On average, it costs $60/ton to produce switchgrass for cellulosic ethanol production, according to a joint research project conducted by USDA-ARS and the University of Nebraska-Lincoln. The project gathered on-farm cost data after contracting with 10 farmers in Nebraska, North Dakota and South Dakota to commercially grow switchgrass for five years, starting in 2000 and 2001. The farmers recorded all costs for producing switchgrass biomass, tracing seed and fertilizer expenses to labor and equipment costs. Total baled biomass yields were recorded for each farm.

Two farmers with previous experience growing switchgrass were able to limit production costs to $39/ton. They were among a group of five farmers who held production costs to $50/ton or less. The researchers suggest other farmers might be able to achieve similar production costs as they gain experience with the crop. Based on the $50/ton figure, and assuming a conversion efficiency of 80-90 gallons per ton, the on-farm production cost of cellulosic ethanol from switchgrass would be about 55-62 cents per gallon. The researchers also speculated that production costs may further decrease as new, "ethanol-friendly" varieties are developed.

The study was designed as follow-up research to an energy analysis paper in which the research team reported that switchgrass, when used for cellulosic ethanol, yielded over five times more energy than required to produce the fuel. The most recent findings are in USDA-ARS’ Bioenergy Research at www.ars.usda.gov/is/pr.