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The promise - and the challenge - of Perennial Commodity Crops

Tuesday, October 2, 2012

Researchers are exploring how to get predictable, year-after-year yields from one-time planting of crops. But, while some farmers are experimenting with varieties such as switchgrass, miscanthus or wheatgrass, or eying the market for biomass and wood pellets, they remain skeptical about their viability

by MARY BAXTER

In the DuPont Pioneer Georgetown lab, rows of narrow tables are topped with genetic equipment that could just as easily be found in a police forensics lab. This $2 million facility, though, is mostly used to detect canola molecular markers.

Few genetic crop labs in Canada have dedicated this sort of attention to canola. Maybe one other, which is involved in mapping the plant's genome, says Lomas Tulsieram, the company's canola research co-ordinator.

DuPont Pioneer's willingness to spend big bucks on canola research shows just how far this crop has come since 50 years ago when plantings in Western Canada yielded 15 bushels to the acre. For Manitoba researchers more than 2,000 miles away, as well as a group of growers, researchers and entrepreneurs here in Ontario, canola's rapid evolution as an oilseed crop exemplifies how long shots can be winners.

In the case of the two University of Manitoba researchers, the long shot is how to make perennial wheatgrass, most commonly used for forage, into a viable cash crop. In Ontario, it's growing perennial biomass crops like switchgrass and miscanthus for non-food uses ranging from fuel and plastics to fibre board.

"The next farming generation is coming along here and we're looking for options," says James Fisher of his decision to introduce nearly 100 acres of switchgrass at his 1,300-acre farm and cow-calf operation near Kilbride, in the north end of Burlington.

A decade or two ago, mainstream agriculture would have regarded the idea of creating perennial commodity crops capable of rivalling the yields of traditional grains and oilseeds as about as realistic as turning lead into gold.

Today, along with the University of Manitoba, institutions such as the Land Institute in Kansas, the University of Minnesota, Washington State University, University of Cornell and the U.S. Department of Agriculture are exploring how to get predictable, year-after-year yields from one-time planting of crops like sunflowers, flax, rye, sorghum, legumes and even corn. As for biomass, there's no question about the possibility. Commercialization is now the challenge.  

Perennial grain and oilseed crop development has taken place on and off for nearly 70 years, beginning in Russia and California. The Land Institute in Kansas has spearheaded much of the current interest. Jerry Glover, a soil scientist formerly with the Institute (and who has been dubbed by the international science journal Nature as one of the world's top five crop researchers), attributes the most recent push to the rising global demand for food and mounting uncertainty about the sustainability of contemporary farm practices.

If approaches to agriculture remain the same over the next 50 years, the amount of nutrients conventional farming extracts from landscapes will double, he told delegates to the Innovative Farmers Association of Ontario's annual meeting in London earlier this year. Agricultural researchers recognize that "we need some radical solutions."

There are what he calls "software solutions," such as conservation tillage, integrated crops management or organic production. "But what an increasing number of scientists are talking about is developing new hardware to manage this landscape." In short, perennial grain and oilseed crops.

Martin Entz, a University of Manitoba plant science professor who specializes in natural systems agriculture, and his colleague Doug Cattani, an assistant professor of perennial crop breeding, tout the crops' ability to restore soils. "Even the best no-till systems are not massaging the soil very deeply," Entz says, explaining that the practice affects the top two feet of soil. The perennial roots of wheatgrass go considerably deeper, creating better tilth.

Perennials also maximize the growing season compared to most conventional crops. Recent studies by the university show they put 30 per cent more carbon into the soil between two and four feet. "They really transform soils," he says.

Perennial crops' potential for reducing energy expense will lower costs of production, predicts Cattani. "You seed it once and it's productive over a number of years – five to 10 years." Problems such as soil erosion are reduced. Perennials help soils dry in the spring and the residue after harvest could be used as pasture. Worked in rotation with annual crops, they could break weed cycles.

Higher yields attainable
Domestication of wild perennials, however, comes with significant challenges. Wheatgrass, one of the crops Cattani focuses on, has the advantage of being farther ahead in domestication because it's used as a forage crop. Seed production to supply the crop therefore already takes place in Western Canada.

So right now the main goal is to make seeds larger and ensure that, during harvest, the kernel breaks free of the lemma and palea (specialized leaves that enclose the grain). Once those challenges are addressed, the road to higher bushel weights becomes smoother, shipping easier and cheaper, and delivery to mainstream food processors a greater possibility. Cattani, though, envisions wheatgrass will most likely first become a specialty grain, such as spelt. "Probably its biggest drawback is it doesn't have the gluten strength that wheat does," he explains.

