Switchgrass as an Income Stabilizing Crop for Cow-calf Producers Impacted by Drought

Jennifer Lutes and Michael Popp

No 205416, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Cow-calf producers in Arkansas experience annual fluctuations in their farm returns and are increasingly scrutinized for their role in climate change. Increasing farm efficiency can increase farm returns and either increase or decrease net greenhouse gas emissions, but often these practices also increase income risk. Diversifying enterprise choices, the addition of switchgrass production grown on converted pasture land, in this case, is thought to lower income risk by providing a drought hardy crop while at the same time a supply of lignocellulosic biomass for potential bio-refineries. Adopting rotational grazing, compared to a baseline of continuous grazing, frees pasture acreage to either increase beef output or to the production of a dedicated energy crop. The objectives are to determine what switchgrass price is needed to be income neutral and whether adoption of switchgrass does in fact impact income risk without affecting feed or food supply. Decision support software, the Forage and Cattle Planner (FORCAP), is used to compare financial returns, along with GHG emissions, across multiple farm management strategies. The study reveals that the addition of switchgrass production, when compared to increased beef production, offers lower income risk but the needed switchgrass price to break even is higher than the price needed to compete with the least intensive continuous grazing option and lowest stocking rate. Net GHG emissions implications of changes are quite small.

Keywords: Agricultural Finance; Land Economics/Use; Production Economics; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 31
Date: 2015
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205416

DOI: 10.22004/ag.econ.205416

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