• TABLE OF CONTENTS
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 Front Cover
 Title Page
 Abstract
 Center information
 Table of Contents
 List of Tables
 List of Figures
 Acknowledgement
 Executive summary
 Introduction
 Objectives
 Methodology
 Research results
 Summary and conclusions
 Reference
 Appendix














Group Title: Industry report - University of Florida Florida Agricultural Market Research Center ; 90-2
Title: Market opportunities for feed grains and alfalfa hay produced on reclaimed phosphatic clay in Florida
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 Material Information
Title: Market opportunities for feed grains and alfalfa hay produced on reclaimed phosphatic clay in Florida
Series Title: Industry report - University of Florida Florida Agricultural Market Research Center ; 90-2
Physical Description: Book
Language: English
Creator: Rahmani, Mohammad
Degner, Robert L.
Publisher: Florida Agricultural Market Research Center, University of Florida
Publication Date: 1990
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Table of Contents
    Front Cover
        Front Cover
    Title Page
        Title Page
    Abstract
        Page i
    Center information
        Page ii
    Table of Contents
        Page iii
    List of Tables
        Page iv
        Page v
    List of Figures
        Page vi
    Acknowledgement
        Page vii
    Executive summary
        Page viii
    Introduction
        Page 1
    Objectives
        Page 2
    Methodology
        Page 2
        Page 3
    Research results
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
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        Page 29
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        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
    Summary and conclusions
        Page 42
        Page 43
    Reference
        Page 44
    Appendix
        Page 45
        Page 46
        Page 47
        Page 48
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Full Text
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May 1990 Industry Report 90-2





MARKET OPPORTUNITIES FOR FEED GRAINS
AND ALFALFA HAY PRODUCED ON


RECLAIMED PHOSPHATIC CLAY IN FLOfIDA
\ entral Science
\ Librar/


Science
'ar'J\ | b
18o Un versitY o
a report by -
,f Florida
-------ltoammad Rahmani and Robert L. Degner


K~orida


Florida Agricultural Market Research Center
a part of
the Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611





















MARKET OPPORTUNITIES FOR FEED GRAINS
AND ALFALFA BAY PRODUCED ON
RECLAIMED PHOSPHATIC CLAY IN FLORIDA






a report by

Mohammad Rahmani and Robert L. Degner






May 1990






Florida Agricultural Market Research Center
a part of
the Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611





























ABSTRACT

This study examined the economic feasibility of producing field corn,
milo, soybeans, wheat and alfalfa on reclaimed phosphatic clay lands in Polk
County, Florida. Livestock and poultry feed requirements were estimated for
several geographic zones around Polk County and compared with production
estimates. These comparisons indicate a ready market for these feedstuffs.
Production costs (excluding land costs) on reclaimed phosphatic clay lands
were estimated and compared with recent market prices. Alfalfa and corn
generated the largest net returns per acre, followed by milo, wheat and
soybeans, respectively.

Key Words: land reclamation, phosphatic clay lands, economics, feed grains,
corn, milo, wheat, soybeans, alfalfa.







THE FLORIDA AGRICULTURAL MARKET RESEARCH CENTER


The Florida Agricultural Market Research Center is a service of the Food

and Resource Economics Department. Its purpose is to provide timely, applied

research on current and emerging marketing problems affecting Florida's

agricultural and marine industries. A basic goal of the Center is to provide

organized groups with practical solutions to their marketing problems. The
Center seeks to provide marketing research and related information to
producer organizations, trade associations, and governmental agencies
concerned with improving and expanding markets for Florida's agricultural and

marine products.
Client organizations are required to pay direct costs associated with
their research projects. Such costs include labor for personnel and
telephone interviewing, mail surveys, travel, and computer analyses.

Professional time and support is provided at no charge by IFAS.

Professional agricultural economists with specialized training and

experience in marketing participate in every Center project. Cooperating
personnel from other IFAS units are also involved whenever specialized
technical assistance is needed.
For more information about the Center, contact:

Dr. Robert L. Degner, Director
Florida Agricultural Market Research Center
1083 McCarty Hall
University of Florida
Gainesville, Florida 32611
(904) 392-1845







TABLE OF CONTENTS


Page

LIST OF TABLES . . . . . .......... iv

LIST OF APPENDIX TABLES . . . v

LIST OF FIGURES ............ . ....... vi

ACKNOWLEDGEMENTS . .... ... . . vii

EXECUTIVE SUMMARY . . . .. ... ... viii

INTRODUCTION .. . . . . . . 1

OBJECTIVES . . . ...... ... 2

METHODOLOGY ...... .. . . . . 2

RESEARCH RESULTS . . . .. .. . 4

Production and Consumption Estimates .... . . 4

Production of Selected Feedstuffs ........... 4

Livestock and Poultry Numbers ............. 5

Consumption Estimates ................... 8

Feedstuff Prices ..... ......... .. .. 16

Long-term trends .................. 16

Seasonal price patterns ............... 21

Costs of production ........... .. 31

Estimated returns ................... 33

Corn . . . . . 33

Milo ........ ............. 33

Wheat. .............. .. . 37

Soybeans . . . . 37

Alfalfa hay .................. 40

Quality considerations . .. . .. 40

SUMMARY AND CONCLUSIONS ............... ... 42

REFERENCES . . . . . . . 44

APPENDIX . . ..... .. . 45








LIST OF TABLES

Table Page
1 Production of selected crops in Florida, 1979 and 1988 . 5

2 Livestock and poultry production in Florida, 1987 and 1982 7
3 Feed grain production and consumption in Florida . 10
4 Hay production and consumption in Florida . .. . 11
5 Estimated proportions of total feedstuffs consumed in Flor-
ida, by class of livestock . . . . .. 13
6 Quantity of purchased feedstuffs by the firms surveyed . 15

7 Annual average corn prices, 1977-1989 . .. . 17
8 Average annual prices for corn and milo, 1976-1988 . .. .19
9 Average annual prices for wheat, soybeans and alfalfa
pellets, 1976-1988 . . . . . 20
10 Estimated net returns per acre for corn, milo, wheat, soy-
beans and alfalfa hay . . . . .. 34







