An Economic Analysis of the IFMPO

The Integrated Farm Management Program Option (IFMPO) of the 1990 farm bill is designed to increase crop management flexibility and promote the use of resource-conserving crops. Economic analysis of this program indicates that, although the current format provides flexibility, it provides little economic incentive to adopt resource-conserving crop rotations.Farm Management,

Impact of the U.S. House of Representatives BTU Tax Proposal on Whole Farm and Enterprise Production Costs in Kansas

Agricultural and Food Policy, Agricultural Finance,

Quick Guide To Quattro Pro for Windows: For Mouse Users

Research Methods/ Statistical Methods,

Farmers’ Willingness to Grow Switchgrass as a Cellulosic Bioenergy Crop: A Stated Choice Approach

Farmers’ Willingness to Grow Switchgrass as a Cellulosic Bioenergy Crop: A Stated Choice Approach Agriculture’s role as a source of feedstocks in a potential lignocellulosic-based biofuel industry is a critical economic issue. Several studies have assessed the technical feasibility of producing bioenergy crops on agricultural lands. However, few of these studies have assessed farmers’ willingness to produce or supply bioenergy crops or crop residues. Biomass markets for bioenergy crops do not exist, and developing these markets may take several years. Therefore, an important, yet unaddressed question is under what contractual or pricing arrangements farmers will grow biomass for bioenergy in these nascent markets. The purpose of this paper is to examine farmers’ willingness to produce switchgrass under alternative contractual, pricing, and harvesting arrangements. Contracts are likely to be the preferred method to bring together producers and processors of biomass for bioenergy. Contract design may vary across farmers and crop type, and may include attributes specific to annual crops, contract length, quantity or acreage requirements, quality specifications, payment dates, and other important features. A stated choice survey was administered in three, six-county areas of Kansas by Kansas State University and the USDA, National Agricultural Statistics Service from November 2010 to January 2011 to assess farmers’ willingness to produce cellulosic biomass under different contractual arrangements. This paper focuses on the switchgrass stated choice experiment from the survey. The stated choice experiment asked farmers to rank their preferred contractual arrangement from two contract options and one “do not adopt” option. Contractual attributes included percentage net returns above the next best alternative (e.g. CRP or hay production), contract length, a custom harvest option, insurance availability, and a seed-cost share option. Respondents then ranked their preferred contract option. The survey also collected data on farm characteristics, bioenergy crop preferences, socio-economic demographics, risk preferences, and marketing behavior. The survey used a stratified sample of farmers who farm more than 260 acres and grow corn. A total of 460 surveys were administered with a 65 percent completion rate. The underlying theoretical model uses the random utility model (RUM) approach to assess farmers’ willingness to grow switchgrass for bioenergy and determine the contractual attributes most likely to increase the likelihood of adoption. This framework allows us to define the “price,” or farmers’ mean willingness to accept, for harvested biomass sold to an intermediate processor. The estimated choice models follow the approach of Boxall and Adamowicz (2002) to capture heterogeneity across farmers and geographic regions due to management differences, conservation practices, and risk preferences. Using the percentage net return above CRP or hay production allows prices to float to levels that will entice farmers to adopt switchgrass. This will help determine a market price for bioenergy crops based on current market and production conditions without specifying an exact monetary value for the biomass. In addition, the survey results will facilitate contract designs between biorefineries and farmers while informing policymakers and the biofuel industry about farmers’ willingness to supply biomass for bioenergy production. Reference: Boxall, P.C. and W.L. Adamowicz, “Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach,” Environmental and Resource Economics 23(2002): 421 – 446.Biofuels, Cellulosic, Biomass, Switchgrass, Farmers, Willingness to Pay, Crop Production/Industries, Production Economics, Resource /Energy Economics and Policy,

Mathematical Formulas for Calculating Net Returns from Participation in Government Farm Programs: Provisions of the Food, Agricultural, Conservation and Trade Act of 1990

Agricultural and Food Policy, Agricultural Finance,

A MICROCOMPUTER MODEL FOR IRRIGATION SYSTEM EVALUATION

ICEASE (Irrigation Cost Estimator and System Evaluator) is a microcomputer model designed and developed to meet the need for conducting economic evaluation of adjustments to irrigation systems and management techniques to improve the use of irrigated water. ICEASE can calculate the annual operating costs for irrigation systems and has five options that can be used to economically evaluate improvements in the pumping plant or the way the irrigation system is used for crop production.Crop Production/Industries,

Net Returns for Grain Sorghum and Corn under Alternative Irrigation Systems in Western Kansas

This study evaluates seven irrigation systems for use in production of grain sorghum and corn. These systems are medium pressure center-pivot (MPCP), low pressure center-pivot (LPCP), low drift nozzle center-pivot (LDN) , low energy precision application center-pivot (LEPA), furrow flood (FF) , surge flood (SF), and subsurface drip (SD). After-tax net present value estimates from investing in and using each system over a 10-year period to produce grain sorghum and corn are compared. The surge flood system, has the highest net returns under typical conditions for irrigation of both grain sorghum and corn. The furrow flood system generates the next highest net returns for both crops, followed by the subsurface drip system. The medium pressure center-pivot system is the least profitable for both crops. Of the center-pivot systems, the low pressure system has the highest net return, but is followed very closely by the low drift nozzle system. The results of the sensitivity analysis indicate that the net return estimates and ranking of the subsurface drip system are very sensitive to the yield response to irrigation. Lower than average crop prices also have a substantial impact on the ranking of this system. The original investment cost is also an important determinant of its net return.Crop Production/Industries,

An Economic Comparison of Composted Manure and Commercial Nitrogen with Imperfect Information

The economic feasibility of fertilizing irrigated grain sorghum with compos ted manure is evaluated using net return budgeting and production function analysis. Although the use of compost is technically feasible, the economic analysis indicates that compost does not comprise a large percentage of the nitrogen source in the profit-maximizing combination with commercial fertilizer.Composted manure, commercial nitrogen, net returns budgeting, production function analysis, irrigated grain sorghum, Crop Production/Industries,

Reduction of Yield and Income Risk Under Alternative Crop Insurance and Disaster Assistance Plans

This study compares the effectiveness of five crop insurance/disaster assistance plans: an individual farm yield insurance plan similar to the current FCIC multi-peril program ; two area yield insurance plans; a farm yield disaster assistance plan; and an area yield disaster assistance plan. These methods are examined for reduction in yield and gross income variability with and without participation in the government deficiency payment programs using farm-level yield data from 98 dryland wheat farms and 38 dryland corn farms in Kansas . Although individual farm yield insurance is complex, suffers from moral hazard and adverse selection problems, and is likely to be the most expensive to administer , it provides more yield and gross income risk reduction than any of the alternative insurance/disaster assistance plans.Crop Insurance, Crop Disaster Assistance, Risk, Wheat, Corn, Risk and Uncertainty,

Economic analysis of flood and center pivot irrigation system modifications, An

Presented at the Central Plains irrigation short course and exposition on February 4, 1997 at the Colby Community Building in Colby, Kansas.Includes bibliographical references.An after-tax net present value(NPV) analysis of investing in three irrigation system modifications for the production of corn, grain sorghum, wheat, and alfalfa is conducted. Modifying a high pressure center pivot with low-drift nozzles and adding surge valves to a gated pipe system is economically feasible for each crop