What is in this article?:
- Economics stymie corn cob biofuels
- Computer projections
Farmers would need to receive about $100 per dry ton from biofuels companies to persuade most to add a cob-collection operation during fall corn harvest.
The computer program projected that none of the 55 farms would begin collecting cobs if wagon rental was $28,000 and cobs brought $40 a ton. If farm operators received $100 a ton from biofuels producers, B-21 projected 22 of the 55 farms would collect cobs.
"We found that at $60 a ton, farm profits increased $10 per acre of corn, but not many farms chose to collect cobs," Erickson said. "If that increased to $120 per ton, the profit reached approximately $37 an acre of corn plus cobs."
Research suggested wagon rental rates often were the make-or-break factor in harvesting cobs. The typical $28,000 lease covers the harvest period, regardless how many acres are involved.
"That's a pretty hefty fixed cost to farmers," Erickson said. "If rental was reduced to $14,000, cob harvest became much more attractive."
The Purdue study also indicated:
• Farms with 2,000 or more corn acres were better able to offset cob-collection costs than smaller farms because of reduced unit costs.
• If paid $100 per ton for cobs, farmers likely would collect 96 percent more cobs under the most favorable operating conditions and costs than the least favorable operating conditions and costs.
• Break-even prices for cobs can differ significantly from farm to farm, depending on corn yield, farm size and production practices.
• Government subsidies might be necessary to encourage more farmers to collect cobs if the public decides cellulosic biofuels are an important energy alternative.
Study findings are contained in Purdue Extension publication ID-417-W, "The Economics of Harvesting Corn Cobs for Energy." The publication is available for free download online at https://mdc.itap.purdue.edu/item.asp?itemID=19701.
Funding for the research was provided by the Indiana Corn Marketing Council.