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1998 STEEP III Progress ReportRESEARCH PROJECT TITLE: Assessing the Economic Viability of No-Till and Related Conservation Systems for Various Agro-Climatic Zones in the Pacific Northwest INVESTIGATORS:Douglas Young (PI), Herbert Hinman (Co-Investigator), Hong Wang (Co-Investigator), Dept. of Agr. Econ., WSU. Cooperators are Dennis Roe, USDA-NRCS; Dave Bezdicek, Dave Huggins, Tim Fiez, Eric Gallandt, Robert Papendick, Department of Crop and Soil Sciences, WSU; Claudio Stockle, Department of Biological Systems Engineering, WSU; Keith Saxton, Frank Young, Ann Kennedy, USDA-ARS, Pullman; Roger Veseth, STEEP Extension Specialist, UI/WSU. PROJECT OBJECTIVES:
KEY WORDS: No-Till, Economics, Conservation Tillage, Pacific Northwest STATEMENT OF PROBLEM: USDA recently reported that U.S. farmers had adopted no-till on 14.8 percent of cropland by 1996 and had substantially reduced soil erosion as a result. In the Pacific Region, which includes the Pacific Northwest (PNW), USDA reported about 1 percent of cropland is in no-till and that the rate of no-till adoption has stagnated in comparison to other farming regions. Fear of economic losses appears to underlie the reluctance of many PNW farmers to adopt no-till. Contrary to these patterns, a small minority of PNW dryland farmers report economically successful use of no-till. A better understanding of the nature of and reasons for the economic performance of these no-till farmers could accelerate adoption of no-till where it is suitable and reduce economic and environmental losses from soil erosion in the PNW. ZONE OF INTEREST: PNW dryland agro-climatic zones with 10" to 22" av. ppt/yr. ABSTRACT OF RESEARCH FINDINGS: We have completed initial interviews with the 11 no-till growers for which comprehensive economic case studies are being conducted. Analysis has not been completed and reviewed by growers for all the case studies, but some preliminary results are presented for one of the earlier case studies from Walla Walla County. This grower produces continuous hard red spring wheat (HRSW) under no-till in a 10 inch precipitation zone and reports an average yield of 31 bu/ac. With premiums for protein, the grower reported missing $5/bu for his wheat only three of the past 17 years and would gross $155/acre at $5/bu and $170/acre at $5.50 /bu. The grower=s variable costs were only $100.40 per acre and total costs were $149.23 per acre. This study illustrated that short planting windows for spring crops accentuate the importance of excellent machinery maintenance, few or no breakdowns, good timing, appropriate machinery capacity, and good overall speed in drilling and weed control. Also, consistently achieving HRSW protein premiums is important for economic success. Preliminary results from the six high ppt. zone no-till farms show average winter wheat yields from 72 to 110 bu/ac and total costs/bu of winter wheat of about $2.80 to $3.50 per bushel. Interestingly, the farm with the highest average yield incurred one of the higher costs per bushel as did the farm with the lowest average yield. Planting and tillage costs were naturally lowest (a minimum of 6 percent) with zero till but approached a high of 20 percent where substantial supplementary tillage was done. However, the group of higher cost growers included representatives of both the zero till and supplementary tillage groups. Weed control and fertilization costs varied widely over the six farms. RESULTS AND INTERPRETATION: Objective 1. To conduct economic case studies of PNW no-till farmers This is a new STEEP III project for which funding commenced during mid-1998; however, we began conducting interviews with no-till farmers on our own during the winter of 1997-98. We have completed all first stage interviews, but will continue to return to some growers to clarify certain information. We are now conducting the economic analysis for each case study. The case studies include 11 no-till growers--nine from SE Washington, one from NE Oregon, and one from northern Idaho. Growers selected for interview were recommended by project cooperators from NRCS and from Cooperative Extension. For final selection it was necessary for the grower to have had adequate experience with no-till farming, have sufficient records or recall to construct detailed production costs estimates, and to be willing to participate in a lengthy interview and follow up process. The initial personal interviews typically lasted two to five hours. Not all no-till growers recommended for the study were prepared to participate, but most were. Information was collected on the timing and composition of farming operations; the size, age, annual repairs, salvage value, and hours of annual use of machinery; speed of operations; type and rates of inputs used; fixed costs such as land costs, taxes, insurance, and overhead; and any