FEDERAL RESERVE BANK OF KANSAS CITY OMAHA BRANCH

FEDERAL RESERVE BANK OF KANSAS CITY – OMAHA BRANCH Anaerobic Digester Adoption on Animal Feeding Operations THE FUTURE OF MANURE DIGESTERS IN WISCONSIN How Can Developers & Regulators Optimize the Economic, Environmental & Energy Benefits of Digesters in the Future? * The views expressed are the author’s and do not necessarily reflect the views of the Federal Reserve Bank of Kansas City or Cortney Cowley* Economist Federal Reserve Banks of Kansas City Omaha Branch

BANK– OF KANSAS CITY FEDERAL RESERVEFEDERAL BANK OFRESERVE KANSAS CITY OMAHA BRANCH The Kansas City Fed has a high concentration of agriculture and monitors conditions closely. Average Farm Income as a Share of Total Personal Income Average Across Counties by Fed District, 20152017 Source: BEA and staff. Proportion of “Farm Dependent” Counties and Agricultural Banks Percent. . . . . Share of U. S. Ag Banks* Farm Counties 0 10 20 30 40 50 Source: BEA, USDA, Ag Finance Databook and staff 60 *Agricultural banks are defined as banks with farm production and farm real estate loans equaling approximately 18 percent or more

BANK– OF KANSAS CITY FEDERAL RESERVEFEDERAL BANK OFRESERVE KANSAS CITY OMAHA BRANCH My research used a national survey of swine and dairy farms to study the economics of anaerobic digesters. • The ‘Hurdles’ to Greater Adoption of Anaerobic Digesters • Neighborhood effects, farm type and size, and nonmarket benefits of anaerobic digestion are important for predicting whether or not a producer will consider this technology for manure management. However, the decision to actually adopt is more dependent on government policies and economic considerations. • Anaerobic Digester Production and Cost Functions • On dairy farms, economic feasibility could be achieved by marketing coproducts, but swine farms required government support to achieve positive NPVs. • Economic Feasibility of Anaerobic Digestion with Swine Operations

BANK– OF KANSAS CITY FEDERAL RESERVEFEDERAL BANK OFRESERVE KANSAS CITY OMAHA BRANCH What is the one most important thing that would have to be done to encourage more wide-spread adoption of anaerobic digestion systems? Adopter s: Source: Cowley 2015

BANK– OF KANSAS CITY FEDERAL RESERVEFEDERAL BANK OFRESERVE KANSAS CITY OMAHA BRANCH Same question, but for non-adopters: Source: Cowley 2015 Source

FEDERAL RESERVE BANK OF KANSAS CITY – OMAHA BRANCH Thank you Cortney Cowley Economist Federal Reserve Bank of Kansas City Email: cortney. cowley@kc. frb. org Website: https: //www. kansascityfed. org/research/agriculture 6