Estimation of Reduced Machinery Ownership Costs in Diversified Cropping Systems

1994 Annual Report for LNC94-063

Project Type: Research and Education
Funds awarded in 1994: $29,544.00
Projected End Date: 12/31/1997
Matching Federal Funds: $11,990.00
Matching Non-Federal Funds: $12,300.00
Region: North Central
State: Nebraska
Project Coordinator:
Glenn Helmers
Dept of Agricultural Economics, University of Nebraska

Estimation of Reduced Machinery Ownership Costs in Diversified Cropping Systems


The economic benefits of rotational cropping are normally perceived to result from positive yield interactions, reduced inputs and reduced risk. The objective of this project was to estimate another benefit, reduced machine ownership and labor costs when growing crops in combination either in rotations or in simple diversification of continuously grown crops. These benefits have been difficult to quantify previous to recent advancements in securing mixed integer linear programming solutions.

In this project farm returns are maximized for four crop alternatives (corn, soybeans, oats and alfalfa) or any mix of the four. The setting is eastern Nebraska under dryland crop production conditions. In addition to the usual annual cost and returns items, the cost of machine ownership and labor is included in the decision process. While it is recognized that this cost will vary by cropping system, the quantification of these costs have been difficult to estimate. Here this is accomplished by including the choice of field machines and labor in the optimizing process and providing a cost for each selected. Omitting machine ownership and labor from consideration in the economics of cropping systems as is commonly done may seriously bias results against diversified and rotational cropping by ignoring system benefits that arise from such crop mixes.

The research model of this project includes several field time windows during which field operations for any crop must be completed. A large number of field machine alternatives were provided. The benefits of crop diversification arise because smaller machine-labor sets can be used for such multi-crop systems compared to larger sets necessary under single crop situations. Multi-crop systems reduce time pressure in the windows of field time. The specific reduced cost results from diversifying crops depends on farm size and crop mix. For example, the highest multi-crop benefit was found when soybeans replaced continuous corn on one-half the acreage of a 640 acre farm, with machine ownership, labor and machine operating costs reduced by $57 per acre (expressed per acre for 640 acres). Machine operating costs were included because these are inseparable from the particular machine set chosen. The reduced cost benefits are less for other crop combinations.

The above benefits were estimated allowing diversified herbicide-tillage methods in combination with diversified cropping. When only diversified cropping under a constant herbicide-tillage system was examined, benefits were reduced but still very significant. The results were also generalized by crop across a range of rotation systems. This enables machine ownership, labor and machine operating costs to be estimated for any crop mix from once-estimated relationships. Hence, a model of the detail described above is only needed once to estimate cost relationships and thereafter, cost of machine ownership, labor and machine operation can be determined for any crop mix. North Central Region SARE 1997 Annual Report.