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Profitability Differences Among No-Till and Conventional-Till Producers in North Central Kansas

Profitability Differences Among No-Till and Conventional-Till Producers in North Central Kansas. Jason Fewell, Dr. Kevin Dhuyvetter, Dr. Michael Langemeier National Farm Business Management Conference Fargo, ND June 14, 2010. Background and Reason for the Study.

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Profitability Differences Among No-Till and Conventional-Till Producers in North Central Kansas

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  1. Profitability Differences Among No-Till and Conventional-Till Producers in North Central Kansas Jason Fewell, Dr. Kevin Dhuyvetter, Dr. Michael Langemeier National Farm Business Management Conference Fargo, ND June 14, 2010

  2. Background and Reason for the Study • To compare key economic measures and determine what might be leading to differences • Bergtold and Funk (2009) found that while many no-till farms are inefficient, farmers using no-till are closer to optimal production levels than those using conventional tillage.

  3. Data • Kansas Farm Management Association (KFMA) • Farm management program where economists work with farm families to: • develop sound accounting practices, • improve decision making, • compare financial performance with similar farms, and • Integrate tax planning, marketing, and asset investment strategies. • More information available at: • http://www.agmanager.info/kfma

  4. Histogram of North Central Kansas No-till Farms

  5. Data *Data arefrom 2004 to 2008. **Not all farms practiced no-tillage for the entire five years, i.e. some may have only been no-till in 2008. 65.4% of the farms are crop farms, and 34.6% are a combination of crop and livestock.

  6. Data

  7. Comparisons of Key Profitability Measures Between Tillage Practices

  8. Adjusted Total Expense Ratios by Farm Size for Conventional and No-till Farms

  9. Economic Total Expense Ratios by Farm Size for Conventional and No-till Farms

  10. Crop Machinery Expense Ratio by Farm Size for Conventional- and No-Till Farms

  11. Crop Fuel Expense Ratio by Farm Size for Conventional and No-Till Farms

  12. Correlations with No-Till Experience and Key Financial Measures

  13. Limitations and Areas for Further Study • Must be no-till on 100% of acres • Difficult to compare across farmers who use no-till on some crops but till other crops • Study income opportunities by sequestering carbon using no-till • How does profit change in first year or two of adoption • Determine motivation for adopting no-tillage • Increased profits • Increased acreage • Environmental concerns • Others

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