Farm-level economic impact of no-till farming in western Oklahoma

Authors: OSEI, EDWARD - Tarleton State University; Moriasi, Daniel; Steiner, Jean; Starks, Patrick

Submitted to: Grazinglands Research Laboratory Miscellaneous Publication
Publication Type: Other
Publication Acceptance Date: 9/16/2009
Publication Date: 9/16/2009
Citation: Osei, E., Moriasi, D.N., Steiner, J.L., Starks, P.J. 2009. Farm-level economic impact of no-till farming in western Oklahoma. Grazinglands Research Laboratory Miscellaneous Publication. 1 p.

Interpretive Summary: No-till has been shown to improve soil conditions and water quality, as compared to conventional tillage methods. However, studies of the relative economic impacts of no-till farming have generally been inconclusive. To help farmers make informed decisions about tillage alternatives, information about the farm-level economic impacts of tillage alternatives, is needed. Farm survey data from the Fort Cobb Reservoir watershed (FCRW) in southwestern Oklahoma was used to evaluate economic impacts of no-till farming as compared to current practices. The Farm-level Economic Model (FEM), an annual economic simulation model, was used to simulate the impacts of the alternative tillage practices on farm profits under various diesel price and winter wheat yield scenarios. While the emphasis was on the dominant crop, winter wheat, simulations were performed for all applicable crops grown in the area. The results indicate that if wheat yields remain unchanged when farmers switch to no-till, no-till would be more profitable than conventional tillage or the current mix of tillage practices in the watershed. Only if wheat yields decline significantly (10% or greater), would no-till be less profitable than conventional tillage or the status quo, even at reasonably high fuel prices. No-till also performs better relative to other tillage practices as fuel prices increase. For each $1/gallon increase in the price of diesel fuel, no-till farm profits improve by roughly $1/acre relative to conventional tillage. In general, if farmers switching to no-till manage their operations carefully and maintain crop yields, they are likely to come out ahead financially. With fuel prices higher now than in the past, the chances of succeeding as a no-till farmer are also better now than before, as compared to other tillage options.

Technical Abstract: Farm survey data from the Fort Cobb Reservoir watershed (FCRW) in southwestern Oklahoma were used to evaluate farm-level economic impacts of no-till farming as compared to conventional tillage and the current mix of tillage practices. The Farm-level Economic Model (FEM), an annual economic simulation model, was used to determine impacts of alternative tillage practices on farm profits under various diesel price and winter wheat yield scenarios. While the emphasis was on winter wheat, alternative tillage simulations were performed for all applicable crops grown in the area. Sensitivity analysis was performed using plausible ranges in diesel prices and in the effects of tillage practices on winter wheat grain yields. The results indicate that if winter wheat grain yields are identical across tillage systems, no-till would be more profitable than conventional tillage or the current mix of tillage practices in the watershed. Even if the switch from conventional tillage to no-till results in a small yield penalty (about 5%), no-till would still be more profitable even at reasonably low diesel price levels. Only when there is a significant wheat yield penalty associated with no-till (10% or greater) would no-till be less profitable than conventional tillage or the status quo, even at reasonably high fuel prices. In general, for each 1% improvement in the yields of winter wheat harvested for grain under no-till relative to conventional tillage, no-till farm profits improve by $3/acre on farms that produce only winter wheat, and an average of $1/acre if averaged across all farms in the FCRW, including those that do not produce winter wheat. Similarly, for each $1/gallon increase in the price of diesel fuel, no-till farm profits improve by roughly $1/acre relative to conventional tillage.