LIST OF APPENDIX TABLES


Table taSf
1 Monthly nominal prices for corn, F.O.B. Atlanta, 1976-1988 46
2 Monthly nominal prices for milo, F.0.B. Atlanta, 1976-1988 47
3 Monthly nominal prices for wheat, F.O.B. Atlanta, 1976-1988 48
4 Monthly nominal prices for alfalfa hay, F.0.B. Atlanta,
1976-1988 .. . ..... .. 49
5 Cost of producing one acre of dryland corn on reclaimed
phosphatic clay (excluding rent) . . 50
6 Cost of producing one acre of milo on reclaimed phosphatic
clay (excluding rent) . . . . . 51
7 Cost of producing one acre of wheat on reclaimed phosphatic
clay (excluding rent) . . . . . 52
8 Cost of producing one acre of soybeans for local markets on
reclaimed phosphatic clay (excluding rent) . . 53
9 Cost of producing one acre of soybeans for north Florida
markets on reclaimed phosphatic clay (excluding rent) . 54

10 Cost of establishing one acre of alfalfa on reclaimed phos-
phatic clay (excluding rent). . . . 55
11 Cost of maintaining and harvesting one acre of alfalfa hay
on reclaimed phosphatic clay (excluding rent) . . 56







LIST OF FIGURES


Figure pap
1 Long-term production trends for corn and soybeans, 1979-
1988 . . . . . . . 6

2 Counties included in feed consumption regions around phos-
phatic clay lands in Polk County and consumption estimates
or selected feedstuffs . . . . 9

3 Estimated percentage of value of feedstuffs consumed by
feed manufacturers, by class of livestock . . .. 14

4 Estimated percentage of volume of feedstuffs consumed by
feed manufacturers, by class of livestock . . 14

5 Nominal corn prices for Tampa and Atlanta and annual farm
prices received by Florida farmers, 1977-1989 . . 18
6 Long-term price trends for corn, 1976-1988 . ... .22

7 Long-term price trends for milo, 1976-1988 . ... .23

8 Long-term price trends for wheat, 1976-1988 . .... 24

9 Long-term price trends for soybeans, 1976-1988 . .. 25

10 Long-term price trends for alfalfa pellets, 1976-1988 . 26

11 Seasonal price pattern for corn, 1976-1988 . ... .28
12 Seasonal price pattern for milo, 1976-1988 . ... .29

13 Seasonal price. pattern for wheat, 1976-1988 . ... 30

14 Seasonal price pattern for alfalfa hay, 1976-1988 ..... 32

15 Monthly prices for No. 2 yellow corn, F.O.B. Tampa, 1987
1989 . . . . . . . 35

16 Estimated monthly prices for milo, F.O.B. Tampa, 1987-1989 36
17 Wheat prices received by Florida farmers and costs of pro-
duction on phosphatic clay lands in Florida . .. 38

18 Soybean prices received by Florida farmers and costs of
production on phosphatic clay lands in Florida . . 39
19 Monthly prices for alfalfa hay, F.O.B. Tampa, 1987-1989 41







ACKNOWLEDGEMENTS


This research was partially funded by the Florida Institute of Phosphate
Research (FIPR) as a part of the Polk County/IFAS Mined Lands Agricultural

Research/Demonstration Project. We appreciate FIPR's financial support, and
are pleased to be part of the multi-disciplinary research team.
We appreciate the valuable contributions of University of Florida

professors W. E. Kunkle, E. A. Otto, R S. Sands, and W. R Walker from
Animal Science, B. Harris from Dairy Science, C. R Douglas and L Harms
from Poultry Science, and J. R Simpson from Food and Resource Economics
(FRE) for providing the feed consumption parameters for the various livestock
and poultry species. We also thank R. P. Beilock from FRE for providing
transportation cost estimates, and we thank the Florida Department of
Agriculture and Consumer Services and the Florida Feed Association for
providing lists of licensed feed manufacturers in Florida. The cooperation
of feed manufacturers and poultry and livestock producers is also greatly
appreciated. Finally, we acknowledge the many contributions of FRE research
assistants David Locascio and Stephenie Mack, and secretary Renelle Ramirez.







EXECUTIVE SUMMARY


* Florida is a feedstuffs deficit state, with an annual shortfall of over 32
million bushels of corn, almost five million bushels of soybeans, and
substantial deficits in alfalfa products and other feedstuffs as well. A
large portion of the shortfall occurs within 200 miles of Polk County.
* This shortfall indicates potential opportunity for producing these crops
in Florida.
* While phosphatic clay producers of alfalfa hay, corn and milo have a slight
transportation advantage to Florida markets, they must also be cognizant
that prices for these crops are determined in highly competitive national
markets.

* Long-term price trends for alfalfa products, corn, milo, soybeans and wheat
are unfavorable. In real terms, prices in recent years have been near
historic lows, and there is little evidence that real prices will improve
to any significant degree.
* Some of the advantages of phosphatic clay soils, such as richness in plant
nutrients and reduced need for irrigation, may be offset by higher labor
and machinery costs.
* Our analyses assume that product quality is similar to that obtainable from
current out-of-state sources. However, aflatoxin and moisture in Florida
corn and alfalfa hay are serious concerns to feed manufacturers. None of
the 30 feed manufacturers and feed users surveyed was concerned about
radionuclides in crops produced on phosphatic clay lands.
* It appears that alfalfa hay and field corn have the greatest profit
potential at current price levels, with milo, soybeans and wheat having the
least. However, it should be noted that our analyses did not consider land
reclamation costs, rents, or taxes. Imposition of modest land costs would
result in very low or negative returns for the three latter crops.
* Most of the costs and returns shown in this report are based upon
Relatively limited research data. As improved cultural practices are
developed for agricultural production on the reclaimed phosphatic clay
lands, costs and returns should be reassessed for all of the crops examined
here.


viii







Market Opportunities for Feed Grains and Alfalfa Hay
Produced on Reclaimed Phosphatic Clay in Florida
by
Mohammad Rahmani and Robert L. Degner'

INTRODUCTION

As the largest domestic producer of phosphate, the state of Florida
accounts for an annual average of 75 percent of total U.S. production
(McHardy, 1983). Approximately 200,000 acres of mined land in Polk County
will be left after mining activities cease about the turn of the century.
More than 60 percent of this land will be in the form of clay settling areas
(Wood, 1986). Phosphate companies are required under state law to reclaim
the mined lands. The main objective of the Polk County Mined Lands
Agricultural Research/Demonstration Project is to explore alternative uses
for this reclaimed land in order to compensate for the loss of approximately
$2.5 million annual tax revenues currently generated by the phosphate
industry (Stricker, 1987).
Preliminary research conducted by the Institute of Food and Agricultural

Sciences of the University of Florida and large-scale field trials managed by
several phosphate companies indicate that reclaimed phosphatic clay lands in
central Florida have the potential to produce several important feed grains
and high quality alfalfa hay if cultural problems unique to reclaimed
phosphatic clay soils can be overcome.
In field trials conducted by phosphate companies, tropical field corn
has yielded about 80 bushels per acre and, in smaller test plots, University
of Florida researchers have obtained yields of approximately 100 bushels per
acre. Wheat and triticale yields of 40 bushels per acre have also been
achieved. Test plot yields of milo (grain sorghum) have been very good,

producing approximately 5,000 pounds per acre. These yields are indications




1Mohammad Rahmani and Robert L. Degner are Visiting Assistant In and
Professor, respectively, in the Food and Resource Economics Department,
University of Florida.







