Case Study: Economic viability of producing animal bedding from low quality and small diameter trees using a wood shaving machine

This study explores the feasibility of producing animal bedding using a wood shaving machine fed with low quality and small diameter trees. An economic decision model was created, allowing individuals to input site and machine-specific parameters into the model. Model output provides data for 2 scenarios. Scenario 1 explores whether a farmer could support this venture by producing bedding for on-farm consumption only. Scenario 2 explores the profit an individual (farmer or nonfarmer) could gain if operating the wood shaving machine for 8 to 40 h/wk throughout the year. Model output for scenario 1 found that the average-sized organic and conventional dairy farm in New England would not be able to support this type of venture. Instead, the breakeven volume of bedding corresponded to farms with greater than 170 cows, indicating that larger farms, or a cooperative of locally clustered small farms using the machine collectively, would have a more favorable payback period. For scenario 2, the payback period was >15 yr if operating 8 h/wk to 561 d if operating 40 h/wk throughout the year. The 15-yr net present value was $159,884 to $1,777,435 and the discounted benefit-cost ratio was 0.8 to 9.3 when operating 8 to 40 h/wk throughout the year. However, if operating 40 h/wk, supply may outweigh demand, as enough bedding could be produced for 30 organic or 25 conventional dairies of average size in the New England region.