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1999 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. INTERIM REPORT: 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 8" to 22" av. ppt/yr. ABSTRACT OF RESEARCH FINDINGS: In depth economic
case studies of 11 no-till farmers confirmed that no-till can be profitable
in the Pacific Northwest when conducted properly. The case studies included
six experienced no-till growers in the 19 to 22 inch precipitation zone
and four in the 8 to 13 inch precipitation zone. All six high precipitation
growers' winter wheat production costs were impressively low and remarkably
uniform. Total costs/bu range from $2.52 to $2.92 compared to $2.95/bu
for a typical conventional tillage budget. The average no-till total production
costs of $2.64/bu beat the 1993-97 average market price for soft white
winter wheat of $3.72 by more than a dollar. The six no-till growers also
had relatively low production costs for spring crops, but the margin was
lower than for winter wheat. The economic success
of these no-till growers was attributable to frugal machinery management
and learning the proper weed control, fertility, and other practices to
make no-till work in their particular farm. Appropriate management for
no-till caused the case study farmers to achieve higher than average yields
in most cases. In other research,
logit and ordered probit regression analysis were used to identify factors
associated with reduced tillage adoption, continuous spring cropping use,
and number of changes made in response to wind erosion. Contrary to previous
results for water erosion control, simple perception of a wind erosion
problem, or membership in a particular socioeconomic category, were not
sufficient to motivate adoption of wind erosion control practices. This
study supported a targeted educational program which: (1) highlighted
the threats of wind erosion to human health and to soil productivity and
(2) described specific potentially profitable farming practices for solving
the wind erosion problem. RESULTS AND INTERPRETATION: Objective 1. To
conduct economic case studies of PNW no-till farmers During 1999, we completed
the economic case studies of all 11 no-till growers in the study--nine
from SE Washington, one from NE Oregon, and one from northern Idaho. 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 was
then entered on input forms, cross checked with the farmer as necessary,
converted to consistent 1998 dollar terms throughout, and a budget for
all crops in the rotation for each grower was generated using the Cooperative
Extension Enterprise Budget Generator in the WSU Department of Agricultural
Economics. The sample contained
six growers from the high rainfall (19-22 in. ppt/yr) annual cropping
zone, four from the low rainfall (8-13 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. Table 1 reports winter
wheat average yields and estimated production costs per acre and per bushel
for the six no-till growers in the high rainfall zone and for an updated
"typical" eastern Whitman County, WA conventional tillage budget
prepared by Cooperative Extension staff. All six no-till growers' winter
wheat production costs are impressively low and remarkably uniform. Total
costs/bu range from $2.52 to $2.92 compared to $2.95/bu for the typical
conventional tillage budget. The average no-till total production costs
of $2.64/bu beats the 1993-97 average market price for soft white winter
wheat of $3.72 by more than a dollar. Total production costs include a
wage for the farmer's labor and a fair market return to land and machinery
investment, as well as other costs. Marketing and insurance costs and
a charge for management were not included. As expected, farmers
with higher total costs per acre tended to produce higher crop yields.
For example, farmer B, whose farm has favorable soils and climate, spends
about $60/ac more to produce winter wheat than the other no-till growers,
but his yields are also 25 bu/ac higher than the other growers. The composition of
costs over input categories also varied over the sample growers. The group
of higher cost growers included representatives of both the zero till
and supplementary tillage groups. Weed control costs varied from 6 to
22 percent of total costs with most growers in the lower range. Similarly,
fertilization costs ranged from about 11 to 17 percent. Of course, regional
soil and climate differences within the 19 to 22 inch ppt. 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. The production costs/bu
for winter wheat relative to selling prices were substantially lower than
those for spring crops (not tabulated here) in this 19 to 22 inch rainfall
zone. For example, total production costs for spring wheat averaged $3.34/bu
for the five no-till growers who grew spring wheat. This is not surprising
because winter wheat has long been the most productive and profitable
crop in the Palouse. It is expected to "carry" more than its
share of total rotation production costs in order to "subsidize"
less profitable, but agronomically necessary, spring crops. It is not possible
to generalize the results in Table 1 from six no-till growers to all growers
contemplating no-till winter wheat production in the annual cropping region
of the PNW. Every farm faces unique resource and business conditions.
