Source: OKLAHOMA STATE UNIVERSITY submitted to NRP
ECONOMICS OF AGRICULTURAL PRODUCTION SYSTEMS FOR OKLAHOMA
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0204037
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2005
Project End Date
Sep 30, 2011
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
OKLAHOMA STATE UNIVERSITY
(N/A)
STILLWATER,OK 74078
Performing Department
AGRICULTURAL ECONOMICS
Non Technical Summary
Reearch is needed to investigate the relative expected economic potential of alternative crop and livestock production activities and systems. The overall objective is to determine the economic consequences of agricultural production alternatives for Oklahoma. Impacts of alternative practices and systems on expected net returns, variability of returns, and input requirements will be determined.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60124103010100%
Goals / Objectives
The overall objective of this project is to determine the economic consequences of agricultural production alternatives for Oklahoma. Impacts of alternative practice and sytems on expected net returns, variability of returns, and input requirements will be determined. In addition, compatibility of the alternative production practices and enterprises with conventional practices and enterprises, resources, and institutional constraints, and potential external costs will be considered. Specific objectives are to: 1. Determine the economic and institutional feasibility, with respect to expected net return, production and financial risk, and rate of return on resources, of alternative production systems compared to existing ones. 2. Determine environmental tradeoffs between alternative and contemporary production systems.
Project Methods
1. a. Cooperate with production scientists (including, when appropriate, agronomists, agricultural engineers, animal scientists, entomologists, and plant pathologists) to develop response functions and/or input-output coefficients for agricultural production alternatives. Data may be obtained from experiment station projects, secondary sources, or derived with simulation models. b. Conduct statistical analysis as necessary to estimate properties of production coefficients. c. Combine technical information with historical price relationships to generate estimates of returns and costs and provide feedback to extension enterprise budget software. d. Information generated will be used in combination with existing data to compare production alternatives. e. Mathematical programming models will be constructed to evaluate and quantify the potential for the production alternatives. f. Historical information regarding price, cost, and yield variability will be used to construct models for the purpose of risk analysis. f. Production strategies that might be preferable for risk-averse producers will be determined. 2. When data are available, external costs and benefits associated with the production alternatives will be considered.

Progress 10/01/05 to 09/30/11

Outputs
OUTPUTS: The U.S. Energy Independence and Security Act of 2007 (EISA) mandates that 136 bil. liters (36 bil. gallons) per year of biofuels be produced in the US by 2022, with 79 bil. liters (21 bil. gallons) coming from feedstocks other than corn grain. Fulfilling this mandate may require the use of several lignocellulosic feedstocks such as forest biomass, urban waste, and biomass from dedicated energy crops such as switchgrass. Development of energy crops was envisioned by the U.S. Dept. of Energy as a way to convert marginal land to a more productive use and at the same time reduce the cost of government commodity and conservation programs that are funded to entice land owners to set aside land from the production of traditional crops. A realistic test of the economics, performance, and persistence of diverse mixtures of grasses and forbs relative to the performance of a monoculture such as switchgrass on a scale required to fulfill EISA mandates requires side-by-side field trials managed as closely as possible to represent production on a large scale. Scientists at OSU with the assistance of personnel and the contribution of land and other resources provided by the U.S. Dept. of Ag, Ag Resch Serv, Southern Plains Range Resch. Sta.,near Woodward, OK conducted a multiyear study at two locations. Research objective was to determine the most productive and lowest cost biomass feedstock production system for marginal lands in W.OK from among three monocultures and four polycultures that included diverse mixtures of grasses and forbs. Study found that biomass yields of diverse mixtures were no greater than yields of monocultures. Even though no herbicides were applied and the plots were not weeded, the proportion of weeds declined from the first year to the third year harvest in every treatment at both locations. Forbs did not persist in the plots. For every treatment that included a mix of species, a dominate grass species emerged by the third harvest. Primary finding was that production costs were lower for monocultures because they produced at least as much, and in some cases more, biomass and had lower seed costs. Diversity may be good in some settings. Polycultures may reduce the risk of disease and pest damage. Society may place a higher value on the variable landscape and other attributes resulting from polycultures relative to monocultures. If objective is to produce massive quantities of biomass for biorefinery feedstock under the constraint that land area is limited, for the conditions that prevailed at these locations during the time of the study, internal economics favored monocultures of productive species. Research results were presented; Invited presentation for the USDA Rural Dev. and Farm Service Agency's Forum on Expanding the U.S. Biofuels Market. Weatherford, Oct. 28, 2010. Invited paper presented at the Renewable Energy Biomass Education Field Days, Knoxville, TN, Nov. 16-18, 2010. Invited paper presented at the SAEA mtgs., Corpus Christi, TX, Feb. 8, 2011. Producing Cellulosic Biorefinery Feedstock: Forage Sorghum versus Switchgrass. Sel. Paper presented at the 2011 Canadian Ag. Econ Soc./WAEA Mtgs., Banff, Alberta, CA. PARTICIPANTS: No Changes. TARGET AUDIENCES: No Changes PROJECT MODIFICATIONS: No Changes

