The Economics of Dairy Digesters - Part One
Tim Hammerich
News Reporter
Some things in ag seem too good to be true, or more accurately, too good to last. That could be said about the money dairies could make from building digesters to convert manure into energy. Terrain senior dairy analyst Ben Laine says digester economics aren’t what they used to be.
Laine… “ If you go back a few years, 2018, 2019 there was kind of a big boom in looking at building these digesters and a lot that came from California's Low Carbon Fuel Standard Program. They were pretty much a home run. I mean, everybody was knocking on producer's doors trying to get them to, to invest in these digester products and capture some of these LCFS credits.
But Laine says that has changed dramatically in recent months as those credits have declined in value by quite a bit.
Laine… “ It's not nearly the home run that had been a few years ago. The value of the low carbon fuel standard credits has declined. It's less than half of what it used to be so that revenue stream has declined. But I think if you are at the point where this is looking like it might make sense and you're running the numbers, there's a better chance that because of the lower credit values right now, you're doing a more conservative projection and, and it's probably got a better chance that this is a good project, good prospect for the long run for that operation.”
That’s Ben Laine of Terrain, a research group partnership within the Farm Credit System.
