I’m always trying to communicate the value of trees in a way that makes sense for graziers. Just how much is shade worth in dollars and cents? Can you put a price tag on nitrogen fixed in the soil? How about the value of honey locust pods?
So while at a pasture walk one day I struck up a conversation with a molasses dealer. Curious about how their product would compare to mine (tree crops), I asked for some numbers. I’m going to use the numbers for organic molasses, as the bulk of grazing dairies are organic. At the time, they were selling molasses for roughly $.40/pound in liquid form. The dealer told me only half of that weight is actual sugars, which meant the price per pound of sugar was $.80.
Now let’s compare that to the cost per pound of honey locust pods. There are a ton of factors that we’re not going to consider, like initial cost share to reduce the cost of the tree (which could be 100%, in which case the sugars are free), value of the shade and nitrogen from the tree, the discount rate for making an investment now that will be repaid slowly over time, potential carbon credit payment for the tree, etc. These are all things that I want an economist to break down, but each situation is going to be unique, so that there’s no way to cover everything in this overview. So we’ll keep it very simple and go with the back-of-the-envelope numbers. Forgive me, economists.
Let’s start by assuming a tree at full capacity will yield 65 pounds of dry matter per year on average, and that the dry pods are 35% sugar. 65 pounds is not at all outrageous. In fact, in a grove of honey locust trees in Alabama, grafted trees of the Millwood variety averaged 95.7 pounds of dry pods annually at age 9 and 10. They were 12.47% water, which means the actual dry matter was 83.8 pounds. Millwood pods in that study were 36.65% sugar. While one could assume the yield only increased over the years, we don’t have that data, so we’ll keep our assumptions on the conservative end and use an average of 65 pounds of dry matter per year at 35% sugar, which means 22.75 pounds of sugar per tree per year. The sugar component right there, disregarding any value in the rest of the pods and seeds, is worth $18.20 as a replacement for organic molasses. If you have 20 such trees per acre, that’s a whopping $364 worth of energy that will boost your production and keep cows in good condition over winter.
Now, what’s the actual cost of the tree? As I mentioned, there’s a lot of factors to consider. If we use a nice round number of $40/tree, assuming a nice grafted tree is purchased, a tree shelter is used, and the farmer provides the labor themselves, we get a nice starting point. Averaged out over 20 years of yield, that’s $2/year. If each tree yields 22.75 pounds of sugar for $2 worth of input, your cost per pound of sugar is a mere $0.088. Just under 9 cents, compared to 80 cents for the equivalent in molasses.
This is just one example of how integrating trees onto your farm is a crucial step in developing a profitable, low-input, high-output farm for the long term.