Impacts
For many years the vast majority of Oklahoma cropland acres have been seeded to continuous winter wheat. For years, crop rotations have been recommended to mitigate weed, pest, and disease problems. Crop rotations are not common in Oklahoma. Alternative winter small grain crops are not economically competitive. Attempts to include summer crops such as corn, soybeans, and grain sorghum have not been successful because they do not fit well in a rotation with winter wheat and do not consistently perform well in dryland conditions in western OK. On average, 16 percent of planted soybean acres and 17 percent of corn acres planted for grain in the state are not harvested. Some years corn is plagued with mycotoxins. Before 2004, winter canola was not produced in the state, there was no local market for canola, and OK producers did not have an economically viable alternative winter crop to rotate with wheat. A multidisciplinary team initiated a comprehensive research program. The team working with a number of private companies and state and federal agencies, identified varieties and initiated variety trials; developed suggested mgmt. practices including seeding rates, fertilizer recommendations, weed, disease, and insect mgmt.; and herbicide, insecticide, and fungicide alternatives; and harvest, storage, and marketing strategies. Initial economic analysis included the preparation of enterprise budgets that included detailed estimates of expected returns, expected production costs, and breakeven yields and prices. Expected net returns were compared with alternatives including grain-only and dual-purpose wheat. The information was assembled and disseminated via outlets including annual winter canola field days, the Great Plains Canola Production Handbook, and Extension publications. Our research has determined that a three year crop rotation that includes canola followed by two years of dual-purpose wheat has a high probability of generating greater net returns than continuous dual-purpose wheat and continuous grain-only wheat. After 6 years of work: *A rotation that includes winter canola is an economically viable alternative. *Wheat producers have an effective alternative for managing weeds and diseases. *An OK cooperative is offering "act of God" contracts for canola. *Two additional buyers became active in 2010. *Canola is processed in the state. *Private companies are investing in variety development. *Local companies are selling seed and other inputs. *In 2009, for the first time, the Oklahoma Agricultural Statistics Service reported canola planted and harvested acres. *Based on the OASS estimates,42,000 acres of canola were planted in the fall of 2008 and 37,000 acres (88%) were harvested in 2009. By contrast only 61% of the fall 2008 planted wheat acres were harvested for grain in 2009. *60,000 acres were planted to canola in the fall of 2009 and 56,000 acres (93%) were harvested. Only 74% of the wheat planted in the fall of 2009 was harvested for grain. *By 2009, harvested acres of canola in OK exceeded harvested acres of a number of important crops including barley, corn for silage, oats, peanuts, and sorghum for silage.

Publications

  • Epplin, Francis M. and Mohua Haque. 2011. Policies to facilitate conversion of millions of acres to the production of biofuel feedstock. Journal of Agricultural and Applied Economics 43:385-398.
  • Aravindhakshan, Sijesh C., Francis M. Epplin, and Charles M. Taliaferro. 2011. Switchgrass, bermudagrass, flaccidgrass, and lovegrass biomass yield response to nitrogen for single and double harvest. Biomass and Bioenergy 35:308-319.
  • Varner, Brandon T., Francis M. Epplin and Gary L. Strickland. 2011. Economics of no-till versus tilled dryland cotton, grain sorghum, and wheat. Agronomy Journal 103:1329-1338.
  • Duke, Jason C., Francis M. Epplin, Jeffrey D. Vitale, and Derrell S. Peel. 2011. Forage plus grain wheat versus grain-only wheat. Journal of the American Society of Farm Managers and Rural Appraisers 74:33-42.
  • Griffith, Andrew P., Francis M. Epplin, Samuel D. Fuhlendorf, and Robert Gillen. 2011. Switchgrass monocultures versus diverse mixtures of grasses and forbs to produce biomass feedstock. Journal of Agricultural and Applied Economics 42(2011):473.
  • Griffith, Andrew P., Francis M. Epplin, Samuel D. Fuhlendorf, and Robert Gillen. 2011. A comparison of perennial polycultures and monocultures for producing biomass for biorefinery feedstock. Agronomy Journal 103:617-627.
  • Haque, M. 2010. Switchgrass biomass to ethanol production economics: Field to fuel approach. Oklahoma State University Department of Agricultural Economics, Ph.D. Dissertation.
  • Varner, Brandon T., Francis M. Epplin, and Gary L.Strickland. 2011. Cotton, wheat, and grain sorghum economics in the Southern Plains by tillage system. Journal of Agricultural and Applied Economics 42(2011):473.
  • DeVuyst, Eric A., Francis M. Epplin, Karen W. Taylor, Gerald W. Horn, and Jeffrey T. Edwards. The Effect of Grazing Past First Hollow Stem On Wheat and Stocker Profits. Oklahoma Cooperative Extension Fact Sheet AGEC- 265. February 2011. http://pods.dasnr.okstate.edu/docushare /dsweb/ Get/Document-7497/AGEC-265web.pdf
  • DeVuyst, Eric A., Francis Epplin, Andrew Griffith, and Tom Peeper. Economics of a Canola-Wheat-Wheat Rotation Relative to Continuous Wheat. Extension paper distributed at the Oklahoma Winter Canola Field Tours in 15 Counties. April 11, 12, 13, and 14, 2011.


