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What to do with all that grass?

John_Walter
Advisor
0 7 3,914

183i078880434DE5474F

 

Native grasses and windbreak anchor soil on our CRP land in Nebraska

 

When it comes to making decisions, I'm often victim in believing the last thing I've heard or read on a topic. In this case, it's a belief that biofuels grasses might be the salvation of our small farm in central Nebraska. The dryland currently is seeded down to warm-season grasses, but what to do when the contract runs out in four years? Based on the last thing I've read, I think  I'll buy a pellet mill and start selling densified biofuel grass to the nearest electric or ethanol plant. Won't I?

 

Clif Little, an Ohio State professor and extension educator, told me recently that switchgrass has potential in Ohio because a coal-burning electric generation plant in the southeast part of the state is considering the warm-season grass as source of fuel. In a review he's done, prices for pelleted switchgrass fuel range from $125 to $175 per ton, and production costs are at about 82/ton, not including transportation, storage or pelleting. So, doing some rough math, I could make about $300 an acre, if I don't have to truck the stuff to southeast Ohio anyway. Couldn't I?

 

So that's one idea. Another fellow I talked with recently, just before I communicated with Clif Little, suggested that I consider grass-fed beef. That's not a bad idea. The math isn't too bad on that either, if I can find a slaughtering plant nearby and don't have to sit in a farmer's market in Kearney every Saturday.

 

Earlier this week, I got a press release from the National Bison Association, touting the advantages of bison ranching to prospective growers. I like the idea of bringing buffalo back to Buffalo County. Would certainly have to rebuild the fences, though.

 

An Extension agent once told me I should plow up the whole quarter, drop a pivot in the middle and grow corn. But, wait a minute, why did we get to this CRP fix in the first place? 

 

A friend of mine in central Kansas always says his most profitable crop year in and year out is alfalfa. We're at about the same longitude and have better soils, I think, plus some irrigation across the road. And, hmmm, there are alfalfa procesors and feedlots nearby....

 

So, help me out, what would you do? 

 

  • Plow it up, put in a pivot and plant corn
  • Leave it in warm-season grass for hay or biofuel production
  • Plant alfalfa
  • Start a grass-fed beef operation (or what the hay, how about bison?)
  • Plant dryland corn and soybeans
  • Sell the ground as soon as the CRP contract ends
  • Other?

 Please remember, I usually believe the last thing I hear....

 

7 Comments
Kay/NC
Honored Advisor

Price that pellet mill before you jump, John.  When you do the math, and factor in distances to an enduser (assuming that one materializes, and you know what they say about  assuming such things, don't you?) it may not be a slam-dunk. 

 

As for grassfed anything...you've got one half of the year covered.  If warm season grasses means half of the year at your latitude, you still have to feed whatever livestock you select 365 days a year.  (BTW, got watering systems and FENCES???) As for non-mainstream livestock, like bison, see if the ones making money are the ones selling breeding stock to everyone else...if you cant' find succseeful commercial producers who have the same sort of time and other resources that you have to dedicate to the proposition, I'd forget them. NAIS is goign to make all livestock produciton more fun as time goes on, too. 

 

Also, keep in mind that as one grassfed beef expert stated at one of the many forage conferences I've attended: "Grass is a function of rainfall."  Not all years are average for precipitation, and even those that are can have devastiing dry spells in them.  Overgrazing will decimate your stands, unless you hold back livestock on stored forages...and drought -driven toxicities, especially to developing offspring in utero, can be ruinous to a breeding herd or flock. 

 

Alfalfa is highly sensitive to drainage, from my experience with it.  It is expensive to establiish, and requires really good management to persist.  Harvesting high-quality hay from it is not as easy as with most other forages.  There is a reason that some things - including a really good bale of alfalfa hay -  cost more to buy....

 

What is the state of the aquifers in the region?  Many are becoming depleted.  Here on the East Coast, some are becoming subject to saltwater wedge intrusion.  We've already seen in California that when it comes to human usage v. ag usage, ag loses every time.  Who knows how long irrigation will be a right, and not a privilege, in any given location? We have been surveyed by the state (NC)  for water usage for the last few years, for the first time in my lifetime in farming. 

 

As for a sale, who knows what capital gains taxes will be in four years, especially if the wealth redistribution crew still rules in DC then?

 

I'd start looking at what USDA might have to offer to replace CRP (CSP possibly) in four years...and maybe talk to that guy with the irrigation across the road, to see what sort of rent he'd offer.   You have time to plan and think.  

Kay/NC
Honored Advisor

One more thought, John.  Lay hands on a copy of "The Long Emergency" by James Howard Kuntsler.  We are already farther along this course than when he updated the last edition.  I needed this oen to explain peak oil and how we got into the mess we are in now. 

 

The definition of "marginal land" is going to get broader as energy costs - and those costs are very clearly not just monetary ones now - rise.  Read the whole book, but concentrate on the section that describes your farm's location.  I won't say this book is apochryphal, but the author makes many salient points. 

My region (Southeast) was not as densely populated in past eras as it is now, and it's starting to become marginal for certain payroll levels to live here and work somewhere else already .  One local employer's supervisor told me at $2 a gallon, some of the workers would call out due to not being able to buy gas to come to work five days a week...think that through...it has a predictable outcome.  Similarly, even if the enzymes or whatever else is necessary to make your switchgrass a viable fuel source, the economics of distance to the generation plant will still apply. 

Get ready for a "new normal."

