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Corn+Soybean Digest

Wind Power: The Next Cash Crop?

The wind may be the next cash crop harvested by some American farmers.

Currently, wind generates about 11 billion kilowatts of electricity, less than 1% of the nation's power. But big improvements in wind power technology, coupled with a need to produce power with fewer environmental drawbacks, has made wind the country's fastest-growing power source.

The cost of power from new high-efficient wind turbines is now competitive with new coal-powered plants. The American Wind Energy Association predicts 6% of America's power will come from the wind by the year 2020.

But giant wind turbines require lots of land in areas with strong, steady winds. That's where farmers stand to gain. They own large parcels in some of the windiest states.

The potential for producing wind-generated electric power is biggest in a north-south corridor in leading corn and soybean states: Minnesota, Iowa, Nebraska, Kansas and Texas. These five states alone have enough wind-power potential to produce more electric power than America now uses, according to the Wind Energy Association.

That potential has begun to open up two new revenue streams for farmers. For example, farmers can charge air rights fees for allowing wind turbines to operate on their land. Air rights leases typically generate $2,000-3,000 per year per wind turbine. Leases usually run for 30 years.

The turbine leases generate steady extra cash with minimal impact on farms. The footprint of these giant turbines is tiny, so only a small bit of land is taken out of production.

“Wind fits into farming because it gives us a diversification of income,” says Larry Mitchell, former deputy administrator for the federal Farm Service Agency, and now chief executive officer of the American Corn Growers Association. “It's another crop to harvest.”

But farmers also have the option of producing wind power themselves and selling the power to utilities. Wind power consultant Dan Juhl says a two-turbine operation will net a farm about $30,000 after expenses during the first 10 years of a contract while units are being paid off. After that, he says, farmers could expect to net more than $100,000 per year after expenses. (Neither figure takes taxes into consideration.)

The turbines cost roughly $900,000 apiece. Each can generate enough power for about 300 homes.

“This is a great opportunity for farmers to diversify and be able to weather the ups and downs of farm commodity prices,” says Juhl, who owns and operates the 17-turbine Woodstock Wind Farm in Pipestone, MN. Because prices are fixed by contract between the wind turbine owner and utilities, they don't fluctuate, he says.

A growing number of utilities are buying wind power or owning wind turbines outright. They include Pacificorp, Xcel Energy, Florida Power & Light and Louisville Gas & Electric. Xcel owns wind turbines or buys power from wind farms in five states.

Overall, the potential for wind power is enormous. The Wind Energy Association estimates the wind could produce 10,777 billion kilowatts annually, three times the amount of power the U.S. now uses.

Top 10 Wind States:

North Dakota
South Dakota


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