Economic Issues Regarding The Implementation Of
Autonomous Machinery In U.S. Agriculture
How much will they cost?
What are the benefits?
Are they more profitable than conventional machines?
How many machines will I need?
More questions than answers!!!
OBJECTIVE: Purchase the machine that will complete
the required task within the time available for the
lowest possible cost.
Field Capacity (FC): Acres per hour
FC = Speed(mph)*Width(ft.)*Efficiency(%)
Minimum Field Capacity (MFC) –Acres per hour
MFC = Acres to Cover
Hours per day * Days Available
Field Days Needed (FDN) = Acres to Cover
Hours per day * FC
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
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
FC= 6*20*.70 = 10.18 acres per hour
500 Acres, 13 hours per day and 4 suitable field days
MFC= 500 = 9.62 acres per hour
This planter CAN plant all 500 acres.
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
Fuel Consumption: 8.75
R&M: 15% R&M: 45%
Annual Use: 600 hours
Annual Use: 150 hours
($91323-$36529)/8 = $6849 ($34702-$15616)/8 = $2386
($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
$12*(1/10.18) = $1.18 per acre
Fuel & Lube
$3*1.15*8.75*(1/10.18) = $2.97 per acre
.15*$91323*(1/10.18)/600 = $2.24 per acre
.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