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Fixed Cost Comparison of Cotton Tillage Systems in the Mississippi Delta

Steven W. Martin, Fred Cooke, Jr., Gordon Andrews, and David Parvin

ABSTRACT

Many studies have addressed cost savings and benefits from reduced tillage systems. Most of these studies have looked at adjustments in herbicide use and "trips across the field." These costs are commonly called direct or variable costs. Few studies have addressed the issue of fixed or investment costs associated with reduced or no-till systems.

The authors have an on-going project related to whole farm analysis. One part of this analysis is comparison of fixed costs or investment costs for different tillage systems and fixed or investment costs for various farm sizes. The following tables summarize part of the results of this analysis. The data are extracted from a whole farm analysis model produced with the SAS Proc LP procedure. For this presentation, three farm sizes are arbitrarily selected (i.e. acreage constraints). Three tillage systems, no-till, conservation till and conventional tillage, are analyzed. Fixed equipment requirements were obtained for the selected tillage systems based on "days fit for fieldwork" (Zapata et. al.) and performance rates provided in the Mississippi State Planning Budgets and the Mississippi State Budget Generator (Laughlin and Spurlock). Prices for the selected equipment were obtained from the Mississippi State University Planning Budgets.

The results suggest that no-till systems have the lowest fixed or investment costs per acre, followed by conservation tillage. Conventional tillage practices have the largest fixed costs per acre. Costs per acre decreased as farm size increased for the conventional tillage systems. For the no-till and reduced tillage systems, costs decreased when farm size increased from 2000 to 3000 acres. There was no decrease in cost per acre for no-till and conservation tillage systems from 1000 to 2000 acres.

These examples are presented only as a guide. For individual producers, farm sizes are seldom as finite as those presented here. Thus, individual farms may have slightly different results. Additionally, no-till and reduced tillage operations may require some degree of tillage for various reasons, thus some fixed equipment expense may not be captured in this analysis. For example, all farm operations regardless of tillage practices, may desire to have some type of disk, etc. However, this analysis does highlight some of the savings possible through reduced fixed or investment costs. In other words, fixed costs as well as variable costs should be considered when comparing tillage systems.





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Document last modified April 16, 2003