LEXINGTON, Ill. — Switchgrass cannot economically compete with corn and soybeans on highly productive farmland, according to a unique field-scale study.

The 2012 growing season marked the third year of a U.S. Department of Energy-funded multiyear project on 320 acres near Lexington, focusing in the economic viability of the bioenergy feedstock.

Paul Walker, Illinois State University agriculture professor, is research lead, with assistance from switchgrass specialists D.K. Lee and Tom Voigt of the University of Illinois.

The latest results take into consideration that no income is generated until the year after the switchgrass stand is established. Yields increase each year after that until reaching maximum production about midway through the perennial’s about 10-year lifespan.

The 320-acre site includes 40 acres of commercially available switchgrass varieties, along with 160 acres of corn and 120 soybean acres.

“The unique thing about this project, and I’m not saying no one else is doing it or has done it, but we’re actually generating economic analysis based on field scale production,” Walker said.

“The literature has mostly computer modeling for economic analysis, and we’re finding that the real-world production and computer modeling aren’t very consistent with each other. I’m still checking if other states have some real-world economic analysis for it.”

Of the three crops struggling through last year’s drought, soybean income was the most per acre.

“The corn only yielded 80-some bushels per acre, so corn lost money, but it lost less money than switchgrass did. Now with the government support program, corn made money,” Walker said.

“For our situation, the crop revenue coverage was guaranteed at 148, and it only made 87 bushels per acre, so it had to pay on the difference at $7.50 a bushel.

“Without CRC, the corn lost $185 per acre. With the CRC payment, it made $270. The soybeans made over $380.”

A different story was found in the 2011 trials with corn leading the way, followed soybeans and switchgrass at the back of the pack.

“But the switchgrass still lost more than that,” Walker said of the 2012 results. “Switchgrass lost $128.15 per acre. It lost $452 in year one. It lost $131 in year two. So the first three years, we’ve lost over $700 an acre producing switchgrass.

“I’m not sure how many farmers are going to want to be in that business very long. They talk about switchgrass production only on the marginal acres. I don’t know why you would even want to grow it on marginal soil. This is on highly productive McLean County soil.”

As is the case with corn hybrids and soybean varieties, switchgrass varieties’ yield also vary.

“Some of the newer varieties have much higher production than the old Cave-in-Rock switchgrass that’s been around for generations,” Walker said. “Kanlow and Blade are two of the varieties we’re using. They’re pretty high-yielding, and they lose a lot less money, but they’re still losing money.”

The largest cost for switchgrass is the first year when the seed is planted and the stand is established through fertilizer and weed management. The average cost for establishing the 40-acre crop in year one was $450 per acre.

“Establishing switchgrass was pretty easy. We didn’t have much trouble,” Walker said. “We fertilized every year with nitrogen. There was seedbed preparation. We used a cultipacker and Brillion seeder. The soil preparation is very similar to establishing alfalfa.

“We sprayed a couple times for weeds that first year, so there was cost to keep the weeds out. Once switchgrass establishes, it competes with weeds very well — they won’t come, but until it’s established, you have to watch for broadleaf weeds.

“So you have to take those costs, particularly the year-one cost of $450 per acre, spread that out over five, seven, 10 years and hopefully switchgrass will be profitable.

“We were expecting it to be profitable in 2012 before the drought hit, so it will be interesting to see if we get enough yield in 2013 to pay for it.”

Pricing the harvested switchgrass was another piece of the research puzzle.

“Ideally, it would be priced based on its alternative energy value either for ethanol production or for use as a substitute for coal in electricity generation,” Walker said.

“We don’t have any of that here in central Illinois, so the market for switchgrass is comparable to not hay, but straw because when it’s harvested after dormancy, it’s mature, and it has very low nutrient value, very low protein. It becomes very high in lignin, so its value as a feedstuff is very low.

“Now, we have fed it, but we have fed it as part of a (total mixed ration) in feedlot diets strictly as roughage, and those cattle are only getting it as only 15 percent of the diet. It is not used as the primary ingredient for beef cows.

“We used switchgrass primarily as bedding because of its low nutrient value, so we price it using the value of wheat straw. That gives it a pretty low dollar value relative to any other use.”

The switchgrass value matched the $50 per ton value of wheat straw in calculating the first two years of income

“So it would have taken nine tons in year one to break even and six tons at $50 a ton in the second year to break even,” Walker said. “At $80 per ton, it would have taken five tons in year one, about four ton in year two and about 4.7 ton in year three to break even.

“Or looking at it another way, at the tons we got per acre at harvest, the dollars to break even over a three year average would have been $156 per ton.

“Those are pretty high prices, and I don’t think folks looking for alternative energy, say, as a fuel source or ethanol, is going to be willing to pay that.”

The fields had an average switchgrass production of 3.02 tons per acre in 2012 and 3.75 tons per acre in 2011.

One caveat is one has to remember that this is only for the first three years of production.

“Eventually, I think switchgrass will yield a lot more, probably the tonnage will almost double, but there’s a huge economic drain in those first couple three years that the producer has to be willing to underwrite until it becomes profitable,” Walker said.

“I’m not sure producers can afford that. Year one, there’s no yield, year two is not going to be as much as three, four, five, and by year four, you ought to be pretty much at maximum production of a typical year. That’s a long time to float an acre of ground until you start making money.

“So I think there’re some problems to getting farmers to accept being producers of switchgrass even if you get the dollars per ton up there high enough.

“The second problem I see is being able to generate enough dollars per ton to make it economical. I’m not sure it’s going to be worth that without government subsidy or support.”

Before farmers are willing to get into the business, more studies need to be conducted on the economics of switchgrass production.

“If it’s truly marginal ground and they can’t do anything else with it, OK. But I’m not sure we have that much ground in Illinois we can’t grow corn on no-till,” Walker said. “No-till allows you to go a lot of places. With no-till corn, I question: Is there marginal ground that only switchgrass can grow and corn can’t in Illinois?

“Part of our project is to see how switchgrass will complete not on marginal ground, but on high-quality soil. We want to see if it can compete. I think we can get really good yields, but whether or not economically they’re still justifiable, I’m not sure the data is going to prove that out.

“This is the first three years of a multi-year project, so there’s always danger in trying to project based on what you have.

“The first three years have not been profitable, and that’s including a drought year of corn and soybeans, when soybeans made it and corn lost money without the CRC support, but with that support program corn made money and switchgrass didn’t. Even without CRC support, I’m not sure switchgrass can compete.”