other costs or special practices. Production history on crop yield and quality for as many years as records or recollection permitted was also collected. The data are then entered on input forms, cross checked with the farmer if necessary, converted to consistent 1998 dollar terms throughout, and a budget for all crops in the rotation is generated using the Cooperative Extension Enterprise Budget Generator in the WSU Department of Agricultural Economics. Preliminary results are sent or taken to the cooperating grower for review and possible correction. This validation process has not been completed with most of the growers so the results presented in this progress report are preliminary. The sample contained six growers from the high rainfall (18-22 in. ppt/yr) annual cropping zone, four from the low rainfall (10-15 in ppt/yr) zone, and one grower from an intermediate rainfall zone who used irrigation. Among the six growers in the annual cropping zone, three used no-till with burning of stubble and three never burned. Three were zero-tillage farmers and three combined use of no-till drills with some limited tillage. There was similar variation in practices among growers in other regions. To illustrate the type of analysis underway, we present below one of the seven budgeting tables prepared for each crop for each grower. Other tables in the analysis present results on machinery inventories and costs, rates and costs of fertilizers and pesticides, and other costs. Table 1 presents the schedule of operations and associated costs for one of the low rainfall case studies. This Walla Walla County grower has 17 years experience growing no-till continuous hard red spring wheat (HRSW) in a 10 inch precipitation zone and reports an average yield of 31 bu/ac. With premiums for protein, the grower reported missing $5/bu for his wheat only three of the past 17 years. Annual records of prices received were not available, but the grower would gross $155/acre at $5/bu and $170/acre at $5.50/bu. The grower reported averaging aabout 8 bu/ac less with HRSW than with soft white winter wheat which often sells for about $1/bu less than high protein HRSW.
Production cost results were impressive with estimated average variable costs of only $100.40 per acre and total costs of $149.23 per acre. At the conservative HRSW price of $5/bu, the farmer would net $54.60/acre over variable costs. The break-even selling price to cover variable costs is $3.24/bushel; HRSW must sell for at least this price to cover all variable costs. At $5.50/bu for HRSW net returns over total costs would exceed $20/acre. At the low HRSW price of $4.10/bu observed during 1998 the grower would incur a loss of over $20/acre for returns over total costs. Potential benefits from this Walla Walla County case study include highlighting the importance of cost management and niche marketing in profitable no-till farming. Preliminary results indicate that efficiency in machinery management is critical to profitable no-till production of spring crops. Short planting windows for spring crops accentuate the importance of excellent machinery maintenance, few or no breakdowns, good timing, appropriate machinery capacity, and good overall speed in drilling and weed control. Also, achieving consistently high grain quality and HRSW protein premiums are important to economic success. Even though the economic analysis and validation by growers has not been completed for all 11 case studies, some preliminary general comparisons from the high ppt. zone can be ventured at this time. Average winter wheat yields varied from 72 to 110 bu/ac on these six farms and the preliminary total costs per bu of winter wheat ranged from about $2.80 to $3.50 per bushel. Interestingly, the no-till case study farm with the highest average winter wheat yield incurred one of the higher costs per bushel as did the farm with the lowest average yield. Readers are cautioned not to make inferences about whole farm profitability on the basis of these winter wheat cost figures alone. In the Palouse, the ratio of returns to costs for winter wheat is typically higher than for other crops in the rotation. Based on our preliminary estimates the composition of costs also varied considerably over the six high ppt. zone no-till case study farms. Planting and tillage costs were of course lowest (around 6 percent) where zero till was used and were close to 20 percent where substantial supplementary tillage was done. However, the group of higher cost growers included representatives of both the zero till and supplementary tillage groups. Weed control costs varied from 10 to 20 percent of total costs with most growers in the lower range. Similarly, fertilization costs ranged from about 7 to 18 percent. Of course, regional soil and climate differences within the 18 to 22 inch ppt. sample area likely account for many of these differences, but