Short-Rotation Energy Plantations in North Central United States: An Economic Analysis

Abstract

Abstract Interest in using intensive silviculture to produce high yields of biomass for energy has increased remarkably in the north central region of the United States. The North Central Forest Experiment Station is cooperating with others in establishing trial plantations throughout the north central region to obtain accurate estimates of biomass yields and costs of producing biomass for energy. The financial attractiveness of two woody biomass plantation alternatives for agricultural land was investigated—a basic short-rotation intensive culture plantation system on average agricultural land and a system on erodible agricultural land that is eligible for government financial incentives. Early growth from selected trial plantations has been greater than expected. However, with the recent energy glut in the United States, forecasted prices that potential users of woody biomass would be willing to pay have gradually decreased because of declining fossil fuel prices. In light of these two recent changes, the system on average agricultural land resulted in a negative financial performance while the system on erodible agricultural land with government financial incentives resulted in a positive financial performance.