2

that production of these crops on phosphatic clay lands is technically
feasible.
This study examines the economic feasibility of producing the most
promising feed grains and hay crops and estimates their market potential.
Issues relevant to the marketing environment for feed grains and alfalfa hay
produced on phosphatic clay and the extent to which these crops can compete
with those shipped to Florida from other states are also addressed.

OBJECTIVES


The overall objective of this report is to explore the market opportuni-
ties for corn, milo (grain sorghum), wheat, soybeans and alfalfa grown on
reclaimed phosphatic clay lands in central Florida. In order to address this
major objective, specific objectives are considered as follows:
1. Estimate the total quantities of selected feed crops consumed
annually in Florida counties by major classes of livestock.
2. Examine the long-term trend of prices as well as the seasonal
price behavior for each of these feed crops.
3. Estimate the cost of producing these feed crops on phosphatic
clay lands in central Florida on a commercial scale.

4. Identify the major geographic sources of feedstuffs to Florida
livestock.

5. Assess the attitudes of feed manufacturers and major livestock
and poultry producers toward feed crops grown on phosphatic
clay lands in central Florida.

METHODOLOGY


To meet the aforementioned objectives of this research, both secondary

and primary data were collected. Secondary data sources included the U.S.
Census of Agriculture, various reports by the Florida Agricultural Statistics
Service, and trade publications such as Feedstuffs. the Southeastern Dairy
Review Survey of Current Business and Agricultural Prices.







2

that production of these crops on phosphatic clay lands is technically
feasible.
This study examines the economic feasibility of producing the most
promising feed grains and hay crops and estimates their market potential.
Issues relevant to the marketing environment for feed grains and alfalfa hay
produced on phosphatic clay and the extent to which these crops can compete
with those shipped to Florida from other states are also addressed.

OBJECTIVES


The overall objective of this report is to explore the market opportuni-
ties for corn, milo (grain sorghum), wheat, soybeans and alfalfa grown on
reclaimed phosphatic clay lands in central Florida. In order to address this
major objective, specific objectives are considered as follows:
1. Estimate the total quantities of selected feed crops consumed
annually in Florida counties by major classes of livestock.
2. Examine the long-term trend of prices as well as the seasonal
price behavior for each of these feed crops.
3. Estimate the cost of producing these feed crops on phosphatic
clay lands in central Florida on a commercial scale.

4. Identify the major geographic sources of feedstuffs to Florida
livestock.

5. Assess the attitudes of feed manufacturers and major livestock
and poultry producers toward feed crops grown on phosphatic
clay lands in central Florida.

METHODOLOGY


To meet the aforementioned objectives of this research, both secondary

and primary data were collected. Secondary data sources included the U.S.
Census of Agriculture, various reports by the Florida Agricultural Statistics
Service, and trade publications such as Feedstuffs. the Southeastern Dairy
Review Survey of Current Business and Agricultural Prices.






3

Feed consumption for individual counties in Florida was estimated by
analyzing secondary data on livestock and poultry numbers, along with feed
consumption parameters for the respective livestock and poultry species.
Data on livestock and poultry were obtained from the 1982 and 1987 U.S.
Census of Agriculture, and recent estimates by Florida Agricultural Statis-
tics Service. Estimates of feed consumption by species were provided by
researchers in the Animal Science, Dairy Science, and Poultry Science
departments at the University of Florida. Seasonal price patterns and long-
term price trends were ascertained from weekly and monthly price data for the
selected feedstuffs for the 1976 through 1988 period.
Primary data were augmented through a survey of licensed feed manufac-
turers in Florida, and several major livestock and poultry producers with
their own feed mills. Lists of licensed feed manufacturers operating in
Florida were provided by the Florida Department of Agriculture and Consumer
Services and the Florida Feed Association. Poultry, pork, and dairy
producers were identified by specialists in the Animal Science, Dairy, and
Poultry departments in the Institute of Food and Agricultural Sciences. A
detailed questionnaire was pretested on several firms and revised prior to
full-scale implementation. Fifty firms were contacted for personal inter-
views. Owners or managers of feed manufacturing plants and farms were
interviewed in person or by the telephone during August and September of
1989. A total of 30 survey questionnaires was completed. Data obtained
included composition and quantities of feedstuff purchases, geographic
sources, delivered prices, sources of price information, and predominant
grades or specifications of feedstuffs. Respondents were also queried as to
the likelihood of purchasing selected feedstuffs produced on phosphatic clay
lands.
Finally, production costs for corn, milo, wheat, soybeans and alfalfa
hay produced on reclaimed phosphatic clay land in central Florida were
estimated using a partial budgeting technique. The production cost estimates
were based primarily on experience gained by growing these crops on research
sites of the Polk County Mined Lands Agricultural Research/Demonstration










Project. The budgets were constructed using cost data for north Florida as
a base and adjusting these data to reflect production cost differences
experienced on reclaimed phosphatic clay lands.

RESEARCH RESULTS


SProduction and consumption estimates for selected feedstuffs, predomi-
nant geographical sources, long-term price trends, seasonal price patterns,
production cost estimates for feed crops produced on reclaimed phosphatic
clay soils, and quality considerations for feedstuffs purchased by feed mills
are discussed below.

Production and Consumption Estimates

Production and consumption estimates of feedstuffs in Florida were made
to determine the annual production shortfall of these crops. The estimates
of the quantities of feedstuffs utilized annually in Florida were derived
using both secondary and primary data. The production deficits for the
various feed crops are assumed to be rough approximations of the market
potential for the respective crops. This assumption requires that relative
prices for the various feedstuffs remain constant and that current producers
within the state are at least as efficient as potential producers on
reclaimed phosphatic clay lands.

Production of Selected Feedstuffs

According to data from the Florida Agricultural Statistics Service
(1989), the production of field corn and soybeans in Florida has sharply
declined over the last ten years. However, production of wheat and hay has
increased (Table 1).








Table 1.--Production of selected crops in Florida, 1979 and 1988.

