Estimation of Reduced Machinery Ownership Costs in Diversified Cropping Systems

Cropping Systems and Herbicide-Tillage Diversification (Part 1)

In one component of the project directed at Objective 1 an analysis was made of the reduced cost benefits of crop diversification, herbicide-tillage diversification, and a combination of both (Appendix 1b).

Four crops (corn, soybeans, oats, and alfalfa) were used in forming six crop rotations. These were corn-soybeans (C-SB), corn-soybeans-soybeans (C-SB-SB), corn-corn-soybeans (C-C-SB), corn-oats-alfalfa-alfalfa (C-O-A-A). corn-soybeans-oats-alfalfa (C-SB-O-A), and corn-soybeans-corn-oats-alfalfa (C-SB-C-O-A). These six along with continuous corn (C) and continuous soybeans (SB) provided the eight cropping systems analyzed. Here an 800 acre farm was analyzed and yield interactions for rotations included in the net return analysis.

Three herbicide-tillage systems were studied. A conventional (CV) system for corn and soybeans employs broadcasted herbicides and one cultivation along with preplant tillage. For the low chemical option (L) a rotary hoe and two cultivation operations are used for post plant tillage along with banded herbicides. For no-till, preplant tillage does not occur and no cultivations or rotary hoeing occurs, however a "burndown" operation using additional herbicides beyond that used in the conventional option is included. Some hand weeding occurs with all three operations and this varies across the three alternatives wit the greatest hand labor requirement under the low chemical option.

The effect of herbicide-tillage mixing is summarized in Table 1. For each crop system, optimum returns were determined 1) by allowing only one H-T alternative, 2) by allowing a mix of H-T but each crop of each system is required to have the same H-T alternative, and 3) allowing a full mix of crop systems as well as H-T alternatives so that each crop of each crop system could employ a different H-T choice.

Overall, for single H-T systems, the low chemical and no-till systems dominate the conventional H-T system. Cropping systems involving oats and alfalfa performed very poorly under the study assumptions. Yet systems involving high proportions of corn also performed poorly demonstrating the high resource requirements of corn in particular "windows."

When mixing of H-T systems is allowed, returns are significantly enhanced for continuous corn, corn-soybeans, and corn-corn-soybeans. For the three cropping systems involving oats and alfalfa, a single H-T remains dominate over potential mixed H-T systems. It can be seen that in every case, mixing of systems involved low chemical and no-till systems.

Only slight increases are found when the last step is allowed (mixed H-T per crop of the rotation). Thus, advantages of mixed herbicide-tillage systems are nearly all realized in full rotation sequences where for each rotation system, H-T practices are the same.

Crop Mixes

Holding herbicide-systems constant, the effect of crop mixing is demonstrated in Table 2. For each of the three H-T systems, optimum solutions were obtained for 1) single crops, 2) the two single crop systems and six multi-crop systems, and 3) cropping system mixes. For the latter two only the optimal solutions are presented.

For single crop, single H-T systems the no-till systems always performed poorly. Also, except for soybeans grown conventionally or in a low chemical manner the remainder of the single crop, single H-T systems performed poorly.

When one rotation was allowed, the no-till H-T system "reversed" itself by outperforming the conventional and low chemical alternatives ($47,591 vs. $34,977 and $39,155 respectively). This was accomplished in a corn-soybean-soybean crop mix. For the conventional H-T choice, crop mixes did not result in any advantage. For the low chemical option, only a very slight advantage ($39,155 vs. $39,070) was realized by a corn-soybean-soybean rotation vs. the continuous soybean option.

When mixes in rotations were allowed, significant and roughly equal increases in returns were realized for each H-T alternative. The optimum levels of crops in such cases involved high proportions of soybeans compared to corn.

Specific and General Crop Diversification Relationships (Part 2)

This part if directed at both Objectives 1 and 2. In this analysis (Appendix 4) crops are first added to other crops in a proportional way and the impact on machine ownership, labor, and machine operating costs observed (termed MOLMO). Further the sequencing of the inclusion of the crop is important. Thus, "branches" resembling a decision tree occur. The results of those branches for each of three initial crops are presented in Table 3. A 640 acre farm was assumed.

