• Traditional model — The producer grows, harvests, stores, and delivers raw material (biomass) in accordance with a contract with the processing plant. Deliveries are made to ensure that the plant has a supply for continuous operation during the processing season, which for most agricultural industries is only part of the year.

• Cotton model — The producer grows, harvests, and stores the raw material (seed cotton) in modules at the edge of the field (Figure 13.2). The gin (processing plant) operates a fleet of trucks to deliver the modules as required for operations during the ginning season. Farmers are paid for the seed cotton that crosses the scale at the gin. The gin operates a warehouse and stores bales of ginned cotton for periodic delivery to its textile mill customers throughout the year.

• Sugarcane (Texas) model — the producer grows the crop. The sugar mill takes ownership of the crop in the field and harvests and delivers it for continuous operation during the processing season. (Sugarcane must be processed within 24 hours of harvest, so storage is not part of the sugarcane system.)

The advantage (or disadvantage, depending on perspective) of the traditional model is

that all quality issues reside with the producer. There is no question who is responsible

if a quality standard is not met. Business people planning the operation of a bioenergy plant tend to prefer this model, though they typically balk at paying a feedstock price that adequately compensates the producer for their additional risk.

The advantage of the cotton model is that the specialized equipment needed for hauling the modules is owned by the gin. The producer does not have to own equipment that will be used only a few times per year. The gin uses its module haulers many more hours per year, thus the hauling cost ($/ton) is less than can be achieved by an individual producer. Typically, gins haul modules in the order they are “called in” by the growers. Module storage time in the field, and any subsequent losses are not dealt with in the grower-gin contract. The grower is paid the contract price for the mass of cotton fiber (and co-products) that the gin produces from a particular module.

The advantage of the Texas model is that the producer does not have to own any harvesting or hauling equipment. The disadvantage is that the producer does not have control over the time of harvest. Sugar content peaks in the middle of the season and a producer who has cane harvested early, or late, sells less sugar. Fortunately, this issue is addressed in the producer contract.