2001 Table of Contents

2001 STEEP III Progress Report

RESEARCH PROJECT TITLE: Managing the Economic Transition to No-Till Farming in the Pacific Northwest

INVESTIGATORS: Doug Young (Co-PI), Hong Wang (Co-PI), Department of Agricultural Economics, WSU. Cooperators are Herbert Hinman, Department of Agricultural Economics, WSU; Dennis Roe, USDA-NRCS; Dave Bezdicek, Joe Yenish, Robert Papendick, William Schillinger, Department of Crop and Soil Sciences, WSU; Dave Huggins, Keith Saxton, Frank Young, USDA?ARS, Pullman; Roger Veseth, Conservation Tillage Extension Specialist, WSU/UI.

PROJECT OBJECTIVES:

1. To identify appropriate economic strategies for PNW farmers in different business and agro-climatic situations to successfully manage financial risk and to maintain acceptable economic returns during the transition to no-till farming.
   
2. To disseminate the results on efficient strategies for managing no-till adoption risk to growers, policy makers and others through extension bulletins, other publications, talks at field days and other meetings, and through other media.

KEY WORDS: No-till, transition, risk, economics

STATEMENT OF PROBLEM: The Pacific Northwest (PNW) lags the rest of the country in adoption of no-till. The financial risks of large up-front costs for purchasing no-till drills have been a barrier to adoption of no-till for many. These barriers have been magnified by low crop prices and by depressed markets for used conventional farm machinery. Recent economic case studies of PNW no-till farmers by the investigators showed wide variation in their economic success depending on how the financial transition to no-till was managed. The timing of machinery purchases, purchase of new or used machinery, custom hiring of some operations, renting or leasing machinery, and management of repair and retooling costs must be strategically tailored to the farm situation. A better understanding of the nature of the risks and returns for different no-till transition strategies could lead to policies and educational programs which would accelerate adoption of no-till where it is suitable.

ZONE OF INTEREST: PNW dryland agro-climatic zones with 8" to 22" av. ppt/yr.

ABSTRACT OF RESEARCH FINDINGS: Analysis of a survey of 266 east-central Washington farmers showed that twenty percent of the surveyed farmers had tried no-till, but most had used this practice jointly with continuous spring cropping, presumably to capture moisture conservation benefits. The survey also revealed that participation in an NRCS-Extension soil conservation program in this region boosted the adoption of no-till.

We interviewed 10 eastern Washington no-till dryland farmers from Whitman and Adams counties during 2001 who considered themselves in the transition from conventional farming. The group showed considerable disparity in renting versus owning land at year 1 of the transition, suggesting that the transition may not require one particular land tenure situation. Although the speed of conversion to no-till acres varied greatly among the farmers, none of the farmers Abacktracked@ in no-till acreage over the five years. Most farmers began by custom hiring or renting a drill in years 1-3 of the transition, but over half had purchased a drill by years 4 and 5. All but one of the drill purchasers in this group reported having paid cash for their no-till drills. The no-till farmers considered drill ownership a desirable goal for economic and agronomic reasons; however, most desired to defer purchase until they could pay for the drill without debt.

Our economic case studies of 11 experienced no-till farmers showed most owned no-till drills. Based on their annual acres of no-till seeded each year, investment analysis showed that most of these farmers were clearly minimizing seeding costs by owning rather than custom hiring drilling services.

We are now modeling which of the diverse drill acquisition strategies observed in our surveys best fit the risk management needs of farmers with different risk carrying capacities and agronomic situations in the Pacific Northwest.

RESULTS AND INTERPRETATION:
Objective 1. To identify economic strategies for PNW farmers to successfully manage financial risk during the transition to no-till farming.

During this year we have (1) examined survey results from 266 east-central Washington farmers to examine which ancillary conservation practices farmers use during the transition to no-till, (2) analyzed the pattern over time of the no-till transition process for 10 eastern Washington farmers, (3) compared the cost of owning no-till drills to custom hiring no-till drilling services for established no-till farmers, and (4) developed methodology for simulating the economic risk of different no-till transition strategies.