The three basic crops (corn, soybeans, and oats) are each analyzed as initial crops and other crops added in different sequences. Alfalfa cannot be used as an initial crop because it requires a "nurse" crop oats for establishment.

When replacing 320 of the 640 acres of corn with soybeans, for example, a benefit of $57.42 per acre is achieved for all 640 acres. Thus, for the 640 acres, MOLMO costs are $36,751 less for 320 corn - 320 soybeans compared to 640 acres of corn. When oats is then added to corn-soybeans resulting in 213.3 acres of each, another $3.15 per acre benefit for all 640 acres is secured. Finally, when alfalfa is added resulting in 160 acres of all four crops, a $33.06 loss per acre occurs. Another view of this is that compared to 640 acres of corn, an equal mix of corn, soybeans, oats and alfalfa result in a decreased cost of $27.51 per acre (57.42 + 3.15 - 33.06). The addition of soybeans to corn generalizing across all additions has mixed (positive and negative) results. Oats is always positive and alfalfa is always negative.

When soybeans is the initial crop, the addition of corn results in mixed effects. Oats has positive benefits, and alfalfa is always negative. Starting with oats, the impact resulting from the addition of corn is mixed, soybean impacts are always positive and alfalfa impacts always negative.

Summarizing across all initial crops, the addition of oats always results in positive benefits with alfalfa having negative benefits. For corn and soybeans the results are mixed depending on particular settings. These results it must be noted are for specific initial crops and for specific proportional changes.

To develop Objective 2 of the project sixty five combinations of corn, soybeans, oats, and alfalfa were constructed to examine the general effect on MOLMO costs for various cropping systems (Appendix 1d). Because alfalfa can't be grown without the presence of oats, the 65 systems do not involve equal proportions of all crops. The proportions of crops covered includes zero, 20, 33.3, 40, 50, 60, 66.7, 75, 80, and 100.

All 65 systems were analyzed related to alfalfa. Alfalfa has had a long history associated with crop diversification. However, the results in Figure 1 demonstrate that while estimated MOLMO costs for alfalfa at 20 percent are not dramatically higher compared to other crops, these costs increase very dramatically thereafter.

For accurate estimates of other crops only the 37 systems not involving alfalfa were examined. This is because oats is tied to alfalfa establishment hence its estimate is biased relative to corn and soybeans using 65 systems because alfalfa has such high costs. For corn, costs increase as the proportion of corn increases. The opposite occurs for soybeans. Hence, combinations of corn and soybeans of one-third and two-thirds respectively would be predicted to be quite efficient relative to the opposite mix. For oats, a small decrease occurs over the 20-50 percent range but generally oat costs are generally stable and relatively low.

The costs of machine ownership, labor, and machine operation for systems of the specific analysis previously discussed can be derived from the general results shown in Figure 1. For example, a corn, soybean, oats, alfalfa system would involve the average of the costs for all four crops in Figure 1 each examined at 25 percent. That cost for machine ownership, labor, and machine operation could be compared to other crop systems evaluated in the same way. This derivation process enables crop budgets for crop systems to be easily derived from the general analysis of estimated relationships by crop. The accuracy of this method is strong. For example, the estimated actual cost of machine ownership, labor, and machine operation for a corn-soybeans-oats cropping system is $105.81 per acre. Using the general results from Figure 1 which were derived from the large number of system estimations, the estimated average cost of the corn-soybeans-oats system is $108.33 per acre. The difference is only approximately $2.50 per acre. Hence, these averages (such as $108.33) can be placed in budgets of cropping systems to cover costs that previously were generally not included. As a context, these average costs can be compared to that of the average of the three crops grown on the entire acreage (Figure 1 - 640 acres). These are $166.38, $108.03, and $115.08 for corn, soybeans, and oats respectively. The average of these is $129.83 per acre. This can be noted as significantly in error relative to $105.81 seriously underestimating system benefits for this three-crop system.

Appendix 1c is also included demonstrating that system benefits derived from the model can be imposed in budgets. The only limitation to this process is that the overall optimal solution cannot be reached using imposed costs.