Annualized net return for various PEWI land use options and practices - PowerPoint Presentation

Slide1

Annualized net return for various PEWI land use options and practices

The following slides provides the details of the individual analysis done for each land use or practice (summarized below). Note: In the slides, land use that carries a positive net value has a green band; land uses that carries a net cost cost have red bands.

Main Assumptions:

20

yr

assessment horizon

4% discount real rate

Opportunity costs based on average land rent for central Iowa (District 5); $297/ac.

All costs and revenues based on 2013/2014 Iowa or regionally located prices.

Source data is presented.

Yield expectations for crops, timber, and biomass are for Central Iowa.

Multi-species

Riparian

BUFFER

COSTS

Quant

Unit

Unit Cost

Total Dollar Value of CostsTiming (yr; a=annual)Present Dollar Value of CostsAnnualized Dollar Value of CostsCOST DESCRIPTIONGRASS SEEDING & MAINTENANCE       Disking Crop Land1.00AC$10.00$100$10$1 Harrowing1.00AC$3.85$40$4$0 Burning1.00AC$0.35$03$0$0 Seed Cost (From Plant Schedule)1.00Total$25.67$260$26$2 Airflow Spreader1.00AC$4.50$50$5$0 fertilizer1.00AC$13.47$130$13$1 Lime1.00AC$34.50$350$35$3 Mowing1.00AC$6.80$7a$92$7 TREE-SHRUB PLANTING & MAINTENANCE       Mechanical Site Preparation 1.00AC$10.00$100$10$1 Direct Seeding AC $0 $0$0 Shrub Cost (From Plant Schedule) Total$234.15$2340$234$17 Tree Cost (From Plant Schedule) Total$494.68$4950$495$36 Tree/Shrub Hand Planting Cost0Per Plant$2.00$00$0$0 Mechanical Tree/Shrub Planting Cost905Per Plant$2.00$1,810 $1,810$133 Chemical Weed Control905Per Plant$0.12$1091$104$8 Mechanical Weed Control100Per Plant$0.06$61$6$0 Fabric Mulch Per Plant$2.22$0 $0$0 Land Rent @ $256/acre1.00 $256.00$256a$3,479$256 Totals      @4%$6,323$465/ac

90% cost-share for buffer establishment

$100/acre “one-time” incentive bonus

$10/ac/

yr

practice bonus

80% of calculated annual rental payment

CRP payment for

Multi

-species Riparian Buffer =Bear Creek, Iowa. Photo: T. SchultzAnnual worth of CRP* for buffer = $222/acre* Based on 2012 Iowa NRCS estimates

Broad assumptions:

Uniform yields @ 6 tons per acre

Static input & biomass prices @ $90/ton

Oak Ridge National lab, 2002

Activities/materials

Year(s) Occurring

Present Value ($/acre)

Establishment Costs (buy seed and plant)

1$65.54FertilizationAnnual$1,334.20Weed ControlAnnual$129.61Harvesting2 - 20$832.16Land Rent (opportunity cost)Annual$3,165.40Total Present Value Costs/acre $5,526.91Revenue SourceYear(s) OccurringPresent Value ($/acre)Switchgrass Biomass2 - 20$6,189.59Total Present Value Revenues/acre $6,189.59@ 5% Net Present Value/acre$662.68Annualized Value/acre$53.1820-year Switchgrass Management Plan Analysis adapted from: Duffy 2008. www.extension.iastate.edu/agdm/crops/html/a1-22.html

Crop rotations on

Owned land

https://www.extension.iastate.edu/agdm/crops/html/a1-80.html

This data needs to be entered/adjusted

Needed PEWI Data:

Choose rotation

(pick the rotation option - CS, CCS, CC - that best approximates your PEWI rotation)

Yield converted to per acre basis

Look up current corn and or bean prices. Adjust input prices as needed.General Assumptions:Static input & commodity pricesUniform land rent charge = $0/acThis data has already been adjusted to 2014 pricesNote: this data is already “annualized”

Crop rotations on

Rented land

https://www.extension.iastate.edu/agdm/crops/html/a1-80.

html

Needed PEWI Data:

Choose rotation

(pick the rotation option - CS, CCS, CC - that best approximates your PEWI rotation)

Yield converted to per acre basis

Look up current corn and or bean prices. Adjust input prices as needed.General Assumptions:Static input & commodity pricesUniform land rent charge = $297/acThis data needs to be entered/adjustedThis data has already been adjusted to 2014 pricesNote: this data is already “annualized”

Removing Borrow Material from Wetland Location

Driving Sheet Piling for Outlet Structure

Drawdown structure

Constructed Wetlands

Woody

systems contribute to a whole host of potential societal benefits in the form of ecosystem services. For example woody systems:Can provide critical habitat and/or travel corridors for a diverse array of species], even in highly managed plantations;

Can help stabilize soils and maintain soil quality and;Efficiently

cycle water and

nutrients and;

Create

long-term, below-ground reservoirs for carbon sequestration (in both natural or plantation systems

);May be ideal for restoring highly degraded lands and for bioremediation treatments and.

