Guidelines for Estimating
Wheat Straw Biomass Production Costs
2017
High Crop Residue Zone in Manitoba
..............................................
Guidelines for Estimating
Wheat Straw Biomass Production Costs
High Crop Residue Zone
Date:
January, 2017
The following budgets are estimates of the cost of producing wheat straw
biomass in Manitoba. General Manitoba Agriculture recommendations are
assumed in using fertilizers and chemical inputs. These figures provide an
economic evaluation of wheat straw biomass and estimated prices required to
cover all costs. Costs include labour, investment and depreciation, but do not
include management costs, nor do they necessarily represent the average
cost of production in Manitoba.
These budgets may be adjusted by putting in your own figures. As a producer
you are encouraged to calculate your own costs of production for various
crops. On each farm, costs and yields differ due to soil type, climate and
agronomic practices.
it b
/ i lt
This tool is available as an Excel worksheet at:
www.manitoba.ca/agriculture
or at your local Manitoba Agriculture GO Office.
The Farm Machinery Custom and Rental Rate is also available to help
determine machinery costs.
*High Crop Residue generally refers to areas of Manitoba within the Red River Valley where farmers
actively manage crop residue with various tillage practices. Producers should use the publication
that best corresponds to their farming practices and soil type.
Note: This budget is only a guide and is not intended as an in-depth study of the cost of production
of this industry. Interpretation and use of this information is the responsibility of the user. If you
need help with a budget, contact your local Manitoba Agriculture GO Office.
Guidelines: Wheat Straw Biomass Production Costs
2
Wheat Straw Biomass Cost of Production Summary - January, 2017
Based on 600 Acres - 60 bu grain yield and 1.52 tons straw per acre
912 Total tons Straw produced
A. Operating Costs
1.01 Estimated Net Nutrient Value 1
2
1.02 Custom Baling
3
1.03 Custom Field Moving
1.04 Custom Hauling 4
1.05 Repairs & Maintenance
1.06 Miscellaneous
Sub-total Operating Cost
1.07 Interest on Operating
Total Operating Costs
B. Fixed Costs
2.0 Depreciation
2.01 Storage
3.0 Investment
3.01 Storage
Total Fixed Costs
Total Cost of Production
Energy Cost Comparison
5
Wheat Straw @ $45.92/ton
6
Wheat Straw cubes@ $85.92/ton
Coal-lignite @ $120/ton
Wood Pellets @ $250/ton
Oats - grain @ $3.25/bu
MB Hydro @ $0.08861/kWh
Natural gas high E @ $0.4900/cu.meter
Natural gas low E @ $0.4900/cu.meter
Per
Million Btu
$5.15
$9.63
$15.20
$24.69
$20.39
$25.96
$16.22
$19.89
$/acre
-$1.82
$38.51
$10.13
$2.73
$0.40
$2.50
$52.45
$1.18
$53.63
$/ton
-$1.20
$25.34
$6.66
$1.80
$0.26
$1.64
$34.50
$0.78
$35.28
$6.67
$4.39
$0.40
$7.07
$0.26
$4.65
$60.70
$39.93
Your Cost
Per kWh
$0.0176
$0.0329
$0.0519
$0.0843
$0.0696
$0.0886
$0.0553
$0.0679
Breakeven Biomass Value
Coal-lignite @ $120/ton
Wood Pellets @ $250/ton
Oats - grain @ $3.25/bu
MB Hydro @ $0.08861/kWh
Natural gas high E @ $0.4900/cu.meter
Natural gas low E @ $0.4900/cu.meter
Wheat Straw per Ton
$135.66
$220.30
$181.97
$231.69
$144.72
$177.52
Breakeven wheat straw $/ton = $ per million Btu x 8.9239 million Btu per ton wheat straw.
1. Est. Nutrient Value is based on 12.5lb.N@$0.39/lb, 4.1lb.P@$0.44/lb, 14lb.K@$0.27/lb, 2.5lb.S@$0.43/lb.
per ton of straw minus $19.45 estimated residue management cost per acre.
