msu-ceco/aec_v1 · Datasets at Hugging Face

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Fertilizer CP SDI SDI Less CP SDI Less CP
Price Scenarios Variable Variable Returns Returns
Cost
$0.24 / lb 82-0-0 $517.90 $499.85
$0.44 / lb 18-46-0
$0.13 / lb 82-0-0 $473.16 $455.11 $466 $3
$0.11 / lb 18-46-0
$0.37 / lb 82-0-0 $571.81 $553.76
$0.85 / lb 18-46-0
Interest Rate Variability Impact
Interest rates in the United States have varied from almost 0% up to 20% since 1950.
Large swings in interest rates can have sizable impacts on the cost of borrowing money.
In this analysis interest rates affect variable operating costs and the cost of borrowing money for irrigation system investments.
Even if irrigation investments are paid for without credit and associated interest expenses on borrowed money, the opportunity cost of having capital invested in one enterprise as opposed to another are relevant to an investor's decision.
Figure 6.
United States Interest Rates: 1955-2010.
Source: St.
Louis Federal Reserve Bank.
In this analysis the base interest rate used is 7.5%.
The low interest rate scenario is calculated using a 5% rate on operating funds and capital investments.
The high interest rate was set equal to 75% of the top rate of 20% charged during the period of the late 1980s early 1990s, i.e., 15%.
Interest variation does have a large impact on relative returns in this analysis.
Low interest rates near 5% benefit SDI over CP systems by $4 per acre, while historically high 15% interest rates cause CP systems to become more profitable than SDI systems by approximately $35 per acre.
Table 4.
Interest Rate Variation Impact on SDI versus CP Returns
Interest Rate CP SDI SDI Less CP SDI Less CP
Scenarios Variable Variable Returns Returns
Cost
Base: 7.5% $517.90 $499.85
Low: 5.0% $511.66 $493.82 $685 $4
High: 15.0% $536.62 $517.91
Cost Inflation Variability Impact
Since the early 1900s, inflation rates in the United States have varied from a negative 1.94% during 1920-29 to a positive 8.7% during the 1913-1919 period.
Since World War II, the decade of the 1970s had the highest annual average rate of inflation at 7.09% per year.
Periods of high inflation in the cost of consumer goods raise consumer's cost of living and tend to diminish their real inflation-adjusted buying power and personal wealth.
In the same way, inflation in agricultural production costs tend to increase cost of production and diminish crop enterprise profitability if not accompanied by increases in agricultural product prices.
In this analysis, the impacts of one time inflations of 3% and 9% in the level of crop production costs are analyzed in comparison to the base scenario of no differential cost inflation.
For this scenario, the impact of inflation in seed, herbicide, insecticide, crop consulting, crop insurance, custom hire / machinery expenses, labor costs, irrigation maintenance and repair, and non-irrigated cropland rental rates are examined.
A more thorough multi-period analysis of inflation impacts over time is called for in future research.
Increasing inflation does not have a large impact on net returns in this analysis, causing increases of $3 to $8 per acre in the advantage of CP over SDI systems from the base scenario.
Table 6.
Interest Rate Variation Impact on SDI versus CP Returns
Inflation Rate CP SDI SDI Less CP SDI Less CP
Scenarios Variable Variable Returns Returns
Cost
Base: 0% Inflation $517.90 $499.85
Low: 3% Inflation $533.44 $514.84
High: 9% Inflation $564.51 $544.83
Broader "Low versus High" Price Cost Scenario Impact
Given the interrelated nature of agricultural and financial markets, it is judicious to examine the impact of broader "low price-low cost" and "high price-high cost" scenarios upon the profitability of SDI versus CP systems.
The various inputs into these two scenarios are given in Table 7.
Whether the "low" price cost or the "high" price cost regime is in effect has a large impact on the relative returns of a subsurface drip irrigation system as opposed to a center pivot sprinkler irrigation system.
"Low" prices and costs strongly favor CP systems while "high" price cost scenarios strongly favor SDI systems.
Table 7.
"Low" and "High" Price-Cost Scenario Inputs
Key Crop "Low" Price-Cost "High" Price-Cost
1.
Corn Price, $/ bu.
$1.95 $6.00
2a.
Natural Gas $, $/mcf.
$2.00 $12.00
2b.
Pumping Cost, $/acre in.
$1.55 $7.78
NH3 , $/lb.
N.
$0.13 $0.37
DAP , $/lb.
$0.11 $0.85
4.
Interest Rates 5.0% 15.0%
5.
Inflation Rate in Crop 3.0% 9.0%
Table 8.
"Low"-"High" Price-Cost Impact on SDI versus CP Returns
Price Regime CP SDI SDI Less CP SDI Less CP
Scenarios Variable Variable Returns Returns
Cost
"Low" Price Cost $442.00 $433.23
"High" Price - $726.07 $686.60 $8,374 $52
Variability in United States' agricultural and financial markets impacts irrigation investment decisions in general, and the decision to purchase a center pivot sprinkler or subsurface drip irrigation system in particular.
The levels of economic variability observed in U.S.
grain, energy, crop input and financial markets have been particularly heightened in recent years.
If the recent past is a reasonable predictor of the future, then volatility in these markets is likely to continue to add risk and uncertainty to irrigation investment decisions for the foreseeable future.
This analysis was based on a decision tool developed by Kansas State University to assist farmers in their irrigation system investment decisions particularly as they consider whether to invest in center pivot sprinkler or subsurface drip irrigation systems.
This analysis focused on the impact of broader economic factors whereas earlier efforts focused more so on system physical efficiencies, design and life span in determining the most profitable system investment.
These results indicate that economic factors and forces that tend to either increase irrigated crop income or that tend to increase costs equally between the irrigation system alternatives tend to either favor subsurface drip irrigation or are neutral to the investment decision between the two options.
Higher corn prices distinctly favor subsurface drip irrigation system returns, while lower corn prices favor center pivot irrigation systems.
Changes in fertilizer prices, natural gas prices and associated irrigation pumping costs, and inflation in crop production costs tend to have neutral or small impacts upon the relative returns to each irrigation system.
Because of the higher investment cost required for subsurface drip irrigation systems, increases in interest rates on either borrowed capital or the on the opportunity cost of invested capital in irrigation systems tend to favor investment in center pivot sprinkler irrigation systems with their lower costs of initial investment.
When grouping economic factors into "low price cost" and "high price cost" scenarios, it turns out that "low price cost" scenarios tend to favor center pivot sprinkler irrigation cost investments.
Conversely, "high price cost" scenarios of economic factors favors subsurface drip irrigation investments.
Future analysis should focus on the multi-period impacts of inflation, interest, and variability in product revenues and crop input costs.
If farmers believe the hypothesis that higher levels of volatility will continue to exist in agricultural, energy and financial markets in the future, then their irrigation investment decisions will need to be all that much more informed in regards to the physical and economic uncertainties they are dealing with.
Use: utilize full pumping capacity as much as possible in systems with end guns or corner arms, VRI type: zone, Prescription type: n/a, management intensity: low.
For soybeans in R4 end of pod elongation stage of growth, there are approximately 37 days to maturity and 9.0 water use to maturity.
For soybeans in R5 Beginning seed enlargement stage of growth, there are approximately 29 days to maturity and 6.5 water use to maturity.
For soybeans in R6 end of seed enlargement stage of growth, there are approximately 18 days to maturity and 3.5 water use to maturity.
For soybeans in R6.5 leaves begin to yellow stage of growth, there are approximately 10 days to maturity and 1.9 water use to maturity.

