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Biomass Sorghum and Sweet Sorghum Data Gathering Report

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Biomass Sorghum and Sweet Sorghum Data Gathering Report Biomass Sorghum and Sweet Sorghum Biomass Sorghum and Sweet Sorghum Data Gathering Report Order Number: D15PX00044 Submitted to: USDA-RMA COTR: Jaime Padget 6501 Beacon Drive Kansas City, Missouri 64133-6205 (816) 926-8466 Submitted by: Watts and Associates, Inc. 4331 Hillcrest Road Billings, Montana59101 (406) 252-7776 [email protected] Due Date: April 6, 2015 This document includes data that shall not be disclosed outside of the Government and shall not be duplicated, used, or disclosed, in whole or in part, for any purpose. The Government shall have the right to duplicate, use, or disclose the data to the extent provided in Order No D15PX00044. All pages of this document are subject to this restriction. Biomass Sorghum and Sweet Sorghum Table of Contents I. Introduction ................................................................................................................................. 1 II. Biomass Sorghum and Sweet Sorghum Description.................................................................. 3 III. Maketing Description.............................................................................................................. 10 IV. Review of Current Programs .................................................................................................. 14 V. Data Collection ........................................................................................................................ 24 VI. Stakeholder Input .................................................................................................................... 28 VII. Risk Analysis ......................................................................................................................... 35 VIII. Feasibility Assessment ......................................................................................................... 41 IX. Recommendations................................................................................................................... 46 List of Tables Table 1. Sorghum Total Acres Planted by State, 2014 Crop Year ................................................. 7 Table 2. Grain Sorghum Production by State, 2013 Crop Year ..................................................... 8 Table 3. Silage Sorghum Production by State, 2014 Crop Year .................................................... 8 List of Appendices Appendix A. 2014 NASS Survey Grain Sorghum Production by County Appendix B. 2012 NASS Census of Agriculture Grain Sorghum, Silage Sorghum, and Sorghum Syrup Production Data by County Appendix C. U.S. Biofuel Support Programs Status Appendix D. Federal and State Bioenergy Laws and Incentives Appendix E. Listening Session Agenda Appendix F. Biomass Sorghum and Sweet Sorghum Listening Session Press Release Appendix G. Production of Biofuel Crops in Florida: Sweet Sorghum and Forage Sorghum (Sorghum bicolor): Overview and Management Use or disclosure of information or data i Risk Management Agency contained on this sheet is subject to the Order No: D15PX00044 restrictions on the title page of this report. Biomass Sorghum and Sweet Sorghum Executive Summary This report addresses issues regarding crop insurance development opportunities and challenges for biomass and sweet sorghum grown as a feedstock for energy production and biobased products.1 Section 1522(c)(17)(A) of the Federal Crop Insurance Act as amended by the 2014 Farm Bill (Public Law 113-79) authorizes the contract for the study under which this report was prepared. Section 1522(c)(17)(A) states: “The Corporation shall offer to enter into 1 [one] or more contracts with qualified entities to carry out development regarding ̶ (i) a policy to insure biomass sorghum that is grown expressly for the purpose of producing a feedstock for renewable biofuel, renewable electricity, or biobased products; and (ii) a policy to insure sweet sorghum that is grown for a purpose described in clause (i).” This data gathering report is required by contract to provide information and analysis “to aid in the development of a crop insurance program [for biomass and sweet sorghum grown as an energy or biobased product feedstock] and identify issues related to potentially providing coverage.”2 The Secretary of the United States Department of Agriculture (USDA) was authorized by the 2002 Farm Bill (the Farm Security and Rural Investment Act of 2002, Public Law 107-171) to identify products as biobased if they are a commercial or industrial product other than food or feed composed (in whole or in significant part) of biological products, renewable domestic agricultural materials, forestry materials, or an intermediate feedstock derived from these products or materials. Consequently, sorghum grown for food or feed is not addressed, except incidentally, as the subject of this study. While the focus of the Contractor’s research effort was gathering information about biomass sorghum and sweet sorghum and the feasibility of developing an insurance program, the contract specifies: “RMA [the USDA Risk Management Agency] is not looking for a complete feasibility study, but is looking for specific aspects needed to understand and determine what type of crop insurance program will work best for these crops, producers, and for the specific data needed to create a crop insurance program that covers producers with an optimal program.”3 Therefore, the analysis of feasibility was focused on approaches to develop an insurance product and the barriers those approaches introduce rather than on reasons such a development effort might be unfeasible. The contract further identifies areas of research that supported the preparation of the report. The findings related to these topics are summarized below in the order presented in the contract. Listening Sessions: The Contractor shall analyze, summarize and interpret the data gathered. The Contractor contacted producers, insurance providers, bioenergy representatives, and leaders representing producers at the state and national levels to determine the level of interest held by the industry in an insurance program for biomass and sweet sorghum produced as a feedstock for energy and biobased products. These efforts culminated in listening sessions in California, Florida, Kansas, and Louisiana. The sessions were poorly attended. Participants included two 1 The government is inconsistent in its use of a hyphen in the term “biobased products.” As the official definition excludes the hyphen, that is the convention that will be used in this report. 2 United States Department of Interior (DOI), Order D15PX00044, page 23 of 35. 3 Solicitation Number D14PS00630-A2, page 50 of 73. Use or disclosure of information or data i Risk Management Agency contained on this sheet is subject to the Order No: D15PX00044 restrictions on the title page of this report. Biomass Sorghum and Sweet Sorghum producers, three producer organization representatives, three insurance industry representatives, and three biobased products industry representatives. The Contractor also communicated with an additional 43 stakeholders by email or in individual conversations in person or by telephone. The strongest interest in crop insurance for biomass and sweet sorghum as a feedstock for renewable biofuel, renewable electricity, or biobased products came from the end users of the crop. These stakeholders believed having a dependable supply of sorghum as a feedstock was dependent on the availability of crop insurance for the producers of that feedstock sorghum. In contrast, many of the producers who communicated with the Contractor seemed to consider the sorghum as a catch crop. Based on testimony from stakeholders, the limited demand for biomass and sweet sorghum, and especially for these crops as a feedstock for energy and biobased products, was influenced by a decrease in federal support for production of biofuels and a drastic decline in the price of petroleum. Description of the Crop: The Contractor shall present data relative to the crop’s economic importance, adaptation, agronomic and botanical classifications, important varieties and their characteristics… Sorghum is a member of the family Poaceae, i.e., a grass. An annual crop, sorghum is planted in the late spring or early fall. In tropical and subtropical climates, more than one planting and harvest is possible in a single crop year. Sorghum grain is harvested at the end of the growing season, generally about 90 to 130 days after planting. While sorghum grain is used as a food outside the United States, in the United States sorghum grain is used primarily as a component in livestock feed. Producers in the United States grow many different varieties of sorghum. These varieties have remarkably different growth patterns depending on the variety and environmental conditions. Some of the sorghum varieties have high soluble sugar content (sweet sorghums). Sweet sorghum contains readily fermentable sugars as well as large amounts of carbohydrate biomass in the form of starch, cellulose, or hemicellulose. Some varieties of sorghum produce tall plants with substantial amounts of complex carbohydrates (biomass sorghums and high-biomass sorghums). Ceres, a biotechnology company, reports production of high biomass sorghum plants as tall as 18 feet under favorable conditions.4 The biomass sorghums are characterized by accumulations of cellulose, hemicellulose, and lignin. These are less easily converted to fuel by fermentation but may be burned directly or refined to produce energy products other than ethanol.
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