A survey of 266 east-central Washington farmers showed that farmers making the transition to no-till often adopt other conservation practices simultaneously. For example, 20.4 percent (8.3+9.8+1.5+0.8 percent from Figure 1) of the sampled farmers had used no-till to some extent, but most had used it jointly with one or two other erosion control practices. Some 11.3 percent had used no-till jointly with spring cropping (Figure 1), possibly to take advantage of moisture conservation advantages of no-till. Similar results were found in our conservation farming literature survey which indicated intensification of cropping permitted by no-till and min-till was a major factor in a 44 percent reduction in fallow in North America over the last three decades. The survey of 266 eastern Washington farmers also showed that participation in an NRCS-Extension educational program significantly boosted the adoption of no-till among farmers. The educational program provided research results on effective no-till technologies and highlighted the off-site costs of wind erosion.

Fig. 1. Percentage of respondents by adoption group.

Eastern Washington no-till transition patterns were surveyed by conducting comprehensive personal interviews with 10 no-till dryland wheat and barley growers from Whitman and Adams counties during the early spring of 2001. The survey sought farmers who considered themselves still in the transition process from conventional farming, but who had accumulated about five years no-till experience. Each farmer provided information on the farm=s size, financial position, and crop rotations at the initiation of the transition. The farmer also described annual no-till drill acquisition (custom, rent, lease, or purchase), annual no-till acreage expansion, and yield experience during the transition period (Tables 1-3).

Table 1. The average, lowest and highest response to selected questions by 10 transition no-till farmers in eastern Washington, spring 2001
Question Low Mean High

Table 2. Pattern of no-till expansion during transition years for six farmers in eastern Washington.

Table 3. Percent of nine farmers acquiring no-till drills by different means during the 5-year transition period.

The ten farmers whose responses are summarized in Table 1 show great disparity in land tenure at year 1 of their no-till transition. The group includes farmers who rented all their land, who owned all their land but were still paying for it, and who owned all their land and had fully paid for it. This suggests that the no-till transition may not require one particular land tenure situation.

These survey results also suggest that eastern Washington farmers make the transition to no-till gradually. Although the speed of conversion to no-till varied greatly among the six farmers listed in Table 2, it is interesting that none of the six Abacktracked@ in no-till acreage over the five years. Each year the same or an increasing percent of acreage was no-tilled. The results in Table 3 indicate that most farmers began by custom hiring or renting a drill in years 1-3 of the transition. But over half of this group of eastern Washington growers had purchased a drill by years 4 and 5. All but one of the drill purchasers in this group reported having paid cash for their no-till drills which ranged in cost from $13,618 to $65,000. These results indicate that no-till farmers consider drill ownership a desirable goal for economic and agronomic reasons. However, most desire to reduce the investment risk of no-till drill purchase by deferring this step until they can pay for the drill without debt. The types of drills purchased included: McGregor, Yielder, Great Plains, Cross Slot, Palouse Zero Till, and Flexicoil Air Seeder. This diversity of equipment suggests that growers are buying models considered appropriate for their particular soils, topography and climatic conditions. The surveyed growers usually kept their conventional tillage equipment. This equipment was viewed as having a low sale value. It also provided a cheap Ainsurance@ if it were necessary to revert to conventional tillage on some fields.

This section lists selected farmer responses to the general question: AWould you have done anything different to maintain a secure cash flow after switching to no-till?@ These responses appear to confirm that economic risk is a potential barrier to no-till adoption.

1. "The biggest problem with no-tillers is that there is always the fear of the unknown. Most guys personally know four or five farmers that went bankrupt trying to make it work. This is quite discouraging, and you feel like you are alone in a new frontier."
   
2. "I do wish that the cost of those drills would come down a bit."
   
3. "You need to find an inexpensive drill to get started and try not to [rely on] custom hire. It is sad when you see others go bankrupt, but you just got to keep on trying."
   
4. "I'd try to find a less expensive high horsepower tractor, and I'd sell all my conventional tillage equipment. It's tough to try to find the right drill that will work for you, and to absorb the cost. Since we don't like to burn, we want a drill that is big enough to finish seeding on schedule, and can punch through all of the extra residue."
   

