ID-211
Tillage Economics, One-Planter Versus Two-Planter Systems:
A Comparison of Conventional and No-Till Tillage for Two Farm Sizes
D. H. Doster
Department of Agricultural Economics
S. D. Parsons
Department of Agricultural and Biological Engineering
D. R. Griffith
Department of Agronomy
E. P. Christmas
Department of Agronomy
Summary
As shown in Figure 1, p. 9, given the yields and costs for Crosby-type soils used in this analysis, the following conclusions about tillage economics can he drawn.
1. Adding extra units to make and use a 1511 bean planter increases economic profits.
2. Switching to no-till increases economic profit.
3. Adding a drill increases economic profit.
4. Switching to a no-till drill adds still more to economic profit.
5. Increasing farm size and machinery size increases per acre profit.
6. Increasing farm size and operating both a planter and a no-till drill on most of the same days further increases per acre profit.
Based partly on this analysis, the following inferences can also be drawn.
1. Increasing machinery size along with still more acres can increase per acre profit.
2. Since farmers tend to bid excess profits into land prices and land rent, widespread adaption of no-till drills is expected to have a positive effect on land prices and rents.
3. Using big machinery jointly can be a profitable alternative.
Introduction
The economics of tillage on farms using one planter for both corn and soybeans are presented in a companion publication (Tillage Economics, One-Planter Systems, Doster, et al., ID-191, Purdue University Cooperative Extension Service, 8/93). To get full benefit from this publication, you should make sure you have ID-191, as well. On highly erodible soils, research at Purdue and elsewhere generally shows that highest yields and highest profits occur from using no-till. On other soils, yield and profit advantages for no-till are less dramatic and may not be the best choice.
Some farmers report unsuccessful results from no-till. As you consider your own performance potential, consider that the most important management skill is the ability to correctly measure your own performance potential. Can you manage this system?
In this publication, the economics of conventional and no-till tillage systems on two planter farms are described and compared with one planter systems. This comparison is made for a 750-acre farm and for a 1200-acre farm. On the 750-acre farm, both corn and beans are planted by the same operator even though a conventional and a no-till drill are used for beans on one farm each. On the 1200-acre farm, a second person is used to operate drills.
For the 750-acre farm budgets, machinery is sized so as to complete planting of corn and beans in 10 days suitable for planting (good field days), using one planter at a time. Because fewer days may be ideally suited for no-till planting within the prime planting period, an 8-row no-till planter is assumed instead of a 6-row planter for the conventional fall plow system.
For the 1200-acre farm budgets, machinery is sized so as to complete planting of corn and beans in 10 good field days, also. However, for the systems with both a corn planter and a bean drill, both machines are operated 8 days, including 6 days when both machines are operated at the same time.
Many farmers have used a second planter for years. Some farmers have had conventional drills and others have converted a 30" corn planter into a 15" bean planter. For several years, about one-fourth of the soybeans were seeded this way. Recently, many farmers have purchased no-till drills, and over half the beans are now seeded in narrow rows.
What's going on? Why is this occurring? What are the consequences? How much acreage will he shifted to drills? Consider the following analysis.
Yield Relationships
Yield relationships among tillage systems for Indiana conditions have been published in another publication (Influence of Production Practices on Yield Estimates for Corn, Soybeans, and Wheat, Doster, et al., ID-l52, Purdue University Cooperative Extension Service, 7/93). They are based on many years of research and farmer experience. For the somewhat poorly drained Crosby silt loam used in this comparison, no- till corn and bean yields are assumed to be 2% less than yields using conventional fall plow tillage. Based on the published yield coefficients, no-till yields may range from 10% more to 10% less than yields with fall plowing, depending on soil type and crop rotation.
Yield coefficients for different soybean row widths are also published in ID-152. In the initial economic comparison, it is assumed that a medium maturity variety was planted in Central Indiana, providing a 12% yield increase for 15" rows and a 16% yield increase for drilled beans, compared to 30" rows.
On land with soil other than the somewhat poorly drained crosby silt loam used in this comparison, yield response to no-till and to narrow rows may differ. Soil type, latitude, planting date, crop rotation, and operator skills all have a bearing. Therefore, the effect of these factors on tillage comparisons must be evaluated for your own farming operations to determine the most profitable tillage system. The effect of a lower yield increase is illustrated later in this paper.
