Extension and Outreach/Department of Economics
The Potential Values and Cost of Corn Stover
Corn Stover Harvest & Transport SeminarOmaha, Nebraska
Sept. 10, 2013
Chad HartDepartment of Economics
Iowa State University
Extension and Outreach/Department of Economics
Renewable Fuels Standard (RFS)
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Extension and Outreach/Department of EconomicsSource: NREL
Extension and Outreach/Department of Economics
Pricing Corn Stover
Added costs to seller (minimum price to accept)•Harvesting and transporting (unless buyer does it)•Nutrient replacement•Reduced tillage? (costs saved)•Yield effect?
Value to buyer (maximum price to pay)•Ethanol use: tied to price of gas and oil •Feed use: tied to prices of alternative feedstuffs
For trade to occur, the price must be between these values.
Extension and Outreach/Department of Economics
Costs to Seller (custom rates)Assume 2 tons of 80% dry matter stover harvested per acre (four 1,250-pound bales)
Harvesting costs $/acre– Chopping stalks $11.40– Raking $ 6.25– Baling ($11.50/bale x 4 bales/ac) $46.00– Collecting ($2.85/bale x 4 bales) $11.40– Transport (20 mi. @ $.20/mi/bale) $16.00– Total $91.05/ac.
Extension and Outreach/Department of Economics
Costs to Seller(variable costs only, including labor)
Harvesting costs, $/acre– Chopping stalks $ 9.84– Raking $ 5.31– Baling (including twine) $15.21– Collecting $ 4.25– Transporting ($3.65/ton x 2.5 tons)$ 9.12– Total $43.73/ac.
Based on Masters thesis by Kevin Peyton, Iowa State, 2012.
Extension and Outreach/Department of Economics
Nutrient removal per ton of dry matter – 3 lb. P @ $0.75/lb. $ 2.25– 19 lb. K @ $0.50/lb. $ 9.50
$ 11.75 / dry ton
X 2 tons/acre (dry matter) $ 23.50 / acre
+ harvesting costs (custom) $ 91.05 / acre
Total cost per acre $114.55
Cost per wet ton (2.5 t /acre) $ 45.82 / ton
Cost per bale $ 28.64 / bale
Extension and Outreach/Department of Economics
Nutrient removal per ton of dry matter – 3 lb. P @ $0.75/lb. $ 2.25– 19 lb. K @ $0.50/lb. $ 9.50
$11.75 / dry ton
X 2 tons/acre (dry matter) $23.50 / acre
+ harvesting costs (variable) $43.73 / acre
Total cost per acre $67.23
Cost per wet ton (2.5 t /acre) $26.89 / ton
Cost per bale $16.81 / bale
Extension and Outreach/Department of Economics
Maximum Price to Offer =value of feedstuffs replaced
per wet ton of stover fed
1.16 tons of hay @ $100/ton $116.00
Less 0.22 tons of DDGs @ $200/ton -$ 44.00
$ 72.00/t
or $45.00/bale
Extension and Outreach/Department of Economics
Bargaining Range
Seller’s Buyer’s
Minimum Maximum
Per wet ton $14.69 to $72.00
Per bale (1,250 lb) $ 9.18 to $45.00
Key determinant: who bares harvest,
transportation and storage costs
Extension and Outreach/Department of Economics
Cleanliness of stover?
Yield impacts of stover removal?
Less tillage needed?
Compaction?
Time needed for fall tillage and fertilizer?
Other Items to Consider
Source: Darr, et al. 2012
Extension and Outreach/Department of Economics
Some Guidance on PricingCorn Stover PricerAg Decision Maker -- Iowa State University ExtensionEstimate a price for corn stover standing in the field or harvested and stored.Ag Decision Maker information file A1-70 "Estimating a Price for Corn Stover" has more details.Please enter your input values into the yellow shaded cells.Place the cursor over cells with red triangles to read comments.
Feed value and nutrient costs for corn stover Nutrient removal rates, lb. / T dry matter (optional)Hay price for medium quality mixed grass/legume hay, $ per ton 125$ Nitrogen, lb.Price of dried distillers grains (DDGS), $ per ton 260$ Phosphorus, lb. 5.9 Price of anhydrous ammonia, $ per ton 800$ Potassium, lb. 25.0 Price of MAP (11-52-0), $ per ton 606$ Estimated weight of a large round bale (optional)Price of potash (0-0-60), $ per ton 600$ Bale diameter, inches 65Estimated moisture percent of stover, % 20% Bale width, inches 60Estimated weight of a large round bale of corn stover 1,250 Est. bale weight, lb. 1,268
Harvesting costs for corn stover Chopping stalks, $ per acre 11.40$ See current Iowa Farm Custom Rate SurveyRaking, $ per acre 6.25$ Baling, $ per bale 11.70$ Estimated bales harvested per acre (optional)Cost for plastic wrap (if used), $ per bale Corn yield, bu./acre 180Moving or transporting bales, $ per bale 8.75$ % of stover harvested 50%Bales harvested per acre 4.0 Est. bales harvested per acre 4.0
Value for large round bales of corn stoverValue based on costs to seller (minimum price to accept) Per Bale Per Wet Ton Per Acre
Pounds of nitrogen removed 0.0 0.0 0.0Pounds of phosphate removed 3.0 4.7 11.8Pounds of potash removed 12.5 20.0 50.0Value of extra nutrients removed 7.66$ 12.26$ 30.66$ Total harvesting costs 24.86$ 39.78$ 99.45$ Equals cost of corn stover (at the farm) 32.53$ 52.04$ 130.11$
Value based on the cost of alternative feed sources (maximum price to offer)Market value of 1.16 tons of hay minus .22 ton of DDGS 54.88$ 87.80$ 219.50$
Extension and Outreach/Department of Economics
Thank you for your time!
Ag Decision Maker web site:http://www.extension.iastate.edu/agdm/