Managing Expected Switchgrass Biomass Yield Variability by Strategically Selecting Land to Lease

Biorefineries that plan to use switchgrass exclusively will have to account for year-to-year variability in feedstock production. The objective of this research is to determine the quantity, class, and location of land to lease for switchgrass production to provide for the needs of a biorefinery. The firm could elect to lease land based on average switchgrass yields or to lease to attempt to insure that even in the worst case (based on historical data) production year the area leased will produce sufficient feedstock to fully provide for the needs of the biorefinery. EPIC was used to generate empirical distributions of switchgrass biomass yields for three land classes for each of 30 counties. Mathematical programming was used to address the objectives and to determine the tradeoff between quantity of land to lease and the daily cost of idling the biorefinery. Leasing sufficient land to ensure adequate feedstock in every state of nature increases the land requirement by 21% and delivered feedstock cost by 7%.