Project Summaries

07-132  Project Manager: J. M. Reeves


James A. Larson, Roland K. Roberts, Burton C. English, Margarita Velandia and Vivian Zhou, University of Tennessee

Purchasing precision agriculture equipment can be a risky decision. The risk stems from the uncertain benefits provided by precision agriculture technology and the associated ownership costs. The benefit of precision agriculture depends on the crop, the input, field characteristics, and farm size. Research has shown the potential for economic benefits with precision agriculture in farm fields exhibiting large spatial variability and in high-value, high-input crops. Cotton is a high-value, high input crop. Growers make extensive use of costly inputs such as seed, fertilizer, and chemicals in the production of cotton. One potentially important source of variability in farm fields is field size and shape. Farm fields in the rolling uplands region of the U.S. Midsouth, which includes cotton growing areas of Tennessee, tend to be smaller and more irregularly shaped when compared to the U.S. Midwest. Irregularly sized and shaped fields are subject to greater problems with overlapping application of inputs. Thus, automatic section control (ASC) technology may have great potential for reducing seed and chemical costs in cotton production. Research was conducted in 2012 to evaluate the profitability of ASC on planters and chemical applicators in Tennessee cotton production.

For the planter ASC analysis, potential savings and the minimum period of time over which investment in ASC on planters would have to be financed to guarantee a positive net cash flow every year were evaluated for alternative farm sizes with various distributions of field types based on overlap or double-planted area. Estimated double-planted area from 52 farm fields in Tennessee were used for the analysis. Percent of double-planted area ranged from 0.1% to 15.5% depending on field size and shape. Fields were classified into low, moderate and high double-planted fields, based on percent of double planted area. Potential seed savings with ASC for planters were evaluated for farm sizes of 988, 1,482, and 1,976 acres. For each farm size scenario, crop area was assumed to be planted in 100% cotton, 50% in cotton and 50% in corn, or 50% in corn and 50% in soybeans. Results indicate that as the percentage of fields in high-double planted area increased, savings from ASC increased, and the minimum number of years to pay back the  investment with positive net cash flows every year tended to decrease. The potential savings from ASC technology ranged from $2 per acre to $11 per acre depending on the distribution of field types in low, moderate, and high double-planted area. For the 988 acre farm that was 100% in cotton, the minimum number of years to pay back the investment was six years if 60% of the fields were in low double-planted area, but only two years if 60% of the fields were in high double-planted area. The minimum times to pay back the investment were shorter for the larger cotton farm sizes because of the larger crop area to spread the initial investment cost over. However, the minimum time to pay back the investment was longer for a farm growing corn and soybeans than for a farm growing cotton with corn or cotton with soybeans. The higher cost of seed for cotton relative to other crops indicated that farms growing cotton may benefit more from ASC technology.

For the chemical applicator ASC analysis, the minimum time to pay the investment in ASC technology back (using discounted cash flows) was evaluated for three cotton farm sizes and for different sized and irregularly shaped fields. The farm sizes were 1,013 acres (650 cotton acres; 363 other crop acres), 2025 acres (1,300 cotton acres; 725 other crop acres), and 4,050 acres (2,600 cotton acres; 1,450 other crop acres). Estimated reductions in chemical usage with ASC that ranged from 1% to 21% with ASC for 21 irregularly shaped and different sized fields from a field study in Kentucky were used in the analysis. The estimated dollar savings in chemicals with ASC technology were calculated based on an average of eight applications per year of herbicides, insecticides, plant growth regulators, and harvest aids on cotton. Results indicated that larger farm sizes and farms with more irregularly shaped and small sized fields benefit more from ASC on chemical applicators. A reduction in chemical usage of 10% or more was required to pay back the investment in ASC technology in five years or less for the small 1,013 acre cotton farm. By comparison, a reduction in chemical usage of only 2% was required to pay back the investment in ASC technology in five years or less for the 4,050 acre cotton farm.  Similar to the planter ASC analysis, the minimum time to pay back the investment was shorter for a larger cotton farm because of the larger crop area to spread the initial investment costs over. This project will continue in 2013.


Project Year: 2012

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