Lab 10 Plan Your Farm Activity

Plan Your Farm

Name_______________________________ Course/Section _____________________

Date ________________________________ Professor/TA _______________________

In this activity, students work in small groups to identify the area in the United States where they want to purchase a 150-acre farm and decide what crops to plant. They will then calculate the yields and values of their crops, as well as their total income earned from their crops. Finally, the students will calculate their net income, after subtracting the cost of production of their crops.

Part One: Choose Your Farm

• Look at the Crops by Geographic Region, and choose a location for your 150-acre farm. (6 points)

State: __North Dakota__ Location (north, central, etc.):_southwestern________

Part Two: Plant Your Crops

Decide on the crops you will plant. Take into account the crops that can grow in the area and the expected production of each crop. (6 points)

• Select at least two crops you will plant. List the selected crops in the following table.
• Decide how many acres you will designate for each crop. In the following table, record your crop and the number of acres designated for each crop.
• Look up the Yield/Acre for each crop from your maps or Table 1, and record this information in the following table.
• Estimate the yield for each of your crops by multiplying the Number of Acres × Yield/Acre. For example: Barley in southern Montana: (150 acres planted) × (100 bu/acre) = 15,000 bu. Record your results in the Crop Yield column of the following table.

Part Three: Calculate Your Income

Calculate the income you will derive from each crop and enter the amounts into the table. (6 points)

• Use the information in Table 1 to determine the price for each of your crops. Record this information in the Price/Yield column in the table.
• Calculate your Crop Income for each crop. To find your Crop Income multiply Crop Yield by Price/Yield. For example: Barley: the yield was (15,000 bu) × $4.45/bu = $66,750. Record your results in the table.
• Add the income for all your crops to calculate your total income and enter your total income in the table.

Part Four: Factor Production Costs

It costs money to grow crops. As a rough estimate, the total costs for growing your crop range from about 47% to 56% of the total income, so you have to subtract these costs of production from your income.

We will estimate that 50% of your income will go to cover the costs of crop production. To calculate the cost of production, multiply your total income by 0.50. To determine your net income subtract your total income from the cost of production.

Calculate the cost of your crop production (6 points)

• Total Income: $ 66928
• Cost of production = (66928) × 50% = $ 33464
• Net Income = Total Income – Cost of Production = $ 33464

Questions:

• Why did you select the crops you did? (1 point)

I opted for corn and spring wheat for three reasons. First, they are suitable for the climate and soil type of Southwestern North Dakota. This can be seen from their yields. Second, the crops are relatively easy to manage since they do not need much maintenance. Finally, they are in demand, as evidenced by the price tags in Table 1.

• Were you surprised at the potential income you could get from farming? Is it what you expected? (1 point)

Yes. While I was impressed by the yield, especially for corn, the price was surprisingly low, hence low income.

• List some costs of production that are involved in growing crops (e.g., seeds, fertilizer, etc.). (1 point)

Seeds, Fertilizer, land lease or purchase, Pesticides and Herbicides, irrigation equipment including water pump and pipes, Tractor and other machinery, Transport, and labor costs.

• Predict what will happen to your income if there is a severe drought and you lose 75% of your production. Could you possibly lose your farm? (1 point)

As established, the income is only 50% of the total output since 50% covers the production costs. If 75% of the yield was lost due to drought, that means the output is 25% of what should have been. Subtracting the 50% for production cost (unaffected regardless of output), one has a deficit of about 25% of the expected yield. This could mean losing the farm.

• Predict what will happen to crop production and income if there are ideal growing conditions for a couple of years. What would you do with any extra money you earn? (1 point)

Ideal growing conditions would mean more yield per acre, and assuming the prices remain constant, the income would be greater. I would invest in a firm with tractors and greenhouses (for diversification of the portfolio). I would also invest in insurance coverage and more technology for greater yield.

• What other crops would you have liked to plant? Why select these crops? (1 point)

Barley and Oats. These plants are from similar families to the selected crops, which means that the soil and climate would have favored their production.

Use these maps to determine what crops can grow in a selected area and how much they yield.

Table 1: Yield and price for various crops

* For sorghum, you have to convert bu/acre to cwt/acre by dividing (bu/acre)/1.67, For example: 58 bu/acre = 34.8 cwt/ac (58/1.67 = 34.8).

** cwt = hundredweight = 100 pounds; 1 cwt = 1.67 bu

^aMaps: U.S. Department of Agriculture, National Agricultural Statistics Service, accessed 7/26/2018 https://www.nass.usda.gov/Charts_and_Maps/Crops_County/

^bFruit Yields: Noncitrus Fruits and Nuts, Final Estimates 2007–2012. U.S. Department of Agriculture, National Agricultural Statistics Service, Statistical Bulletin Number 1043, October 2014, accessed 7/26/2018 http://usda.mannlib.cornell.edu/usda/nass/SB985/sb1043.pdf

^c2018 prices: Agricultural Prices, National Agricultural Statistics Service (NASS), Agricultural Statistics Board, U.S. Department of Agriculture. USDA Agricultural prices; ISSN: 1937-4216, released 6/28/2018. Pp. 6, 23. http://usda.mannlib.cornell.edu/usda/current/AgriPric/AgriPric-06-28-2018.pdf