Contract miscanthus growers are being sought by newly launched energy pellet supplier Terravesta.

The company, which earlier in the year processed its first miscanthus cane into power-generating pellets at its plant in Kimbolton, Cambridgeshire, is looking to establish contract growing arrangements with farmers.

Terravesta chairman William Cracroft-Eley said: “This is a really good opportunity to get into the crop – the whole company has been set up to create a really short supply chain with growers and we have enormous demand from customers.”

Index-linked contracts ranging between five and 10 years are available, backed up by secure end-user supply contracts, he added.

Any growers interested in getting involved must first be accepted on to Natural England’s Energy Crops Scheme, which also offers English growers grant funding for the establishment of short-rotation crops.

The grant funding, which covers up to 50% of all establishment costs up to a capped maximum (approximately £2,600/ha), is available for planting schemes starting in 2013. “The crop needs to be of suitable quality for pelleting – our requirement is 16% moisture or less, delivered at our call in Hesston bales,” added Mr Cracroft-Eley.

COSTINGS 

Establishment and planting in year one £2,260/ha (£1,130/ha with 50% grant)
Establishment in year two £50/ha (£25/ha with 50% grant)
Total establishment cost £2,310/ha (£1,150/ha with 50% grant)
Net margins
Year 1 -£1,160/ha
Year 2 -£40/ha
Year 10 £1,184.51/ha

Average net margin/ha over a 10-year period is £521.29/ha/year. Costings based on Terravesta contract signed at time of planting, increased by RPIX annually, assumed at 4.5%. Haulage rates vary depending on location but are between £15/t and £18/t in the above scenario.

“The maximum moisture we can take on a pelleting contract is 18% – anything over that level we have to market elsewhere and it could probably cost them up to about £7-8/t in penalties, but that depends on where they are in the country.

“The delivered price for 2012 is £68/t at 16% moisture and we are happy to arrange haulage quotes.”

He said miscanthus offered a good return on marginal areas normally used for annual cereal cropping, as well as certainty of yield, cost and price year on year.

“For a grower the financial returns for a 10-year period are an average net margin of £520/ha. Anybody planting in 2013 would have their first harvest in 2015 and then a crop every year afterwards – a minimum 10ha planting is required.”

“The costs are subject to individual quotations but they are based on having a contractor supply and plant the rhizome. It’s an expensive crop to establish and the supplier of the plant usually gives an establishment guarantee,” said Mr Cracroft-Eley.

“What they do not include is rabbit fencing – if you have a rabbit-sensitive site you would probably want to put some in.”

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