Economic Budgets
Economic budgets for 750-acre farms and 1200-acre farms growing a corn-soybean rotation are created for six tillage systems.
Crop sales revenue less direct production
costs are calculated as per acre returns over direct costs. Needed part-time labor is hired at $10 per hour.
Overhead expenses are charged as follows. Full-time labor cost is set at $22,500 per farm. Machinery replacement costs for timely sets of machinery are estimated using the Purdue Machinery Cost Calculator (Maxi-PMC User Guide: Purdue Machinery Cost Calculator, Doster, D. H. and T. G. Baker, C-EC-10, Purdue University Cooperative Extension Service, 6/93) and 1993 machinery list prices. Machinery depreciation, property taxes, insurance, and opportunity cost interest are shown as per acre average costs. land rent is set equal to the amount remaining from returns over direct costs less the other overhead expenses on the conventional fall plow 750-acre budget.
Economic profit is found by subtracting the direct costs and the overhead expenses from the sales revenue. The per acre rent is set at $72 on all farms. Therefore, economic profit is set at zero on the conventional fall plow 750-acre budget. The relative profitability of the various other tillage systems on both the 750-acre and 1200-acre budgets is then presented as economic profit per acre and per farm.
The 750-Acre Budgets
For the 750-acre one-planter farms, machinery size, 1993 list price, and annual costs are listed in Table 1 for the conventional fall plow and no-till tillage systems. Annual machinery cost per acre is shown to be $44 for the conventional fall plow system and $33 for the no-till system. The extra machinery needed for the two planter farms is shown in Table 2. The 15' no-till drill is the third item. For the 11-15" planter, $10,000 is added to the 6-30" planter. A conventional 15' drill is also included.
Six one-planter tillage systems for rotation corn/soybeans on a 750-acre farm are described in ID-191. In Table 3, find six tillage systems for Crosby soil, including the 630" conventional and no-till systems from that publication. Extra planter units were added to the conventional planter so as to plant 15" beans. The two planter systems include a conventional bean drill and a no-till bean drill. In all six systems, corn is planted in five days; then beans are seeded in the next five days suitable for fieldwork.
Note the following conclusions.
First, the no-till planter is $13 per acre more profitable than the conventional fall- plow system. Second, planting soybeans with a 15" attachment increases profits $7 on conventional and $4 per acre on no-till. Third, planting soybeans with a drill increases profits $6 on conventional and $7 per acre on no-till.
Per acre revenue is highest for conventional corn planting and conventional drilling of beans. However, returns over direct costs are highest for no-till corn and no-till drilled beans. Higher herbicide cost is more than offset by much lower part-time labor, fewer repairs, and less fuel. When machinery overhead is included, the no-till drill budget is the easy winner. (Of course, if yield increases are less, the answer is different.)
Let's look at the various comparisons.
Compared to the conventional systems, the 11-15" bean planter budget has more herbicide cost and more machinery overhead, but it shows almost five bushels higher bean yield.
Compared to the conventional system, the conventional drill shows much higher revenue, thanks to the highest bean yield in the table. The drill system does have higher herbicide cost and higher machinery overhead, but the economic profit is the highest of the conventional tillage systems shown.
The no-till budget using the corn planter to plant both crops shows the lowest revenue, the highest herbicide cost, the lowest part- time labor cost, the lowest machinery overhead, and the second highest profit.
The soybean yield difference between the no-till budgets using the corn planter at 38.2 and using the no-till drill at 44.3 bushels is 16%. Assuming this five day drill usage, the break-even yield difference needed is about 3 bushels, or about 7%.
The no-till budget using the drill for beans shows the highest per acre economic profit. Seed and herbicide cost are highest. Low-cost items include per acre machinery and part-time labor.
Suppose it were possible to plant corn in 30" rows and beans in 7 1/2" rows with the same planter. Suppose yields were the same as shown in the two drill budgets in Table 3. Then, depending on the cost of such a machine, economic profit might be similar to the profits shown for the drill systems. Such a planter is reportedly being developed.
The 1200 Acre Budgets
The most significant effects from switching to a no-till drill are yet to be shown. Perhaps the effects occur as follows.