One and a half hours north of where Cattani works in Winnipeg, Eric Fridfinnson already grows perennials like alfalfa, timothy grass and tall fescue for seed. Seed production occupies about 20 per cent of the 7,000 acres he farms with his brother in the Interlake district (cereals and oilseeds like flax are other principal crops). He says a seed crop like timothy can last five years, although four is more common. Alfalfa can last up to six, though the brothers usually grow it for three.

You'd think Fridfinnson would enthuse about another use for perennials, but the soft-spoken farmer politely outlines his skepticism. "The idea for some farmers might have some merit," he says.  Especially for farmers who wrestle with soggy soils at certain parts of the year. "They might be able to establish those crops and produce some grain." But, in his experience, grasses are tricky to establish. There's the dilemma of choosing between row width and yield. "If people are producing alfalfa as a hay crop, they would plant at 10 pounds seed per acre, but when we plant for seed it's in wider rows (12- to 18- inch rows) and that's not very much seed to an acre. Really, it's a couple of cups," he says.

Tighter plantings, the brothers have found, hurt the plants' ability to produce seed.  
Perennial weeds are an issue. The seed crops they plant are considered small acre crops and obtaining registration for appropriate herbicides usually means going through various farm associations.

He also suspects diseases like fusarium could be a significant peril. "They'll likely be even more susceptible to the plant diseases that are giving us grief in the spring crop." Damage is bad enough when it happens in an annual crop. "But if you have a perennial crop that you plan to use for three or four years and you lose part of it, you lose it for the three or four years. It's a bit of a double-edged sword."

To be fair, Cattani had already observed that fine-tuning is the reason why it will take perennial seed grain at least 20 to 25 years to reach farmers' hands. Along with all the other hurdles, there are the unknowns of climate change. How are breeders to approach creating crops to withstand the changes? "Do we allow the crops to adapt over time?" he asks. What about a wheat that has been developed to withstand certain forces over a five-year period? "How is what we planted going to stand up to what's coming five years later? That's always a big unknown."

The greatest challenge, therefore, "is to make sure we don't rush ourselves and have something that is what it is billed as – consistent yield over a number of years," he says. "We better make sure we have a good product to give to the producers before we go ahead."

Genotyping pivotal
Back at DuPont Pioneer's lab, Gang Chen, the lab's research scientist, holds up a hand-sized clear box plate made up of skinny test tubes. It looks like it has been drilled by a seed planter calibrated impossibly tightly. He grins. Inside each tube would be a DNA sample and, up until last year, it took a day to create 50 of these box plates. With the new automated equipment, they can prepare 1,000 in the same time.

Genotyping, the practice of linking specific plant traits with specific genes, is perhaps one of the greatest modern advances in plant breeding. In the DuPont Pioneer lab, it shaves months, if not years, off the development of new canola varieties.

Genotyping is also pivotal to advancing the development of perennial grain crops. Without it, breeders would have to wait until the plant's traits manifest themselves in the field. For some crops, this could mean having to wait up to three years. With genotyping, all they need is to review the seeds.

But when it comes to genetic engineering, many of those involved in perennial development part ways with commercial breeders. Glover uses the example of corn to support his argument against its use. For corn to become perennial, it would have to survive the winter, be able to grow after seed is harvested and then survive the summer. "Those are all complex traits. Shooting in a single gene isn't going to help much. It would be very expensive to shoot all of the necessary genes into the right spot and get them all to function properly."

Cattani notes that most of their funding at the University of Manitoba comes "out of the natural production systems." One graduate student is working on developing some genetic marking assisted selection. "But given our current funding sources, genetically modified are not in the foreseeable future."

However, at the U.S. Department of Agriculture-ARS lab in Cornell University's Institute for Genomic Diversity in Ithaca, N.Y., one researcher makes his case for considering genetic engineering to develop perennial corn.

Without access to modern genomic technology, Edward Buckler estimates it would take at least 100 years to develop perennial corn; with it, about 10 years to develop and another 10 to test and perfect. With the right funding, it could be made yield-competitive against the best hybrids of today or surpass them, he says.

Buckler contributed to the Department of Agriculture's analysis of the corn genome, published this year. He says working with such an extensively studied plant means that, once the key genetics behind corn's wild perennial relatives are unravelled, applying them to corn becomes a far more straightforward process than breeding favourable traits into a lesser-parsed plant like wheatgrass.
"We could use the classical genetic approach of just crossing them," he says. "However, for speed purposes, there may be an argument" in favour of using engineering.