However, these case studies show that promising economic results are possible
with no-till winter wheat production in the 19 to 22 inch rainfall region
with proper management. Tables 2, 3, and
4 report winter wheat, spring barley, and HRSW average yields and estimated
production costs per acre and per bushel for the four no-till growers
in the 8 to 13 inch rainfall zone and for a revised "typical"
conventional tillage budgets for this zone prepared by Cooperative Extension
staff. The no-till winter wheat total costs/bu for growers J and L are
$2.66 and $3.10, with the Extension conventional tillage estimate falling
in the middle at $2.98 (Table 2). All three total costs, which include
a wage for the operator and market returns for land and machinery as well
as other costs, compare favorably to the 1993-97 average market price
for soft white winter wheat of $3.72/bu. No-till spring barley
total costs for growers J and L also "straddle" the Extension
conventional tillage cost with the three estimates ranging from $58.35/ton
to $75.69/ton (Table 3). Both growers would realize a profit given the
1993-97 average barley price of $85/ton. Grower J in a 13-inch rainfall
area enjoys a yield and cost of production advantage over farmer L in
a 11-inch rainfall area for both winter wheat and spring barley. Farmer I grows continuous
no-till HRSW in a 11-inch rainfall area averaging 38.5 bu/ac. Farmer K
averages 31 bu/ac in an 8-inch rainfall area (Table 4). The higher rainfall
farmer produces HRSW at $3.85/bu versus $4.70/bu for the farmer in the
drier area. Higher crop yields for farmer I account for the difference.
Total production costs per acre for the two farmers are very similar.
Total costs/bu for farmer I falls considerably below, and for farmer J
just above, the 1993-97 average HRSW price of $4.50/bu. Extension's conventional
tillage HRSW total cost estimate of $3.27/bu falls considerably below
the costs of farmers I and K and the average HRSW price. The Extension
budget assumes a similar yield of 35 bu/ac, but about $33/ac less total
costs than the average of the farmers. The estimates for farmers I and
K are based on several years individual experience as successful HRSW
growers in the area. The Extension HRSW cost estimate is based on the
collective judgement of a panel of growers and Extension personnel whose
experience with this relatively new crop for this area is not known. The case study results
indicated that efficiency in machinery management is critical to profitable
no-till production of spring crops in this low rainfall region. 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. In summary, the case
studies indicated that no-till production of a winter wheat-spring barley-fallow
rotation in the 11 to 13 inch rainfall region of eastern Washington could
be profitable assuming long-run average crop prices. Two growers also
produced continuous no-till HRSW at or near breakeven costs. Of course,
it is not possible to generalize the results from these four no-till growers
to all growers contemplating no-till production in the low rainfall regions
of the PNW. Every farm faces unique resource and business conditions.
However, these case studies show that promising economic results are possible
with no-till with proper management. Readers should recognize
that the production cost efficiency results presented here do not permit
any conclusions about the comparative overall profitability of the no-till
growers. Profit comparisons require information on both sides of the economic
equation--production costs and marketing performance. For example, it
is known that one of the growers in Table 1 with higher production costs
forward contracted his 1998 wheat crop for over $4/bu. This grower earned
significantly higher profits than others who had slightly lower production
costs but sold their wheat during 1998 for less than $3/bu. b1993-1997 average market price=$3.72/bu. Table 2. Winter
Wheat - Summer Fallow Yields and Costs of Production for Two No-Till Farmers
and an Extension Conventional Tillage Budget, 11 to 13 inch Rainfall Zone. b1993-1997 average market price=$3.72/bu Table 3. Spring
Barley Yields and Costs of Production for Two No-Till Farmers and an Extension
Conventional Tillage Budget, 11 to 13 inch Rainfall Zone. b1993-1997 average market price=$85/ton Table 4.
