Economic Feasibility of Switchgrass Production as a Bioenergy Feedstock in South Carolina

In the last few years the interest around the development of renewable sources of energy has considerably increased in response to the negative environmental impacts and scarcity of fossil fuels. Switchgrass (Panicum Virgatum) is a perennial crop, native to North America that has been identified as a promising energy crop due to its high biomass production and its ability to adapt to marginal environments (poor soils). This study evaluated the economic feasibility of Switchgrass production for South Carolina farmers and its eventual commercialization as bioenergy feedstock. With this objective, partial budgets for the initial stages of the crop and a capital budget for its productive stage were developed, using yield and costs estimates from the Clemson University Pee Dee Research Center and the University of Tennessee. Additionally, the price that the crop could get in the market and the real prices of its inputs were identified and analyzed as potential factors of risk. Following the World Bank’s methodology net CO₂ emissions were estimated. The analysis showed a positive return to profit and management of 27 USD$/Acre and a 90% probability of Switchgrass being profitable, assuming its positive externalities are taken into account when determining its market price.