Nevada producers are increasingly interested in alternative technological methods such as precision agriculture (PA) that will increase their yields while maintaining acceptable levels of production expenses. According to Prairie Geomatics (date unknown) PA can be described as, “an information and technology based farm management system to identify, analyze, and manage variability within fields for optimum profitability, sustainability, and protection of the land resource.” For purposes of this paper, PA involves a global positioning system, site-specific soil testing at regular grid locations and variable-rate technology for fertilizer application.
Lovelock has approximately 22,000 acres of irrigated alfalfa hay under cultivation. The primary market for this hay is the dairy industry in California. In a normal year, producers get three cuttings but many are moving to a four-cut system. The county production average is approximately 4.5 tons per acre with a three-cut system and approximately 5.5 tons per acre with a four-cut system (Breazeale and Owns, 2006).
While there is a substantial body of information concerning the agronomics and economic feasibility of PA on a number of crops, alfalfa hay production under Nevada conditions has not previously been investigated. Information was located related to the use of PA in alfalfa in northeastern California (Schmierer, Munier and Ahlrichs, 2004). However, due to the relatively low value of alfalfa hay, the authors of the information were recommending the use of PA technology only in what they termed, “management zones.” Management zones are large areas comprised of low fertility soils with positive responses to chemical fertilizers. Due to the cost of the PA technology, it was recommended that only large areas containing previously identified low fertility soils be included in the management zones. In this PA study of Lovelock, producers were applying the technology to entire fields, thus including both good and bad soil areas.
Objectives
During the 2006 growing season, three Lovelock area alfalfa hay producers, with partial funding from the Nevada Seed Research and Promotion Board, initiated a PA project to see if they could increase their yields using PA technology. However, in the meantime they asked Cooperative Extension to determine what their break-even yields would be utilizing the PA technology. The two principle objectives of this study were:
- To determine the costs of incorporating a PA fertilization regime in alfalfa hay.
- To determine the break-even yield for alfalfa hay using PA.
Description and Cost of PA Provided
The PA contractor for this project divided each producer’s fields into two-acre grids. GPS coordinates were taken at the four corners of each field and then approximately 15 soil probes were taken within the grid. Soil laboratory results of the 15 probes were projected onto a grid map and a soil selection machine with computer readouts applied the recommend rate at each of the 15 probe sites. For areas between the 15 probe sites, a statistical program calculated the variable rates necessary to maximize production.
The cost for the GPS soil sampling was $35 per acre within each grid sampled. The rate of fertilizer application varied among the fields within the study depending on the soil fertility levels within the sampled grids. Because of this variability, fertilizer costs ranged from $80 to $150 per acre. Therefore, the total cost per acre for the PA service (i.e. soil sampling and material applied) ranged from $115 to $185 per acre.
Break-Even Analysis
Table 1 shows an annual enterprise budget for a typical irrigated alfalfa hay operation in the Lovelock area and lists current production costs and income using flood irrigation (Breazeale and Curtis, 2006). As can be seen, there is an estimated yield of 4.5 tons with an average price of $95 per ton. In addition, there is some aftermath grazing of livestock that brings in another $22.50 per acre for gross revenue from alfalfa hay of $450.00. Total operating costs are estimated to be $268.26 and total ownership costs $133.00 (cash overhead $55.99 and non-cash overhead costs $77.01) for a total cost per acre of $401.26. The expected return over total costs is $48.74. There are no fertilizer costs shown because, with the exception of the establishment year, Lovelock producers do not normally apply fertilizer to their alfalfa fields. This somewhat unusual practice was verified with multiple producers and a private consultant when preparing the original enterprise budget fact sheet and again when preparing this publication.
Table 2 shows the break-even yield for the PA system utilized in this study. Break-even yield is calculated by dividing total cost by output price. Three different output prices per ton (e.g. $90.00, $100.00 and $110.00) were used in calculating the break-even yield. The original total cost amount was taken from Table 1, with the exception that the cost of the PA service was added on to the current budget’s total cost. Due to the variability in fertility requirements among the fields in the study, three different fertilization cost levels (e.g. $115, $150, and $185) were calculated. Thus, the total cost of producing one acre of irrigated alfalfa hay using PA as defined in this study ranged from $516.26 to $586.26.
The highest break-even yield is 6.51 (level #3) tons per acre at $90.00 per ton. At a market price of $110.00 per ton the break even yield for level #3 is 5.34 tons per acre. At level #2, the break-even yields range from a high of 6.13 tons down to 5.01 tons and level #1 from 5.74 ton down to 4.69 tons per acre. All price ranges and associated fertility levels produced break-even yields that are above the current county average of 4.5 tons per acre for a traditional three cutting system. However, the required yields at $100 and $110 per ton are within the range that several growers are currently producing with a four cutting system.
Table 1 - Pershing County Forage Production Costs and Returns, 750 acres, 2006
PA represents the per acre cost of the fertilizer regime
*table here
Summary and Recommendations
The use of a PA fertilization program for irrigated alfalfa hay based upon Lovelock production costs increases overall annual costs from $115 to $185 per acre compared to the current non- PA management system. At a minimum, with the current alfalfa hay market price near $100.00 / ton, producers will need to increase their yields by 1.15 to 1.85 tons per acre just to maintain the same dollar returns per acre that they are presently achieving without using the PA technology. While anecdotal information from local alfalfa hay producers in Lovelock indicates that these higher yields may be possible, the extra cost of the technology is sufficiently high that it appears questionable whether the use of a PA fertilization program will pay for itself. In addition, it may be more cost effective for the Lovelock producers to divide their fields into the “management zones” described by the California study. The PA technology would then be utilized only within these zones rather than being applied on larger areas with relatively fertile soils. While this study provides some benchmark data for producers to consider, it is recommended that further research be conducted to document actual on-farm yields and the costs associated with the use of this technology in alfalfa hay production.
Acknowledgment: Special thanks to Simplot Soilbuilders of Winnemucca, Nevada, and the Nevada Seed Research and Promotion Board, Reno, Nevada.
References
Breazeale, D.E. and Curtis, K.R. (2006). Pershing County Alfalfa Hay Establishment, Production Costs and Returns, 2006. Fact Sheet-06-19, University of Nevada Cooperative Extension, Reno.
Breazeale, D.E. and Owens, M. (2006). 2004-2005 Pershing County Agricultural Statistics. Fact Sheet-06-61, University of Nevada Cooperative Extension, Reno.
Prairie Geomatics. (date unknown). Precision Farming. Document retrieved 13 March, 2006.
Precision Agriculture. (2003). Economics in Precision Agriculture. Document retrieved 5 May, 2006. Site funded by Cal Poly San Luis Obispo, Cal State Fresno and University of California, Davis.
Precision Agriculture. (2003). Irrigation Water Management: Strategies for Precision Farming. Document retrieved 5 May, 2006. Site funded by Cal Poly San Luis Obispo, Cal State Fresno and University of California, Davis.
Schmierer, J.L., Munier, D.J., and Ahlrichs, J.S. (2004). Alfalfa Yield Maps and Managament Zones from Satellite Images Aid in Diagnosing Field Production Problems. In D. Mulla (ed). Proceedings of the 7th International Conference on Precision Agriculture, Minneapolis, Minnesota., July 25-28, 2004, p. 2083-2093.
