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Hood: How to profit through precision

Would you spend an additional $1 per acre to increase your profitability in 2001?

That's about what it would cost a 1,200-acre cotton farmer to recoup the price of a cotton yield monitor, assuming a yield increase of 10 pounds per acre.

“Faced with increasing costs and decreasing returns, we're struggling to try to find a better way to survive. And, for the first time in our lives we have the tools to utilize the data from our farm ourselves to finetune our management and increase our profitability,” says precision farming pioneer Kenneth Hood of Perthshire, Miss.

Hood sees the widespread adoption of precision farming equipment as dependent on one thing, the ability to increase profits. “We need to identify the regions of variability within a crop and then develop a strategy to rectify those variability differences and increase yields.”

The first, and most economical, step for growers interested in precision equipment, he says, is to purchase a yield monitor.

With an estimated low-end price of $5,680 and an upper-end price of $9,780, Hood calculates that a cotton yield monitor system would cost the majority of producers less than $1 per acre.

Specifically, he says, the cheaper system would cost a 600-acre cotton grower $1.58 per acre if it resulted in an increase of 10 pounds per acre. Assuming that same yield monitor resulted in a yield increase of 50 pounds, the grower's cost would drop to 32 cents per acre. The high-end yield monitor system, with a value of almost $10,000, would cost $2.72 per acre, assuming a 10-pound yield increase, and 54 cents per acre assuming a 50-pound yield increase.

The same two yield monitor models would cost a 1,200-acre cotton grower less because the cost of the system would be spread out over a larger operation. For example, the $5,680 system would equate to a charge of 79 cents per acre if it produced a 10-pound per acre yield increase, and a 16-cents per acre charge if it produced a 50-pound per acre yield increase. The more expensive $9,780 yield monitor system would translate into a cost per acre of $1.36 with a 10-pound yield increase and 27 cents with a 50-pound yield increase.

Hood's cotton yield monitor cost recovery figures are derived by taking the cost of the yield monitor system, dividing it by the acreage covered, and then dividing that figure by the income received from any yield increase, assuming a cotton price of 60 cents per pound. The package system quoted includes a cotton picker yield monitor, a digital GPS receiver, a differential correction fee, storage cards and mapping software.

“Farming input decisions, including whether or not to buy precision equipment, all boil down to the question: What and how much do I put where to maximize my profits? What's paramount is that it makes money,” Hood says. “A yield monitor is very valuable because it tells you where your income is coming from. It can also teach us to manage our soils better and to better identify crop health.”

A yield map isn't the only precision tool that Hood utilizes to increase his profits.

Each crop year, he starts with a bare soil imagery of each field. “In some fields, the soil type on our farm changes five times from one end of a field to another.”

He continues to use remote sensing imagery throughout the growing season, in tandem with variable rate technology and soil and yield mapping.

“We need to find out why we have so much variability. We can use these tools to break down our cost and profit per acre and see the variability, not just across the entire farm but within each field,” Hood says.

According to Hood, using variable rate technology has allowed him to cut his input costs while, at the same time, increasing cotton yields. Variable rate seeding, he says, has saved him 31 to 66 percent in seeding costs and increased his yields 2 to 10 percent.

Along the same line, Hood has cut his insecticide costs by using remote sensing imagery and a GPS equipped applicator to apply pesticides only where they are needed in a field. “In one 238-acre field, we sprayed 158 acres, and didn't spray the remaining 80 acres, for a chemical savings of 34 percent. That amount of savings has got to get your attention.”

He has also realized cost savings factoring precision technology data into both his plant growth regulator treatment decisions and his crop termination decisions.

The price tags of these other precision tools, according to Hood, are as follows: grid soil sampling, $3 to $10 per acre; remote imagery, $6 to $10 per acre; crop consultant trained in precision “information gathering,” $6 per acre; and a GIS package, $500 to $5,000.

“You crawl before you walk, and we're still crawling when it comes to precision agriculture,” Hood says. “Precision farming is all about asking and answering the questions: What is the problem? What can we do about it? What are the costs?”


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