Fertilizer CP SDI SDI Less CP SDI Less CP

Price Scenarios Variable Variable Returns Returns

Cost

$0.24 / lb 82-0-0 $517.90 $499.85

$0.44 / lb 18-46-0

$0.13 / lb 82-0-0 $473.16 $455.11 $466 $3

$0.11 / lb 18-46-0

$0.37 / lb 82-0-0 $571.81 $553.76

$0.85 / lb 18-46-0

Interest Rate Variability Impact

Interest rates in the United States have varied from almost 0% up to 20% since 1950.

Large swings in interest rates can have sizable impacts on the cost of borrowing money.

In this analysis interest rates affect variable operating costs and the cost of borrowing money for irrigation system investments.

Even if irrigation investments are paid for without credit and associated interest expenses on borrowed money, the opportunity cost of having capital invested in one enterprise as opposed to another are relevant to an investor's decision.

Figure 6.

United States Interest Rates: 1955-2010.

Source: St.

Louis Federal Reserve Bank.

In this analysis the base interest rate used is 7.5%.

The low interest rate scenario is calculated using a 5% rate on operating funds and capital investments.

The high interest rate was set equal to 75% of the top rate of 20% charged during the period of the late 1980s early 1990s, i.e., 15%.

Interest variation does have a large impact on relative returns in this analysis.

Low interest rates near 5% benefit SDI over CP systems by $4 per acre, while historically high 15% interest rates cause CP systems to become more profitable than SDI systems by approximately $35 per acre.

Table 4.

Interest Rate Variation Impact on SDI versus CP Returns

Interest Rate CP SDI SDI Less CP SDI Less CP

Scenarios Variable Variable Returns Returns

Cost

Base: 7.5% $517.90 $499.85

Low: 5.0% $511.66 $493.82 $685 $4

High: 15.0% $536.62 $517.91

Cost Inflation Variability Impact

Since the early 1900s, inflation rates in the United States have varied from a negative 1.94% during 1920-29 to a positive 8.7% during the 1913-1919 period.

Since World War II, the decade of the 1970s had the highest annual average rate of inflation at 7.09% per year.

Periods of high inflation in the cost of consumer goods raise consumer's cost of living and tend to diminish their real inflation-adjusted buying power and personal wealth.

In the same way, inflation in agricultural production costs tend to increase cost of production and diminish crop enterprise profitability if not accompanied by increases in agricultural product prices.

In this analysis, the impacts of one time inflations of 3% and 9% in the level of crop production costs are analyzed in comparison to the base scenario of no differential cost inflation.

