Farmers Starting to Engage in Biomass Dialogue

July 16, 2010

BY Rona Johnson

I wish I could have been at the Minnesota Ag Climate and Energy Forum in Wilmar, Minn., where farmers talked about revenue opportunities in the alternative energy industry.

When we started Biomass Magazine in 2006 and were doing stories on energy crops such as switchgrass and miscanthus, I knew it would take a while before they would catch on because the people who have the expertise to produce them are a cautious lot.

There are several reasons for this and here are just a few. First, farmers typically don't grow crops that have no market. Second, because their fortunes change with the weather they demand a safety net, in the form of crop insurance. Third, they have to make enough to cover their expenses.

If you would have asked a farmer to grow switchgrass in 2006, they probably would have looked at you like you were insane. But I think the tide is starting to change.

At the meeting in Willmar, Chris Clayton of DTN Progressive Farmer mentioned that even farmers who dismissed ethanol are now planting more corn acres to keep up with the growing demand for the renewable fuel, which has led to stronger corn prices.

Of course, increasing production is entirely different from producing whole new crops, but then Ron Fagen of Fagen Inc., of Granite Falls, Minn., talked about his company is turning its attention from building ethanol plants to renewable energy in the form of wind and biomass.

This to me is the key to farmers finally getting into the energy crop business because it shows there is going to be a market as there are plants being built. And it shows that an industry can and should change as the nation's needs change.

As far as the crop insurance industry, as USDA develops the dedicated energy crop portion of the Biomass Crop Assistance Program, I'm sure they have thought about the risks involved and are working on it.

As for making a profit that will largely depend on any assistance farmers will get via the BCAP and how much energy producers are able to pay for biomass, which remains to be seen. But there are a lot of smart people working on that as well and I'm sure before long we'll be able to come up with some good working estimates from both ends of the spectrum.

For me, the fact that farmers are starting to talk about their roles in the renewable energy industry is a clear signal that commercial production of energy crops are on the horizon.







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