1. A farmer gets a no-till drill and uses it to seed beans after planting corn, perhaps conventionally.
2. This farmer then switches to no-till planting of corn and frees up the disc tractor driver.
3. This farmer then rents more land, gets a bigger combine, etc., and operates both planters no-till on most days. Most farmers won't trade all their machinery immediately so as to again be timely on the new total acreage. Often it's not possible to get exactly the right sizes. This problem increases management challenges. It also increases the chances for a person to realize extremely low yields from late planting, say, 2 years out of 10. Nevertheless, farmers rent land when they can. Then, they change machinery sizes, work longer hours, and/or take more chances. Of course, some farmers have excess machinery capacity now. After adding some acres, they'll still be timely.
In Table 4, machinery sizes and annual costs are shown for these conventional tillage systems and three no-till systems. Both conventional and no-till include a corn planter for corn and three ways to plant beans; namely with a corn planter in 30" rows, a corn planter in 15" rows, and a drill. The corn planter is sized as a 10-row unit for conventional and as a 12-row unit for no-till to represent a situation for completing both corn and soybeans with one planter on 1200 acres in 10 planting days.
In Table 5, this farmer shifted 100% of acreage to the new size machinery. Therefore, more acres are farmed with the same labor, except for one extra part-time tractor driver at planting. Farm size increased 60%, total machinery cost increased slightly less than 60%, leaving per acre machinery cost almost the same. When used the same number of hours, per acre machinery cost is about the same, regardless of farm size, above 500 acres. Actually, the per acre cost for larger planters is more; for larger tractors, it is sometimes more, sometimes less; for larger combines, it is less.
Another, perhaps more likely, alternative is to shift to no-till on only part of the acres and to make that shift decision based in part on the spring weather. This alternative is not shown.
In Table 5, six budgets are shown for a 1200-acre farm. Beans are planted in 7-, 15-, and 30-inch rows, beans and corn are planted both conventionally and no-till.
For the two budgets using a drill, the same size machinery is used on the 1200-acre farm as on the 750-acre farm. Both rigs are operated 8 days, including 6 days when they are run simultaneously. Compared to the same system on the 750-acre farm, each planter is operated 60% more hours, resulting in higher repairs, but lower per acre overhead cost.
True, the management requirements increase. It's hard to keep a corn planter and a bean planter operating at the same time and more part-time labor is needed. But that's what many farmers are learning to do. More farmers will learn to do this, in order to use both planters all the days of the prime planting season. what's the payoff?
First, compare the conventional 1200- acre (with 10-30" planter) with the 750-acre farm (with 6-30" planter). The economic profit per farm is $20,400 on the 1200 acres versus $0 on the 750 acres. Full-time labor is $11.00 less per acre. Part-time labor is $3.00 less per acre. The overhead cost for the bigger machinery is $3.00 less per acre.
The bottom line for the 1200-acre 10- 30" corn, 19-15" bean planter is $18 per acre versus $7 per acre on the comparable 750- acre farm, or $21,600 on the 1200 acres versus $5,250 on the 750 acres. The difference for the conventional drill is $16 per acre versus $6. This is $19,200 on the 1200 acres versus $4,500 on 750 acres. Reduced per acre labor causes the increased profits.
Note the difference when the same size no-till drill is used on both size farms. The economic profit is $32 on the 1200 acres versus $20 on the 750 acres. This is an extra $23,400 ($38,400 - $15,000). Again, using the same full-time labor on more acres more than offsets slightly lower yields.
Also find the 12-30" no-till planter. The economic profit for the 1200-acre no-till machine is $27 per acre versus $13 per acre for a 8-30" no-till system on 750 acres. A no-till 12-row 30" machine with extra seed boxes for 15" beans can plant 1200 acres in 10 days. Recognize that the planter is included both as a conventional 10-row rig and as a 12-row no-till machine. This is done to compare the effect of planting with one planter using the two different tillage systems.
With conventional tillage, the one planter with 15" bean units is $1 more profitable than the two planter drill system and $6 better than the 1 planter 30" bean system. With the no-till system, the two planter drill system is the most profitable. To summarize, when acreage and labor are sufficient to operate both a no-till corn planter and a no-till drill at the same time on 6 days and also to operate both rigs on 2 other days each, this system is the most profitable system identified for Crosby and similar soils. This analysis is made with bean yield increases of 12% for 15" rows and 16% for 7" rows.
Large Acre Farms
Mainly because more acres are operated with the same full-time labor, economic profit per acre and per farm on the 1200-acre farms in Table 5 is higher than on comparable 750-acre farms in Table 3. Will profit increase further on still larger farms?
