Economic Returns Due to AlfalfaEconomic Returns Due to AlfalfaEconomic Returns Due to Alfalfa Economic Returns Due to Alfalfa Cultivar Selection Over 30 of Cultivar Selection Over 30 of Testing in CA EnvironmentsTesting in CA Environments

Authors:Authors:Daniel H. Putnam, Andre Biscaro, Steve Orloff, Craig Giannini, Chris DeBen, and Karen Klonsky(UCCE/U i it f C lif i D i CA)(UCCE/University of California, Davis, CA)

What is an alfalfa variety?

A population of plants consisting ofA population of plants consisting of genetically diverse individuals that have been selected for improved traits:p

yield, fall dormancy,

f

Considerable plant-to-plant variation,Multiple genotypes = Major asset = great

forage quality, persistence, disease and insect resistance;

p g yp j gadaptation

;

Percent Resistance Abbreviations resistance1

HR Hi hl R i t t 51%HR Highly Resistant >51%R Resistant 31-50%MR Moderate Resistant 15-30%MR Moderate Resistant 15 30%

LR Low Resistant 6-14%S Susceptible <5%T Tolerance --1 Percent of plants in a population resistant to a given pest

Locations used for the UC alfalfa cultivar testing program

Intermountain: FD: 2‐4Cuts: 3‐4Sites: Tulelake, Scott Valley.Elevation 2 100 3 950 ftElevation: 2,100‐3,950 ft

San Joaquin Valley: 

FD: 7‐9Cuts: 7‐8

Sacramento Valley: 

FD: 4‐8Cuts: 5‐7Sites: DavisElev.: 65 ft

Coastal Valleys: FD: 4‐8Cuts: 5‐7Sites: Variable

Sites: Parlier, Five PointsElev.: 330‐660 ft

Elev.: 65‐165 ft

High Desert: FD: 5‐8Cuts: 6‐7Sites: LancasterEl 2 300 2 600 ft

Total California  Alfalfa Production (2007)• 987 493 a( 399 632 ha) Elev.: 2,300‐2,600 ft

Low Desert: FD: 8‐11Cuts: 7‐11Sites: El Centro, 

• 987,493 a( 399,632 ha)• 7.1 t/a (15.9 Mg/ha)• Value:  $1.17 Billion • Largest acreage crop in CA

‐NASS data

BlytheElev.: minus 260 ft

Total California Alfalfa Production

- Approx. 930,000 acres - 7.1 t/a - Value: $1.17 Billion

L t i CA- Largest acreage crop in CA

Why look at variety trials? “ASS,U,ME”

Scientific approach – follows protocols; Decades of breeding for pest-resistant,

high-yielding and high-quality alfalfa; Losses are seldom recognized; Primary step in IPM – cost effective; Measure for dealing with insects and diseases.

VARIETY SELECTION SETS THE UPPER LIMIT OF YIELD & PERFORMANCELIMIT OF YIELD & PERFORMANCE

However…

Some growers still don’t take sufficient time Some growers still don t take sufficient time to compare varieties

And simply favor inexpensive seed And simply favor inexpensive seed…

Economic Analysis

Enables a more rational approach to the value of variety data to guide cultivar selection

Seed costs as a percentage of production

Establishment costs

seed 12%

4-Year production costsseed 2%

Other Establish

ment Costs 88%

Other Production Costs

98%

Title $0 $100 $200 $300 $400 $500 $600 $700

Economic Value Due only to Variety Choice (Single year ‐ 2009 Data, UC Davis)

$/acre (yield diff. * $150)

$0 $100 $200 $300 $400 $500 $600 $700

Magna 801 FQ

WL 530HQ

HybriForce 800

8R100

PGI 608

Pacifico

Integra 8800

Magna 788

Magna 995

Artesian Sunrise

HybriForce 700

Sutter

Cisco

DKA 50‐18 Differential Economic Effect of Variety Choice:

Fraction of a ton?TruTest

WL 440HQ

6R100

Differential Economic Effect of Variety Choice:Assumptions:*Hay Price: 150$/ton *Response averaged over 1 year as per UC Davis 08-planted Variety Trial. First full year of production.