2. The cost of custom baling is based on $11.40 per bale.
3. The cost of custom field moving of bales is based on $3.00 per bale.
4. The cost of custom hauling is based on $5.50/mile for 5 miles.
5. Total straw Cost of Production (COP) + 15% producer markup (risk, managment and profit margin).
6. Total straw COP + 15% producer markup + $40.00/ton straw cube production cost.
Disclaimer: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry.
Interpretation and utilization of this information is the responsibility of the user.
Manitoba Agriculture
3
Wheat Straw Biomass Cost of Production Input Assumptions
Land
Total Acres
600 acres
Producer Markup
(Risk, management, and profit margin)
15%
Nutrient Value (Fertilizer cost)
Nitrogen
Phosphate
Potassium
Sulfur
$/lb
0.393
0.443
0.272
0.425
Grain Production
Wheat yield
Straw to Grain Ratio
Baled/Harvested Straw
Wheat
Straw
lbs/ton
12.5
4.1
28.0
2.5
Straw
Nutrient
Value
100%
100%
50%
100%
60.0
1.30
bu/ac
S:G
65%
Custom Rates
Heavy harrow - custom rate ($/acre)
Average harrow passes per acre
Deep tillage - custom rate ($/acre)
Baling - custom rate ($/bale)
Pickup, load, unload and stack - ($/bale)
Average round bale weight (lbs)
Average bale moisture content
Hauling - custom rate per loaded mile
Hauling - average miles per load
Hauling - average bales per load
$4.75
2
$9.10
$11.40
$3.00
900
11
$5.50
5
34
Repairs & Maintenance
% rate of investment
$/acre
passes
$/acre
$/bale
$/bale
lbs
%
$/mile
miles
bales
2%
Miscellaneous
Miscellaneous Costs
Straw chopper - diesel fuel
Wheat straw cube production
Average coal moisture content
Wood pellet moisture content
Oat grain moisture content
Interest
Interest on Operating
Investment interest rate
$2.50
$0.85
$40.00
12
5
12.5
$/acre
$/acre
$/ton
%
%
%
4.50 %
2.25 %
Energy Cost Comparisons
Wheat straw - dry basis
MB Hydro residential rate
Coal - lignite
Wood pellets
Oats (grain - 34 lb. bushel)
Natural gas - high efficiency
Natural gas - low efficiency
Cost per unit
$39.93
ton
$0.08861
kWhr
$120
ton
$250
ton
$3.25
bushel
m3
$0.490
m3
$0.490
Btu per unit
7,713
lb.
3,413
kWh
6,900
lb.
8,200
lb.
8,242
lb.
m3
32,844
m3
32,844
Heat
Efficien
65%
100%
65%
65%
65%
92%
75%
Capital Costs
Capital Costs
Storage Investment
Storage
Total Capital Investment
Biomass
Cost/Acre
$20
Useful
Life
3
Salvage
Value
0%
Market
% Allocated Allocated
Value
to Biomass
Biomass
$12,000
100%
$12,000
$12,000
$12,000
Manitoba Agriculture
Guidelines: Wheat Straw Biomass Production Costs
4
Assumptions
1. Assumed a total of 600 acres of wheat straw biomass.
2. Assumed an average yield of 1.52 tons per acre.
3. Assumed a 15% producer markup per ton of straw.
4. Straw value is based on net nutrient value per acre.
5. Machinery and equipment costs for the wheat straw biomass enterprise are based on
custom rates. Storage facilities were valued at $12,000 in total.
