2000 Table of Contents

2000 STEEP III Final Report

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 TYPE: 1998-2000

PROJECT OBJECTIVES:

1. To evaluate the cultural practices, production costs, profitability, and economic risk of no-till farming systems used by leading no-till farmers in various agro-climatic zones of the PNW.
   
2. To examine factors associated with adoption of no-till and minimum-till farming among a random sample of over 266 central Washington dryland farmers surveyed in 1997.
   
3. To disseminate the results of economic analysis of conservation tillage systems to growers and others through publications, field days, and other media.
   

KEY WORDS: No-Till, Economics, Conservation Tillage, Pacific Northwest

STATEMENT OF PROBLEM:

USDA 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, four in the 8 to 13 inch zone and one with irrigation.

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, 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

We completed economic case studies of the 11 no-till growers included 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.

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 hard red spring wheat (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.

The impressive cost results for several of the case studies raise the question of whether this nonrandom sample of no-till growers was atypically successful due to personal experience, managerial acumen, or favorable agro-climatic environments. While these growers may be further along on the learning curve than most, they were very humble about failures along the way and claimed to be blessed by no special luck or knowledge.

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.

The bottom line results for yields and production costs in this paper report only a small fraction of the detail of the farm-by-farm and crop-by-crop budget tables contained in WSU Extension Bulletins EB1885 and EB1886 (see list of publications). These bulletins include complete descriptions of the machinery complements; machinery use rates; sequences of operations; types and rates of herbicides, fertilizer, seed and other inputs; and other costs.. Variable, fixed, and total costs are reported by crop and by farm. Growers are encouraged to scrutinize the detailed tables in Bulletins EB 1885 and EB1886 with a sharp pencil in hand and insert their own practices, yields, and estimated costs as appropriate to estimate how their own predicted costs might compare to those of the established no-till farmers. Bulletins 1885 and 1886 are available for free from the Internet (http://farm.mngt.wsu.edu/onlinepub.html) or for a small fee from Bulletins, Washington State University, P.O. Box 645912, Pullman, WA 99164-5912.

Table 1. Winter Wheat Yields and Costs of Production for Six No-Till Farmers and an Extension Conventional Tillage Budget, 19 to 22 inch Rainfall Zone.

^a Painter, K., H. Hinman, and J. Burns. 1995 Crop Rotation Budgets for Eastern Whitman County, Washington. Washington State University, Cooperative Extension Bulletin EB1437, Pullman, WA, 1995 (revised and updated, 1999).

^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.

^a Hinman, H. and A. Esser. 1999 Enterprise Budgets: Summer Fallow-Winter Wheat Rotations and Hard Red Spring Wheat Annual Cropping, Adams County, Washington State. Ext. Bul. 1883, Washington State University, May 1999.

^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.

^a Painter, K., H. Hinman, and J. Burns. 1995 Crop Rotation Budgets for Western Whitman County, Washington. Cooperative Extension Bulletin EB 1795, Washington State University, 1995.

^b 1993-1997 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.

^a Hinman, H. and A. Esser. 1999 Enterprise Budgets: Summer Fallow-Winter Wheat Rotations and Hard Red Spring Wheat Annual Cropping, Adams County, Washington State. Ext. Bul. 1883, Washington State University, May 1999.

^b1993-97 average market price=$4.50/bu

Objective 2: To examine factors associated with adoption of no-till and minimum-till farming.

During 1999 we completed the initial statistical analysis of the factors associated with adoption of conservation practices by Adams, Benton, Douglas, Grant, and Franklin County farmers in central Washington. Over 95 percent of the 266 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.

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.

Recent statistical analyses of this data set, in support of a subsequent STEEP project, was targeted to discerning factors associated with a successful transition to no-till. Again results show the importance of targeted agricultural/environmental education programs at an early stage. Results show that innovative farmers who change to conservation tillage often experiment with several conservation practices.

Objective 3: To disseminate research results

Grower interest in this project was quite high and we responded with a variety of talks, publications, video presentations, and Internet publications. We were invited to present results at both the 1999 and 2000 PNW Direct Seed Conferences and also prepared papers for the Conference proceedings. These were also produced as videotapes. We presented five separate reports on no-till economics in the 1998-2000 WSU Crop and Soil Science Department Field Day Proceedings Technical Reports. Ours were the only social science research reports in these proceedings. We also cooperated with WSU Crop and Soil Science extension faculty who were conducting agronomic case studies of no-till growers. Where the samples of our two projects overlapped, we cooperated by adding an economics component to the no-till grower profiles published in three PNW Extension publications. We also contributed a report to the PNW Conservation Tillage Handbook.