Difference due to added seed cost: ($3.00/lb) at 20 

/

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600

Economic Value Due only to Variety Choice (Three Year - Fresno County West Side Data, 2007-2009)

$/acre 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600

WL 535HQDesert Sun 8. 10RR

GrandslamPacifico

AL 999

$/acre 

AL 999CW 1010

INTEGRA 8900WL 660RR

Dura 843WL 625HQ

59N5959N59TriplePlay

AmeriStand 855RRRevolution

CW 909CUF101

Magna801FQ LSD (P< 0.10)Impalo WF

CW 801RRALF 8R100

798 alfalfaWL 550RR

DKA84-10RRHi hli

( )

Difference in Cost due to a $3/lbHighline

INTEGRA 8801RConquistador

SequoiaINTEGRA 8800

DKA65-10RRWildcard

Differential Economic Effect of Variety Choice:Assumptions:*Hay Price: 150$/ton less additional seed costs.*Seeding Rate: 20 lbs/acre

due to a $3/lb INCREASE in seed cost ($60/acre)

WildcardAmeriStand 815TRR

RRALF 6R100Integra 8400R

*Seeding Rate: 20 lbs/acre*Varieties perform as per Research Trial

THE VALUE OF IMPROVED VARIETIES ALMOST ALWAYS EXCEEDS DIFFERENCES IN SEED COSTS

Choice of Variety

High Yielding Variety (Seed A)

Medium Yielding Variety (Seed B)

Low Yielding Variety (Seed C)

Economic consequences of choosing varieties

Seed price ($/Lb) 3.50 2.50 1.50

Potential yield (ton/A/yr) 12.8 11.6 10.9

Seed cost ($/A) 87.50 62.50 37.50

* Gross Returns 3yrs ($/A) 5,760 5,220 4,905

Net - Seed cost ($/A) 5,673 5,158 4,868

Seeding Rate (Lb/A) Difference in Return ($/A) vs. lower yielding variety**

10 835 305 -

20 815 295 -

30 795 285 -

40 775 275 -40 775 275

* Gross Returns = Potential yield (from variety trials) * $150

** Assuming differences among A B and C are only due to variety choice Assuming differences among A, B and C are only due to variety choice

Hay price = $150

Yi ld diff i d t j tifYield difference required per year to justify an increase in seed price, amortized over

4 years

4 0

5.0

6.0

on/A

/yr)

Yield differences (top to bottom) between varieties - Five Points, CA 2007-2009

5.0

6.0

on/A

/yr)

0.03

0.01

0.04

0.06

0.08

0.09

0.11

0.13

0.14

0.15 0.161.0

2.0

3.0

4.0

Yiel

d di

ffere

nce

(to

1.0

2.0

3.0

4.0

Yie

ld D

iffer

ence

(to

0.00.2 0.6 1.0 1.4 1.8 2.2 2.6 3.0 3.4 3.6 3.8

Aditional price of seed ($/Lb)

0.01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Alfalfa Varieties

Y

How much more would you pay to have a variety that produces an extra ton/A/yr?

If a Seed A produces 1 ton/A/yr more than If a Seed A produces 1 ton/A/yr more than Seed B, then it would be feasible to pay up to $24/Lb more for Seed A;$ ;

[1 ton = $150 = $600 (4 years): $600/25Lb = $24/Lb]

*Seeding rate of 25Lb/A

What is the actual economic value of i d i i ?improved varieties?

