Switchgrass Enterprise Budget

Establishment Costs ⁽¹⁾

Weed burn down ⁽²⁾

Seedbed preparation

Seeding

Weed control (post-emerg tank mix) ⁽⁵⁾

Assumptions

Note - Assumptions made for the purpose of this budget (costs, yields, etc) are estimates for discussion only, and will change according to research, agronomics and economic conditions. Users should make their own assumptions. As switchgrass is a new commercial crop in Ontario, considerable research and field experience is required in order to answer many of the agronomic and economic questions being asked. Assumptions made in these budget estimates are not to be considered recommendations.

1. Establishment using conventional tillage. No-till establishment may be more practical on some land due to slope and stoniness. No-till establishment may be less reliable, so further research is required.
2. Field prep for establishment of switchgrass with a glyphoste burndown may have to be done twice (fall & spring) in excessively weedy fields, doubling these costs (equivalent to approximately $1/tonne).
3. Field operation costs (spraying, plowing, cultivating, seeding, fertilizer spreading, swathing and baling) have been estimated from commercial custom rates and market conditions.
4. Seed costs may change according to supply and demand as a seed industry develops. Seeding rate recommendations may change based on further research.
5. No herbicides are currently registered for use on switchgrass in Ontario. Product registration of herbicides will be required before commercial use. Research is currently being done by the University of Guelph. Recommended products, rates and costs will depend on research results.
6. "Establishment year land cost" is used to account for slow establishment that will likely result in no product to sell for the first year. Second year yields may only be approximately 50% of the stand average, which has been accounted for in the 3.1 tonne/ac 10 year average. This estimate assumes:
   • direct seeded as opposed to using a cereal companion crop
   • a minimum $30 per year return to land (rental rate opportunity cost).
7. Establishment failure rate" is used to account for unsuccessful establishment 1 time out of 10. This is only an estimate for discussion and will require research and field experience to establish a more accurate number.
8. Land costs have the potential to be extremely variable, depending on factors such as location, drainage, slope, and the economics of other land uses, such as other crops and cattle. Land may be available at lower value, but with lower yield potential.
9. The establishment costs will need to be recovered over the productive life. The costs are amortized at an interest rate of 5% over 10 production years. This will vary widely, depending on agronomic factors such as establishment success and yield, and economic factors such as alternate crop opportunities.
10. Research is required to determine appropriate N rates based on yield response.
11. Yield estimate at 3.1 tonnes/acre are based on a fall cut - spring harvest system. Yields are potentially higher with a fall harvest, but with higher ash content and phosphorus (P) & potassium (K) removal rates. Yields will vary widely depending on agronomics and environmental conditions. An estimate will be become more accurate with further field experience in Ontario.
12. P & K "removal rates" assume a spring harvest system where significant mineral leaching has occurred. This example assumes removal of 4.0 lbs P₂O₅ per tonne @ 55¢/lb, and 2.9 lbs K₂O per tonne @ 55¢/lb, which is equivalent to about $3.80 per tonne. Using "removal rates" for P & K assumes that fertility levels are not yield limiting, and therefore likely in the "Medium" soil test range. Some of the targeted acreage could be more marginal in fertility and require higher fertilizer application rates.
13. "Removal & storage" estimates reflect the cost of moving bales off the field and into storage (building or on skids and under a tarp).
14. Hauling - if the processing plant is pricing based on FOB the plant, trucking costs will need to be included to haul from storage to the plant
15. In order to attract producers, farmers will expect a "Return To Risk & Management" in addition to the COP. This will vary with individual producers, depending on the profitability and risks associated with other crops and investments.
    

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