Crop Unit 1979 1988 Percent change

(-------1,000-------) (Percent)

Corn bushels 17,967 3,770 -79
Soybeans bushels 13,137 3,335 -75
Wheat bushels 432' 2,035 +371
Hay, all tons 619 729 +18

*Data for 1978; data from 1979 through 1988 not available.
Source: Florida Agricultural Statistics, Field Crops Summary. 1988.

Florida's corn production in 1988 was only about one-fifth of the
production in 1979. During the same time, soybean production dropped to only

a quarter of 1979 production (Table 1, Figure 1). Hay production increased
slightly over the past decade, but wheat production increased nearly five
fold. Nevertheless, wheat production is still relatively small compared with
corn and soybeans. Further, in absolute terms, the increase in wheat
production was dramatically overshadowed by the declines in corn and soybean
production. The total tonnage of these major feed items decreased by over 70
percent from 1979 to 1988.

Livestock and Poultry Numbers

Secondary data also indicate a decrease in all major livestock classes
except sheep, but sheep represent an almost infinitesimal proportion of

animal units statewide. Also, there was a decrease in three-month-old or
older chicken inventory, but an increase in broilers and other meat-type
chickens sold (Table 2). Overall, the increases in sheep and broiler
production and the declines in cattle and hogs represents a significant
reduction in the demand for most feedstuffs.
Even so, comparing production data on selected feedstuffs and livestock
and poultry production in Florida for the time period 1979 to 1988 shows that
the rate of decrease in supplies of major feedstuffs has been considerably
greater than the rate of decrease in livestock and poultry (tables 1 and 2).

















Corn


........ ......... .- ---- ---



Soybeane
.. .... .. .. .. ... .... ... .. .... . . . . . .. . . .


I I
1983 1984


1985


1986
1986


I I
1987 1988


Year


Figure 1.--Long-term production trends for corn and soybeans, 1979-1988.


20


15-


10


5-


-I


I
1979


I
1980


1981
1981


I
1982


5
c
c






7

Table 2.--Livestock and poultry production in Florida,

Livestock
and poultry 1982 1987

(---------Number---------)


1987 and 1982.


Percent change

(Percent)


Cattle and calves:

Inventory

Beef cows

Milk cows

Sold

Hogs and pigs:

Inventory

Sold

Sheep and Lambs:

Inventory

Chickens (3 months
and older):

Inventory

Broilers and other
meat-type chickens:

Sold


2,178,552

1,098,152

194,550

1,108,300


203,231

328,150


7,360



15,374,588



76,220,724


1,879,124

995,250

176,993

1,025,178


156,137

266,652


8,867



12,964,760



93,224,832


Source: 1982 and 1987 Census of Agriculture, U.S. Department of
Commerce, Bureau of the Census, Washington, DC, April 1989.










Consumption Estimates

Annual consumption of feed grains and alfalfa hay in Florida were

estimated using livestock and poultry numbers from the 1987 Census of
Agriculture. Consumption estimates were made for dairy and beef, cattle,
horses, swine and poultry. The estimates were based upon livestock and
poultry numbers from the Census and the composition of typical feed rations
provided by livestock and poultry production specialists at the University of
Florida. Feed consumption was estimated by county and categorized into three
geographical areas based upon distance from the greatest concentration of
reclaimed phosphatic clay lands in Polk County: counties within a 100-mile
radius, counties within a 100- to 200-mile radius, and counties outside a
200-mile radius (Figure 2). These classifications were made in order to
identify the potential geographic markets for feed grains and hay because of
the economic importance of transportation costs. Tables 3 and 4 show
consumption estimates, production as reported by the 1987 Census of Agricul-
ture, and the resulting estimated shortfall for corn, soybeans, alfalfa hay
and Bermuda hay in Florida for each of the aforementioned geographical areas.














SPolk County


= <100 miles
Corn 17,541,000 bushels
Soybeans 3,065,000 bushels
Alfalfa hay 478,000 tons


Ei] 100 200 miles
Corn 17,186,000 bushels
Soybeans 3,257,000 bushels
Alfalfa hay 148,000 tons

I >200 miles
Corn 4,535,000 bushels
Soybeans 844,000 bushels
Alfalfa hay 47,000 tons


Figure 2.-Counties included in feed consumption regions around phosphatic clay
lands in Polk County and consumption estimates for selected feedstuffs.








10

Table 3.--Feed grain production and consumption in Florida.

Corn Soybeans'

Distance from Percent of Percent of
Polk County Bushels consumption Bushels consumption


Less than
100 miles:

Consumption

Production

Shortfall

100-200 miles:

Consumption

Production

Shortfall

Greater than
200 miles:

Consumption

Production

Shortfall/
Surplus

State totals:

Consumption

Production

Total
Shortfall


(Number)


17,541,000

130,000'

17,411,000


17,186,000

3,158,000'

14,028,000



4,535,000

3,333,000c

1,202,000


39,262,000

6,621,000

32,641,000


(Percent)b


100

1

99


100

18

82



100

73

27


100

17

83


(Number)


3,065,000

2, 000cd

3,063,000


3,257,000

630,000-

2,627,000



844,000

1,625,000'

(781,000)


7,166,000

2, 257,000c

4,909,000


(Percent)b


100

0

100d


100

19

81



100

193


(93)


100

31

69


'Soybean meal consumption in the study area was converted to whole
soybeans using a 1:1.27 conversion factor.

bPercentages are based upon consumption.

eAdjusted for counties with data withheld to avoid disclosing for
individual farms.

dProduction represents less than 0.1 percent.






11

Table 4.--Hay production and consumption in Florida.

Distance from Alfalfa Bermuda Total alfalfa Percent of
Polk County hay hay and Bermuda consumption

(--------------Tons--------------) (Percent)

Less than 100 miles:
Consumption 478,000 158,000 636,000 100

Production' N. A. N. A. 360,000 57

Shortfall N.A. N. A. 276,000 43

100-200 miles
Consumption 148,000 61,000 209,000 100
Production* N. A. N.A. 208,000 100

Shortfall N. A. N. A. 1,000b O

Greater than 200 miles

Consumption 47,000 17,000 64,000 100

Production* N. A. N.A. 104,000 163
Surplus N.A. N. A. 40,000 63

State Totals

Consumption 673,000 236,000 909,000 100

Production" N.A. N. A. 672,000 74

Total Shortfall N.A. N.A. 237,000 26

*Adjusted for counties with data withheld to avoid disclosing for
individual farms. This figure includes all types of hay, whereas consumption
estimates are only for alfalfa hay and Bermuda hay. Thus, estimates of the
hay shortfall are conservative.

'Shortfall represents less than 0.5 percent.

