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Economics of Poplar Production in Minnesota, USA

Research Issue

[photo:] Poplar growing on a farm in central Minnesota, USA.Uncertain profitability across the landscape is a concern that hinders broad-scale deployment of short-rotation woody crops such as poplars. However, there may be specific locations throughout the United States where these purpose-grown trees are the best crop choice because of unique soil, climatic, or market conditions that limit the alternatives, thereby creating opportunities for inclusion of these woody feedstocks into national (and regional) bioenergy portfolios. In addition to physical productivity, costs and markets are key factors determining landowners’ decisions about whether to grow a given crop on their land. Escalating prices for corn, soybeans, and other agronomic crops, in particular, have increased the demand for land capable of growing such woody crops. Therefore, it is important to integrate productivity with cost and market data in order to develop enterprise budgets that producers can use to inform their decisions.    

Our Research

We evaluated the joint effects of poplar biomass productivity and land costs on poplar production economics in Minnesota, USA. Specifically, we compared the results for two genetic groups across 12 Minnesota counties, using a process-based model (3-PG) to estimate aboveground biomass productivity. The genetic groups consisted of generalist genotypes that grow well across the state versus specialist varieties that are better-adapted to specific soil and climate conditions. The counties represented three levels of productivity which, due to spatial stratification, were analogous to three biomass supplysheds. We calculated optimal rotation ages (ORA) and breakeven prices (at 5 and 10% discount rates) for each combination of productivity and genetic group. From these joint analyses, we developed complete poplar crop enterprise budgets for the state and are currently assessing landowner adoption preferences based on these budgets.

Expected Outcomes

Our results are important for producers making decisions on whether poplars warrant broad-scale deployment for bioenergy, biofuels, and/or bioproducts, as well as phytotechnologies. This information is also important for policymakers and resource managers interested in economic and ecological trade-offs among various crop alternatives. Researchers will also gain vital information for understanding the relationship between productivity and economics of these purpose-grown trees.    

Research Results

Lazarus, W.; Headlee, W.L.; Zalesny, R.S., Jr. 2015. Impacts of supplyshed-level differences in productivity and land costs on the economics of hybrid poplar production in Minnesota, USA. BioEnergy Research 8:231-248.

Lazarus, W.; Headlee, W.L.;  Zalesny, R.S., Jr. 2014. Impacts of supplyshed-level differences in productivity and land costs on the economics of hybrid poplar production in Minnesota, USA. In: 10th Biennial Conference of the Short Rotation Woody Crops Operations Working Group; July 17-19, 2014; Seattle, WA, USA. Also presented at: International Poplar Symposium VI; July 20-23, 2014; Vancouver, British Columbia, Canada.

Zalesny, R.S., Jr. 2012. Woody feedstock production for bioenergy and environmental sustainability in the North Central United States. In: 3rd Pan American Congress on Plants and Bioenergy; July 15-18, 2012; Urbana-Champaign, Illinois.

Zalesny, R.S., Jr.; Donner, D.M.; Coyle, D.R.;  Headlee, W.L. 2012. An approach for siting poplar energy production systems to increase productivity and associated ecosystem services. Forest Ecology and Management 284:45-58.

Lazarus, W.F.; Tiffany, D.G.; Zalesny, R.S., Jr.; Riemenschneider, D.E. 2011. Economic impacts of short rotation woody crops for energy or oriented strand board: a Minnesota case study. Journal of Forestry 109:149-156.

 

Research Participants

Principal Investigators

  • William F. Lazarus, University of Minnesota, Department of Applied Economics, St. Paul, MN
  • William L. Headlee, Iowa State University, Department of Natural Resource Ecology and Management, Ames, IA
  • Ronald S. Zalesny Jr., US Forest Service Northern Research Station- Team Leader, Research Plant Geneticist

Research Partners

  • Dean Current, University of Minnesota, Center for Integrated Natural Resource Management, St. Paul, MN
  • Bradford Bender, Michigan State University, Forest Biomass Innovation Center, Escanaba, MI
  • Brian Stanton, GreenWood Resources, Inc., Portland, OR

Last Modified: October 4, 2016