Farm-level economic impact of no-till farming in the Fort Cobb Reservoir Watershed

Abstract

No-till farming has been identified as an important conservation practice with potential to improve soil quality and protect water quality. However, adoption of new tillage and production practices is determined by numerous economic and noneconomic factors in addition to land stewardship. The objective of this study was to assess the effects of fuel costs and crop yield on farm-level economics in no-till systems in comparison with other tillage systems for wheat production in southwestern Oklahoma. The Farm-level Economic Model, an annual economic simulation model, was used in conjunction with survey data from the Fort Cobb Reservoir Watershed in southwestern Oklahoma to determine impacts of alternative tillage practices on farm profits. Sensitivity analysis was performed using plausible ranges in diesel prices, winter wheat grain yields, herbicide costs, labor wages, and farm size. The results indicate that if winter wheat grain yields are not significantly impacted by tillage systems, no-till would be more profitable than conventional tillage or the current mix of tillage practices in the watershed. Only when there is a significant wheat yield penalty associated with no-till (10% or greater) might no-till be less profitable than conventional tillage or the status quo at reasonably high fuel prices. In general, for each 1% improvement in wheat yields under no-till relative to conventional tillage, no-till farm profits improve by US$7 ha⁻¹ (US$3 ac⁻¹) on farms that produce only winter wheat and an average of US$2.50 ha⁻¹ (US$1 ac⁻¹) if averaged across all farms in the Fort Cobb Reservoir Watershed, including those that do not produce winter wheat. The study also finds that higher diesel prices, higher labor wages, lower herbicide costs, and smaller farm sizes are all relatively advantageous to no-till.