Corn production in Florida supplies only 17 percent of the estimated
consumption for the state. In 1987, the statewide shortfall of corn was 32.6
million bushels, with the greatest shortfall within a 100-mile radius from

phosphatic clay lands. In this geographic zone, the shortfall of corn was

over 17 million bushels; in the 100- to 200-mile zone, an additional 14

million bushel shortfall was experienced. Thus, there is substantial market
potential for corn and close substitutes such as grain sorghum relatively







12

close to the reclaimed phosphatic clay lands, affording a significant
transportation advantage.
Soybean production and soybean meal consumption was also examined for
each of the geographic regions. While the shortfall (in soybean bushel
equivalents) exceeds 5. 6 million bushels, it is still substantially less than

the quantity required by an economically efficient processing mill. Thus,
soybean production from reclaimed phosphatic clay lands would have to be
marketed through terminal markets or be transported to a processing plant
before soybeans could be utilized. Because the nearest terminal markets are
in north Florida and the nearest soybean mills are located in Georgia,
soybeans produced on reclaimed lands would be subject to substantial
transportation cost disadvantages. However, since processed whole soybeans
can be fed to dairy beef, poultry and swine, it is likely that soybeans
produced in Central Florida would be processed and fed locally.
Although the hay production in Florida provides for almost three-

quarters of the estimated consumption, virtually all of the hay shortfall in
the state is within a 100-mile radius from phosphatic clay lands. Also, it
is quite likely that the shortfall is particularly acute for high quality hay
such as alfalfa. Thus, it appears that there is significant market potential
for alfalfa hay on phosphatic clay lands.
SThe primary data collected from firms surveyed was generally consistent

with the findings derived from secondary data. Estimates of consumption
derived from survey data also indicates that poultry is the largest consumer
of feedstuffs in Florida. The survey indicated that over 42 percent of
volume or 44 percent of the value of the feedstuffs is consumed by poultry.
Dairy cattle consume about 26 percent of the volume and value, followed by
horses, accounting for 13 and 10 percent of the tonnage and value, respec-
tively. Beef cattle and swine consume about six to seven percent of all
feedstuffs. Feed consumption estimates based on secondary data show the
ranking, but somewhat different percentages for some of the major classes of
livestock and poultry; part of the differences are due to the lack of
estimates for the miscellaneous category (Table 5, figures 3 and 4). Despite






13

these differences, the survey of feed manufacturers and large farms tends to
confirm the large feedstuff deficits estimated using secondary data.

Table 5.--Estimated proportions of total feedstuffs consumed in Florida, by
class of livestock.

Estimates based upon feedmill survey Estimates
based upon
Class of secondary
livestock Percent of tonnage Percent of value data*

(----------------------Percent----------------------)

Poultry 42 44 38
Dairy 26 26 24
Horses 13 10 17

Beef 7 7 15

Swine 6 7 6

Miscellaneous 6 6 -c
Totals 100 100 100

*Estimates based on Census of Agriculture livestock numbers and
consumption estimates provided by livestock production specialists.

bMiscellaneous includes fish, rabbits, and some pet food formulations.

cThe miscellaneous category was not estimated due to the lack of
secondary data and appropriate consumption parameters.











Poultry (44%)


Dairy (26%)


Horses (18%)

Miscellaneous (6%)

Swine (7%)
Beef (7%)


Figure 3.--Estimated percentage of value of feedstuffs consumed
by feed manufacturers by class of livestock.


Poultry (42%)


Horses (13%)


Miscellaneous (6%)

Swine (6%)


Dairy (26%)


Beef (7%)


Figure 4.-.Estimated percentage of volume of feedstuffs consumed
by feed manufacturers by class of livestock.






15

Corn, with an annual consumption of over 710,000 tons (more than 25

million bushels), is the most important feed ingredient used by the 30

Florida feed manufacturers interviewed. Other major ingredients include
soybean meal with about 252,000 tons, wheat mids with 140,000 tons, and
alfalfa pellets and cubes with 41,000 tons annually. Significant quantities

of alfalfa hay, milo and wheat bran are also used by these manufacturers and

livestock producers (Table 6).

Table 6.--Quantity of purchased feedstuffs by the firms surveyed.

Feedstuffs Tonsa Percent

Corn 710,933 61.1

Soybean 252,449 21.7

Wheat mids 140,184 12.0
Alfalfa pellets/cubes 41,020 3.5
Wheat/bran 8,094 0.7
Milo 6,646 0.6

Alfalfa hay 4,147 0. 4

Totals 1,163,473 100.0

*Based on responses from 30 firms.


Over 96 percent of the total feedstuffs tonnage
surveyed is resold to customers. The implication is

vertical integration between the mill and user level
viewed.


handled by the firms
that there is little

for the firms inter-










Feedstuff Prices

Several price series were used to provide insights as to the potential
profitability of feedstuff production on reclaimed phosphatic clay lands.
Long-term trends and seasonality of price fluctuations were analyzed using
Atlanta prices because adequate data for major Florida markets were unavail-
able. However, recent price series for Tampa or for Florida production
regions were used whenever available. Analysis of annual price series for
corn in Atlanta and Tampa, and annual average prices received by Florida
farmers, indicates a high degree of correlation among these series (Table 7,
Figure 5). Thus, it is likely that Atlanta prices for corn and the other
feed items examined provide a reasonable indication of long-term price
trends. Also, because of a lack of Florida-based data, the Atlanta price
series were used to estimate seasonal price patterns as well. More recent
monthly F. O.B. prices for Tampa or Florida farm prices were used as an
indication of current price levels and were used to estimate net returns for
the crops produced on phosphatic clay lands in Polk County.

Long-term trends

Weekly F. 0. B. Atlanta prices for corn, milo, wheat, soybeans and alfalfa
pellets were analyzed for a period of 13 years, 1976 through 1988. Alfalfa
pellets were used as a proxy for alfalfa hay because hay prices were
unavailable. Weekly prices unweightedd) were aggregated into annual averages
(tables 8 and 9). Real prices (adjusted for inflation) were calculated using
the 1982-84 Consumer Price Index.








Table 7.--Annual average corn prices, 1977-1989.

F. 0.B. F. 0.B.
Year Farm prices* Tampa prices Atlanta prices'

(--------------Dollars per bushel--------------)

1977 1.60 2.57 2.44
1978 2.10 2.74 2.62
1979 2.85 3.14 3.02
1980 3.40 3.47 3.36
1981 2.85 3.75 3.48
1982 2.45 3.14 2.92
1983 3.80 4.01 3.69
1984 3.05 3.96 3.69
1985 2.55 3.36 3.04
1986 1.95 2.82 2.55
1987 1.85 2.42 2.15
1988 3.00 3.47 2.90
1989 2.30 3.37 3.12


*Source: Florida Agricultural
issues.


