The Economics of Anaerobic Digester Operation on a Minnesota Dairy Farm

William F. Lazarus and Margaretha Rudstrom

Review of Agricultural Economics, 2007, vol. 29, issue 2, pages 349-364

Abstract: Anaerobic digesters for livestock operations are receiving attention for energy production and odor control. A farm-based digester went into operation in September 1999, on an 800-cow dairy farm in Minnesota. The goals of this paper are to analyze the contribution that a digester system can make to dairy farm profitability, and to demonstrate the impact of government and utility subsidies on profitability. Results indicate that the current selling price of electricity is not sufficient to justify building an anaerobic digester in most cases unless there is a subsidy or significant nonenergy market benefits. Copyright 2007 American Agricultural Economics Association

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