Two comprehensive Cooperative Extension bulletins, one for each rainfall zone, summarizing the complete economic case studies for each crop and each no-till grower were published both in print form and on the Internet. These bulletins provide full detail by crop on the machinery complement, cultural practices, input rates and types, and other cost factors for each grower. After release, a large number of "hits" were observed at the Internet site. We also consented with requests for interviews by newspaper and radio reporters which resulted in media coverage of the results. The WSU College of Agriculture Research Center selected our project as one of a handful of "featured research" projects in its 1999 Annual Report.

We also completed analysis and reporting of earlier STEEP research. One research topic 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 results.

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. Oumou Camara, an MA student on the project, worked tenaciously and hard to complete this project over two years. 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, previously 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.

Dr. David Walker and Dr. Amos Bechtel collaborated on and coauthored publications related to the Conservation Reserve Program and other conservation policies.

PUBLICATIONS AND PRESENTATIONS, 1998-2000:

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 Dofing, S. (Editor) 1998 Field Day Proceedings: Highlights of Research Progress. Tech. Report 98-2, pp. 81-84. Dept. Crop and Soil Sciences, Wash. State U., Pullman.

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, pp. 125-127. 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, pp. 131-133. 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, pp. 215-219. January 5-7, Int. Ag. Trade Center, Spokane, Washington.

Young, D.L. and O. Camara. Cost and profitability results of farmers using direct seed systems in the Pacific Northwest. Video DS9-7, Economics and Strategies for the Transition to Direct Seed Cropping Systems. Digital-Quality Videotapes: Northwest Direct Seed Cropping Systems Conference, Cooperative Extension, Wash. State U., Pullman. 1999. Videocassette.

Camara, Oumou, Doug Young and Herb Hinman. 1999. "The Bottom Line" In E. Mallory et al., Direct Seeding in the Inland Northwest: John Rea Farm Case Study." PNW 514, Pacific Northwest Extension Publication.

Camara, Oumou, Doug Young and Herb Hinman. 1999. "The Bottom Line" In E. Mallory et al., Direct Seeding in the Inland Northwest: Frank Lange Farm Case Study." PNW 516, Pacific Northwest Extension Publication.

Camara, O., D. Young, and H. Hinman. 1999. 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 EB 1886, November, Pullman, WA (49 pp.). Also published on the Internet at (http://farm.mngt.wsu.edu/onlinepub.html).

Camara, O., D. Young, and H. Hinman. 1999. 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 EB 1885, November, Pullman, WA (35 pp.). Also published on the Internet at (http://farm.mngt.wsu.edu/onlinepub.html).

Young, Doug, Oumou Camara, and Herb Hinman. 2000. "Economic Case Studies of Direct Seed Farmers." Proceedings Northwest Direct Seed Cropping Systems Conference, pp. 49-55. January 4-6, Pendleton, OR.

Young, Doug, Herb Hinman, and Roger Veseth. 2000. "PNW Economics Research Shows No-Till Profitability." In Chapter 10, Pacific Northwest Conservation Tillage Handbook Series No. 14, University of Idaho.

Young, D.L. 2000. Economic Case Studies of Direct Seed Farmers. Video 2-DSO-B. Digital-Quality Videotapes: Northwest Direct Seed Cropping Systems Conference. Cooperative Extension, Wash. State U., Pullman.

Young, D.L. with WSU CAHE Information Staff. January 2000. "Research Shows No-Till Can Be Profitable in the PNW." One of featured research projects in Agricultural Research Center 1999 Annual Report, College of Agriculture and Home Economics, Washington State University.

Young, Doug and Herb Hinman. 2000. "The Bottom Line" In E. Mallory et al., Direct Seeding in the Inland Northwest: Thomas Farm Case Study." PNW 523.

Young, Doug, Herb Hinman, and Roger Veseth. "PNW Research Shows No-Till Profitable."In Dofing, S. and R. Veseth (Editors) 2000 Field Day Proceedings: Highlights of Research Progress. Tech. Report 00-1, pp. 102-103. Dept. Crop and Soil Sciences, Wash. State U., Pullman.

Wang, Holly, DouglasYoung, and Oumou Camara. 2000. "The Role of Environmental Education in Predicting Adoption of Wind Erosion Control Practices." Abstract in Journal of Agricultural and Resource Economics (December).

Other 1998-2000 STEEP research publications and presentations with support from this and previous STEEP project resources:

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.

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. 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. 1999. The importance of using farm level risk estimates in CRP enrollment bids. Abstract in Journal of Agricultural and Resource Economics (December).

Contact us: Hans Kok, (208)885-5971 | Accessibility | Copyright | Policies | WebStats | STEEP Acknowledgement
Hans Kok, WSU/UI Extension Conservation Tillage Specialist, UI Ag Science 231, PO Box 442339, Moscow, ID 83844 USA Redesigned by Leila Styer, CAHE Computer Resource Unit; Maintained by Debbie Marsh, Dept. of Crop & Soil Sciences, WSU