The answer is yes. A 10-row conventional planter is shown on the 1200- acre farm. You can purchase 12-row, 16- row, and 24-row planters. You can also purchase hitches to make 30' drills. In addition, some farmers have learned to use one set of trucks to haul grain from multiple combines harvesting in the same field. Therefore, with the same labor crew, they can use larger machinery to farm more acres in the same time as used here on the 1200- and 750-acre farms.
For the 1200-acre farm shown in Table 5, a no-till 8-30 planter and a no-till 15' drill are used so as to complete corn and soybean planting in 10 days. For a 2400-acre farm, a no-till l6-30 planter and a no-till 30' drill could be used to complete planting in 10 days. On this new size farm, yields would be the same as on the 1200-acre farm since plant-harvest dates would be the same. Per acre machinery costs would be about the same. However, per acre labor costs would be only half as much since the same total labor would be used on both the 2400-acre and 1200-acre farms.
Remember, when operated the same number of hours, per acre costs for different sized machinery sets are about the same. When labor time is spent using big machinery on large acreages instead of using liable machinery on small acreages, per acre labor costs are lower. That's the advantage that so- called big farmers have.
Only a small percentage of cornbelt acreage is currently farmed with the largest available machinery. However, as older farmers retire, most of their acres could be rented or purchased by farmers who will use the largest available machinery. Farmers are in a competitive market economy. To compete effectively, a farmer must be a low- cost producer. In the future, once present machinery wears out, that likely means many farmers will be using their crop season labor on bigger and still bigger machinery than most farmers now have.
The limit to farm size is management cost. Management cost increases when the manager is no longer a tractor driver or a combine driver. Therefore, the lowest cost farm size is likely the size that can be handled by one crew with one set of big machinery operated long hours.
Consider the evidence over many years, which shows a positive relationship between profit and land prices and rents. If the tillage< related material shown herein represents reality, land prices and rents can be expected to increase or to decrease less than would be the situation without this productivity- enhancing farming system.
Some farmers can't or don't want to operate more acres themselves. Another way to spend the crop season time on bigger machinery is to join with others and use one set of machinery jointly. If fewer units are used to farm the same acreage, less hired labor may be needed, and labor costs will be less. If the machines can be operated more< hours per day, machinery costs will be less.
When Yield Increases Are Less
Suppose yield increases are 6% for 15" rows and also for 7" drills. This 6% increase is indicated in Influence of Production Practices on Yield Estimates for Corn, Soybeans, and Wheat, ID- 152, Purdue Cooperative Extension Service, 7/93 for full- season soybean varieties in central Indiana. Budgets for these yields for 750-acre and 1200-acre farms are shown in Table 6 and 7.
By tillage system, the economic profit comparison in Table 6 is quite different than in Table 3. For the 750-acre farms in Table 6, the one planter no-till system is most profitable at $13 per acre more than the conventional fall plow system. For the 1200- acre farms in Table 7, the one planter no-till system is also the most profitable at $10 per acre more than the conventional fall plow system. For both farm sizes, when soybean yield increases are only 6%, the 15" planters and the drills are less profitable than the 30" no-till system.
A Comment on Leases
Economists study how people trade with each other, try to understand why, and then predict how people will trade in the future.
Changes in crop production practices can affect lease terms that landlords offer tenants. Suppose a tenant has a 50/50 lease in which the tenant receives half the crop and provides all the labor and machinery, but only half the other direct costs. Look at Tables 3, 5, 6, and 7, and create 50/50 budgets for each planter system.
First, you will find that the tenant appears to benefit more than the landlord from a shift away from the conventional fall plow one planter system. Second, particularly if soybean yield increases are not as great as suggested here, it's possible, especially on the 1200-acre farm, to create a situation where the tenant benefits from no- till and the landlord realizes less returns.
Numerous inferences can be made from these observations, including the following.
1. Tenants with superior no-till bean production skills will benefit in the switch to no-till.
2. Such skilled tenants will pay their landlords some of the gain either by adjusting their share lease terms or by paying a higher cash rent.
3. Beans will continue to be grown in more conventional tillage, and not by no-till methods, on some farms.
Finally, crop farming systems are changing and may continue to change. Farm operators who switch tillage systems often continue to own previously used equipment until they are satisfied with their performance with a new system. Thus, their machinery costs are higher than suggested in the budgets in this publication.
