There could be more trees and grass in the Mid-South’s farming future, according to a University of Tennessee study on a new renewable energy initiative presented to Congress in February.
The 25X’25 initiative proposes that the nation derive 25 percent of its energy supply from renewable sources by 2025, while continuing to produce safe, abundant and affordable food, feed and fiber. The initiative represents a broad alliance of more than 400 agricultural energy, business, labor and environmental groups.
According to Brent Bailey, southeast coordinator of the initiative, “The focus is on economic development, our national energy security and the environmental benefits. You could say this is a food, feed, fiber and fuel vision.”
Bailey, who discussed the plan at a press briefing at the Memphis Bioworks Foundation, in Memphis, said the plan “will have a positive impact on local, state and national economies through job creation and those types of things. Hopefully it will also improve our national security.”
Bailey’s job will be to coordinate 11 Mid-South and Southeast states to develop energy strategies, implement the recommendations and turn them into law. Georgia and Florida have already taken action on the plan.
Bailey says the 25x’25 action plan would cost 5 percent of what America spent on imported oil in 2006 and would result in a dramatic increase in new jobs and economic activity for rural areas, along with significant reductions in oil consumption and global warming emissions.
A 102-page study of the impact of the initiative indicates that the Southeast and Mid-South are in favorable positions to provide the lion’s share of cellulosic feedstocks to meet the 25X’25 goal. Energy feedstocks for ethanol include corn grain, stover, wood residue, straw and dedicated energy crops such as switchgrass.
The study, conducted by the University of Tennessee economics department, indicates that U.S. soybean acreage might take the largest hit from any shift in crop mix, perhaps as much as 20 million acres nationwide. Meanwhile acreage dedicated to switchgrass would rise and yields double by 2025.
Much of the switchgrass acreage is expected to come from land currently dedicated to pasture, the study says. The study also forecasts higher prices for cotton, corn and soybeans, as well as increasing yields for these commodities.
Here are findings from the UT study:
• America’s farms, forests and ranches can play a significant role in meeting the country’s renewable energy needs.
• The 25x’25 goal is achievable. Continued yield increases in major crops, strong contributions from the forestry sector, utilization of food processing wastes, as well as the use of over 100 million acres of dedicated energy crops, like switchgrass, will all contribute toward meeting this goal. A combination of all of these new and existing sources can provide sufficient feedstock for the additional renewable energy needed.
• The 25x’25 goal can be met while allowing the agricultural sector to reliably produce food, feed and fiber at reasonable prices.
• Reaching the goal would have a favorable impact on rural America and the nation as a whole. Including multiplier effects through the economy, the projected annual impact on the nation from producing and converting feedstocks into energy would be in excess of $700 billion in economic activity and 5.1 million jobs in 2025, mostly in rural areas.
• By reaching the 25X’25 energy goal, the total addition to net farm income could reach $180 billion, as the market rewards growers for producing alternative energy and enhancing national security. In 2025 alone, net farm income would increase by $37 billion compared with USDA baseline projections.
• Reaching the goal would also have significant positive price impacts on crops. In the year 2025, when compared with USDA baseline projections, national average per bushel crop prices are projected to be 71 cents higher for corn, 48 cents higher for wheat, and $2.04 higher for soybeans.
• With higher market prices, an estimated cumulative savings in government payments of $15 billion could occur. This does not include potential savings in fixed/direct or Conservation Reserve Program payments.
• In the near term, corn acres are projected to increase. As cellulosic ethanol becomes commercially viable after 2012, the analysis predicts major increases in acreage for a dedicated energy crop like switchgrass.
• The higher feed crop prices do not result in a one-to-one increase in feed expenses for the livestock industry. Increases in ethanol and biodiesel production result in more distillers dried grains (DDG) and soybean meal, which partially compensate for increased corn prices. In addition, the production of energy from manure and tallow could provide additional value for the industry.
• Contributions from America’s fields, farms and forests could result in the production of 86 billion gallons of ethanol and 1.2 billion gallons of biodiesel, which has the potential to decrease gasoline consumption by 59 billion gallons in 2025.
To obtain the amount of renewable energy in the goal, two conditions need to be met. First is the commercial introduction of the technology for cellulosic-to-ethanol conversion.
Second is the development of an energy dedicated crop economy with 105.8 million planted acres. This acreage is projected to come in production by intensifying the management of pasture in cropland, in order to release 172 million acres of pasture/rangeland to energy feedstock production.
The study says that the Midwest would have a comparative advantage to produce cellulosic ethanol from corn and wheat residues, while the Southeast and the South would have the comparative advantage in dedicated crops production.
Acreage shifts are projected at 20 million acres from soybean production, 9 million acres from wheat production, and the remaining from corn and minor crops production.
The 25X’25 coalition is supported by the Energy Future Coalition, which collects money from private foundations. The coalition was formed shortly after the terror attacks of 9/11, to study the possibility of achieving energy independence.