Progress 10/01/09 to 09/30/10

Outputs
OUTPUTS: A study was conducted to determine the most efficient species, level of N, and harvest frequency from among four perennial grass species ('midland 99' bermudagrass, 'carostan' flaccidgrass, 'SL 93-3' (a selection from 'Alamo') switchgrass, and weeping lovegrass. Another study was conducted to determine the most economical species, harvest frequency, and carbon tax required for either of the two candidate feedstocks (switchgrass and miscanthus) to be an economically viable alternative for cofiring with coal for electricity generation. Another study was conducted to determine the optimal grazing termination date for beef steers grazing dual-purpose winter wheat and to determine the value of knowledge of the date of first hollow stem information. Research results were presented (title, location, date): Optimal Switchgrass Harvest Strategies Accounting for Yield and Nitrogen Requirement Differences by Month of Harvest. Southern Agricultural Economics Association meetings, Orlando, Florida, February 6-9, 2010. Use of a Producer Survey to Reconcile Differences in Experiment Station Yield Estimates. Southern Agricultural Economics Association meetings, Orlando, Florida, February 6-9, 2010. Switchgrass to Ethanol: A Field to Fuel Approach. Agricultural and Applied Economics Association Meetings, Denver, Colorado, July 25-27, 2010. Extending the Duration of Switchgrass to Minimize Delivered Cost in Oklahoma. Agricultural and Applied Economics Association Meetings, Denver, Colorado, July 25-27, 2010. PARTICIPANTS: Faculty in the Agricultural Economics, Plant and Soil Science and Biosystems and Agricultural Engineering Departments and graduate students in the Department of Agricultural Economics. TARGET AUDIENCES: No changes PROJECT MODIFICATIONS: No changes

Impacts
Switchgrass produced more biomass than the other three species (bermudagrass, lovegrass, and flaccidgrass). For the yields obtained and the prices used in the budgets, biomass produced from the most cost efficient bermudagrass, lovegrass, and flaccidgrass systems would be from 20% to 26% more costly than biomass produced from the most cost efficient switchgrass system. Biomass yield to nitrogen fertilizer response functions were estimated for switchgrass. For most biomass price (e.g. from $40 to $70 per Mg) and nitrogen price (e.g. $0.44 to $1.54 per kg) combinations, the optimal strategy is to establish switchgrass, and in post-establishment years, to fertilize with 65 kg nitrogen per hectare (58 pounds per acre) per year, and to harvest once per year after senescence. For the location and the environmental conditions that prevailed during the experiment, switchgrass with one harvest per year produced greater yields at a lower cost than miscanthus. In the absence of government intervention such as requiring biomass use or instituting a carbon tax, biomass is not an economically competitive feedstock for electricity generation in the region studied. Dual-purpose winter wheat (fall-winter forage plus grain) production is an important economic enterprise in the southern Great Plains. Most dual-purpose wheat acres are stocked with steers with a placement weight of 450 to 600 pounds. Grazing termination to enable grain production is a critical decision. Results indicate that for most price situations grazing should be terminated at or before the wheat plant growth stage of first hollow stem. Marginal wheat returns from extending grazing beyond the first hollow stem stage were negative. The value of first hollow stem information ranges from $1.50 to $10 per acre.

