Opportunity or Pipe Dream?

October 29, 2013 08:29 PM
Opportunity or Pipe Dream?

Dairy digesters have $3 billion potential for large herds

Large dairy farms, those with 500 or more cows, have the potential to collectively generate an additional $3 billion of net income if they install methane digesters supercharged with food waste that is now landfilled.

That’s according to a study commissioned by the Innovation Center for U.S. Dairy.

The net return from an integrated energy approach could be $50 to $200 per cow per year. Do the math: For a 500-cow dairy, that would generate an additional $25,000 to $100,000 annually.

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Bonus Content

More on the digester study

There are currently about 2,650 dairy farms with 500 or more cows in the U.S. If each installed a methane diges­ter, they could collectively dispose of more than 108 million tons of cow manure each year, plus an additional 19.8 million tons of food waste, says Jerry Bingold with the Innovation Center.

Of this food waste, 15 million tons is commercial food waste currently going into landfills. An additional 4.8 million tons would come from food processors, which also is likely going into landfills.

The numbers get even more staggering when you consider: 

  • The 19.8 million tons of food waste is comparable to 8% of annual U.S. landfill dumping.
  • The methane digestion of cow manure and food waste would avoid emissions of 13 million metric tons of carbon dioxide (CO2).
  • That is equal to removing the emissions of 3.2 million U.S. passenger cars from the road.  

The income potential from dairy digesters is nothing to sneeze at, collectively. The Innovation Center study estimates that 2,650 digesters would generate 11.7 million megawatt hours of electricity annually.

Estimated current market value of this power is $894 million.

Through further processing, digesters could also produce 331,000 tons of nitrogen and 109,000 tons of phosphorus fertilizers. Their added value would be about $790 million.

About 30 million cubic yards of fiber would also be produced, which could be used as a peat moss replacement or on-farm bedding material. The estimated value of this fiber is $217 million.

And, the digesters would qualify for 11.7 million renewable energy credits from the electricity produced, valued at another $34 million.

It’s probably not realistic to think that all 2,650 large U.S. dairy farms will install digesters any time soon. But the Innovation Center has set a goal to have 1,300 farms with digesters by 2020. 
But even that adoption rate hinges on a number of factors:

  • Digesters that work reliably day after day, month after month, with minimal downtime and constant methane gas production to fuel electricity-producing gensets.

Given methane digesters’ checkered history over the past two decades, convincing dairy farmers and lenders to invest in the technology will likely be the biggest challenge.

  • A consistent, reliable source of food waste from grocery stores, schools and other institutions to bolster methane production.

Food retailers such Wal-Mart, Kroger, Publix and Whole Foods have expressed interest. Some universities, such as Elizabethtown College in Pennsylvania and the University of Wisconsin-Oshkosh, have already signed on to the concept.

  • The development of local markets to serve as retail outlets for the soil amendments that are produced by the digesters. 

Digester Project Funding Guide

To help farmers evaluate whether a digester makes economic and environmental sense for their operations, the Innovation Center for U.S. Dairy has developed a 14-page Digester Project Funding Guide.

Once completed, the information generated by the guide should provide data that can be used for grant applications to help cost-share digester projects.

"The key to any successful project is in due diligence at the start and getting your information and tools organized," says Jerry Bingold with the Innovation Center for U.S. Dairy.

"Expect to provide the same type of information that you would need to supply to the bank for a loan or to develop a business plan as required for most grant programs."

Copies of the guide can be found by going to the bonus content for this article at www.dairytoday.com.


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