In a follow-up study on the economics of switchgrass production for cellulosic ethanol, researchers from the Agricultural Research Service and University of Nebraska-Lincoln, found on average, switchgrass production costs were $60 per ton. The scientists contracted with 10 farmers in Nebraska, North Dakota and South Dakota to commercially grow switchgrass for five years starting in 2000 and 2001. Throughout the study, the farmers recorded all costs for producing switchgrass biomass, from seed and fertilizer expenses to equipment and labor costs. Total baled biomass yields were recorded for each farm.
Two farmers with previous experience growing switchgrass were able to limit production costs to $39 a ton. They were among a group of five farmers whose production costs were $50 or less per ton. That's something farmers elsewhere could probably achieve as they, too, gain production experience with switchgrass, the researchers suggest. Based on the $50-per-ton figure, and assuming a conversion efficiency of 80 to 90 gallons per ton, the farmgate production cost of cellulosic ethanol from switchgrass would be about $0.55 to $0.62 per gallon. ARS agronomists expect production costs will also decline as new, "ethanol-friendly" cultivars are developed.