Transcript Economic Feasibility of Auto Guidance in the Midwest
Economic Feasibility of Auto Guidance in the Midwest
M.S. Thesis Agricultural Economics Purdue University Matt Watson
Why Study Auto Guidance
Currently used in Australia, Arizona, California Manufacturers see vast potential in Midwest market Midwest producers have uncertainty about returns on auto guidance technology
Objectives of this Analysis
Determine if Auto Guidance is economically feasible on a base farm at or below 2000 acres Test whether skip and overlap will be a major part of the benefits of auto guidance • Determine if light bar guidance can provide these benefits at a lower cost
Objectives of this Analysis
Examine auto guidance and expansion with the same basic set of equipment Explore spatial sensitive practices, like controlled traffic, and analyze the effects on feasibility of auto guidance
John Deere- AutoTrac System
Introduced in 2002 with tracked tractors 2003-Opened market with wheeled tractors Utilize GreenStar system and Starfire System • Only requires addition of AutoTrac key card and steering control unit Provides own differential correction service SF2 with accuracy of +/- 4 inches Recommended Uses • Tillage • Spraying • Seeding Operations Listed Benefits • Optimize machine efficiency • Reduce operator fatigue • Increase yields
IntegriNautics-AutoFarm System Aftermarket system available for all major manufacturers Offers RTK system with base station • One time cost, no recurring subscription costs • 5 mile coverage area with mobile station (must be in line of site) • 7 mile coverage area with fixed station (must be in line of site) • +/- 1 inch accuracy Major uses listed are • Reducing operating costs • Reducing capital investment • Running in night and fog • Broadening labor pool Kit includes base station, cab box and monitor, GPS antenna, and all needed cables Optional data logger for mapping and surveying
Trimble-AgGPS Autopilot
Available as two systems DGPS with +/- 6 inch accuracy Recommended uses • Tillage • Broad acre air seeding • Application of fertilizer and insecticide RTK with +/- 1 inch accuracy Available on Case, CAT, John Deere Wheeled or Tracked
Beeline Navigation-Arro system
Available for all major manufacturers OEM with AGCO tractors Can come in three accuracy levels • DGPS with +/- 4 in • Base station at decimeter accuracy • Base station at centimeter accuracy Mobile or fixed base station • Offers fastest setup time on base station
Methodology of Model
Annualize technology cost using sinking fund approach with 3 years Deterministic model uses 7 year average yields and December cash prices for central Indiana from 1996-2002 Risk model uses empirical distribution from the same years Use planter as limiting factor for farm size • Using 12 row planter and probability of days worked in central region
How the Model Works
Revenues generated by yields and harvest price Base Farm Guidance Farm Budget Revenues Farm Budget Guidance Benefits Technology Costs Revenues
Guidance Benefits in Model
Inputs-Chemicals, Fuel, Labor • Use overlap for reductions Increase in field speeds • Auto guidance 20% • Light bar guidance 13% Increase work day length • Base-14 hours • Light bar-18 hours • Auto guidance-20 hours
Controlled Traffic
Use Randall Reeder data from The Ohio State University to quantify compaction into 2 levels: 10 ton and 20 ton Indiana distributions in first two stages represent compaction at that level Each acre has a percentage with traffic (use compacted yield) and a percentage without traffic (use adjusted yields) Additional fuel benefits by alleviating compaction
Controlled Traffic
Percent of field with traffic Fuel Reductions DGPS Auto Guidance 20% RTK Auto Guidance 15% Light Bar Guidance 30% Tramline 50% 50% 50% 30% 20%
Setup of Model
Stage I- Technology adoption without expansion Stage II-Technology adoption with expansion Stage III-Technology adoption with controlled traffic on original farm size Sensitivity on interest rates, technology costs, and light bar acres
Technology and Time Needed Stage I
600 500 400 300 200 100 0 Corn Soybeans Whole Farm Base Light Bar Auto Guidance
Technology Cost-Stage I
12 10 8 6 4 2 0 Technology Cost DGPS Auto Guidance Light bar Total Cost RTK Auto Guidance
Results-Stage I
160 155 150 145 140 135 Corn Soybeans Average Base DGPS Auto Guidance RTK Auto Guidance Light Bar
Expansion Acres-Stage II
3500 3000 2500 2000 1500 1000 500 0 Base Light Bar Auto Guidance
Technology Cost-Stage II
12 10 8 2 0 6 4 Total Cost Stage II Total Cost Stage I DGPS Auto Guidance Light bar RTK Auto Guidance
Results-Stage II
160 155 150 145 140 135 130 125 Corn Soybeans Average Average with replacemnt cost Base DGPS Auto Gudiance RTK Auto Guidance Light Bar
Controlled Traffic Yields-Stage III
200 150 100 50 0 Base Corn Moderate Compaction Corn: Heavy Compaction RTK Auto Guidance Tramline Beans: Moderate Compaction Beans: Heavy Compaction DGPS Auto Guidance Light Bar
Results on Highly Compacted Soils-Stage III
190 180 170 160 150 140 Corn Base RTK Auto Guidance Tramline Soybeans Average DGPS Auto Guidance Light Bar
Sensitivity
Model shows little change to increasing interest rates, especially in stages II and III Lowering technology costs changes profitability • Stage I-Allowed DGPS auto guidance to be more profitable than base case • Stage II-Allowed RTK auto guidance to be more profitable base case • Stage III- RTK auto guidance provided greater average returns than DGPS auto guidance in highly compacted soils
Sensitivity
Holding light bar acres constant and including replacement costs • dropped light bar guidance below RTK auto guidance Important when production includes mechanical cultivation, side dress nitrogen, planting with high accuracy
Conclusions
Auto guidance reduces field time on the fixed size 2000 acre farm, but it is not the most profitable guidance option: • Light bar guidance can provide almost the same benefits at a lower cost • Profitable when investment costs are reduced by one half
Conclusions
DGPS auto guidance is profitable for expansion with the same equipment • Spreading technology cost over more acres • Provides higher returns over light bar guidance when spreading machinery replacement costs over more acres • RTK auto guidance is profitable when technology costs are reduced by one half
Conclusions
Soils that are highly susceptible to compaction make DGPS and RTK systems profitable • Reducing technology costs makes the RTK system provide greater returns than the DGPS system Continuous corn growers increase returns of DGPS auto guidance for moderate levels of compaction • More response to compaction • More field operations
Areas of Further Research
Driver fatigue Value of time Wage and labor pool Strip tillage Side dress nitrogen Contour farming Environmental benefits