Statistics, Field Crops Summary, various


bSource: Southeastern Dairy Review (simple average monthly prices),
various issues.

'Source: Feedstuffs (simple average of weekly prices), various issues.










4.50



4.00



-3.50
Q0


. 3.00
I-
a)

2 2.50

.5
o 2.00 -



1.50



1.00 -


-O


..

, .* /
#


I
1977


1978
1978


1979
1979


1980
1980


1981


1982


Tampa
-
I
/ Atlanta%


S. *
I


Florida farm
price


1983
1983


1984
1984


1985


i

.. % I.
*. % A.,
**. .1


1986


1987


1988


Year

Figure 5.--Nominal corn prices for Tampa and Atlanta and annual
farm prices received by Florida farmers, 1977-1989.


I
1989


r 1 1 I 1 r








Table 8.--Average annual prices for corn and milo, 1976-1988.

Corn Milo

Nominal Real Nominal Real
Year prices prices prices prices*

(Dollars per bushel) (Dollars per cwt.)

1976 2.82 4.96 4.72 8.29

1977 2.54 4.03 3.86 6.36

1978 2.62 4.02 4.11 6.31
1979 3.02 4.16 4.33 5.96

1980 3.56 4.08 4.84 5.87

1981 3.48 3.83 5.02 5.53

1982 2.92 3.03 4.13 4.28
1983 3.69 3.70 5.32 5.34
1984 3.69 3.55 6.22 5.98

1985 3.04 2.83 4.56 4.24

1986 2.55 2.33 4.13 3.77

1987 2.15 1.89 2.78 2.45

1988 2.93 2.48 2.90 2.57

*Real prices are calculated by deflating nominal prices by Consumer
Price Index, 1982-84 100, taken from the Survey of Current Business. United
States Department of Commerce, Bureau of Economic Analysis, various issues.
Source: Feedstuffs (simple average from weekly prices for Atlanta;
quantity data required for computation of weighted prices were
not available).









Table 9.--Average annual prices
1976-1988.


for wheat, soybeans and alfalfa pellets,


Wheat' Soybeansb Alfalfa pellets*

Nominal Real Nominal Real Nominal Real
Year prices prices prices prices prices prices

(----------Dollars per bushel-----------) (Dollars per ton)

1976 3.21 5.64 7.00 12.30 127.23 223.61
1977 2.69 4.43 6.00 9.90 111.46 183.92
1978 3.14 4.82 6.80 10.43 106.24 162.95
1979 3.90 5.37 6.60 9.09 131.99 181.81

1980 4.36 5.29 7.90 9.59 143.72 174.42

1981 4.04 4.45 5.20 5.72 154.90 170.41
1982 3.23 3.34 5.45 5.65 132.94 137.76
1983 3.70 3.71 8.15 8.18 136.06 136.60
1984 3.76 3.62 6.19 5.96 136.95 131.81
1985 3.36 3.12 5.19 4.82 112.58 104.63
1986 2.94 2.68 4.90 4.47 114.50 104.47
1987 2.78 2.45 5.55 4.89 113.52 99.76
1988 3.49 2.95 7.50 6.34 124.08 104.88


Feedstuffs (simple average from weekly
Field Crops Summary (season average
farmers in Florida).


prices for Atlanta).
prices received by


cReal prices are calculated by deflating nominal prices by Consumer
Price Index, 1982-84 100, taken from the Survey of Current Business. United
States Department of Commerce, Bureau of Economic Analysis, various issues.


*Source:

Source:






21

Over the 13-year period, all five commodities showed significant
downward trends in real prices, with most declining by 55 to 70 percent from
1976 to 1987 (figures 6 through 10). Milo and alfalfa pellets show sharper
price decreases than soybeans. While real prices in 1988 for milo have
dropped to less than a third and for alfalfa pellets to less than one-half of
the 1976 levels, real prices for soybeans dropped by about 50 percent, $12.30
per bushel in 1976 to $6.39 per bushel in 1988 (tables 8 and 9). Although
real prices for most of the commodities showed a slight increase in 1988 and
1989, these recent increased were attributed to the 1988 drought. On a
national basis, there is little evidence to indicate that real prices for the
major feedstuffs examined will regain the levels experienced in the late

1970s and early 1980s. Over the next few years, prices are likely to be
similar to those experienced in the late 1980s, barring unforeseen cata-
strophic events.

Seasonal price patterns

Weekly prices for No. 2 yellow corn (F. 0. B. Atlanta) for the 1976-1988
period were aggregated into monthly observations and analyzed to determine
seasonal price patterns. Atlanta prices were selected because it is the
nearest major market for which weekly prices were available; as mentioned
previously, annual corn prices for Atlanta and Tampa were found to move

together, and monthly prices probably do so as well (Figure 5).
Seasonal prices for corn tend to rise steadily in the months following
harvests in the major corn-producing states. Thus, prices typically begin to
increase in November, continuing throughout the remaining winter and spring
months, with peak prices occurring in May. As substitute feedstuffs become
plentiful, and as new crops of feed grains begin to be harvested, corn










5 0 0 ...... ....................................................... .. .. .... ... ... ... .. .. .. ...... ... .... ........... .. ........ .... ... ................ ... ........ .. ............................... ....... .. ............ ..... .. .. ... ......


Real prices


Nominal prices. -
.. ...... ... ............................. ......
. ", --
2. -


12 0 0 . . . . . . .. .. . .. . . . .. . . . . .. ... . . ... . .... .. ... . .. .... ... . .. . . . ... ........ .. .. . ... . .... . .. . . . ... .... .. . .. . .



0.00 I I
a






0.00
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Year

Figure 6.-Long-term price trends for corn, 1976-1988.








9.00-


8 .0 0 ........ .... ..................................... ......... ............ .. .. ..... ............ .................. ............. .................. ........................................................................ ...... ......................


7 0 0 .. ...... .. .......... p ..ic 0. ........................................ ............. ......................................... ........................................................................... .......... .....................................
8.00





'- 6.00

Co
50 5.-0
-- 5 .0 0 .............................. .............. ............. ......... ...... ........................ ... .. .. ....... ....... ......... .... ... .... ............... .. .................................................................................
Nominal prices

4.0 %


3.00
4 .0 0 ....................... N o.. .. .l ..................................................... .. .... ............................................... .......................... ................ -,- .............................................


