WHOLE FARM ECONOMIC ANALYSIS OF PRECISION FARMING PRACTICES

Authors: MARTIN, STEVE - MISS STATE UNIV; Hanks, James

Submitted to: National Cotton Council Beltwide Cotton Conference
Publication Type: Proceedings
Publication Acceptance Date: 1/5/2004
Publication Date: 6/5/2004
Citation: Martin, S.W., Hanks, J.E. 2004. Whole farm economic analysis of precision farming practices. National Cotton Council Beltwide Cotton Conference. 2004. CD-ROM, pp. 708-715.

Interpretive Summary: Studies were conducted to develop precision farming technologies for cotton production and access the economic benefits of these technologies. This process took the approach of trying to bring uniformity to an otherwise variable field. A 33-acre field of Cumbaa Farms was divided into three distinct soil management zones, labeled 1, 2, and 3, respectively, as clay content increased. Variable rate technologies were used to apply production inputs such as seed, nitrogen fertilizer, plant growth regulator, and insecticide. Savings associated with the precision farming technologies were based on deviations from the inputs used on zone 2, which were considered the 'norm.' Savings varied for each of the crop inputs with nitrogen fertilizer costs increasing slightly each year. Overall, the there was a six percent savings attributed to the precision farming technologies. Spreading the costs of precision farming technologies over larger areas with other crops included should significantly reduce the unit costs associated with the technologies. Future studies will concentrate on varying production inputs based on economic benefit rather than producing more uniformity in the appearance of the crop over the entire field.

Technical Abstract: Studies were conducted in 2001 and 2002 to further develop farm level precision agriculture technologies and evaluated the economic benefits. A 33-acre field of Cumbaa Farms was divided into three distinct management zones based on soil electrical conductivity measured with a Veris® Soil Mapping System. Zones were labeled 1, 2, and 3, respectively, as clay content increased. Variable rate technology was used to apply production inputs such as seed, nitrogen fertilizer, plant growth regulator, and insecticide. The objective of the precision farming technology was to bring the lower yielding zones (2 & 3) up to the level of zone 1. Savings associated with the precision farming technologies were based on deviations from the inputs used on zone 2, which were considered the 'norm.' Benefits derived from the total precision farming program were based on yield increases per zone over the five years that yield records were available. The precision farming practices in this 33-acre field resulted in a six percent net yield increase. There was $0.02 per acre seed cost savings associated with precision planting the field. Insecticide costs were also reduced $1.04 per acre in 2001 and $2.45 in 2002. Plant growth regulator expense was reduced in 2002 by $1.27 per acre. Fertilizer costs however increased in each year, $0.19 per acre in 2001 and $0.07 in 2002. The net result of these savings amounts to $0.97 per acre in 2001 and $3.66 in 2002. If the acreage were expanded to 750 acres, (i.e., maximize cotton picker capacity) the costs of precision farming equipment would be reduced from $150.29 per acre to $11.80 per acre, therefore become somewhat more realistic. In addition, much of the precision farming equipment could be used for other crops, which would reduce the cost per acre by distributing the cost over a much larger acreage.