 with a yield of 28.75 wet tons. The total cost per acre for full-season sweet sorghum under furrow irrigation (8 acre-inches) in the College Station Region is $694.20 with a yield of 26.52 wet tons, while mid-season sweet sorghum has a lower total cost of $568.43 per acre and also a lower yield of 16.70 wet tons. Harvest, haul, fertilizer, and irrigation are the largest components of the direct cost. The cost to produce a gallon of ethanol is approximately $0.60 per gallon for full-season sweet sorghum under a 95% extraction rate for both regions. Dryland sweet sorghum in the Texas High Plains yields 11.2 wet tons with an estimated total production cost of $303.17 per acre and potential cost to produce ethanol of $0.64 per gallon under 95% extraction.

The enterprise budget for irrigated biomass sorghum in the Texas High Plains has production of 24.12 wet tons or 7.5 dry tons with a total cost of $615.78 per acre. Harvest, haul, irrigation, and fertilizer account for more than 75% of the direct expenses. The cost per gallon of ethanol is approximately $1.03 per gallon. Dryland high-biomass sorghum is projected to have a yield of 10.45 wet tons or 3.25 dry tons with total costs of $249.61 per acre in the Texas High Plains and a higher yield of 29.50 wet tons or 6.79 dry tons and also higher costs of $481.86 in the College Station Region. The cost per gallon of ethanol produced is estimated at $0.96 and $0.89 for the Texas High Plains and College Station Regions, respectively.

Results suggest that sweet sorghum may have a cost advantage over biomass sorghum. However, the feasibility of each crop can vary greatly and depends on the type and location of the processing plant being considered. Further research should be conducted to analyze the feasibility of different types of potential processing plants before they are established in the state.

References

Renewable Fuels Association. 2008. Renewable Fuels Standard. http://www.ethanolrfa.org/pages/renewable-fuels-standard. Accessed February 8, 2008.