A DECISION SUPPORT TOOL FOR OPTIMIZING INTEGRATION OF SPECIALTY CROP ENTERPRISES IN GRAIN PRODUCTION SYSTEMS

Lori HoaglandAssistant ProfessorSpecialty Crop Production SystemsDepartment of Horticulture & Landscape ArchitecturePurdue University, USA

Agriculture in the Midwestern U.S.

Early farms were small and highly diverse

1950’s – mechanization, inexpensive agrochemical inputs & crop subsidies

Today – 85% of cropland planted to corn and soybeans

Specialization vs. diversification

Specialization - greater productivity & market efficiency

- maintaining profitability becoming more difficult

- negative environmental and social consequences

Crop diversification - benefits: more balanced nutrient and pest management

cycles; greater farm income; reduced income variability

and risk

- large-scale shifts out of corn-soybeans unlikely

- integrating specialty crops as supplementary enterprises

Specialty crop opportunities in the MW

Demand for local specialty crop production is growing rapidly

Revitalize rural communities

- Create jobs

- Improve farm

income

Promote sound nutrition & health Contribute to environmental sustainability

Distribution of farmers markets in 2010

Integrating specialty crop enterprises

Specialty crop production requires more intensive management and greater planning

Adoption requires evidence of perceived benefit to the current system

Computer based land-use models

Objectives of this study

Determine feasibility of integrating various supplemental specialty crop enterprises

Identify supplemental crop alternatives that: - have agronomic and market feasibility

- contribute to the sustainability of the operation

- fit in during times of low labor requirements

- not require additional specialized machinery or

knowledge by the producer

Develop a decision support tool to help growers make decision regarding optimal acreage allocation

Methodology

Develop a base model of a typical corn-soybean operation in eastern Nebraska to identify periods for integration

- Average farm size, equipment compliment and debt

- Climatic conditions influencing time available for field tasks

- Labor availability of one full-time farm operator

- Activities associated with corn-soybean production

Corn-soybean base model

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1 6 11 16 21 26 31 36 41 46 51

Weeks

Lab

or

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urs

/Week)

Field Tasks Off Tasks Field Time Available Off Time Available

Viable enterprise alternatives

1) Residue grazing by livestock 2) Winter Wheat/Fall Cabbage

3) Spring Cabbage/ Fall Sunflower

4) Agroforestry

Enterprise budgets & LP model Detailed enterprise budgets for each

alternative - activities and labor requirements

- costs, returns, subsidy payments, etc.

Dynamic linear programming model - land (256 ha) and machinery held constant

- labor: one full-time operator

- available capital unlimited

- 3.75 ha windbreak system held constant

- market constraints on woody floral crops

Results

     Net return

 System  Land allocation (ha) Without  subsidies

 With  subsidies

Corn-soybeans alone CS - 256 ($4,765.44) $21,480.96 Grazing considered CS - 256 ($925.44) $25,320.96 Winter wheat/fall cabbage considered CS - 247.90; WW/FC - 8.10 $34,502.72 $60,754.79 Spring cabbage/sunflower considered CS - 254.54; SC/S - 1.46 $3,489.66 $29,686.05 Windbreaks and woody florals considered with market constraints

CS - 254.96; WB - 3.75; SC - 0.10 ; GW - 0.13; BR - 0.02 $4,174.37 $30,011.95

All options considered CS - 243.54; WW/FC -7.88; SC/S - 0.54 WB - 3.75; SC - 0.10; GW - 0.13; BR - 0.02 $40,637.44 $66,456.97

CS-corn-soybeans; WW/FC-winter wheat/fall cabbage; SC/S-spring cabbage-sunflower; WB-windbreak; Woody florals: SC-scarlet curls; GW-goal willow; BR-bailey redtwig dogwood

Subsidies and labor constraints keep majority of land in grain crops

Sensitivity analyses

     Net return

 System  Land allocation (ha) Without  subsidies

 With  subsidies

Corn-soybeans alone CS – 256 ($4,765.44) $21,480.96

All options considered CS – 243.54; WW/FC – 7.88; SC/S – 0.54; WB – 3.75; SC – 0.10; GW – 0.13; BR – 0.02 $40,637.44 $66,456.97

All options considered with additional market opportunities

CS – 243.54; WW/FC – 7.88; SC/S – 0.54; WB – 3.75; SC – 0.29 $49,152.07 $74,971.60

All options consideredwith market constraints and an additional full-time skilled operator

CS – 243.54; WW/FC – 7.88; SC/S – 0.54; WB – 3.75; SC – 0.10; GW – 0.13; BR – 0.02 $40,637.44 $66,456.97

All options considered with market constraints and part-time seasonal labor

CS – 233.23; WW/FC – 8.32; SC/S – 10.2; WB – 3.75; SC – 0.10; GW – 0.13; BR – 0.02 $86,758.25 $111,443.93

Additional market opportunities and labor

CS-corn-soybeans; WW/FC-winter wheat/fall cabbage; SC/S-spring cabbage-sunflower; WB-windbreak; Woody florals: SC-scarlet curls; GW-goal willow; BR-bailey redtwig dogwood

Summary and considerations

Diversification with supplemental specialty crop enterprises

- is feasible and profitable

- challenges: greater planning, lack

of infrastructure, farm policy

Computer based land-use models can help growers evaluate alternatives and optimize acreage allocation

Decorative woody florals

Acknowledgements

Graduate committee at the University of Nebraska-Lincoln

- Dr. Laurie Hodges, Associate Professor, Horticulture

- Dr. James Brandle, Professor, Agroforestry

- Dr. Glenn Helmers, Professor Emeritus, Agricultural

Economics

- Dr. Charles Francis, Professor, Agronomy Funding: - University of Nebraska-Lincoln and Purdue

University

Agriculture Research Programs

Questions?