3 .0 0 .............................................................. ............................................ .......................... .................................. ...... ...................... ..................................... .... ... ...... .......................


2.00-
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Year


Figure 7.--Long-term price trends for milo, 1976-1988.













Real prices


6.00




5.00




"R 4.00
r-
J)




(0
0 2.00


a


I I I I I I I I I I I I I
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Year

Figure 8.--Long-term price trends for wheat, 1976-1988.


Nominal prices 7

. ................ ......... ... ............................. ....................................... .................................... ............... ..................................... .............. ......... ...............
% *
^"^s"- -.^


1.00


0.00


............... ........... 1. ............................................. .. ........... ........................








14.00



12.00


10.00 -


()
.J 8.00 -

L
0
2 6.00 -



4.00 -


2.00



0.00


-


I I I I I I I I I I I I
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Year

Figure 9.--Long-term price trends for soybeans, 1976-1988.


1
1988


~


.... ........ ................ .. --.....................----......................................--..


Real prices







Nominal prices '

- % --------------------------- -- -- --- -- -- --------------------- ---.-------
% .- -J
-------------
. . . . . . . .. . . . . . . . . . . . . .


I I I















S.......... .................................. ....... ................... .. .. .. ...


240.00



220.00



200.00


180.00



160.00


140.00



120.00


100.00


80.00


......... ........................................................................
-
Nominal prices ,'

% ,
."* J#*
.. . .. . .. . .. . .. . .. . .. . .. . .. . . . .


... .... ..... ....... \ ...................... .................................. ...................
\^~ .-- -- -
% -- -
.. .. .. .. .. .. .. .
%CLI I


I I I i i i I I I I I I
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1!

Year


Figure 1O.--Long-term price trends for alfalfa pellets, 1976-1988.


I
388


Real prices


-








prices usually begin to drop in June and July, reaching seasonal lows in
October (Appendix Table 1, Figure 11).
Early planting (February) of corn for grain on phosphatic clay lands in
Polk County is not recommended due to the fact that harvesting coincides with
the summer rainy season. The new practice is to grow a crop of wheat or
triticale from mid-November to late April and then plant tropical corn in
June in the wheat stubble with a no-till planter and harvest it in November.
This system permits harvest of both crops in the dry season and does not
require irrigation. The harvest of t-rpical corn in November is when prices
are about five percent below the annual average (Figure 11).
Because of the high degree of substitutability between corn and milo
and a great deal of overlap in their harvest seasons, the seasonal price
patterns for milo are similar to those of corn. Peak milo prices in Atlanta
ty call occur in June and July, and seasonal lows in October and November
(Appendix Table 2, Figure 12). Unfortunately, harvest on reclaimed phosphat-
ic clay lands would most likely coincide with the seasonal low prices.
Seasonal prices for wheat indicate a more favorable situation for
production in Polk County. The expected harvest period on the phosphatic
clay lands would be April, nearly two months prior to harvests in major
production regions of the U.S. An April harvest would result in prices that
are near seasonal highs (Appendix Table 3, Figure 13).


































JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Month

Figure 11.-Seasonal price pattern for corn, 1976-1988.


1.15




1.10




1.05


1.00




0.95




0.90

































JAN FEB MAR APR MAY JUN
Mor


JUL AUG SEP OCT NOV DEC


Figure 12.--Seasonal price pattern for milo, 1976-1988.


1.15


1.10




1.05


1.00




0.95




0.90

































JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Month

Figure 13.-Seasonal price pattern for wheat, 1976-1988.


1.15


1.10




1.05


1.00




0.95




0.90







31

Alfalfa hay production in Polk County appears to be technically

feasible during two distinct periods, March through June and October through

November. A limited data series for alfalfa hay prices in Tampa indicates
that the spring harvest would probably be sold at prices that are somewhat
below the annual average, but the fall harvest would command prices that are
likely to be above the annual average (Appendix Table 4, Figure 14).

Costs of production

The costs of production estimates for the selected feedstuffs were

based primarily on data from research plots of the Polk County Mined Lands
Agricultural Research/Demonstration Project in Bartow. Appendix tables 5
through 11 show production cost estimates for corn, milo, wheat, soybeans,
and alfalfa. Land costs have been excluded from these budgets because, at

the present time, there is no good means for establishing rents or amortized
development costs for phosphatic clay lands for agricultural use. Due to the
adequate amounts of phosphate, potash and lime in phosphatic clay soil,
fertilizer costs are lower. Further, the water-holding capacity of the clay
reduces or eliminates the need for irrigation. However, machinery costs will
probably be higher than state averages because the heavy, sticky clay

requires more time and energy for most cultural practices, resulting in
greater wear on machinery. Thus, it seems that the fertility and irrigation
advantages are going to be offset by higher labor and machinery costs.


































JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Month

Figure 14.--Seasonal price pattern for alfalfa hay, 1986-1989.


1.15


1.10




1.05


1.00




0.95




0.90








Estimated returns

Recent market prices and estimated production costs were analyzed for
corn, milo, wheat, soybeans and alfalfa hay. Estimated net returns for each
of these crops appear below.
Cor.--In order to incorporate the effects of the Polk County area's
transportation cost advantage, recent Tampa F.O.B. prices were used as the
anticipated market prices for corn. The Tampa F.0.B. price for 1989 for the
month comprising the likely harvest period for corn on the reclaimed
phosphatic clay lands was $3.31 per bushel (Table 10, Figure 15). At a yield
of 80 bushels per acre, production costs are approximately $2.34 per bushel,
resulting in estimated net returns of $77.60 per acre (Table 10). It is
likely that the 1989 prices were somewhat elevated due to the 1988 drought;
if future prices revert to 1987 levels, net returns would only amount to $8
per acre (Figure 15).
Milo.--Milo prices were not available for the Tampa market, so Tampa
F.O.B. prices for No. 2 yellow corn were adjusted to reflect the historical
price differential between No. 2 yellow corn and milo in the Atlanta market
for the 1976-1988 period. On a weight-equivalent basis, the milo price is
typically about 82 percent of the corn price. Thus, the estimated market
price of milo in the Tampa market in the October-November 1989 harvest period
was about $4.63 per hundredweight. At a yield of 4,000 pounds per acre,
production costs were estimated at $3.82 per hundredweight, resulting in net
returns of slightly over $32.00 per acre (Table 10, Figure 16).