Both supporters of conventional and genetic engineered breeding approaches say commercial breeders will be interested in getting involved when development of the perennial crops reach a certain stage. Perennials would be just like any other crop, showing steady improvement in performance over time. Growers typically want to keep current with the best varieties, Buckler points out. "You'd plant it for five years and then plow it under." Seed companies "could still make a lot of money on perennials but they would sell the seed for a lot more."   

But can these breeders convince farmers?

Frenzy of biomass studies
One thing that surprised James Fisher the first time he drove into an established stand of switchgrass with his haybine was how high the grass was. "You go through a little bit of a dip and you can't see the edges of the field anymore from the tractor seat," he says. "Everything else disappears."

Fisher introduced the crop to his farm in 2009, the same year that Ontario Power Generation (OPG) issued a request for an expression of interest to supply and transport solid biomass fuel to its coal plants in Atikokan, Thunder Bay, Nanticoke and Courtright.

Using biomass for power generation was already a proven technology elsewhere. At the time, the Netherlands had set a goal of obtaining 12 per cent of the total energy produced from its coal plants from biomass. According to the OPG briefing document, it would take at least two million tonnes or more of biomass to reach that target.

The OPG request for an expression of interest also generated a frenzy of studies to evaluate biomass' feasibility as an energy crop. One was a business case that the Simcoe-based Erie Innovation and Commercialization initiative of the Ontario Fruit and Vegetable Growers Association published in conjunction with the Ontario Federation of Agriculture. The study looked at all of the production components, aggregation of the crop and its end use. It showed that cost of production could be competitive with other Ontario major crops and looked at "what we considered to be an acceptable return to producers," says John Kelly, vice president of Erie Innovation.

Fisher was soon convinced of the new crop's potential. Like other cash croppers, he had experienced a tough haul when prices for grains and oilseeds plummeted in the mid-2000s. Having experimented with crops ranging from triticale and hulless oats to sorghum Sudan grass, he was used to trying new things.

What he particularly liked about biomass was the possibility that it would fit well with the 750 acres of hay he grows. Because of the hay, he had the appropriate equipment to harvest the new crop. So he joined a group of about 50 farmers to respond to the OPG request and planted the switchgrass on marginal land previously used for cash crops.

But the OPG opportunity failed to materialize. Fisher's group never received a formal response to its proposal. And although the provincial government this year announced plans to use wood biomass to fuel its Atikokan plant, it has remained silent about the possibility of using agricultural biomass elsewhere. "I think it's pretty much dead until you hear otherwise," Fisher says.

However, some of the farmers involved, including Fisher, believed biomass still had legs to serve other markets and formalized their Ontario Biomass Producers Group into a co-operative. Today it has 22 paid members, mostly from southwestern Ontario. Fisher is its president.

The co-op's goal is to develop markets "so that we can have a fair value at the farm," he says. It may mean having to acquire equipment, such as mobile briquetters to increase the density of their biomass or trucking "to make it all happen."

Right now, there is no real biomass market in Ontario. There are some other uses, mostly as a straw substitute for bedding or cover for strawberries and vegetable crops, and to supply studies on potential uses for the crop.

Bill Deen, an associate professor in plant agriculture at the University of Guelph, says those uses for biomass, along with using it on-farm for heat, represent the typical way new crops get introduced and develop – "slowly, over a period of time." Smaller niches help make the economics of establishing the crop become manageable, he says. As the industry develops, "farmers are able to do what they do best – innovate and debug and develop the system, look for alternate uses."

That's a perspective Fisher shares. In retrospect, he realizes the OPG expectation that a new crop could be taken from zero to a million tonnes a year within a short time period was unrealistic. "There needs to be a ramp up to the industry," he says. He anticipates the market will develop first by responding to demand for thermal or co-generation heating applications. These "will allow us to build the market at a more reasonable pace," he says.

"That's not to discount what I call the mid-size applications like a fibreboard plant with 100,000 tonnes a year likely. That's doable, with a bit of lead time." A larger amount would need the help of a U.S.-type incentive program or government intervention "unless, or until we get a cellulosic ethanol application. That might ramp up fairly quickly."

But there has to be enough money in these larger scale applications to ensure everyone in the value chain can make a profit, he emphasizes.

Limiting factor
Scott Abercrombie anticipates it may take even longer for markets to take shape. Abercrombie makes wood fuel pellets to use in stoves and boilers. He decided to add miscanthus to his farm near St. Marys in 2008 after a price jump in the wood waste he normally uses. He has increased his stand each year since, and added switchgrass. He now has 10 acres of each crop and is a participant in a biomass field-scale research project that the Ontario Soil and Crop Improvement Association is conducting on behalf of the Ontario Federation of Agriculture.