In addition, other yield-increasing, fertilizer- and chemical-decreasing technologies are now being tested on a site- specific basis by some farmers. Since the operator will perform the service and the landlord will realize some of the benefits, further lease adjustments are possible, if these systems are shown to be cost effective.
Implications
The numbers presented support the decisions many of you have already made, namely, to get a no-till drill. One of the consequences of your decisions is that you will next decide to get more land. Some of you will then realize you can get still bigger equipment and be able to operate more acres. Perhaps others will look for ways to use big machinery jointly. Based on the evidence presented here for Crossbar type soils, using a second planter most days results in higher profits. Higher production profits are related to higher rents.
Figure 1: Economic Profit Comparisons
Planter Combinations for a Timely Planted 750-Acre Farm, Corn/Soybean Rotation, Crosby Soil
One Planter 2 Planters
--------------------------- ---------------------------
Fall Plow No-Till Fall Plow No-Till
----------------------------------------------------------------------------------------------------
Corn 6-30" 6-30" 8-30" 8-30" 6-30" 8-30"
Beans Same 11-15" Same 15-15" 15' Conv 15' N-T
(+5 rows) (+7 rows) Drill Drill
1 operator plants both corn and beans in =10 days
5 days corn, 5 days beans in sequence
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Economic Profit (750 acres):
Per Acre $0 $7 $13 $17 $6 $20
Per Farm $0 $5,250 $9,750 $12,750 $4,500 $15,000
Planter Combinations for a Timely Planted 1200-Acre Farm, Corn/Soybean Rotation,
Crosby Soil
One Planter 2 Planter
------------------------- ---------------
Fall Plow No-Till Fall Plow No-Till
----------------------------------------------------------------------------------------
Corn 10-30" 10-30" 12-30" 12-30" 6-30" 8-30"
Beans Same 19-15" Same 25-15" 15' Conv 15' N-T
(+9 rows) (+13 rows) Drill Drill
1 operator 2 operators
10 days total 10 days total
5 days each 8 days each planting
in sequence 6 days both planting
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Economic Profit (1200 acres):
Per Acre $17 $18 $27 $30 $16 $32
Per Farm $20,400 $21,600 $32,400 $36,000 $19,200 $38,400
Table 1: Machinery Size, 1993 List Prices, Annual Cost, and Estimated Per Acre Purchase
Prices1 for Conventional Fall Plow and No-Till Tillage Systems, 750-Acre
Corn/Soybean Rotation Crosby Soil
Fall Plow No-Till
-------------------------------- ---------------------
Size List Price Annual Cost2 List Price Annual Cost
---------------------------------------------------------------------------------------------
Tractor2 (number) 121 $61,480 $6,240
75 $29,232 $2,967
68 27,028 2,743
P&K Spreader 6 ton 8,932 991 8,932 991
NH3 Applicator 5-knife 3,132 348 3,132 348
Plow 5-16" 10,440 1,159
Disc4 17' 13,224 1,468
Planter 6-30" 19,140 2,494
No-Till Planter 8-30" 28,604 3,727
Rotary Hoe 15' 4,292 473
Cultivator 6-30" 4,988 550
Field Sprayer 30' 3,132 345
40' 4,060 447
Combine 89,320 10,209 89,320 10,209
Grain Head 15' 12,760 1,458 12,760 1,458
Corn Head 4-30' 16,820 1,923 16,820 1,923
Truck 17,400 1,914 17,400 1,914
Wagons 6,960 766 6,960 766
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Total $299,048 $33,081 $214,220 $24,750
List Price/Acre1 $399 $285
Annual Cost/Acre $44 $33
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1 For cost calculations, all machines are assumed to be purchased at 85% of list price.
2 Annual costs as a percent of list price are as follows: tractors, 10.15; plows and discs,
11.1; planters, 13.03; combines, 11.43; other, 11.
3 Tractor size (horse power) listed for each tractor.
4 Disc equipped with broadcast herbicide incorporation kits (sprayer and tanks).
Table 2: Additional Machinery for Two Planter Tillage Budgets, 750-Acre Farms
List Price Annual Cost @ 750 Ac1
---------------------------------------------------------------------------------
Planter 11-15"2 $10,000 $1,303 $2/ac.
Drill, 15' 11,000 1,430 2/ac
No-Till Drill, 15' 22,000 2,860 4/ac
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1 The total farm size is 750. The machine cost per acre is twice the amount shown
since only half the acres are planted to beans.
