Profitability and conservation on a small scale
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Abstract
Like all things, the agriculture industry has advanced throughout time, whether through improved understanding or technology to overcome problems, such as profitability, which is currently a huge concern in the industry. A potential approach to overcome profitability issues while maintaining sustainability is to manage farm land at a much smaller scale than at a farm or even field level. This project aims to understand how using a yield raster map at a sub acre level and applying financial input data can create useful detailed high-resolution profit maps that can be used to increase future profitability. Using two years of harvest and input data for corn and soybeans on a particular cooperator’s farm, the results indicate that soybean fields were unprofitable with both $9.00 and $11.00 commodity prices. However, corn had more favorable economics than soybeans, and at the higher commodity price of $5.50 was almost always profitable at the field scale. Results also showed that there were parts of fields that were unprofitable no matter what commodity price was used in the analysis. By avoiding row cropping the unprofitable areas and thereby eliminating the variable cost of production on those parts of fields, the overall profitability increased, even though these areas were not being farmed. Managing fields in smaller scale units than an entire field allows producers to capture opportunities for profitability while increasing conservation if unprofitable areas are seeded to perennial grasses, for example. Eliminating production costs in areas that are consistently unprofitable and utilizing those areas for conservation practices can create a win-win situation not observed when fields are managed as a single homogeneous unit.