Abercrombie says that the industry's "limiting factor" is the price of natural gas. The wood glut will remain in the market as long as gas prices are low, making it a cheaper biomass alternative to purpose-grown crops. He predicts gas prices will stay low for another five to eight years.

Others suggest, however, that the industry could expand rapidly. Kelly points to the growing trend of using high cellulose crops to make chemicals and plastics. Then there is the potential of supplying the European heating market with fuel pellets. "The projections for the European market, for example are for fairly rapid growth," he says. "You don't want to miss the boat."

In fact, earlier this year Canadian Biofuel in Chatham announced it would supply an Italian company with 48,000 tonnes of fuel pellets a year. The pellets are intended for central heating plants serving apartments and institutions.

Ian Moncrieff, the company's president and CEO, notes that Italian demand for fuel could reach as high as three million tonnes this winter, far outstripping its own capacity to produce fuel. Other northern European companies previously supplied the difference, but now they're using more fuel, too. "The demand for pellets in Europe is going up exponentially," he told
 BetterFarming.com in July.

In a July interview, he estimated that he would need between 12,000 and 15,000 acres of biomass to produce 100,000 tonnes at his plant.

By early August, Fisher's group had not been formally approached by Moncrieff. Fisher says, however, that they have looked into the possibility of supplying European markets, "but it didn't look very practical to us." They discovered two huge hurdles. One is that ocean freight rates can fluctuate wildly and it's hard to get a price locked in for more than a year or two. "Then there's exchange rates," he says. "You need somebody pretty talented to hedge your currency risks."

Having pelleting plants up and running would help minimize risks and his group could perhaps look at shipping "a boatload or two." But to have to develop the plant and aggregate the biomass, he says, is too risky. "There are too many things you can't lock down, even with a 10-year contract in Europe."

It's like trying to figure out which needs to come first – the chicken or the egg. Perennial biomass crops need to be grown so that new products can be developed. If farmers wait for a market "then it's three years to establish and they're going to go somewhere else," Fisher says.

But try to convince farmers to take on such a risk without some sort of incentive. It's not easy, as Urs Eggimann, the co-operative's vice-president, points out.

Eggimann first planted switchgrass in 2009 on former pasture, drawn to the perennial's beneficial effects on the soil and the shelter it offered wildlife. In fact, switchgrass was the first crop the retired computer professional had ever planted on his recreational farm near Holland Centre in Grey County. He bought another farm in Grey Highlands two years ago with the goal of planting switchgrass there, too.

"I really wanted to prove that it can be done and how it needs to be done on really marginal farmland," he says. With the help of both neighbours and custom farmers, he continued to add switchgrass acreage.

Other farmers are interested in his efforts, but want to see established markets  before jumping in, he says. "All I can tell them is that the biomass industry cannot take off in a big way unless they see there's some commitment from the farm community." A small plot is a cheap investment for increasing a farm's revenue down the road. "You cannot just sit on the sidelines as a farmer."

Success problematic
Yet establishment can be extremely difficult. The first year Eggimann tried, the former pasture was burned down and then disked before planting the crop. All that approach achieved was to "put new life" into weed seeds.

The next year, he cut his fields twice, applied glyphosate two weeks after his last cut in early September and disked. He planted in the spring with a no-till seed drill, but dry weather delayed the crop. Both plantings have since rallied.

That hasn't been the case for Ron DeVisser, who farms near Chesley. He wanted to use switchgrass as bedding for his turkey barns. "We have tried for two years to establish switchgrass by no-tilling it into old pasture on a hillside," he writes in a June 8 email. "No success. Last week, we actually disked that land and have replanted it."

Abercrombie says the first years of planting proved to be the biggest challenge for his miscanthus crop. He averaged an establishment rate of 40 to 50 per cent (miscanthus are planted from rhizomes). Paying close attention to the viability of the rhizomes, ground conditions and timing of planting as well as determining what herbicides and pesticides to use, has since pushed that rate to 99 per cent.

Cost, too, is diminishing. He estimates he spent nearly $5,000 an acre to introduce rhizomes that he imported from Austria. Next spring, he plans to use root stock from his own farm.

Moncrieff recognizes that the high costs of establishing a crop like miscanthus is a deterrent. Added to the expense of planting is the loss of income while the crop matures, which, for miscanthus, is three years.

But there are ways around the problem. In May, ACC Farmers' Financial, a not-for-profit farm lender, obtained federal approval to add sorghum, miscanthus and switchgrass to the Agriculture and Agri-Food Canada advance payments program. Under the program, farmers can obtain a cash advance of up to $400,000 for biomass crops in Ontario and Nova Scotia. The first $100,000 of the advance is interest-free; the prime lending rate applies to the remaining amount.

