The Economics of Anaerobic Digester Operation on a Minnesota Dairy Farm

Abstract

Anaerobic digesters for livestock operations are receiving attention for energy production and odor control. A farm-based digester went into operation in September 1999, on an 800-cow dairy farm in Minnesota. The goals of this paper are to analyze the contribution that a digester system can make to dairy farm profitability, and to demonstrate the impact of government and utility subsidies on profitability. Results indicate that the current selling price of electricity is not sufficient to justify building an anaerobic digester in most cases unless there is a subsidy or significant nonenergy market benefits.A naerobic digesters for livestock operations are receiving attention because energy production and odor control are two critical issues for producers and society. The technology has a somewhat tarnished reputation, however, with many failures as well as some successes since it initially became popular after the early 1970s energy crisis. The goals of this paper are to analyze the contribution that a digester system can make to dairy farm profitability and to demonstrate the impact of government and utility subsidies on digester profitability.

Farm biogas production in organic agriculture: System implications

“…Organic as well as conventional farmers frequently report reduced weed infestation when manures are digested before application to the field (Lazarus and Rudstrom, 2007;Anspach et al, 2011). Although scientific findings on seed germinability after anaerobic digestion are inconsistent (Allan et al, 2003), several experiments have shown the high potential of AD for decreasing or destroying seed viability (Engeli et al, 1993;Šarapatka et al, 1993;Westerman et al, 2012aWesterman et al, , 2012b as well as for the extension of germination time (Allan et al, 2003).…”

Economic analysis of small-scale agricultural digesters in the United States

“…In the literature, discount rates range from 4.0 to 14.25% and lifetime expectancies range from 10 to 20 years [9,10,24,26,27,33]. In addition, cost sharing of 50% of capital cost was analyzed under each scenario.…”

“…Agricultural digesters utilizing this process were first widely constructed in the United States during the 1970s [1,9].…”

Community digester operations and dairy farmer perspectives

“…Given this, their adoption does not make sense for smaller farms with less capital and less manure. The EPA AgStar handbook lists a minimum of 500 cows as a condition for installing AD technology (USEPA 2007); indeed, in the entire country there does not appear to be a currently working digester on a farm with fewer than 400 cows (Lazarus and Rudstrom 2007). Yet even though adopting anaerobic digestion technologies may not make financial sense, odor complaints, CAFO regulations, and diversification become increasingly pertinent to small-to mid-sized farms.…”