Now factor in the Micanthus crop life without replanting and the comparison is skewed. GKG has a life 15-17 yrs Micanthus I believe is less around 15 ys. (verify?) My agronomist clients here in Texas confirm Micanthus survives most winters dormant and productive vs GKG we know this. From a standpoint or market potential here in Texas (Somewhere?) GKG IMO is being grown for this exact reason, confirmation of winter hardiness. Believe were not stupid to support anything without our own research. Here is the kicker and still one of the most attractive features at least from a tropical standpoint.
Micanthus study confirms what we know.
There is no revenue in the first year. In the second
year, we assume that only 50 percent of the yield, or 5 tons per
acre, is achieved, for a revenue of $225 per acre. Third-year yield is 7.5 tons per acre, for a revenue of $338 per acre. Revenue for years 4 through 15 is $450 per acre.
Net Revenues and Financial Analysis
The last columns of the spreadsheet show the total costs, revenues,and present value of each item. The total costs over 15 years are estimated to be $4,189 per acre while total revenues are estimated at $5,962 per acre. Net revenue is $1,773 per acre for the 15-year budget period. The payback period—which tells investors how long it will take for revenues to cover establishment costs—is six years using the financial assumptions in this scenario.
Since this project occurs over a 15-year period, you need to
account for the time value of money to get an accurate value. The
time value of money is reflected in an interest (discount) rate used
by investors. Revenues and costs not received today are “discounted”
to the present, hence net present value (NPV). This allows investors
to compare alternative projects over the same lifetime. If the NPV is
positive, it implies that investors receive at least their acceptable rate
of return. The NPV in this scenario, using a 4 percent rate, is $1,041
per acre. This NPV would obviously change if the discount rate,
project length, and the costs and revenues were changed. Annualizing
the NPV gives us an equal annual income (EAI) value of $94. The
EAI compared to an annual rental on the land expresses NPV as an
annual return, so it can, for example, be a good investment.
Miscanthus rhizomes. Photo courtesy of David Marrison.
Summary Giant miscanthus is one of the faster-growing warm-season grasses that are propagated by rhizome division. These unique planting requirements mean that the up-front costs for miscanthus establishment are higher than for other dedicated energy crops. However, the yields..... TAKE MY COMMENTS AS MY OPINION BUT I DO HAVE CROP EXPERIENCE. At least with hay costs we are spot on from planting to harvesting!
