Biofuels are still too costly to compete in the energy market and it has been suggested that low-value feedstocks could provide an opportunity for the production of low-cost biofuels; however, the lower quality of these feedstocks requires the introduction of a conditioning step in the biorefinery process. The aim of this study was to evaluate whether feedstock savings cover the cost of conditioning in the case of animal bedding. The BioSTEAM software was used to simulate a wheat straw biorefinery and an animal bedding biorefinery, whose economic performance was compared. The wheat straw biorefinery could deliver ethanol at a minimum selling price of USD 0.61 per liter, which is similar to prices in the literature. The cost of producing ethanol in the animal bedding biorefinery without water recycling was almost 40% higher, increasing the minimum selling price to USD 1.1 per liter of ethanol. After introducing water recycling in the conditioning step, the animal bedding biorefinery could deliver ethanol at a minimum selling price of USD 0.38 per liter, which is 40% lower than in the case of the wheat straw biorefinery. This demonstrates that low-value feedstocks can be used to reduce the biofuel price, as feedstock savings easily cover the additional conditioning cost.