Growing Biomass Fuel Industry, Declining Local Forage Demands, and Changing Greenhouse Gas Emissions from US Agriculture: A Case Study
Agricultural and Resource Economics
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AbstractThis paper investigates the effect of a biomass crop introduction in a local market where field crops; cattle forage and biomass crops compete for the agricultural resources and determine land use. A simulation study for a State in the US (Minnesota) with extensive and diverse agricultural resources that could also support a biomass industry is reported. Local market impact on prices and land use is summarized. A local biofuel industry with 1.0 billion gallon capacity can transform declining local land values to stable or moderately increasing land values; partly because secular declines in cattle forage can be replaced with biofuel demands. The effects of greenhouse gas emissions and sinks are also estimated. The local agriculture sectors’ net greenhouse gas changes are converted from a net emission to a net sink position with a biofuels industry-we calculate an annual net improvement of 55 bil. Lbs CO2 –equivalent; due; in part; declining cattle emissions and favorable land use effects from expanding hay production.