Reduced funding for a critical federal government program has in turn reduced the amount of money received by Bruce Nelson and other corn growers supplying stover to Poet-DSM Advanced Biofuels’ Project Liberty in Emmetsburg, IA.
In 2010, the Poet plant became a qualified biomass crop conversion facility under the Biomass Crop Assistance Program (BCAP), says Adam Wirt, Poet’s biomass manager. The government matched the amount paid by Poet for that year’s stover, and growers received $80-85/ton.
For 2011, Congress cut BCAP funding from more than $100 million to $17 million, and USDA’s Farm Service Agency earmarked the entire amount for another phase of the program. The loss of matching payments “has created a lot of issues,” says Wirt.
Poet initially contracted to pay growers $41/dry ton for their 2011 residue, assuming the government would match it. When that didn’t happen in 2011, the company revised its contracts, offering $67-73/ton to growers who agreed to supply stover for three additional years.
“So now they’re paying an average of $71/ton for a four-year contract,” Nelson reports. “That makes it profitable for both the custom guy and the farmer and, apparently, Poet.”