Impact of environmental values on the breakeven price of switchgrass

This study estimates the farm-gate breakeven price of switchgrass relative to wheat in Oklahoma, USA. The breakeven price of switchgrass is determined for two situations: when external consequences are ignored and when the environmental costs of changes in soil erosion, fertilizer (nitrogen and phosphorous) runoff, and soil organic carbon (SOC) are considered. Results suggest that if indirect land use changes are ignored, the farm-gate breakeven price of switchgrass when only the internal costs are considered is 69%-144% greater (depending on land quality) than if the value of selected external consequences are considered. The potential environmental benefits are greater if highly erodible land is switched from annual cropping to switchgrass.