We reexamined findings from our earlier economic case studies of experienced no-till farmers. This group was beyond the transition and was no-tilling all or most of their farms. Several of these farmers had purchased no-till drills and we compared their cost of drill ownership to prevailing custom rates. Based on their annual acres no-till seeded each year, the comparison showed that most were minimizing seeding costs by owning their drills. They used a wide variety of strategies to economize drill ownership and use costs. Some farmers rented larger tractors needed only for no-till drilling, some bought used drills and retrofitted them, some assembled no-till drills in farm shops. Others shared no-till drills and tractors with relatives or neighbors, timed purchases of drills and tractors during high cash flow years, and shopped for low cost financing for drill and tractor purchases. Some did custom no-till planting to help pay for drills.

During the past year we have acquired (and received training in) the state-of-the-art Simetar agricultural risk simulation program developed at Texas A&M University. A PhD student is using this program to measure the riskiness of different no-till drill acquisition sequences for farms of different size, equity structure, and regions. We have developed an ancillary program which considers the correlation of crop prices over time to properly reflect the risk encountered by a transition no-till farmer. Yield risk with no-till crops in the region is based on field experiments conducted by cooperators in this project. Optimal strategies are being determined for PNW farms with different risk carrying capacities and agronomic situations.

Objective 2. To disseminate results.
Research results identifying factors associated with adoption of no-till and the no-till transition process were presented to growers and scientists in WSU's field day proceedings. Results on no-till and fallow reduction in North America and on the experimental design of conservation tillage field experiments were published in professional journals. We presented results on the economics of weed control to three local and international groups. The PI's on this project are the sole social science participants in the multi disciplinary conservation farming systems discussion and planning group at Washington State University Crop. As a member of the State Advisory Committee for the Natural Resources Conservation Service (NRCS) in Washington state, the senior PI has been able to communicate research findings to NRCS on a periodic basis.

INTERACTION (COOPERATION) WITH OTHER SCIENTISTS CONDUCTING RELATED ACTIVITY: We sought advice from WSU Crop and Soil Sciences faculty, USDA-ARS scientists, and NRCS personnel listed as Cooperators above in the selection of no-till farmers for case studies and surveys. These cooperators also have provided data on no-till yield levels, yield variability, and input requirements. Drs. Bill Schillinger and Frank Young have been especially helpful in providing data from their long run no-till and min-till cropping systems at Lind and Ralston in Adams County. We have also conferred with Dr. Larry van Tassel, U. Idaho, and Drs. Herb Hinman and Gayle Willett, WSU on procedures for incorporating time and uncertainty into the profitable acquisition on no-till drills. Dr. James Richardson, Texas A&M University has provided software and valuable advice for modeling the economic risk of no-till equipment acquisition over time.

PUBLICATIONS AND PRESENTATIONS:

STEEP

Juergens, L., D. Young, D. Roe and H. Wang. 2001. Preliminary farmer survey results on the economics of the transition to no-till. In 2001 Field Day Proceedings: Highlights of Research Progress. Department of Crop and Soil Sciences Technical Report 01-04, Washington State University, Pullman, WA.

Upadhyay, B., D. Young and H. Wang. 2001. Do farmers who adopt multiple wind erosion control practices differ from their neighbors? In 2001 Field Day Proceedings: Highlights of Research Progress. Department of Crop and Soil Sciences Technical Report 01-04, Washington State University, Pullman, WA.

Smith, E. and D. Young. 2000 (published in 2001). The economic and environmental revolution in semi-arid cropping in North America. Annals of Arid Zone 39(3): 3447-361.

Schillinger, W., H. Shafer, B. Sauer, A. Kennedy, D. Young, D. Wysocki, and
T. Paulitz. 2001. No-till seeding into standing irrigated stubble instead of burning. Preliminary farmer survey results on the economics of the transition to no-till. In 2001 Field Day Proceedings: Highlights of Research Progress. Department of Crop and Soil Sciences Technical Report 01-04, Washington State University, Pullman, WA.

STEEP related

Wei, W., J. R. Alldredge, D.L. Young, and F.L. Young. 2001. Downsizing an integrated crop management field study affects economic and biological results." Agronomy Journal (March-April 2001) 93:412-417.

Young, D.L. 2001. Three seminars, Topics in economics of weed control in conservation tillage. Washington State University, January 24; USDA, Economic Research Service, Washington, DC, March 24; European Conference on Precision Agriculture, Montpellier, France, June 19.

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