Economic Feasibility of Producing Ethanol from Dry Pea and Corn as Feedstock in North Dakota: A Risk Perspective

Abstract

Dry pea has the potential to be an economical replacement for com in North Dakota ethanol plants. Dry pea costs of production are less than com because fewer purchased inputs are required and because dry pea offers a number of rotational benefits in small grain crop rotations. Dry pea can also thrive in arid regions of western North Dakota where annual rainfall is low. This study develops stochastic economic models to evaluate the replacement potential of dry pea for com as an ethanol feedstock. Results find that plant efficiency increases and input supply risks are reduced when dry pea replaces corn. However, at present com/dry pea price ratios, dry pea is not competitive economically. Com prices would have to rise more than 20% for dry pea to become competitive.