The Alternative Land Use Services (ALUS), a farmer-led program that offers ecological goods and services payments to farmers for different projects, may also consider payment for switchgrass and other prairie grasses, says Dave Reid, ALUS' provincial transfer facilitator. ALUS operates in Norfolk County and is expanding to other areas in the province. (Reid explains that the program won't consider miscanthus because varieties that were supposedly infertile have been found to spread seeds; Abercrombie says he has not seen any evidence of spreading with the variety he uses, miscanthus giganteus.)

Moncrieff estimates the ACC advance could cover 70 to 80 per cent of a miscanthus crop's establishment costs. To sweeten the pot, Canadian Biofuel, with the assistance of Italian investors, would pay the landowner land rent for two years, he says. In return, growers would be expected to sell the miscanthus to the company at a discounted rate of $45 per tonne for two to three years. After that, they would receive the full rate of $60 per tonne.

Deen, however, says there are still many basic questions that need to be addressed for biomass crops. In the case of miscanthus, for example, "we are talking about a new crop, a perennial, and we're really basing the development of the industry currently on varieties that we essentially took from elsewhere."  Deen says some variety research has taken place at the University of Guelph and at New Energy Farms in Leamington, owned by Dean and Jason Tiessen. Nevertheless, "we really don't have yet a variety that I would say is ideally suited to Ontario," he says. "If we're in this game, if we think there's potential, somebody's got to step up and actually do some basic breeding/screening work to try to develop this miscanthus as a crop."

Abercrombie says he's satisfied with the miscanthus variety he's growing, while acknowledging that breeding programs would help to hone the plant's traits. But "as soon as you have a plant that has got proprietary rights to it, then that drives up the establishment cost and all of a sudden there are fees and complications as soon as you want to start to expand your own acreage."

Market development and even crop development "take a long time, much longer than one would think, sometimes," Fisher observes. He jokes about how it seems that the market has been poised to take off in six months or a year ever since his group started in 2009. But the possibility is becoming "more real all the time. I'm quite confident that our co-op will be able to make something happen, not for the spring of 2013, but probably for the spring 2014 crop."

While there's no guarantee that being an early adopter will get the advantage before the crop matures into a commodity, "I think there's a reasonable chance that the pioneers will indeed market at an advantage, not forever, but for 10 to 15 years."

In the meantime, since drought has destroyed much of the province's forage crops, he's exploring another use for his switchgrass, which withstood the dry weather: hay replacement. He tested the crop on his cattle in July. "They ate it just fine." If it brings in seven to eight cents a pound, it'll mark the first time this new perennial biomass crop has made him some money. BF

 

Biomass building material production coming soon to Ontario
Catherine Tredway, president of White Cloud Innovation Inc., sees biomass as the source to create green building materials like composite panels which can compete against plywood, MDF and particle board.

"We're committed to 30 million panels, but the reality is that we could probably sell about 75 million this year," Tredway says. So far, customers lined up are in the commercial furniture and transportation industries.

The company is also looking at a process that will allow it to make shapes for everything from toy building blocks to car parts.

Tredway is an architect who was inspired to make building materials out of purpose-grown crops and agricultural waste while travelling to Third World countries four years ago. She had just finished selling her company and wanted to find a way to make a difference in struggling economies. "I spoke to a lot of the large building manufacturers that I had worked with and approached most of the major international chemical companies" asking for access to their research and development departments to develop new products. "Actually, they were really receptive to us," she says.

Tredway claims tests have revealed that board made from agricultural fibre is flame-resistant, waterproof and won't delaminate. Products will go to market at the same price or slightly less than their competitors. Two manufacturing facilities will be set up in Alberta to begin with, but she anticipates more will be needed, since, to keep costs down the fibre has to come from a 200-kilometre radius around the factories. Each factory would need about 272,000 tonnes annually per line.

"We're not fibre-dependent; so we would use fibres that are naturally found in the areas where we're manufacturing." These can range from wood to plants like wheat, alfalfa, canola, flax and purpose-grown crops like switchgrass and miscanthus. Perennial crops are "the future of our business," she says.

Tredway acknowledges that bridging the time period for perennial biomass crops to mature is a major challenge. She says the company is exploring using crop residue in the interim. White Cloud plans to pay a premium for the purpose-grown crop as well as royalties. "I can't say what that amount is going to be because that's under negotiation, but it will be a meaningful amount," she says. "We hope to have the first line running in three months," she said in mid-July. BF

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