Precision Farming Investment Tool for Cotton Growers

Kurt LawtonCotton, Equipment, Financing, University

Cotton growers looking at precision farming investments should check out the Cotton Precision Agriculture Investment Decision Aid (CPAIDA), created by University of Tennessee Production Economics Analysis Group.

The Cotton Precision Agriculture Investment Decision Aid (CPAIDA) is a stand alone, computerized decision tool for analyzing investments in precision agriculture technologies. It was developed to meet the need for better educational information about the returns required to pay for investments in precision agriculture technologies used by cotton farmers.

Currently available “payback” modules include map- and sensor-based variable rate application of sprayer-applied chemicals, sensor-based liquid nitrogen application, and sensor-based weed control. Additional modules for calculating the cost of gathering spatial information via electrical conductivity, yield monitor, and remote sensing are also provided. A distinctive sensitivity analysis feature allows users to evaluate a variety of “what if” scenarios for these technologies based on their particular farm characteristics.

The decision aid guides users through a systematic analysis of the precision farming investment decision via a set of clickable tabs and expandable menu options. The equipment information tab allows the user to select equipment components and enter purchase price.

Default equipment complements are set for each module, and users can click on cells to change equipment manufacturers or modify prices. The farm data tab lets users personalize the decision aid based on their unique farm situation, information gathering costs, and payback parameters which can include input cost savings, lint yield gain, and reduced equipment operating and ownership costs. The profitability summary tab displays results in the form of enterprise budgets that compare cost and return estimates with and without precision farming.

A final column indicates how individual cost items vary based on the precision farming investment decision and summarizes the expected profitability from adoption of the selected equipment complement.

Finally, a sensitivity analysis tab displays the results graphically. The main figure summarizes the profitability of the proposed equipment complement and provides an estimate of the payback period in years. Here, users can change key cost and return parameters, such as farm size or input savings, and evaluate how changes in these values influence the profitability of the investment decision.

The CPAIDA decision aid is also available at Copies of CPAIDA on a CD ROM may also be obtained by writing James Larson, Department of Agricultural and Resource Economics, 2621 Morgan Circle, 302 Morgan Hall, Knoxville, TN 37996. This decision aid was funded by Cotton Incorporated.