This paper compares environmental and profitability outcomes for a centralized biorefinery for cellulosic ethanol that does all processing versus a biorefinery linked to a decentralized array of local depots that pretreat biomass into concentrated briquettes. The analysis uses a spatial bioeconomic model that maximizes profit from crop and energy products, subject to the requirement that the biorefinery must be operated at full capacity. The model draws upon biophysical crop input-output coefficients simulated with the Environmental Policy Integrated Climate (EPIC) model as well as market input and output prices, spatial transportation costs, ethanol yields from biomass, and biorefinery capital and operational costs. The model was applied to 82 cropping systems simulated across 37 subwatersheds in a 9-county region of southern Michigan in response to ethanol prices simulated to rise from $1.78 to $3.36 per gallon. Results show that the decentralized local biomass processing depots lead to lower profitability but better environmental performance, due to more reliance on perennial grasses than the centralized biorefinery. Simulated technological improvement that reduces the processing cost and increases the ethanol yield of switchgrass by 17% could cause a shift to more processing of switchgrass, with increased profitability and environmental benefits.
By suppressing pest populations, natural enemies provide an important ecosystem service that maintains the stability of agricultural ecosystems systems and potentially mitigates producers pest control costs. Integrating natural control services into decisions about pesticide-based control has the potential to significantly improve the economic efficiency of pesticide use, with socially desirable outcomes. Two gaps have hindered the incorporation of natural enemies into pest management decision rules: (1) insufficient knowledge of pest and predator population dynamics and (2) lack of a decision framework for the economic tradeoffs among pest control options. Using a new intra-seasonal, dynamic bioeconomic optimization model, this study assesses how predation by natural enemies contributes to profit-maximizing pest management strategies. The model is applied to the management of the invasive soybean aphid, the most significant serious insect threat to soybean production in North America. The resulting lower bound estimate of the value of natural pest control ecosystem services was estimated at $84 million for the states of Illinois, Indiana, Iowa, Michigan and Minnesota in 2005.
Soybean aphid, Aphis glycines Matsumura (Hemiptera: Aphididae), is one of the most damaging pests of soybean, Glycine max (L.) Merrill, in the midwestern United States and Canada. We compared three soybean aphid management techniques in three midwestern states (Iowa, Michigan, and Minnesota) for a 3-yr period (2005-2007). Management techniques included an untreated control, an insecticidal seed treatment, an insecticide fungicide tank-mix applied at flowering (i.e., a prophylactic treatment), and an integrated pest management (IPM) treatment (i.e., an insecticide applied based on a weekly scouting and an economic threshold). In 2005 and 2007, multiple locations experienced aphid population levels that exceeded the economic threshold, resulting in the application of the IPM treatment. Regardless of the timing of the application, all insecticide treatments reduced aphid populations compared with the untreated, and all treatments protected yield as compared with the untreated. Treatment efficacy and cost data were combined to compute the probability of a positive economic return. The IPM treatment had the highest probability of cost effectiveness, compared with the prophylactic tank-mix of fungicide and insecticide. The probability of surpassing the gain threshold was highest in the IPM treatment, regardless of the scouting cost assigned to the treatment (ranging from $0.00 to $19.76/ha). Our study further confirms that a single insecticide application can enhance the profitability of soybean production at risk of a soybean aphid outbreak if used within an IPM based system.
Soybean aphid, Aphis glycines Matsumura, is a major invasive pest that has caused substantial yield loss and increased insecticide use in the United States since its discovery in 2000. Using the economic surplus approach, we estimate the economic benefits of U.S. research and outreach for integrated pest management (IPM) of soybean aphid. We calculate ex ante net benefits from adoption of an IPM economic threshold (ET). The ET triggers insecticide application only if the value of predicted yield damage from pest scouting is expected to exceed the cost of pest control. Our research finds that gradual adoption of an ET for soybean aphid management will generate a projected economic net benefit of $1.3 billion, for an internal rate of return of 124%, over the 15 yr since soybean aphid IPM research began in 2003. Lower and upper bound sensitivity analysis brackets the estimated net benefit to U.S. consumers and soybean, Glycine max (L.) Merr., growers in the range of $0.6 to $2.6 billion in 2005 dollars. If a 10% rate of return is attributed to IPM applied research and outreach on soybean aphid, that would leave nearly $800 million to compensate prior activities that contribute to the development and adoption of IPM.
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