Economics of alfalfa rotations
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Economics of Alfalfa Rotations. Ken Barnett UW-Extension January 26, 2005. Alfalfa is a major profit center on most dairy farms. Annual yield has the largest impact on its profitability. As the stand ages, the yield declines due to environmental stresses, wheel traffic, and diseases.

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Economics of Alfalfa Rotations

Ken Barnett

UW-Extension

January 26, 2005


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The economic analysis required the creation tractors and implements. The costs calculated are: energy, labor, repairs, ownership interest cost, and a depreciation charge.

of seven enterprise budgets. They were:

  • an alfalfa establishment budget

  • an alfalfa hay budget for the first year

    following establishment

  • an alfalfa hay budget for the second

    year following establishment


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  • an alfalfa hay budget for the third year tractors and implements. The costs calculated are: energy, labor, repairs, ownership interest cost, and a depreciation charge.

    following establishment

  • an alfalfa hay budget for the fourth year

    following establishment

  • a corn silage budget for the year

    following the plowdown of the hay

  • a corn silage budget for the corn after

    corn year(s)


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The 6 rotations selected were: 210 acre constraint.

  • EAAAACCC (8-year)

  • EAAAACC (7-year)

  • EAAACC (6-year)

  • EAACC (5-year)

  • EAAC (4-year)

  • EAC (3-year)


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The base prices were -- 210 acre constraint.

  • oatlage - $71.50/ton of dry matter (tdm)

  • corn silage - $57.60/tdm

  • hay - $114.94/tdm

  • haylage - $114.94/tdm


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The base yields were -- 210 acre constraint.

  • establishment crop, 2.0 tdm oatlage

    and 1.0 tdm haylage

  • hay crop, 4.25 tdm (decreasing 0.5 tdm

    each year as the stand aged)

  • corn crop, 5.0 tdm (10 percent larger in

    the year following plowdown)


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Income, Costs, and Profit ($) per Acre for Selected Rotations

The 4-year rotation is the most profitable. The 3-year rotation is the least profitable.


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Tons of Dry Mater Production and Acres in each Crop per Year by Selected Rotations

From 825 tdm/A for EAAAACC to 903 tdm/A for EAACC produced per year.


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Rotation EAAC (the most profitable) by Selected Rotations

Percent Return on Assets by Alternative

Methods of Valuing Land and Equipment

The equipment complement selected had a new value of $689,234 with $456,458 cost basis value remaining.


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Rotation EAC (the least profitable) by Selected Rotations

Percent Return on Assets by Alternative

Methods of Valuing Land and Equipment


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Profit per Acre ($) for Selected Rotations for the most profitable rotation is over 38 percent higher that the return to assets in the least profitable rotation.

by Selected Starting Hay Yield and Rate of Yield Decline

The 4-year rotation is the most profitable. The 3- and 8-year rotations are the least profitable.


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Profit per Acre for Selected Rotations for the most profitable rotation is over 38 percent higher that the return to assets in the least profitable rotation.

by Selected Differences Between the

Base Corn Silage Price and Changing Hay Prices

The 4-year rotation is the most profitable. The 3- and 8-year rotations are the least profitable.


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Conclusions and Summary for the most profitable rotation is over 38 percent higher that the return to assets in the least profitable rotation.

  • The 4-year rotation (EAAC) was the most profitable at $91.91 per acre using the base values.

  • The 4-year rotation continued to be the most profitable for all of the changes in the base hay yield and rate of decline in the base hay yield as the stand aged.


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