Publications

  • Haque, M., F.M. Epplin, and C.M. Taliaferro. 2009. Nitrogen and harvest frequency effect on yield and cost for four perennial grasses. Agronomy Journal 101:1463-1469.
  • Taylor, Karen W., Francis M. Epplin, B. Wade Brorsen, Brian G. Fieser, and Gerald W. Horn. 2010. Optimal grazing termination date for dual-purpose winter wheat production. Journal of Agricultural and Applied Economics. 42-1:87-103.
  • Aravindhakshan, S.C., F.M. Epplin, and C.M. Taliaferro. 2010. Economics of switchgrass and miscanthus relative to coal as feedstock for generating electricity. Biomass and Bioenergy 34:1375-1383.
  • DeVuyst, Eric A., Francis Epplin, Derrell Peel, Gerald Horn, and David Lalman. 2010. Wheat stocker decision tools. Journal of Extension 48:3TOT8.
  • Aravindhakshan, S.C. 2010. Essays: Biofuel feedstock production economics and identifying jumps and systematic risk in futures. Oklahoma State University Department of Agricultural Economics, Ph.D. Dissertation.
  • Haque, Mohua, and Francis M. Epplin. 2010. Optimal switchgrass harvest strategies accounting for yield and nitrogen requirement differences by month of harvest. Journal of Agricultural and Applied Economics 42-3:590.
  • Duke, Jason C., and Francis M. Epplin. 2010. Use of a producer survey to reconcile differences in experiment station yield estimates. Journal of Agricultural and Applied Economics 42-3:595.
  • DeVuyst, Eric A., Francis Epplin, Thomas F. Peeper, and Mark C. Boyles. 2009. Oklahoma Canola Systems vs. Continuous Wheat Budget Comparison. Oklahoma Cooperative Extension Fact Sheet AGEC-257. July 2009. http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document -6339/AGEC-257pod.pdf
  • DeVuyst, Eric A., Francis Epplin, Derrell Peel, Karen Taylor, Gerald Horn, Dave Lalman. 2009. Oklahoma Wheat Stocker Spreadsheet Decision Aid. Oklahoma Cooperative Extension Fact Sheet AGEC-258. August 2009. http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-6449/AGEC- 258web.pdf
  • DeVuyst, Eric A., Francis Epplin, Derrell Peel, Karen Taylor, Gerald Horn, and David Lalman. 2009. Oklahoma Wheat Stocker Purchase Planner. Oklahoma Cooperative Extension Fact Sheet AGEC-259. September 2009. http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-6494/AGEC- 259web.pdf
  • Wright, Sarah, Jeff Edwards, Chad Godsey, Jeff Vitale, Francis Epplin, Randy Taylor. 2010. Conservation Tillage in Oklahoma: Perceptions and Demographics of Producers. Oklahoma Cooperative Extension Report E-1019.


Progress 10/01/08 to 09/30/09

Outputs
OUTPUTS: Research results were presented (title, location, date): Canola-Wheat Rotation versus Continuous Wheat for the Southern Plains. Southern Agricultural Economics Association meetings, Atlanta, Georgia, January 31-February 3, 2009. Conventional Tillage versus No-till: Characteristics of Producers and Farms. Southern Agricultural Economics Association meetings, Atlanta, Georgia, January 31-February 3, 2009. Could the South and Southwest Play in a Cellulosic Ethanol Game Southern Agricultural Economics Association meetings, Atlanta, Georgia, January 31-February 3, 2009. Alternative Energy and Agriculture: Perspectives on Cellulosic Feedstock and Cellulosic Biorefineries. Southern Association of Agricultural Scientists meetings, Atlanta, Georgia, January 31-February 3, 2009. Biofuels in Perspective: Opportunities for Research Funding. Department of Agricultural Economics. Stillwater. February 13, 2009. Alternative Energy and Agriculture: Perspectives on Ethanol Production. Oklahoma State University Department of Animal Science. February 18, 2009. Reconciling Reported Grain Yield Differences Between Dual-purpose And Grain-only Wheat. Southwestern Wheat Research and Education Consortium Meeting. Amarillo, Texas, March 24-25, 2009. USA Biofuels in Perspective (Economics). Invited seminar presented to group from Turkmenistan and the Tulsa Global Alliance. April 28, 2009. USA Biofuels in Perspective (Economics). Invited seminar presented to group from Latin America: Energy Security For The Future: Clean Energy And Alternative Fuels A Regional Project For South America. June 17, 2009. Biomass: Producer Choices, Production Costs and Potential. The Role of Extension in Energy. The Role of Extension in Energy conference , sponsored by the Farm Foundation, and the USDA's Office of Energy Policy and New Uses. Little Rock, Arkansas, June 30-July 1, 2009. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Conventional tillage (CT) continues to be used on the vast majority of land seeded to monoculture winter wheat (Triticum aestivum L.) in the Southern Plains of the United States. In the region, wheat can be grown for either grain-only, forage-only, or for both fall-winter forage + grain (dual-purpose). Astudy was conducted to determine the net returns of five alternative wheat production systems, for both CT and no-till (NT). The five production systems included one for forage-only, two for dual-purpose (fall-winter grazing + grain) with different planting dates, one grain-only, and one forage-only double cropped with foxtail millet [Setaria italica (L.) Beauv.]. The field research was conducted on three farm fields for 3 yr. Average wheat grain yields were greater with CT, whereas average fall wheat forage yields were significantly greater on the NT plots. Wheat hay and millet hay yields were not significantly different across tillage systems. Economic analysis was conducted for both a machinery complement sized for a 260-ha farm and a machinery complement sized for a 1036-ha farm. For both farm sizes and both tillage systems, the early-September-planted dual-purpose system produced the greatest net returns. For the 260-ha farm, CT produced greater net returns than NT for each of the five production systems. Conventional tillage also produced greater economic returns for the three systems that included grain harvest for the 1036-ha farm. However, for the larger farm size, NT generated greater net returns for both total forage systems. Determining the time available for required harvest operations is an essential prerequisite to optimizing lignocellulosic biomass (LCB) harvest costs. Estimating the number of days expected to be available for mowing and baling is difficult because agricultural field work is heavily weather dependent. Harvest costs are expected to constitute a large component of the cost to deliver LCB to a biorefinery. Harvest costs depend in part on the investment required in harvest machines, and this investment depends on the number of field workdays during the harvest window. Therefore, a reasonably precise estimate of the number of harvest days is necessary to determine the investment in harvest machines required to support a LCB biorefinery. A study was conducted to determine the number of suitable field workdays in which switchgrass (Panicum virgatum L.) can be mowed and the number of days that mowed material can be baled. Empirical distributions of the days available for mowing and for baling switchgrass were determined for nine counties in the USA state of Oklahoma. Distributions were determined for each month and for two potential harvest seasons (short, October-December and extended, July-February). Beginning harvest in July and extending harvest through February would require only 37% as many baling machines as would be required for a short (October-December) harvest season. This potential reduction in harvest machine investment is consistent across location. An extended harvest season could reduce the investment required in harvest machines and the costs to deliver feedstock.