For this scenario, the impact of inflation in seed, herbicide, insecticide, crop consulting, crop insurance, custom hire / machinery expenses, labor costs, irrigation maintenance and repair, and non-irrigated cropland rental rates are examined.

A more thorough multi-period analysis of inflation impacts over time is called for in future research.

Increasing inflation does not have a large impact on net returns in this analysis, causing increases of $3 to $8 per acre in the advantage of CP over SDI systems from the base scenario.

Table 6.

Interest Rate Variation Impact on SDI versus CP Returns

Inflation Rate CP SDI SDI Less CP SDI Less CP

Scenarios Variable Variable Returns Returns

Cost

Base: 0% Inflation $517.90 $499.85

Low: 3% Inflation $533.44 $514.84

High: 9% Inflation $564.51 $544.83

Broader "Low versus High" Price Cost Scenario Impact

Given the interrelated nature of agricultural and financial markets, it is judicious to examine the impact of broader "low price-low cost" and "high price-high cost" scenarios upon the profitability of SDI versus CP systems.

The various inputs into these two scenarios are given in Table 7.

Whether the "low" price cost or the "high" price cost regime is in effect has a large impact on the relative returns of a subsurface drip irrigation system as opposed to a center pivot sprinkler irrigation system.

"Low" prices and costs strongly favor CP systems while "high" price cost scenarios strongly favor SDI systems.

Table 7.

"Low" and "High" Price-Cost Scenario Inputs

Key Crop "Low" Price-Cost "High" Price-Cost

1.

Corn Price, $/ bu.

$1.95 $6.00

2a.

Natural Gas $, $/mcf.

$2.00 $12.00

2b.

Pumping Cost, $/acre in.

$1.55 $7.78

NH3 , $/lb.

N.

$0.13 $0.37

DAP , $/lb.

$0.11 $0.85

4.

Interest Rates 5.0% 15.0%

5.

Inflation Rate in Crop 3.0% 9.0%

Table 8.

"Low"-"High" Price-Cost Impact on SDI versus CP Returns

Price Regime CP SDI SDI Less CP SDI Less CP

Scenarios Variable Variable Returns Returns

Cost

"Low" Price Cost $442.00 $433.23

"High" Price - $726.07 $686.60 $8,374 $52

Variability in United States' agricultural and financial markets impacts irrigation investment decisions in general, and the decision to purchase a center pivot sprinkler or subsurface drip irrigation system in particular.

The levels of economic variability observed in U.S.

grain, energy, crop input and financial markets have been particularly heightened in recent years.

If the recent past is a reasonable predictor of the future, then volatility in these markets is likely to continue to add risk and uncertainty to irrigation investment decisions for the foreseeable future.

This analysis was based on a decision tool developed by Kansas State University to assist farmers in their irrigation system investment decisions particularly as they consider whether to invest in center pivot sprinkler or subsurface drip irrigation systems.

This analysis focused on the impact of broader economic factors whereas earlier efforts focused more so on system physical efficiencies, design and life span in determining the most profitable system investment.

These results indicate that economic factors and forces that tend to either increase irrigated crop income or that tend to increase costs equally between the irrigation system alternatives tend to either favor subsurface drip irrigation or are neutral to the investment decision between the two options.

Higher corn prices distinctly favor subsurface drip irrigation system returns, while lower corn prices favor center pivot irrigation systems.

Changes in fertilizer prices, natural gas prices and associated irrigation pumping costs, and inflation in crop production costs tend to have neutral or small impacts upon the relative returns to each irrigation system.

Because of the higher investment cost required for subsurface drip irrigation systems, increases in interest rates on either borrowed capital or the on the opportunity cost of invested capital in irrigation systems tend to favor investment in center pivot sprinkler irrigation systems with their lower costs of initial investment.

When grouping economic factors into "low price cost" and "high price cost" scenarios, it turns out that "low price cost" scenarios tend to favor center pivot sprinkler irrigation cost investments.

Conversely, "high price cost" scenarios of economic factors favors subsurface drip irrigation investments.

Future analysis should focus on the multi-period impacts of inflation, interest, and variability in product revenues and crop input costs.

If farmers believe the hypothesis that higher levels of volatility will continue to exist in agricultural, energy and financial markets in the future, then their irrigation investment decisions will need to be all that much more informed in regards to the physical and economic uncertainties they are dealing with.

Use: utilize full pumping capacity as much as possible in systems with end guns or corner arms, VRI type: zone, Prescription type: n/a, management intensity: low.

For soybeans in R4 end of pod elongation stage of growth, there are approximately 37 days to maturity and 9.0 water use to maturity.

For soybeans in R5 Beginning seed enlargement stage of growth, there are approximately 29 days to maturity and 6.5 water use to maturity.

For soybeans in R6 end of seed enlargement stage of growth, there are approximately 18 days to maturity and 3.5 water use to maturity.

For soybeans in R6.5 leaves begin to yellow stage of growth, there are approximately 10 days to maturity and 1.9 water use to maturity.