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Economics Of Farm Digesters Explored
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BioCycle February 2011, Vol. 52, No. 2, p. 15
ECONOMICS OF FARM DIGESTERS EXPLORED
The U.S. Department of Agriculture published two reports in February dealing with carbon prices, climate change and the adoption of methane digesters on dairy and hog farms to manage potential greenhouse gases (GHG), nutrients and odors while producing electricity and heat for use on and off the farm. According to both the summary and comprehensive reports, climate change mitigation policies that effectively put a price on GHG emissions could allow livestock producers to “sell” these reductions to other GHG emitters who face emissions caps or who voluntarily wish to offset their own emissions. Depending on the direction and scope of future climate change legislation, the reports state, income from carbon-offset sales could make methane digesters profitable for many livestock producers. Of 157 farm-based digesters in the United States (as of October 2010), 126 are on dairies and 24 are at hog operations.
The reports concluded that larger operations would be more likely to adopt a digester and would likely earn substantially higher profits on average than smaller operations. Hence, introduction of a carbon market in a region could enhance existing economies of scale in production and result in further concentration of production on the largest operations. The reports also found that smaller livestock operations may be able to achieve a more efficient digester scale by supplementing manure with food waste products — thus boosting methane production and introducing tip fees — or by sharing a digester with other small operations. The full reports are available at www.ers.usda.gov/
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