Publications

  • Biermacher, Jon, Francis M. Epplin, B. Wade Brorsen, John B. Solie, William R. Raun, and Marvin L. Stone. 2009. Economic feasibility of site-specific optical sensing for managing nitrogen fertilizer for growing wheat. Precision Agriculture 10:213-230.
  • Decker, JonAnn E., Francis M. Epplin, Deena L. Morley, and Thomas F. Peeper. 2009. Economics of five wheat production systems with no-till and conventional tillage. Agronomy Journal 101-2:364-372.
  • Biermacher, Jon T., B. Wade Brorsen, Francis M. Epplin, John B. Solie, and William R. Raun. 2009. The economic potential of precision nitrogen application with wheat based on plant sensing. Agricultural Economics 40:397-407.
  • Hwang, Seonghuyk, Francis M. Epplin, Byoung-hoon Lee, and Raymond L. Huhnke. 2009. A probabilistic estimate of the frequency of mowing and baling days available in Oklahoma USA for the harvest of switchgrass for use in biorefineries. Biomass and Bioenergy 33-8:1037-1045. Duke, Jason C., Francis M. Epplin, Jeffrey D. Vitale, and Thomas F. Peeper. 2009. Canola-Wheat Rotation versus Continuous Wheat for the Southern Plains. Journal of Agricultural and Applied Economics 41-2:542.
  • Djido, Abdoulaye Ibrahim, Jeffrey D. Vitale, and Francis M. Epplin. Conventional Tillage versus No-till: Characteristics of Producers and Farms. 2009. Journal of Agricultural and Applied Economics 41-2:542.
  • Boyles, M. C., T. F. Peeper, and M. J. Stamm editors. M. Boyles, J. Criswell, F. Epplin, K. Giles, C. Godsey, W. Heer, G. Hergert, J. Holman, D. Jardine, C. Jones, V. Martin, D. Mengel, T. Peeper, D. Peterson, K. Roozeboom, T. Royer, H. Sanders, P. Sloderbeck, M. Stamm, and C. Thompson. 2009. Great Plains Canola Production Handbook. Oklahoma State University, Kansas State University, University of Nebraska Report MF-2734 (Revised).
  • Epplin, Francis M. 2009. Biomass: Producer Choices, Production Costs and Potential. The Role of Extension in Energy. ed. Burton C. English, R. Jamey Menard and Kim Jensen. Chapter 1. pp. 1-12. Oak Brook, IL: Farm Foundation, 2009.


