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Minnesota Crop News > 2001-2008 Archives

December 5, 2001  

 Using the "Bottom Line" to Compare Tillage Systems

 George Rehm, Extension Soil Scientist and John Cunningham, Extension Educator, Big Stone County

Ridge-till, strip (zone)-till, and no-till are conservation tillage systems that are adapted to growing conditions in Minnesota and surrounding states.   The advantages of each system have been described in many ways.  The economic advantage of these systems, however, is fequently overlooked.

Minnesota crop producers who use a conservation tillage planting system frequently point to an improved "bottom line" as a major advantage considering the current situation with higher production costs and low commodity prices, it is critical to achieve optimum yield with efficient costs of production.

The economic advantage of conservation tillage can be described in several ways.   Economic information, however, is usually most effective if it is provided by farmers who keep good records.  In order to obtain useful economic information, it was apparent that a survey involving current farmers was needed.  Therefore, a survey was designed that would compare production costs of one conservation tillage system (ridge-till) to those of a conventional tillage system.

To complete this survey, several ridge-till farmers were asked via personal interviews to provide production costs for both corn and soybeans in both owned and rented management systems.  These producers also identified a neighbor who farmed approximately the same number of acres using a conventional planting system.  The neighbor provided similar information for their farming operation. Using yields provided by the growers (ridge-till and conventional planted systems) and associated production costs, it was possible to calculate the cost of growing a bushel of corn or soybeans.  This calculated cost is frequently referred to as the bottom line.  The information collected for corn production is summarized in the following table.  All costs are calculated on a per acre basis.


Production costs in conventional and ridge-till plant systems

Production
Input

Tillage System and Land Ownership


Conventional (own)

Conventional (rent)

Ridge-Till (own)

Ridge-Till (rent)

$/acre


fertilizer 55.69 58.84 49.15 37.95
seed 32.89 34.68 37.75 34.62
herbicide 26.04 30.61 21.31 16.13
fuel 10.94 7.92 6.95 5.81
cash rent -- 89.05 -- 73.28
total production cost 278.61 335.87 226.70 246.96
yield (bu/acre) 144.9 140.7 149.0 139.5
cost $/bu. 1.94 2.38 1.52 1.77


Similar values for soybean production are summarized in the next table.

Production costs for soybeans in conventional and ridge-till planting systems.

Production
Input

Tillage System and Land Ownership

Conventional (own)

Conventional (rent)

Ridge-Till (own)

Ridge-Till (rent)

fertilizer 0.70 5.81 5.34 5.27
seed 23.55 18.54 24.34 25.05
herbicide 26.54 20.37 17.31 14.99
fuel 8.80 8.08 6.14 4.77
cash rent -- 73.95 -- 78.18
total production cost 169.99 192.75 158.37 196.28
yield (bu/acre) 41.5 40.3 43.7 40.1
cost $/bu. 4.13 4.85 3.69 5.08

When the amount of money needed to produce a bushel of corn is considered, there was a substantial difference between the farmers using the conventional system and those using the ridge-till system.  For owned land, the ridge-till farmer had an advantage of $.42 per bushel while reporting a slightly higher average yield.  When land was rented, the cost of growing a bushel of corn was $.61 per bushel less when the ridge-till planting system was used and reported yields were nearly equal.

Costs of individual inputs can be evaluated when seeking an explanation for the lower cost of production.  Major costs are listed in the first table.  While the money spent for seed was nearly the same, farmers who used the ridge-till planting system spent less for fertilizer, herbicide and fuel.  The ridge-till farmer also spent less for machinery and machinery replacement.  With less expense and the same yield, a lower cost of production would be expected.  It's important to note that the cost for producing a bushel of corn in the ridge-till system is less than the current loan rate for corn.

When the soybean crop is considered, the ridge-till farmer spent less to produce a bushel if the land was owned.  This was not the situation if the land was rented.  The money spent to fertilize soybeans varied widely for farmers who used both tillage systems. Seed costs were nearly the same.  There were, however, substantial differences in the amount of money spent for herbicide and fuel.

The information gathered in this survey supports the statements made by many farmers who use the ridge-till planting system.  Yields are equal to yields in a conventional tillage planting system; but, costs are lower.  As a result, there is a higher potential for profit at the end of the year with the ridge-till planting system used in the corn-soybean rotation.

 

 
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