The Value of Straw

By Jochum Wiersma, small grains specialist, U of M

To put a value on something, we generally look at the marketplace and let supply and demand determine the value of the goods in question.  The market for wheat has been giving a clear signal ever since late summer; the prices for wheat continue to climb and break one record after another. To determine the value of straw, we can look at some local or regional hay auctions to get some idea what livestock producers are willing to pay.

However, we also could look at it from a different angle. Opportunity costs are defined as the costs of using a resource based on what it could have earned if used for the next best alternative.  For example, the opportunity the cost of farming your own land is the amount you could have received by renting it to someone else. Likewise, (wheat) straw has an opportunity cost. Leaving the straw on the field, rather than removing it by baling it, has a value. One way to determine the value of straw left in the field is to look at the nutrients that are available in the straw. Using NRCS nutrient removed calculator, (http://npk.nrcs.usda.gov), the straw of a 50 bu. spring wheat crop contains ± 34 lbs of N, 3.5 lbs of P, and 62 lbs of K (assuming a harvest index of 0.45). At today’s prices ($ 0.46 /lb N, $0.60/lb P₂0₅) and ($0.42 /lb K₂0) that wheat straw has a value of $52.00/A.

There are obviously some caveats with this calculation. First the nutrients do not all become available to the crop the next cropping season as the straw needs to break down, which will occur over time. Second, the estimate is only that. The literature reports quite a range of values for the nutrient content in wheat straw. Nonetheless, it is an approach to value straw.

The shortcoming of the nutrient equivalent valuation is that the other benefits of leaving the straw are not valued. These benefits include erosion control (both wind and water) as well as maintaining/building soil organic matter content. An ever increasing body of evidence in the scientific literature clearly shows the benefit to maintain or increase soil organic matter content. The valuation of the benefits that are created by leaving straw on the field are, however, much more difficult to come by.

One way to value the benefits of leaving straw in the field is to estimate the loss in productivity (grain yield) that occurs if the straw is removed over a period of time.  Some very interesting research has been done over the years to determine whether changes in productivity occurred with removal of not just the grain, but also the residue. One of the most often quoted pieces of research was conducted in Nebraska in the late eighties and published in the early nineties. Grain yield of corn increased 17% or nearly 20 bushels as 150% of the residue was returned (aka additional residue was added to build soils organic matter) to the soil as compared to having all the residue removed. At today’s corn prices, these 20 bushels additional yield equal an opportunity cost of $90.00 (30 x $4.50). Again, a pretty staggering number, and it doesn’t even include a valuation for the erosion control that is also created. 

Although this study doesn’t provide a valuation for wheat straw, it does illustrate the point very well. Maintaining or building soil organic matter creates a sizable opportunity cost that one needs to value, should you decide to bail all or part of the straw and either sell it as bedding or a feedstock for industrial applications (including cellulosic ethanol).