2 The $10,000 is for five extra planter units, etc., added to the 6-30" planter.
Table 3: Economic Budget for Rotation Corn and Soybeans, Indiana Crosby Soil, 750
Acres, Six Tillage Systems
One Planter Two Planter
-------------------- ------------------
Conventional No-Till Conventional No-Till
---------------------------------------------------------------------------------------------------
Corn 6-30" 6-30" 8-30" 8-30" 6-30" 8-30"
Beans 6-30" 11-15" 8-30" 15-15" 15' Drill 15' Drill
---------------------------------------------------------------------------------------------------
Crop Mix Summary: 50% Corn 50% Beans
---------------------------------------------------------------------------------------------------
Per Acre Yield (bu.)
Corn $2.35 122 122 119.6 119.6 122 119.6
Beans $5.60 39 43.7 38.2 42.8 45.2 44.3
Per Acre Revenue $253 $267 $248 $260 $270 $265
Less Direct Cost:2 ($ per acre)
Fertilizer 25 25 24 25 25 25
Seed 15 17 15 17 18 18
Herbicide 25 28 33 33 31 33
Part-time Labor 7 7 1 2 7 2
Machinery Repair 8 8 3 3 7 3
Machinery Fuel 7 7 3 4 7 4
Drying 5 5 5 5 5 5
Insurance & Misc. 9 9 9 9 9 9
Direct Cost Interest 7 7 8 8 7 8
Returns Over Direct Costs $146 $155 $147 $154 $154 $158
Less Overhead Expenses:
Full-Time Labor Cost 30 30 30 30 30 30
Machinery Depreciation 23 25 17 19 25 20
Mach Prop Taxes & Ins 3 3 2 2 3 2
Machinery Interest 18 19 14 15 19 15
Land (cash rent) 72 72 72 72 72 72
Economic Profit Per Acre $0 $7 $13 $17 $6 $20
Economic Profit Per Farm $0 $5250 $9750 $12750 $4500 $15000
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1 All corn is planted with either the conventional or no-till 6-30" planter.
Beans are seeded with the machine identified in the column heading.
2 Quantities for direct cost items for fall plow tillage were calculated using
Purdue Extension specialists' recommendations as reported in 1992 Estimated
Grain Crop Production Costs and Returns or Indiana (D. H. and C. L. Dobbins,
CES-250, 1992) with input prices for 1993.
Table 4: Machinery Size and 1993 Annual Costs for Conventional Fall Plow and
No-Till Tillage Systems 1200-Acre Corn/Soybean Rotation Crosby Soil
Annual Costs1
Fall Plow No-Till
------------------------------ --------------------
Corn 10-30" 10-30" 6-30" 12-30" 12-30" 8-30"
Beans 10-30" 19-15" 15' Drill 12-30" 25-15" 15' Drill
-----------------------------------------------------------------------------------------------
Tractor2 (number) 194 10,042 $10,040 $10,040
$6,261 $6,261
110 5,523 5,523 5,523
60 2,410 2,410
75 2,967
P & k Spreader 6-ton 991 991 991 991 991 991
NH3 Application 9-knife 700 700 700 700 700 700
Plow 8-16" 1,938 1,938 1,938
Disc 29' 2,312 2,312 2,312
Planter 10-30" 3,900 3,900 2,494
19-15" 2,085
No-Till Planter 12-30" 5,380 5,380
8-30"
3,727
25-15" 3,127
Drill 15' 1,430
No-Till Drill 2,860
Rotary Hoe 6-30" 473
10-30" 797 797
Cultivator 550
10-30" 917 917
Field Sprayer 40' 447 447 447 447 447 447
Combine 13,586 13,586 13,586 13,586 13,586 13,586
Grain Head 20' 1,673 1,673 1,673 1,673 1,673 1,673
Corn Head 6-30" 2,461 2,461 2,461 2,461 2,461 2,461
Truck 3,062 3,062 3,062 3,062 3,062 3,062
Wagons 1,226 1,226 1,226 1,226 1,226 1,226
Total $49,575 $51,658 $51,316 $35,787 $38,914 $36,110
Per Acre $41 $43 $43 $30 $32 $30
-----------------------------------------------------------------------------------------------
1 Annual costs are derived from B-92 Input Form Guide Book, Doster, D. H. and
C. L. Dobbins, C-EC-11, Purdue University Cooperative Extension Service,
1993.
