jordan shockley and tim stombaugh. losing popularity savings of 2-10% upgradeability
TRANSCRIPT
Jordan Shockley and Tim Stombaugh
Overview of Navigational Aids & Precision Agriculture Investment
LightbarsLosing PopularitySavings of 2-10%Upgradeability
Auto-Steer
GPS Classifications
Low-Cost Sub-Meter Decimeter RTK
$50-300 $1k – 4k $5k-10k+$1500/yr >$25k
8-25 ft. <3 ft. <1 ft. < 1 in.
Auto-Steer AccuracyHardwareGPSMachine qualityCalibrationImplement drift
A-B Line
Passive: Over-steer tractorActive: Steer implement
Solutions
Less expensiveTractor running over rowLimited response speedDifficult to predict implement performance
Passive Steering
Implement Steering
Reduces skips and overlapsReduces fatigueAccurate placement of inputsLengthening of operator’s workdayIncrease in machinery field capacity
Reduced machinery costsPermits more land area to be planted during
optimal timeReduce riskLand investment implications
Benefits of Auto-Steer
Is Auto-steer Profitable?Should I Adopt?
Answers “Should I make a change?”Estimate of changes in income, expenses and
profits associated with a proposed modification in the whole farm plan
Examples of possible changes?
Partial Budgets
Allows managers to make adjustments“Fine-tuning”Consider interactions consciouslyFocus on marginal - things that actually
change from implementing the new planIf it doesn’t change, don’t include it
Partial Budget Aspects
Additional RevenueReduced RevenueAdditional CostsReduced Costs
Additional revenue and reduced costs raise profits
Reduced revenue and additional costs lowers profits
Four Things Can Happen as a Part of a Change:
Simplifies task involving complex decisionsForces consideration of marginal economicsEncourages considering change -simple tool
Advantages of Partial Budgets
Can still be cumbersome with complex changes
Economic evaluation not always a physically feasible evaluation
Many small changes are possible but not enough time to evaluate them all with partial budgeting
Disadvantages of Partial Budgets
Partial Budget Framework
Additional Costs (AC): AC – Fixed AC – Variable (per acre)*A
Additional Revenue (AR): AR – Fixed AR – Variable (per acre)*A
Reduced Revenue (RR): RR – Fixed RR – Variable (per acre)*A
Reduced Costs (RC): RC – Fixed RC – Variable (per acre)*A
Total1 = ACF + ACV *A+ RRF + RRV *A
Total2= ARF + ARV *A+ RCF + RCV*A
Net Change In Profit = Total2 - Total1 + or - ???If + , then implement the changeIf - , then don’t implement the change
Break-Even Acreage
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RCARRRAC
RRACRCARA
The amount of acres required for which you would be indifferent to making the change. (i.e. the net change in profit = 0)
Opportunity cost (e.g. learning curve)Risks (up/down)Feasibility (physically possible, resource
requirements)Desirability (noneconomic goals)
Considerations
800 acres$35,000 investment outlay, $5,000 ownership costIncrease yields from 150 bu/ac to 151 bu/acCorn price = $4.40/bu
Fertilizer = $111 Savings = 3%Seed = $76 Savings = 2%Herbicide = $30 Savings = 7%Fuel = $17 Savings = 10%Labor = $20 Savings = 10%
Auto-Steer Example
Partial Budget – Auto-Steer ExampleAdditional Costs:Auto-steer Ownership $5,000
Additional Revenue:Corn Sales (151-150 bu/ac)*$4.40/bu*800 ac = $3,520
Reduced Revenue: Reduced Costs:Fertilizer $111*800*.03 = $2,664Seed $76*800*.02 = $1,216Herbicide $30*800*.07 = $1,680Fuel $17*800*.10 = $1,360Labor $20*800*.10 = $1,600
Total: $5,000 Total: $12,040
Net Change In Profit: $7,040
Should you purchase auto-steer to increase profits?
YES – Profits are expected to increase $7,040 for the farm
Break-Even Acreage: Auto-Steer Example
)1.*20()1.*17()07.*30()02.*76()03.*111(40.400
0500000
A
acres 2.332A
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RRACRCARA