Progress 10/01/07 to 09/30/08

Outputs
OUTPUTS: Infrastructure for production, harvest, storage, and transportation of lignocellulosic biomass (LCB) is not developed. While some farmers have forage harvest machines and equipment that might be used to harvest LCB, it is unlikely that most regions would have machine harvest capacity necessary to provide massive quantities of LCB in a consistent package and to provide an orderly flow of LCB to a biorefinery throughout the year. Conventional models assume a fixed harvest charge per unit of LCB and do not recognize that harvest machines may not be readily available and that harvest days are limited by weather. The objective of this research was to determine how the method of modeling harvest cost changes the estimate of the number of LCB harvest machines necessary to support a biorefinery, and the estimated cost to deliver LCB. A mathematical programming model was developed that includes integer decision variables enabling investment in harvest machines that provide monthly harvest capacity based on expected harvest days per month. Results from a conventional model are compared to those of the alternative model that endogenously determines the number of harvest machines. To provide 3.628 dry kt daily to a biorefinery the endogenous harvest cost model selected 26 harvest units. Alternatively, the solution provided by the conventional model that assumes a fixed cost per unit harvested and that ignores weather constraints and machine investment, provides a solution that in some months would require 55 harvest units and costs substantially more than the exogenously assumed fixed cost per unit. Another study was conducted to determine the cost to produce switchgrass for both a land-lease alternative and a farmer-contract alternative, to determine if the National Renewable Energy Laboratory's estimated delivery cost of $35 per dry ton is realistic, and to identify likely challenges to the development of switchgrass as a dedicated energy crop. When the $12 to $12.54 per ton transportation costs are included, the estimated cost to deliver feedstock ranges from $48 to $67 per dry ton; substantially more than the NREL goal of $35. At 90 gallons per ton, the feedstock component estimated cost is $0.53 to $0.74 per gallon of ethanol, as opposed to NREL's goal of $0.39. It is unlikely that land costs, storage costs, and harvest cost (with existing harvest technology) could be much less than those estimated. Reductions in cost necessary to achieve the $35 goal would most likely require increases in switchgrass yields per acre. Agronomic research on crop response to nitrogen fertilizer suggests that a plateau function may be appropriate, but the plateau varies across fields and years. Available models that treat the plateau as a stochastic variable are not readily extendable to handle field or year random effects as seems to be appropriate based on the agronomic data. A project was initiated and conducted to develop a method of estimating a response function with a stochastic plateau that can capture random effects. The method was then used to determine economically optimal levels of nitrogen fertilizer for wheat. PARTICIPANTS: Individuals: Drs. M. Taylor, D. Doye, S. Henneberry, RJ Schatzer and Wade Brorsen (OSU, Ag. Economics); Drs. Thomas Peeper and Charles Taliaferro (OSU Plant and Soil Science); Dr. Raymond Huhnke (OSU Biosystems and Agricultural Engineering); Graduate Students (OSU Ag. Economics);J. Decker, J. Duke, JK. Kalpana, M. Haque, S. Aravindhakshan -former graduate students - G. Tembo, E. Tostao and L. Mapemba. Faculty from Wes Watkins Agriculture Research and Extension Center. TARGET AUDIENCES: Agricultural producers, farmers and ranchers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
This research addresses issues related to the most economical use for Oklahoma's agricultural and rural resources. The purpose is to determine the expected economic consequences of alternative production systems for existing (e.g. wheat, beef cattle) and potential (e.g. biorefinery feedstock, canola) enterprises.

Publications

  • Tembo, Gelson, B. Wade Brorsen, Francis M. Epplin, and Emilio Tostao. 2008. Crop input response functions with stochastic plateaus. American Journal of Agricultural Economics 90-2:424-434.
  • Mapemba, Lawrence D., Francis M. Epplin, Raymond L. Huhnke, and Charles M. Taliaferro. 2008. Herbaceous plant biomass harvest and delivery cost with harvest segmented by month and number of harvest machines endogenously determined. Biomass and Bioenergy 32:1016-1027.
  • Yoder, Jonathan, Ishrat Hossain, Francis Epplin, and Damona Doye. 2008. Contract duration and the division of labor in agricultural land leases. Journal of Economic Behavior and Organization 65:714-733.
  • Epplin, Francis M. 2008. Millions of Acres for Dedicated Energy Crops: Farms, Ranches, or Plantations Chapter 12. pp. 109-116 in Transition to a Bioeconomy: Integration of Agricultural and Energy Systems. ed. Burton C. English, R. Jamey Menard and Kim Jensen. Oak Brook, IL: Farm Foundation.
  • Decker, JonAnn Elizabeth . 2008. Alternative production systems for traditional monoculture wheat acres in the southern plains for two farm sizes. Oklahoma State University M.S. Thesis.
  • Duke, Jason Chance. 2008. Comparison of production systems involving grain-only wheat, dual-purpose wheat, and canola. Oklahoma State University M.S. Thesis.
  • Khanal, Kalpana., Shida Henneberry, Merritt Taylor, R. Joe Schatzer, Francis M. Epplin, B. Warren Roberts, Jonathan Edelson, and Jim Shrefler. 2008. Organic and conventional vegetable production in Oklahoma. Journal of Agricultural and Applied Economics 40-2:733.
  • Haque, Mohua, Francis M. Epplin, Sijesh Aravindhakshan, and Charles Taliaferro. Cost to produce cellulosic biomass feedstock: Four perennial grass species compared. Journal of Agricultural and Applied Economics 40-2(2008):725.
  • Decker, JonAnn E., Francis M. Epplin, Deena L. Morley, and Thomas F. Peeper. Alternative cropping systems for traditional monoculture wheat acres in the Southern Plains for two farm sizes. Journal of Agricultural and Applied Economics 40-2(2008):725.