the data indicate different philosophies on supplementary tillage, weed control, and fertility management among no-till growers. Future analysis will assess other factors which underlie these differences. Objective 2: To examine factors associated with adoption of no-till and minimum-till farming among a random sample of 293 central Washington dryland farmers. The electronic data file for this survey has been acquired and we have reviewed the descriptive results of the survey of Adams, Benton, Douglas, Grant, and Franklin County WA farmers. We will complete the statistical analysis of conservation practice adoption during the next year to 18 months. The survey has data on adoption of eight conservation practices of which using no-till or minimum till is one. Over 95 percent of respondents used some conservation practice(s). Leaving wheat stubble standing over winter was the most popular practice followed by reducing tillage operations, especially rodweedings. A substantial number of respondents had delayed initial spring tillage and increased chemical weed control. Twenty-one percent reported having used min-till or no-till. Objective 3: To disseminate research results We have presented preliminary results for one farm in the WSU Field Days bulletin and are scheduled to present further results at the STEEP Direct Seeding Conference in early January 1999. We have cooperated with extension efforts including a grower profile series under way by WSU Crop and Soil Sciences faculty who are doing a companion study on agronomic practices of successful no-till farmers. As the economic case studies of more no-till farmers are completed we will continue to cooperate with this group and others. We are planning to publish extension bulletins summarizing the economic comparisons for both the high rainfall and low rainfall no-till case studies. During 1998 we completed analysis and reporting of earlier STEEP research which provided information to assist growers make profitable decisions on the enrollment or reenrollment of land in the Conservation Reserve Program (CRP). We also completed the final updating of two chapters for a forthcoming book highlighting previous STEEP research accomplishments. INTERACTION (COOPERATION) WITH OTHER SCIENTISTS CONDUCTING RELATED ACTIVITY: We have conferred with many of the WSU Crop and Soil Sciences faculty, USDA-ARS scientists, and NRCS personnel listed as Cooperators in the selection of no-till case studies and in the interpretation of results. We have also cooperated with a related WSU USDA-SARE project which has interviewed some of the same successful conservation farmers. The agronomic and outreach activity of this SARE project will complement the economic and cost assessment research proposed in this project. Perhaps most importantly, we acknowledge the no-till growers from three states whose extensive commitment of time and cooperation has made the no-till study possible. We thank Dr. Doug Scott of the WSU Department of Agricultural Economics who provided the electronic file of the central Washington conservation practices survey and shared with us earlier descriptions of the results of the survey. This survey was originally conducted as part of the Columbia Plateau Air Quality project on which the PI was a participant. PUBLICATIONS AND PRESENTATIONS: Camara, O., D. Young, H. Hinman and D. Roe. 1998. Profitability of a long term no-till continuous spring wheat farm in Walla Walla County. In Donaldson, E. (Editor) 1998 Field Day Proceedings: Highlights of Research Progress. Tech. Report 98-2. Dept. Crop and Soil Sciences, Wash. State U., Pullman. Other 1998 STEEP research publications and presentations with support from both previous and current years= resources: Bechtel, A. and D. Young. 1998. The role of fixed costs in determining CRP breakeven bids. Paper presented at Regional Project NC-214 Annual Meetings, Kansas City, MO. Bechtel, A. and D. Young. 1998. The importance of using farm level risk estimates in CRP enrollment bids. Paper presented at Regional Project NC-214 Annual Meetings, Kansas City, MO. Bechtel, A. and D. Young. 1998. How county average data can underestimate farm level risk: a Douglas County WA wheat production example. In Donaldson, E. (Editor) 1998 Field Day Proceedings: Highlights of Research Progress. Tech. Report 98-2. Dept. Crop and Soil Sciences, Wash. State U., Pullman. Young, D., F. Young, J. Hammel and R. Veseth. 1998. A systems approach to conservation farming. Chapter 9 In Conservation Farming in the United States: The Methods and Accomplishments of the STEEP Program. CRC Press LLC, Boca Rotan Fl (at press). Walker, D. and D. Young. 1998. Conservation policy issues. Chapter 12 In Conservation Farming in the United States: The Methods and Accomplishments of the STEEP Program. CRC Press LLC, Boca Rotan Fl (at press). |
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