What is in this article?:
• The specter of herbicide-resistant weeds multiplying at astronomical rates has changed some growers’ thinking on the matter of conservation-tillage.
• Extension economists at the University of Georgia have completed an investment comparison of conventional- and conservation-tillage equipment using enterprise budgets.
Facing the unenviable task of battling glyphosate-resistant Palmer amaranth pigweed, some cotton growers are considering making the switch from conservation-tillage production back to conventional-tillage.
Over the years, farmers have chosen conservation-tillage for many reasons, including incentives from government programs, benefits to soil and water quality, on cost savings on labor and equipment. But the specter of herbicide-resistant weeds multiplying at astronomical rates has changed some growers’ thinking on the matter.
For this reason, Extension economists at the University of Georgia have completed an investment comparison of conventional- and conservation-tillage equipment using enterprise budgets. The impact of variable fuel and chemical prices on the investment decision were evaluated using a sensitivity analysis. Breakeven yields and prices needed to realize a return on investment were also calculated.
Cotton has always been a very capital and labor-intensive crop, considering the specific equipment that is required, as well as the time and other inputs needed to grow it, says Amanda Smith, UGA Extension economist.
“Investment decisions for equipment are extremely important,” she says. “The great thing about higher cotton prices is that it makes the equipment investment decisions a little easier. You can cover those fixed costs, where in some years we were getting by just covering the direct, variable and operating expenses. We can’t do that in a long-term way and be sustainable, so investment decisions are definitely important.”
With the increased weed pressure and the problem with herbicide resistance, some growers who already are doing conservation-tillage are looking at ways to deal with this situation other than with hand labor or chemicals, and they’re considering a switch to conventional-tillage, says Smith.
She and other UGA economists looked at the investment and operating costs for the equipment, the yield needed to make an annual payment on an operating note, calculated the break-even prices and yields at varying acreages, and conducted a sensitivity analysis looking at different fuel and herbicide costs.
“The first thing we looked at was the investment and operating costs,” she says. “We used the enterprise budgets because they use Extension recommendations for production practices, and they’re representative of production practices in south Georgia, although we know that individual farms do vary.”
Also, the economists compared pre-harvest implements only, assuming that growers already were in cotton production, and they assumed that new equipment was purchased, realizing that growers oftentimes buy used equipment at auction.
This study was presented earlier this year, accounting for the lower prices considered for diesel fuel and cotton.
“First, we took a look at a conventional-till operation. We have a 30-foot disk with a rip-and-bed operation. Most of our equipment is eight-row, and our budgets are based on 850 acres for this analysis. We plant with in-furrow pre-emergence, using a 165-horsepower tractor, post-emergence directed spray, a nitrogen side-dress application, and a high-clearance sprayer with five trips over the field,” she says.
The new equipment purchase resulted in a total cost of $260,000. For operating costs, the cost of diesel was calculated at $2.85 per gallon and labor at $11.25 an hour, with a labor factor of 25 percent to account for switching implements and other factors. Repairs and maintenance are based on about 3 percent of the investment cost. The operating cost for conventional equipment comes out to about $32.80 per acre, and the fixed costs based on 850 acres of cotton is about $36 per acre.