Progress 10/01/06 to 09/30/07

Outputs
The Farm Security and Rural Investment Act of 2002 enabled managed harvest of Conservation Reserve Program (CRP) grassland acres for biorefinery feedstock use. A study was conducted to determine the cost to procure, harvest, store, and transport a flow of lignocellulosic biomass feedstock produced on CRP grasslands to an optimally located biorefinery and to determine how policies that restrict harvest frequency and harvest days influence cost. Three biorefinery sizes (1,000, 2,000 or 4,000 tons of biomass per day) were considered for three different policy scenarios. Base-25 scenario restricted harvest days and the harvest frequency to approximate the policy restrictions as implemented under the 2002 Farm Bill. Flex-25 scenario relaxed the harvest day restriction and Flex-50 scenario relaxed both the harvest day and harvest frequency restrictions. It was determined the estimated cost to deliver a flow of feedstock to a biorefinery ranged from $26 to $58 per ton depending upon the size of the biorefinery, number of harvest days and harvest frequency. Increasing biorefinery feedstock requirements from 1,000 to 4,000 tons per day increases required transportation distances and increases the expected delivery cost by $14 per ton for the Base-25 model, by $9 per ton for the Flex-25 model and by $5 per ton for the Flex-50 scenario. Given the underlying assumptions of the model, for the case study region, restricting the harvest days and harvest frequency would impose a rather substantial cost. The harvest day restriction (Base-25 versus Flex-25) more than doubles the expected harvest cost and expected field storage costs and increases the cost to deliver a ton of biomass by $17 to $21 per ton. The harvest frequency restriction is less costly. Estimated cost reductions achieved by doubling the frequency of harvest (Flex-50 versus Flex-25) are $2 to $5 per ton. For the biomass biorefinery industry to develop and be economically feasible, it would be prudent for policy makers to enable an expanded harvest period for biomass for biorefinery processing. The logical harvest season for native grasses for biorefinery use is outside the nesting and brood season for grassland birds. A managed harvesting season could be designed to be in accordance with a well stipulated conservation plan and in line with long-term protection of existing grasslands. Such a policy would not only benefit the environment and natural habitat for wildlife but would also be in the interest of the biorefinery industry for sustainable and continuous flow of biomass feedstock to the biorefinery. A study was conducted to determine the value of two monensin supplementation strategies for steers and heifers pastured on fall-winter wheat relative to the value of a free-choice mineral supplement containing no monensin. Expected return from feeding a free-choice commercial supplement containing monensin above the expected return from feeding a free-choice high-calcium mineral supplement, ranged from $11.23 per head ($8.20 per acre) for steers with a beginning weight of 375 pounds to $19.40 per head ($10.09 per acre) for heifers with a beginning weight of 525 pounds for a March 11 sale date.

Impacts
This research addresses issues related to the most economical use for Oklahoma's agricultural and rural resources. The purpose is to determine the expected economic consequences of alternative production systems for existing (e.g. wheat, beef cattle) and potential (e.g. biorefinery feedstock, canola) enterprises.

Publications

  • Epplin, Francis M., Christopher D. Clark, Roland K. Roberts, and Seonghuyk Hwang. Challenges to the development of a dedicated energy crop. American Journal of Agricultural Economics 89(2007):1296-1302.
  • Mapemba, Lawrence D., Francis M. Epplin, Charles M. Taliaferro, and Raymond L. Huhnke. Biorefinery feedstock production on Conservation Reserve Program land. 2007. Review of Agricultural Economics 29-2:227-246. Taylor, Karen W., Francis M. Epplin, Derrell S. Peel, and Gerald W. Horn. 2007. Value of an extended grazing season and value of monensin supplements for stocker cattle grazing winter wheat pasture. Journal of the American Society of Farm Managers and Rural Appraisers. 70:59-71.
  • Carreira, R. I., A. L.Stoecker, F. M. Epplin, J. A. Hattey, and M. A. Kizer. Subsurface drip irrigation versus center-pivot sprinkler for applying swine effluent to corn. 2006. Journal of Agricultural and Applied Economics 38-3:645-658.
  • Biermacher, Jon, Francis M. Epplin, B. Wade Brorsen, John B. Solie, and William R. Raun. Maximum value of a precise nitrogen application system for wheat. 2006. Precision Agriculture 7-3:193-204.
  • Kaitibie, Simeon, William E. Nganje, B.Wade Brorsen, and Francis M. Epplin. 2007. A Cox parametric bootstrap test of the von Liebig hypotheses. Canadian Journal of Agricultural Economics 55:15-25.
  • Epplin, Francis M. 2007. Economics: No-till versus Conventional Tillage. Chapter 6 in No-Till Cropping Systems in Oklahoma. Oklahoma Cooperative Extension Report E-996. Hwang, Seonghuyk. 2007. Days available for harvesting switchgrass and the cost to deliver switchgrass to a biorefinery. Oklahoma State University Ph.D. Dissertation. Taylor, Karen Wiebke. 2007. Dual-purpose winter wheat and stocker production. Oklahoma State University Ph.D. Dissertation.
  • Biermacher, Jon T. 2006. Economic feasibility of site-specific optical reflectance technology as an alternative strategy for managing nitrogen applications to winter wheat. Oklahoma State University Ph.D. Dissertation.
  • Taylor, Karen W. and Francis M. Epplin. 2007. Optimizing dual interdependent products from a single crop. Journal of Agricultural and Applied Economics 39-2:420.
  • Hwang, Seonghuyk and Francis M. Epplin. 2007. Days available for harvesting lignocellulosic biomass. Journal of Agricultural and Applied Economics 39-2:421.
  • Busby, David, Randall D. Little, Saleem Shaik, Angelina Martins, Francis M. Epplin, Seonghuyk Hwang, Brian S. Baldwin, and Charles M. Taliaferro. 2007. Yield and production costs for three potential dedicated energy crops in Mississippi and Oklahoma environments. Journal of Agricultural and Applied Economics 39-2:421.