…it’s difficult to measure directly!Li it tiLimitations:

Transferability of Data - Degree to which yield performance in trials match farmer’s fields

Adaptation Rate - Extent to which farmers and seed companies choose varieties based upon this information

Value of Yield vs. Other Traits - The relationship of yield to other valuable attributes (e.g. resistance to disease and insects, forage quality, persistence, salt tolerance, herbicide tolerance). Improved varieties may have other benefits besides simply yield

Masking of Genetic Potential with other practices, such as suboptimum cutting schedules, pest management, fertility practices which limit the genetic advantages of better varieties

Total  Annual Gross Economic Value and value potentially due to variety

$1,200,000 

y

(X 1,000)

$1,065,214 

$800,000 

$1,000,000 

$319,081 $400,000 

$600,000  30%.

$‐

$200,000 

Due to Variety Total Value

Due to Variety Total Value

(Normalized to 2009 dollars, averaged over 30 years of California production)

Summation Data from Multiple Trials

Table 2. Summary of Alfalfa Cultivar Trials conducted from 1974 through 2009 in the different production regions of California. Each N is the summation of a multi-year trial (for example, a 3-year trial, 35 varieties, 7 cuts/year at Davis). The average yield difference is the top-to-

Summation Data from Multiple Trials

Average Yield Regional Potential Yield

RegionNumber of

TrialsHarvests Per

yearDuration of

TestingTotal Number

of HarvestsAverage

Trial YieldDifference Due

to VarietyContribution to CA

ProductionDifference Due

to Variety(N) C t Y (N) t/ t/ % %

bottom difference averaged across all the trials in a region. Most trials are conducted for 3 years. Statewide averages are weighted based upon percent acreage of regions.

(N) Cuts Years (N) t/a t/a % %Intermountain 32 3 to 4 128 379 6.2 1.5 10% 23.9%Sacramento Valley 27 5 to 7 87 498 9.3 2.6 14% 28.4%San Joaquin Valley 25 7 to 8 86 556 10.1 3.5 54% 34.3%Coastal 4 4 to 5 9 38 4.0 1.1 1% 27.4%High Desert 4 6 to 7 12 78 9.2 1.8 2% 19.1%L D t 21 8 t 11 56 356 7 8 1 6 20% 21 0%Low Desert 21 8 to 11 56 356 7.8 1.6 20% 21.0%

Statewide 113 6 to 7 378 1905 8.9 2.7 100% 30.0%

Effect of Region on Economic Return Due to V i t

500

600

Variety

300

400

500

cre

Price: 150$/ton

100

200

300

$/ac

0

100

Figure 6 Regional differences due to variety These are the average top-to-bottom yield differences due to variety averaged across all UCFigure 6. Regional differences due to variety. These are the average top to bottom yield differences due to variety, averaged across all UC trials, over the past 30 years, multiplied by $150/ton. This represents 378 location/years of testing statewide.

Total value and the value potentially due to i 30 i C lif ivariety, over 30 years in California.

$1,400,000

$1,600,000Value of California Alfalfa, 1980‐2009

Total

(X 1,000)

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

PotentialValueDue 

Total

$0

$200,000

$400,000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

to Variety

CONCLUSIONS

Potential yield increases due to variety choice Potential yield increases due to variety choice are economically significant for farmers;

This value easily exceeds differences in seed costs especially over years;costs, especially over years;

CONCLUSIONS

Avg yield differences due to variety as Avg. yield differences due to variety, as measured in 378 location/yrs in CA field trials was 2.7 ton/a/yr, or approx. 30% of the mean y , pp %values;

Yield differences due to variety were greater in some regions than othersin some regions than others.

CONCLUSIONS

Thank you for your attention! Thank you for your attention!

Questions/Comments? Questions/Comments?

Assumptions for these Calculations:

Potential yield differences are similar to thosePotential yield differences are similar to those measured in 378 trial years of UC variety tests, as a percent of average value

Economic value due to yield alone, not other genetic traits

Does not consider yield effects on supply-demand curves, or the effects of forage quality on price and the yield quality tradeoffquality on price and the yield-quality tradeoff

This is a description of the maximum effects on economic returns due to varietyon economic returns due to variety.