Hard Red Spring Wheat Yields and Costs of Production for Two No-Till Farmers
and for an Extension Conventional Tillage Budget, 8 to 11 inch Rainfall
Zone. b1993-97 average market price=$4.50/bu Objective 2:
To examine factors associated with adoption of no-till and minimum-till
farming. Logit and ordered
probit regression analysis were used to identify factors associated with
reduced tillage adoption, continuous spring cropping use, and number of
changes made in response to wind erosion. Contrary to previous results
for water erosion control, simple perception of a wind erosion problem,
or membership in a particular socioeconomic category, were not sufficient
to motivate adoption of wind erosion control practices. This study supported
using a targeted educational program which: (1) highlighted the threats
of wind erosion to human health and to soil productivity and (2) described
specific potentially profitable farming practices for solving the wind
erosion problem. Objective 3:
To disseminate research results During 1999 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 published two
chapters in a 1999 book highlighting previous STEEP research accomplishments. INTERACTION (COOPERATION) WITH OTHER SCIENTISTS CONDUCTING RELATED ACTIVITY: We conferred with
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 of the no-till case studies. We cooperated
throughout with WSU Crop and Soil Sciences Extension faculty, Ellen Mallory
and Tim Fiez, who had interviewed some of the same no-till farmers regarding
agronomic issues. We shared with this group summaries of our economic
results for several leaflets profiling individual no-till farmers. Most
importantly, we acknowledge the no-till growers from three states whose
extensive commitment of time and cooperation made this study possible. Dr. Doug Scott of
the WSU Department of Agricultural Economics provided the electronic file
of the central Washington conservation practices survey and shared with
us earlier descriptive 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. Dr. Scott Cardell, private statistical consultant,
provided advice on statistical procedues. PUBLICATIONS AND PRESENTATIONS: Camara, O., D. Young, H. Hinman and H. Wang. 1999. Economics of No-till Winter Wheat on Farms in the 8 to 13-Inch Rainfall Zone of Eastern Washington. In Dofing, S. (Editor) 1999 Field Day Proceedings: Highlights of Research Progress. Tech. Report 99-1. Dept. Crop and Soil Sciences, Wash. State U., Pullman. Camara, O., D. Young, H. Hinman and H. Wang. 1999. Economics of No-till Wheat and Barley Production on Farms in the 19 to 22-Inch Rainfall Zone of the Pacific Northwest. In Dofing, S. (Editor) 1999 Field Day Proceedings: Highlights of Research Progress. Tech. Report 99-1. Dept. Crop and Soil Sciences, Wash. State U., Pullman. Young, D. and O. Camara. 1999. Cost and profitability results of farmers using direct seed systems in the Pacific Northwest. In Proceedings Northwest Direct Seed Cropping Systems Conference and Trade Show. January 5-7, Int. Ag. Trade Center, Spokane, Washington, pp. 215-219. Camara, O., D. Young, and H. Hinman. Economic Case Studies of Eastern Washington and Northern Idaho No-Till Farmers Growing Wheat, Barley, Lentils, and Peas in the 19-22 Inch Precipitation Zone. Washington State University Cooperative Extension Bulletin EB1886, Pullman, WA (at press). Camara, O., D. Young, and H. Hinman. Economic Case Studies of Eastern Washington No-Till Farmers Growing Wheat and Barley in the 8-13 Inch Precipitation Zone. Washington State University Cooperative Extension Bulletin EB1885, Pullman, WA (at press). Other 1999 STEEP
research publications and presentations with support from both previous
and current years' resources: Bechtel, A. and D.
Young. 1999. Is whole-farm analysis important in marginal land-use decisions?
A CRP bid example. Journal of the American Society of Farm Managers and
Rural Appraisers 62(1):78-84. Bechtel, A. and D. Young. 1999. The importance of using farm level risk estimates in CRP enrollment bids. Abstract in Journal of Agricultural and Resource Economics, Vol. 24, No. 2, Dec. 1999. Young, D., F. Young, J. Hammel and R. Veseth. 1999. 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, Florida, pp.173-191. Walker, D. and D. Young. 1999. 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 Florida, pp. 193-211. |
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