FACTORS IN MACHINERY SELECTION

Report
Economic Issues Regarding The Implementation Of
Autonomous Machinery In U.S. Agriculture
Jordan Shockley
Agricultural Economics
 How much will they cost?
 What are the benefits?
 Are they more profitable than conventional machines?
 How many machines will I need?
 Insurance?
 Labor impacts?
 Risk?
 Environmental impacts?
 Energy consumption?
 More questions than answers!!!
OBJECTIVE: Purchase the machine that will complete
the required task within the time available for the
lowest possible cost.
 Machinery Size
 Timeliness
 Costs
 Field Capacity (FC): Acres per hour
FC = Speed(mph)*Width(ft.)*Efficiency(%)
8.25
 Minimum Field Capacity (MFC) –Acres per hour
MFC =
Acres to Cover
Hours per day * Days Available
 Climate
 Machinery Operations
 Soil Moisture
 COMPACTION!
 Solutions????
Field Days Needed (FDN) =
Acres to Cover
Hours per day * FC
http://www.nass.usda.gov/Statistics_by_State/Kentucky
/Publications/Crop_Progress_&_Condition/index.asp
 Timeliness Cost
 Ownership Cost
 Operating Cost
 Timeliness costs arise due to the inability to complete
a field operation in a relatively short period of time.
 How much time? Difficult to estimate!
 Varies year to year based on weather and crop prices.
 Depreciation = (Cost - Salvage Value)/Useful Life
 Interest= Avg Value of Investment * Interest Rate
 Avg Value = (Purchase Price + Salvage Value)/2
 Property Taxes = Purchase Price * Tax Rate
 Insurance = Purchase Price * Insurance Rate
 Labor = Wage * (1/Field Capacity)
 Fuel, oil, lube = Fuel Price*1.15*Fuel Consumption
Rate*(1/Field Capacity)
 Repairs and maintenance = R&M Factor*Purchase
Price*(1/Field Capacity)/Total Hours Used
 ALL COSTS ARE PER ACRE!!!
 Relevant machinery data can be found in ASABE
Standards form D497.5-Agricultural Machinery Data
8 Row No-Till Planter
Speed: 6 mph
Width: 20 feet
Efficiency: 70%
FC= 6*20*.70 = 10.18 acres per hour
8.25
500 Acres, 13 hours per day and 4 suitable field days
MFC= 500 = 9.62 acres per hour
13*4
This planter CAN plant all 500 acres.
Tractor
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
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130 hp Tractor
Purchase Price: $91,323
Salvage Value: 40%
Useful Life: 8 years
Interest Rate: 8%
 Fuel Consumption: 8.75
gal/hr
 R&M: 15%
 Annual Use: 600 hours
Planter
 8 Row No-Till Planter
 Purchase Price: $34,072
 Salvage Value: 45%
 Useful Life: 8
 Interest 8%:
 R&M: 45%
 Annual Use: 150 hours
Tractor
Planter
 Depreciation
 Depreciation
($91323-$36529)/8 = $6849
 Interest
($91323+$36529)*.08 = $10228
$10228/2 = $5114
($34702-$15616)/8 = $2386
 Interest
 Total Ownership Cost
 Total Ownership Cost
$6849+$5114 = $11963
$2386 + $2013 = $4399
(34702+$15616)*.08 = $4025
$4025/2 = $2013
Total Machinery Ownership Cost for Planting = $16,362 per year
 Labor
$12*(1/10.18) = $1.18 per acre
 Fuel & Lube
$3*1.15*8.75*(1/10.18) = $2.97 per acre
 R&M
 Tractor
.15*$91323*(1/10.18)/600 = $2.24 per acre
 Planter
.45*34027*(1/10.18)/150 = $10.03 per acre
Total Machinery Operating Cost for Planting = $16.42 per acre
 Ownership Costs = $16,362
 Operating Costs = $16.42*500 = $8,210
 Total Machinery Costs = $24,572
This planter and tractor can get planting done in a timely
manner and it will cost $24,572 per year.
 If the field capacity of the machine is less than the
minimal field capacity required you will need a larger
planter or you might go with 2 tractors and planters
 If you own more than one machine, ownership costs
must reflect multiple machines.
 If the machine is going over the field more than once,
that must be incorporated into the machinery
operating costs by multiplying the total cost per acre
by the number of trips across the field

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