Progress 10/01/05 to 09/30/06

Outputs
Research is ongoing to develop sensor-based systems to determine crop nitrogen needs. To be economic and to achieve wide adoption, a sensor-based site-specific application system must be sufficiently efficient to overcome both the cost disadvantage of dry and liquid sources of nitrogen relative to applications before planting of anhydrous ammonia and possible losses if weather prevents applications during the growing season. The objective of this study was to determine the expected maximum benefit of a precision nitrogen application system for winter wheat (Triticum aestivum) that senses and applies nitrogen to the growing crop in the spring relative to a uniform system that applies nitrogen before planting. An estimate of the maximum benefit would be useful to provide researchers with an upper bound on the cost of delivering an economically viable precision technology. Sixty five site-years of data from two dryland winter wheat nitrogen fertility experiments at experiment stations in Oklahoma were used to estimate the expected returns from both a conventional uniform rate anhydrous ammonia application system before planting and a precise topdressing system to determine the value of the latter. For prices of $0.55 and $0.33 per kg nitrogen for urea-ammonium nitrate and anhydrous ammonia, respectively, the maximum net value of a system of precise sensor-based nitrogen application for winter wheat was about $22-$31 per ha depending upon location and assumptions regarding the existence of a plateau. However, for prices of $1.10 and $0.66 per kg nitrogen for urea-ammonium nitrate and anhydrous ammonia, respectively, the value was approximately $33 per ha. The benefit of precise nitrogen application is sensitive to both the absolute and relative prices of urea-ammonium nitrate and anhydrous ammonia. The majority of cropland in the rain fed region of the NC District of Oklahoma is seeded to winter wheat. Many years prior to 1996, federal policy provided incentives for District producers to grow wheat and disincentives to diversify. In 1996, the Federal Agriculture Improvement and Reform Act (FAIR) (Freedom to Farm Act) was instituted, followed by the Farm Security and Rural Investment Act (FSRIA) in 2002. The objective of this study was to determine the impact of FAIR and FSRIA programs on crop diversity in the North Central District of Oklahoma. The economics of three systems, monoculture continuous winter wheat, continuous soybeans (Glycine max), and a soybeans-winter wheat/soybeans rotation, were compared using cash market prices (CASH), CASH plus the effective loan deficiency payments (a yield dependent subsidy) of the FAIR Act of 1996, and CASH plus the effective loan deficiency payments of the FSRIA of 2002. We found that the loan deficiency payment structure associated with FAIR provided a nonmarket incentive that favored soybeans. However, under provisions of the 2002 FSRIA, the incentive for soybeans was adjusted, resulting in greater expected returns for continuous wheat. Due to erratic weather, soybeans may not be a good alternative for the region. Research is needed to identify crops that will fit in a rotation with wheat.

Impacts
This research addresses issues related to the most economical use for Oklahoma's agricultural and rural resources. The purpose is to determine the expected economic consequences of alternative production systems for existing and potential enterprises.

Publications

  • Epplin, Francis M., Curtis J. Stock, Darrel D. Kletke, and Thomas F. Peeper. Cost of conventional tillage and no-till continuous wheat production for four farm sizes. Journal of the American Society of Farm Managers and Rural Appraisers 69(2005):69-76.
  • Biermacher, Jon, Francis M. Epplin, and Kent R. Keim. Wheat and soybean cropping systems for the Southern Great Plains of the United States as influenced by federal policy. Renewable Agriculture and Food Systems 21-2(2006):77-83.
  • Biermacher, Jon, Francis M. Epplin, B. Wade Brorsen, John B. Solie, and William R. Raun. Maximum value of a precise nitrogen application system for wheat. Precision Agriculture 7-3(2006):193-204. Epplin, Francis M., Curtis J. Stock, Darrel D. Kletke, and Thomas F. Peeper. Economies of size for conventional tillage and no-till wheat production. Journal of Agricultural and Applied Economics 37-2(2005):506.
  • Biermacher, Jon, Francis M. Epplin, B. Wade Brorsen, John B. Solie, William R. Raun, and Marvin Stone. Nitrogen fertilization of growing wheat based upon site-specific optical sensing. Journal of Agricultural and Applied Economics 37-2(2005):506.
  • Edwards, Jeff, Francis Epplin, Bob Hunger, Case Medlin, Tom Royer, Randy Taylor, and Hailin Zhang. No-till wheat production in Oklahoma. Oklahoma State University Cooperative Extension Service. Extension Facts F-2132, May 2006.
  • Boyles, M. C., T. F. Peeper, and M. J. Stamm editors. D. Baltensperger, J. Criswell, F. Epplin, K. Giles, W. Heer, G. Hergert, D. Jardine, V. Martin, D. Mengel, D. Peterson, C. Rife, T. Royer, H. Sanders, P. Sloderbeck, and C. Thompsom. Great Plains Canola Production Handbook. Kansas State University Report MF-2734. July 2006.