Biofuel Profitability

Linda Benedict, Vlosky, Richard P.  |  3/1/2011 1:50:34 AM

Paths to prosperity for small and medium-sized producers in Louisiana and Mississippi

Richard P. Vlosky

Baseline data is needed to help forest and agricultural producers determine their role in the rapidly growing biofuel and energy sector, including small and medium-sized producers. The supply chains for getting wood and other biobased feedstock from producers to consumers have not been clearly established.

A team of researchers received $409,000 from the U.S. Department of Agriculture’s Agriculture and Food Research Initiative to examine these issues in Louisiana and Mississippi. Small agricultural producers and forest landowners are those with 10-139 acres, and medium-sized producers are those with 140-999 acres. The project results will indicate how emerging bio-based technologies and markets can be integrated into business models, how new business opportunities can be identified and how innovative management strategies can be adopted to enhance profitability and diversify revenue streams. Forest residues, dedicated forest biomass production, agricultural energy crops and residuals, as well as poultry litter, are feedstocks being explored.

The study is being conducted in three phases. Phase I focuses on developing qualitative and quantitative information on agriculture and forestry in the focus regions. This is being done through focus groups and a mail survey to 9,000 small and medium-sized enterprises in Louisiana and Mississippi.

Phase II will be a more detailed examination of alternative market-product scenarios that will estimate county/parish, regional and state economic effects. Phase III will provide stakeholders the results from the first two phases through workshops and publications.

Three study regions were selected in the two states, each focusing on a unique potential biofuel-bioenergy feedstock from agriculture and forests as well as poultry litter. Each study region will re ceive an array of scenarios for different biobased products and business strategies. Financial risk will be evaluated, and estimates of regional and state economic effects will be made. View a map of Mississippi and Louisiana.

Delta Region
Poverty is a significant problem in the Delta Region, which contains some of the poorest census tracts in United States. Agriculture is a major land use in the region. Most acreage in the Delta is in soybean, corn and rice production, with additional acres in catfish production. Forests constitute about one-quarter of the land use, primarily in areas along streams unsuitable for tillage because of erosion. This region has some of the most productive soils in the world and will likely remain dominated by row-crop agriculture.

Central Mississippi
Central Mississippi is home to numerous poultry operations. Seven counties each produce more than 50 million broilers a year, and poultry production is important to the economies of more than 12 additional counties. Central Mississippi is dotted with poultry houses interspersed among forests and pastureland. The poultry industry comprises a large number of independent producers that sell to major manufacturers such as Sanderson Farms, Tyson and others. This region is a significant producer of timber, the state’s No. 2 agricultural commodity. Diversifying income streams through additional revenue sources would enhance productivity of these producers, most of whom have small to medium-sized farms.

Southwest Louisiana
Compared with northwest Louisiana and the Louisiana Florida Parishes north of Lake Ponchartrain, the southwest region of the state has a relatively low current level of forest utilization.

Richard P. Vlosky, Crosby Land and Resources LLC Professor and Director of Forest Products Development, School of Renewable Natural Resources.

(This article was published in the winter issue of Louisiana Agriculture Magazine.)

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