Table 5: Economic Budgets for Rotation Corn and Soybeans, Indiana Crosby Soil,
1200 Acres, Six Tillage Systems
One Planter1 Two Planter1
--------------------- ----------------
Conventional No-Till Conventional No-Till
------------- ------------ ------------ --------
Corn 10-30" 10-30" 12-30" 12-30" 6-30" 8-30"
Beans 10-30" 19-15" 12-30" 23-15" 15" Drill 15' Drill
--------------------------------------------------------------------------------------------------
Crop Mix Summary: 50% Corn 50% Beans
Per Acre Yield (bu.)
Corn $2.35 122 122 119.6 119.6 119.3 117.4
Beans $5.60 39 42.2 38.2 42.8 45 44.1
Per Acre Revenue $253 $261 $248 $260 $266 $261
Less Direct Cost:2 ($ per acre)
Fertilizer 25 25 24 25 25 25
Seed 15 17 15 17 18 18
Herbicide 25 28 33 33 31 33
Part-time Labor 4 4 1 2 6 2
Machinery Repair 8 8 3 3 8 4
Machinery Fuel 7 7 3 4 7 4
Drying 5 5 5 5 5 5
Insurance & Misc. 9 9 9 9 9 9
Direct Cost Interest 7 7 8 8 7 8
Returns Over Direct Costs $149 $152 $148 $153 $150 $153
Less Overhead Expenses:
Full-Time Labor Cost 19 19 19 19 19 19
Machinery Depreciation 22 23 16 17 23 16
Mach Prop Taxes & Ins 3 3 2 2 3 2
Economic Profit Per Acre $17 $18 $27 $30 $16 $32
Economic Profit Per Farm $20,400 $21,600 $32,400 $36,000 $19,200 $38,400
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1 The 6-30 and 8-30 planters and the 15' drills are operated 8 days each. First
the corn planter is operated 2 days; both planters are then operated 6 days;
and the soybean planter is operated 2 more days. The l0-row and 12-row machines
are operated 10 days.
2 Quantities for direct cost items for fall plow tillage were calculated using
Purdue Extension specialists' recommendations as reported in CES-250 with input
prices for 1993.
Table 6: Summary of Economic Budgets for Rotation Corn and Soybeans, Indiana,
750 Acres, 6% Soybean Yield Increase for 15" Rows and for 7" Rows
One Planter Two Planter
----------------------------- --------------------
Conventional No-Till Conventional No-Till
-----------------------------------------------------------------------------------------------
Corn 6-30" 6-30" 8-30" 8-30" 6-30" 8-30"
Beans 6-30" 11-15" 8-30" 15-15" 15' Drill 15' Drill
Per Acre Yield (bu)
Corn $2.35 122 122 119.6 119.6 122 119.6
Beans $5.60 39 41.3 38.2 40.5 41.3 40.5
Per Acre Revenue $253 $259 $248 $254 $259 $254
Return Over Direct Costs $146 $147 $147 $148 $143 $147
Economic Profit Per $0 ($1) $13 $11 ($5) $9
Acre
Economic Profit Per $0 ($750) $9,750 $8,250 ($3,750) $6,750
Farm
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Table 7: Summary of Economic Budgets for Rotation Corn and Soybeans, Indiana,
1200 Acres, 6% Soybean Yield Increase for 15" Rows and for 7" Rows
One Planter Two Planter
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Conventional No-Till Conventional No-Till
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Corn 10-30" 10-30" 12-30" 12-30" 10-30" 12-30"
Beans 10-30" 19-15" 12-30" 23-15" 15' Drill 15'
Drill
Per Acre Yield (bu)
Corn $2.35 122 122 119.6 119.6 119.3 117.3
Beans $5.60 39 41.3 38.2 40.5 41.1 40.3
Per Acre Revenue $253 $259 $248 $254 $255 $251
Return Over Direct Costs $149 $150 $148 $147 $139 $143
Economic Profit Per $17 $16 $27 $24 $5 $22
Acre
Economic Profit Per $20,400 $19,200 $32,400 $28,800 $6,000 $26,400
Farm
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NEW 2/96
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Cooperative Extension work in Agriculture and Home Economics, state of Indiana,
Purdue University. and U.S. Department of Agriculture cooperating; H. A
Wadsworth, Director, West Lafayette, IN. Issued in furtherance of the acts of
May 8 and June 30,1914. Purdue University Cooperative Extension service is an
equal opportunity/equal access institution.