6. The budget is based on a round bale production system with outside storage.
Wheat Straw Biomass Cost of Production Worksheet
A. Operating Costs
1.01 Estimated Net Nutrient Value
Nitrogen
12.5
1.00
x
$0.39
=
$4.91
P2O5
x
=
lbs/ton straw
straw nutrient vaue
cost/lb
$/ton
x
=
28
0.50
$0.272
$3.81
lbs/ton straw
straw nutrient vaue
cost/lb
$/ton
x
=
3
1.00
$0.43
$1.06
lbs/ton straw
straw nutrient vaue
cost/lb
$/ton
=
x
=
$11.60
1.52
$17.63
$/ton estimated nutrient value
tons straw per acre
Estimated straw nutrient value per acre
+
=
$4.75
2.0
$9.10
$0.85
$19.45
heavy harrow per acre
passes per acre
deep tillage per acre
straw chopper - diesel fuel per acre
Estimated residue management per acre
=
$17.63
$19.45
-$1.82
Estimated straw nutrient value per acre
Estimated residue management per acre
Estimated Net Nutrient Value per Acre
÷
=
x
=
60.0
36.744
1.63
1.10
1.8
bu/acre
bu/tonne
tonnes per acre
tons per tonne
tons grain per acre
1.30
straw to grain ratio
Sulfur
x
subtotal
Total
Wheat Yield
Straw Yield
lbs/ton straw
straw nutrient vaue
cost/lb
$/ton
4.1
1.00
$0.44
$1.82
K2O
subtotal
Your Cost
Manitoba Agriculture
Guidelines: Wheat Straw Biomass Production Costs
Total
0.65
1.80
1.52
600
912
x
=
x
=
5
baled/harvested straw
tons grain per acre
tons straw per acre
acres
tons of straw produced
1.02 Custom Baling Costs
1.5
2000
900
$11.40
$38.51
tons straw per acre
lbs/ton
bale weight (lbs)
$/bale
$ /acre
1.03 Custom Field Moving Costs
Pick up, load, unload & stack
1.5
x
2000
÷
900
x
$3.00
=
$10.13
tons straw per acre
lbs/ton
bale weight (lbs)
$/bale
$ /acre
x
÷
x
=
1.04 Custom Hauling Costs
x
=
=
5
$5.50
$27.50
34
900
15.3
$1.80
x
=
1.5
$1.80
$2.73
tons/acre
$/ton
$ /acre
2.0%
$20
$0.40
percentage rate
investment/acre
$ /acre
x
=
miles per load
$/mile
$/load
bales/load
bale weight (lbs)
tons/load
$/ton
1.05 Repairs & Maintenance
x
=
*Investment in straw biomass includes storage.
1.06 Miscellaneous
=
$2.50
1.07 Interest on operating costs
$52.45
÷
2
x
4.5%
=
$1.18
$/acre
subtotal operating
average
interest rate
$/acre
Capital Costs
Storage
Total Capital Investment
Market
% Allocated
Value
to Biomass
$12,000
100%
$12,000
Allocated
Biomass
$12,000
$12,000
Manitoba Agriculture
Guidelines: Wheat Straw Biomass Production Costs
B. Fixed Costs
2. Depreciation
2.01 Storage
6
÷
÷
=
$12,000
$0
3
600
$6.67
storage investment
salvage value
years useful life
acres
$/acre
+
÷
÷
x
=
$12,000
$0
2
600
4.0%
$0.40
storage investment
salvage value
average
acres
investment rate
$/acre
3. Investment
3.01 Storage
C. Energy Cost Comparison
4.01 Wheat Straw
7,713
x
0.89
=
6,864.57
x
2,000
= 13,729,140
x
65%
=
8,923,941
x
=
÷
=
$39.93
15%
$45.92
8.9239
$5.15
÷
=
8,923,941
3,413
2,614.69
÷
=
$45.92
2,614.69
$0.0176
Btu per pound
dry matter content
Btu per pound (as received)
Pounds per ton
Total Btu per ton
Heat Efficiency
Net Btu per ton
Cost of Production per ton
Producer Margin
Cost per ton
Million Btu per ton
per Million Btu
Net Btu per ton
Btu per kWh
kWh per ton
Cost per ton
kWh per ton
per kWh
4.02 Wheat Straw Cubes
x
=
x
=
x
=
7,713
0.89
