Economic Feasibility of Agricultural Land Conversion to Switchgrass in the Lower Fox River Watershed, Wisconsin

Abstract

Located in the four Northeastern counties of Brown, Calumet, Outagamie, and Winnebago, the Lower Fox River Watershed (LFR Watershed) extends from Lake Winnebago to the Bay of Green Bay. The most common land use in the watershed is agriculture, which helps contribute to the high phosphorus and total suspended solids loads that the Bay of Green Bay receives. Corn, soybeans, alfalfa, and wheat dominate the major crop types in the LFR Watershed. Switchgrass is being investigated as a possible alternative crop in the LFR Watershed due to its ability to provide economic revenue to farmers while providing a myriad of environmental services for the watershed. Economic comparisons between traditional crops and switchgrass are sparse and generally geographically limited. Lowland agricultural soils can be subjected to extended periods of water saturation, which can limit crop growth and affect crop yield. In Chapter 3 the economic comparison between a corn and soybean rotation and switchgrass on marginal lowland fields is investigated. Results indicate that both cropping patterns are profitable in the LFR Watershed, with a corn/soybean rotation generating an average profit of $104.10 or $133.73 per acre (depending on nutrient application type) per year and switchgrass generating an average profit of $24.66 per acre per year. Under an initial investigation, a corn and soybean rotation outcompetes switchgrass by $80-$110 per acre. However, switchgrass provides many environmental benefits, including reductions in phosphorus and total suspended solids runoff, sequestration of carbon, and provides habitat for animal species. Subsidy programs exist that recognize the importance of environmental benefits and increase the profitability of switchgrass. Some of the relevant programs in the LFR Watershed are described in Chapter 4 as well as the subsidy money that could be available. Most subsidy programs do not provide enough money to close the gap between switchgrass and traditional agriculture. However, the USDA administered Biomass Crop Assistance Program (BCAP) has the potential to help switchgrass profits exceed that of a corn and soybean rotation by $20 to $50 per acre per year.