FACTORS IN MACHINERY SELECTION - BAE

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FACTORS IN MACHINERY SELECTION - BAE Powered By Docstoc
					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                     Planter
   130 hp Tractor             8 Row No-Till Planter
   Purchase Price: $91,323
                               Purchase Price: $34,072
   Salvage Value: 40%
   Useful Life: 8 years       Salvage Value: 45%
   Interest Rate: 8%          Useful Life: 8
                               Interest 8%:
 Fuel Consumption: 8.75
  gal/hr
 R&M: 15%                     R&M: 45%
 Annual Use: 600 hours
                               Annual Use: 150 hours
           Tractor                        Planter
  Depreciation                  Depreciation
 ($91323-$36529)/8 = $6849      ($34702-$15616)/8 = $2386
  Interest                      Interest
 ($91323+$36529)*.08 = $10228   (34702+$15616)*.08 = $4025
  $10228/2 = $5114               $4025/2 = $2013
  Total Ownership Cost          Total Ownership Cost
   $6849+$5114 = $11963          $2386 + $2013 = $4399

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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posted:3/22/2013
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