6,864.57
2,000
13,729,140
65%
8,923,941
x
+
=
÷
=
$39.93
15%
$40.00
$85.92
8.9239
$9.63
8,923,941
Btu per pound
dry matter content
Btu per pound (as received)
Pounds per ton
Total Btu per ton
Heat Efficiency
Net Btu per ton
Cost of Production per ton
Producer Margin
Wheat Straw cube production per ton
Cost per ton
Million Btu per ton
per Million Btu
Net Btu per ton
Manitoba Agriculture
Guidelines: Wheat Straw Biomass Production Costs
7
÷
=
3,413
2,614.69
Btu per kWh
kWh per ton
÷
=
$85.92
2,614.69
$0.0329
Cost per ton
kWh per ton
per kWh
x
=
x
=
x
=
6,900
0.88
6,072.00
2,000
12,144,000
65%
7,893,600
÷
=
$120.00
7.8936
$15.20
÷
=
7,893,600
3,413
2,312.80
÷
=
$120.00
2,312.80
$0.0519
x
=
x
=
x
=
8,200
0.95
7,790.00
2,000
15,580,000
65%
10,127,000
÷
=
$250.00
10.1270
$24.69
÷
=
10,127,000
3,413
2,967.18
÷
=
$250.00
2,967.18
$0.0843
x
=
x
=
x
=
8,242
0.88
7,211.75
2,000
14,423,500
65%
9,375,275
÷
$191.18
9.3753
4.03 Coal - Lignite
4.04 Wood Pellets
4.05 Oats - grain
Btu per pound
dry matter content
Btu per pound (as received)
Pounds per ton
Total Btu per ton
Heat Efficiency
Net Btu per ton
Cost per ton
Million Btu per ton
per Million Btu
Net Btu per ton
Btu per kWh
kWh per ton
Cost per ton
kWh per ton
per kWh
Btu per pound
dry matter content
Btu per pound (as received)
Pounds per ton
Total Btu per ton
Heat Efficiency
Net Btu per ton
Cost per ton
Million Btu per ton
per Million Btu
Net Btu per ton
Btu per kWh
kWh per ton
Cost per ton
kWh per ton
per kWh
Btu per pound
dry matter content
Btu per pound (as received)
Pounds per ton
Total Btu per ton
Heat Efficiency
Net Btu per ton
Cost per ton
Million Btu per ton
Manitoba Agriculture
Guidelines: Wheat Straw Biomass Production Costs
8
=
$20.39
per Million Btu
÷
=
9,375,275
3,413
2,746.93
Net Btu per ton
Btu per kWh
kWh per ton
÷
=
$191.18
2,746.93
$0.0696
Cost per ton
kWh per ton
per kWh
4.06 Manitoba Hydro
x
÷
=
$0.0886
1.00
3,413
$25.96
per kWh
Million Btu
Btu per kWh
per Million Btu
4.07 Natural Gas
-High Efficiency
4.08 Natural Gas
-Low Efficiency
x
=
32,844
92%
30,216
Btu per cubic meter
Heat Efficiency
Net Btu per cubic meter
x
÷
=
$0.490
1.00
30,216
$16.22
Cost per cubic meter
Million Btu
Net Btu per cubic meter
per Million Btu
÷
=
30,216
3,413
8.85
Net Btu per cubic meter
Btu per kWh
kWh per cubic meter
÷
=
$0.490
8.85
$0.0553
x
=
32,844
75%
24,633
Btu per cubic meter
Heat Efficiency
Net Btu per cubic meter
x
÷
=
$0.490
1.00
24,633
$19.89
Cost per cubic meter
Million Btu
Net Btu per cubic meter
per Million Btu
÷
=
24,633
3,413
7.22
Net Btu per cubic meter
Btu per kWh
kWh per cubic meter
÷
=
$0.490
7.22
$0.0679
Cost per cubic meter
kWh per cubic meter
per kWh
Cost per cubic meter
kWh per cubic meter
per kWh
Created and maintained by Manitoba Agriculture Farm Management
Manitoba Agriculture GO Office or:
For more information, contact your local
January, 2017
Roy Arnott
Farm Management Specialist
Manitoba Agriculture
For more information
• Contact your local Manitoba Agriculture
Growing Opportunities (GO) Office.
• Visit us at manitoba.ca/agriculture.
ESR-016086
January 2015