Jim Meade / Iowa City
Senior Advisor

John,

 

If you want to do the last thing you heard of, talk wtih Dr. Emily Heaton, ISU agronomist, who will tell you all about miscanthus for cellulosic ethanol.

http://www.ag.iastate.edu/news/releases/676/

http://www.youtube.com/view_play_list?p=94EE080D499F9354

I note you didn't talk of rebidding your land into CRP?  Or leasing it out for a hunting preserve.

I'm not sure I'd put much money into anything that depends on the Oglala aquifier, if that is under you.  But I'm not directly knowledgeable.

Who would butcher the bison if you want to sell interstate?  Would you want USDA looking over your shoulder in the packing plant?   That was an issue with a guy from South Dakota that got into it.  http://www.wildideabuffalo.com/news-splendid.html

 What do other locals do with similar ground?  That might be a good place to start.

when you run the numbers, the bottom line is the last thing you see.  Probably a good place to start in considering any alternatives.

 

Kay/NC
Honored Advisor

John, a young friend just asked me to read the latest Popular Mechanics magazine, which has a cover story all about alternative energy.  It does a decent job inside of exploring a lot of the myths in the chase for the Holy Grail of clean energy.  You might enjoy it, in light of this discussion. 

 

One source I had never really considered, which the French have used to a limited extent for 40 years, is tidal power to turn turbines.  Makes huge sense, at least at first glance.  As long as the world turns, we ought to have tides. 

 

I feel bad that my response to you was no pessimistic.  I did not mean it that way, but we are looking at some changed circumstances.  The US military (and US-paid contractors) are presently providing security for a Chinese copper mine in Afghanistan.  Look at the military spending and manpower commitment in the Newsweek back page analysis this week.  I am glad we are so strong militarily, but at least some of this is being squandered, unless they know a LOT of things they aren't telling us taxpayers, about some of the scraps of land we are fighting over right now. 

 

I worry some days about this country, and how well we are going to fare by the end of this century.  Our "moon shot" needs to be cheap, clean energy.  If we get to that point, everything else will seem simple by comparison.  Until we do, the world that we inhabit will start to get smaller, physically and metaphorically. 

 

If your land can hold its own expense load for taxes and such in CRP, and that or some other alternative to it exists in 2014 - and I think it will, for carbon sequestration, as in CSP, if nothing else - then that isn't so bad.  This place was - as the county health department guy looking for a place to put a septic field in 1994 told us - "only good for one thing...holding the world together."  Some land serves that purpose, and that may be enough. 

 

Water will be the  skeleton key to land utility more than ever, so that is the bottleneck issue I'd look into first, before anything else entered into my thinking. 

wt510151
Senior Contributor

In the past, the NPPD didn't need to invest in alternative energy. Now they have to and using wind turbines primarily. After the state bill was signed allowing  electricity export, anything is possible in energy production. There are a few coal powered electric plants in mid to western part of the state, plus many ethanol plants in your area. Many buyers, but many sellers too.

This state is known for its corn-fed beef, not grass fed. Do you think you could change enough minds to get shackle space at an USDA plant and retain control of the product?. If you are thinking bison, ask yourself why Ted Turner has to sell it in the largest cities of the country. Do you think you could set up a similar network?

As for anything requiring groundwater, I would seriously consider that an oil pipeline will be going through a section of the Sandhills, an area without much barrier to the water table. Many have seen the potential consequences if oil facilties are not maintained or installed correctly.

I don't know if your decision will be based on future earnings, retirement income, or passing it to heirs. Also don't know if your residence is close by or in another state as daily control would be necessary for most of your options. It does make a difference if you want short term or long term gain or even if you are willing to pay for a farm manager of this property. If you could get a buyer to pay you $8,000 an acre today, would you take it so you didn't have to make this ownership decision?

GrundyBoy
Member

Consider a plan that marries up grass in the shorter term with agroforestry for the long term. I don't know what type of forestry it might be, but I'm sure you'd garner a lot of attention in the middle of NE by planting something that could become a forest. And your grandchildren would certainly remember you kindly with a nice pay day many years from now!

bikinkawboy
Veteran Contributor

It's pretty tough for someone else to tell you what's the best route to take.  It's like shoes, what fits one person doesn't fit the next.  A lot also depends upon whether you want to work it or lease the place out and get a check.

 

As for buffalo, that market fizzled out several years ago.  I'm sure there are still some folks who are making money raising them, but it would have to be from meat and not breeding stock.  I know a fellow who had a 100-200 herd of buffalo for 30+ years, but liquidated his herd several years ago because the bottom fell out of the market.  And fencing for buffalo is expensive, his fence was tall woven+barbed wire with electrified wire on the inside, railroad ties for posts, cows with calves had crunched in the sides of his truck and so on. 

 

For cattle, you will still need good exterior fences.  Cow prices are high now and getting a herd started would require a chunk of money.  The option would be to lease the pasture or run stockers fee for gain.  Doing anything right after the CRP contract expires would require water be available.  You have the option of applying for EQIP funds through NRCS for a planned grazing system.  It won't pay for exterior or property line fences, but would help pay for interior subdivision fences, water sources, pipeline and tanks.  However, you would need to apply, hope your application is chosen and so on.  Best talk to NRCS in your county for more info there because I'm in Missouri.

 

If you row crop the place, you again have the choice of applying for EQIP funds to help offset the cost of building terraces, waterways or other soil conserving practices.  After being in CRP for all those years, it might be a good time to start a no-till program.

 

Switchgrass does have potential for fuel or ethanol, but either would require a lot of trucking for a high volume, low value product and the market-buyer would need to be very close.  Othewise, trucking will eat you alive.

 

You might talk to some of the local farmers and see what their interest is for them cash renting the place.  Get a good enough cash rent and you could afford your 25% share of the cost of building conservation practices.