Cost Activities/materialsYear(s) OccurringPresent Value ($/acre)Establishment Costs (buy stock & plant)1$306.00Maintenance Costs (mow and spray)1 - 3$177.01Harvest and Chip10$2,332.87Thin Between Rows11$57.30Thin Between Rows13$31.18Harvest and Chip20$1,432.18Land Rent (opportunity cost)Annual$3,165.40Total Present Value Costs/acre $7,501.94Revenue SourceYear(s) OccurringPresent Value ($/acre)Woody Biomass *10$5,525.22Woody Biomass *11$128.92Woody Biomass *13$70.16Woody Biomass *20$3,392.01Total Present Value Revenues/acre $9,116.31 @ 4% Net Present Value/acre$1,614.37Annualized Value/acre $129.54Short-rotation Woody Crop System (SRWC) – Hybrid Poplars* Hybrid poplar yield data: R. Hall, Pers. Comm. 201220-year Plantation Management Plan

Conventional Forest

Analysis Assumptions:

Stumpage rates for W. Oak/R. Oak = $360/$260 MBF;

clearcut

silvicullture

; Rotation age = 65 years;

Biomass sales at $20/ton (tops/bark of merchantable species; all non-merchantable trees)

Final stumpage value per acre at rotation age = $1,800 per acre Additional $200/acre/year in hunting lease fees.Harvest & biomass on-site processing costs $150/acre; $5/ac/year overhead charge. Managed hardwood forests can: Habitat & corridors for diversity of game/non-game species. Can help stabilize soils and maintain soil quality;Efficiently cycle water and nutrients;Create long-term, below-ground reservoirs for carbon sequestrationEqual Annual Income = $320/acreHunting only $195/ acreScenario Data: Species Distribution, Basal Area per acreTimber data used for analysis from Amana Colonies, 2001 – Compartment 10 Upper Amana. Inventory conducted by ISU Forestry students (Amana is Iowa’s largest industrial forestland owner)

Assumptions:

Finished grass-fed beef with hanging weight right around 630 pounds (which usually translates into about 1,000 pounds live weight).http://

www.wallacefarms.com/http://ebersolecattleco.com

/

Net profit for

grass

fed beef in

Cornbelt

(2012) = $250 per head.Grass-fed beef: Improved Pasture or Rotational GrazingPotential Ecosystem BenefitsFrom Boody et al. 2005 adoption of grass-based livestock systems would greatly:reduce emissions of greenhouse gases (40 %),decrease soil erosion (50 -80 %), decrease fuel use, and improve water quality (lower nutrient loss/ increased soil mention)Enhance habitat for deer, turkey, quail, and other birds (could increase by a factor of five).Profit data from http://farmbiztrainer.com/docs/Grass_Fed_Beef_Presentation.ppt.

Alfalfa Production: Average Net Revenue

Data: ISU Ag Econ Extension; A.

Johanns

:

http://www.extension.iastate.edu/agdm/

decisionaidsall.html

Restored prairie at the Neal Smith National Wildlife Refuge in Central Iowa

Restored PrairiePrairie ecosystems provide services that: Disperse seeds

Mitigate drought and floods Cycle and move nutrients Detoxify and decompose waste

Control agricultural pests

Maintain biodiversity

Generate and preserve soils and

fertility

Contribute to climate stability Regulate disease-carrying organisms

Protect soil from erosion Protect watersheds, streams & river channels Pollinate crops and natural vegetation Provide aesthetic beauty Provide wildlife habitat Provide wetlands, playas Provide recreation Provide research opportunitiesOn average in Iowa, the costs of restoring prairie on agricultural land is $350/ acre/ year.Hunting leases are a possibility; assuming $380/acre/ year lease revenue (e.g., $95/ acre x 4 hunting leases/ac/ year). Leaves a net revenue of $30/ year

Net costs of conservation Corn or Beans

Total net costs* for conservation crop ground = $24/ac/year* Does not factor any potential yield increase or decrease

Selecting conservation corn or beans assumes that the fields involve the following Best Management Practices:

Data sources:

http

://www.ipm.iastate.edu/ipm/icm/2000/10-23-2000/

notillsteady.html

; Kling, C., Rabotyagov

, S., Jha, M., Feng, H., Parcel, J., Gassman, P., & Campbell, T. (2007). Conservation practices in Iowa: historical investments, water quality, and gaps. A report to the Iowa farm bureau and partners. Final report. Iowa State University Center for Agricultural and Rural Development, Ames, IA.No-till cultivationCover crops (cereal rye)Grass waterwaysCost and or savings associated with this suite of BMPs:On average in Central Iowa, about .05% of a field could use a grass waterway = $15/ac/yearCover crops, aerial seeded = $34/ac/yearNo -till leads to a total savings = $25/ac/year (mostly from using less diesel, labor and depreciation)