Table 10.--Estimated net
alfalfa hay.


returns per acre for corn, milo, wheat, soybeans and


Estimated
yield per Production Market Estimated
Crop acre/units costs prices net returns

(------Dollars per unit------) (Dollars per acre)

Corn 80 bu. 2.34 3.31* 77.60
Milob 40 cwt. 3.82 4.63b 32.40

Wheat 40 bu. 2.96 3.50c 21.60
Soybeans:
local sales 30 bu. 4.96 5.45C 14.70

N. Florida delivery 30 bu. 5.60 5.45 (4.50)

Alfalfa hay 4 tons 69.64 167.50* 391.44


*1989 Tampa F.0.B.
(various issues).


price for harvest period, Southern Dairy Review


bEstimated average price for Tampa for 1989 for the harvest period. The
milo price is based upon 82 percent of the corn price on a per-pound basis.
This is the price differential experienced in the Atlanta market for the
1976-1988 period.
eSeason average prices received by Florida farmers in 1989, Florida
Agriculture: Field Crops.








5.00 -




4.00 -


4)

S3.00 -
) -

U)

& 2.00 -

0


1.00




0.00 -


1988 Prices (drought)


1989 Prices -
..... .... ........ I.........................
..... .......

1987 Prices


Estimated costs of production


& -.


JUN JUL
Month


Figure 15.--Monthly prices for No. 2 yellow corn, F.O.B. Tampa, 1987-1989.


Harvest




- -
* *
.* ..



JAN
JAN


FEB
FEB


I
MAR


APR
APR


MAY
MAY


AUG
AUG


SEP
SEP


OCT
OCT


NOV
NOV


DEC
DEC


.*.:..


=-~t~-:










7.00



6.00



5.00


4.00



3.00


2.00



1.00



n nn


1988 Prices

,--------
_ .......................................... .................. ....................... ........ ........ ................ .... .............. ... ......... ............... .............. ............................ .....
I %
-p

1989 Prices
I

............. . .. . ..... ............. ............. ......... .........

***.....
--- 1987 Prices





Estimated costs of production


Harvest





. .


.. .. .. .


S -- ---
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Month


Figure 16.--Estimated monthly prices for milo, F.O.B. Tampa, 1987-1989.


4-
CL
0)
0.
0)
(0

O
-a


... .. .. .


V.








Wheat.--Local (Tampa) market prices were not available for wheat.
However, published price estimates of season average prices received by
Florida farmers were available. Although most Florida wheat production
occurs in the Panhandle region and in north Florida, it is assumed that Polk
County producers could obtain similar prices. In 1989, the average price
received for wheat by Florida farmers was $3.50 per bushel. Production costs
on the Polk County phosphatic clay lands, at a yield of 40 bushels per acre,
would be approximately $2.96 per bushel, resulting in net returns per acre of
$21.60. As in the case of corn, if wheat prices drop to pre-drought 1987
levels, returns would be negative (Table 10, Figure 17). Triticale, a wheat-
rye cross, also appears to have similar or even better potential as a feed

grain. Production research on triticale is currently underway.
Soybeans.--Because soybeans are neither grown in the Tampa region in
commercial quantities nor widely consumed in an unprocessed state, there is
no local market and hence no local price series. However, unprocessed
soybeans can be incorporated into cattle rations, and a relatively low-cost
"roaster" used to increase their feed value to livestock. Thus, it appears

that a local (south and central Florida) market could be developed for whole
soybeans. The only other market alternative would be to haul the soybeans to
the nearest north Florida terminal markets, which would add approximately
$0.75 per bushel in marketing costs.
If soybeans can be sold to local users at the 1989 state farmer price
of $5.45 per bushel, the estimated net returns per acre are $14.70, assuming
a yield of 30 bushels per acre. However, if the beans have to be transported
to a north Florida buyer, a net loss of $4.60 per acre is likely (Table 10,
Figure 18).









4.00


3.00




I)
(0
1. 2.00
._


at
1.00


1.00


0.00


1987 1988 1989
Year

SWheat prices Wheat costs


Figure 17.--Wheat prices received by Florida farmers and costs
of production on phosphatic clay lands in Florida.








8.00







6.00




()


0 4.00
0.


cO
a

2.00


n nn


_"........... _. _.r .. _.................... ... ................. r ...... .....



















- _


1987 1988 1989
Year

SSoybean prices ...*** Soybean costs, local sales

Soybean costs, N. Florida sales

Figure 18.--Soybean prices received by Florida farmers and costs

of production on phosphatic clay lands in Florida.









Alfalfa hav.--Monthly price estimates for alfalfa hay (F.0.B. Tampa)
were available for several years. The weighted average price for 1989 for
the anticipated harvest periods was $167.50 per ton. When establishment
costs are prorated over a three-year period and yields are conservatively
estimated at four tons per acre, production costs for alfalfa hay are just
under $70.00 per ton. At these costs and prices, the net return per acre is
just under $400 per acre (Table 10, Figure 19, Appendix tables 10 and 11).
Even if market prices were to decline to the 1987 levels, net returns would
approach $250 per acre. Thus, alfalfa hay appears to be one of the most
promising crops for the reclaimed lands. It should be noted, however, that
there are still many unresolved land reclamation and cultural practices that
could adversely affect the estimates of net returns.

Quality considerations

Most of the feed mill operators expressed their interest and willing-
ness to purchase any of the selected feedstuffs produced on phosphatic clay
lands in central Florida. However, their expressed likelihood was subject to
two main conditions: quality, and price competitiveness of the feedstuffs
produced on phosphatic clay lands with those shipped to Florida from other
states. Almost all of the feed mill operators were extremely concerned that
Florida-produced corn would have unacceptable levels of aflatoxin. They were
also adamant about getting high quality alfalfa hay with low moisture levels.
Interestingly, only one of the interviewees brought up the matter of
radionuclides, and wanted to know the radionuclide levels on crops grown on
reclaimed phosphatic clay lands. Others did not seem very concerned, or did
not know anything about this issue.











Harvest


200.00



180.00



160.00


1987 Prices


a,
. .


- .----- ------ ................-


JAN FEB MAR APR MAY


Harvest


I --I I


JUN JUL AUG SEP OCT
Month


NOV DEC


Figure 19.--Monthly prices for alfalfa hay, F.O.B. Tampa, 1987-1989.


988..... Prce
^ ___*__r


C

0
o.

CL

0
Q.

O
Cl


140.00



120.00


100.00



80.00

69.64

60.00


I _


1 _


" *. 1989 Prices


.............................. .


I








42

SUMMARY AND CONCLUSIONS

Florida is a feedstuffs deficit state. Annual consumption far

surpasses the state production for most of feed grains and alfalfa products.
Statewide, there is a shortfall of over 32 million bushels of corn, almost
five million bushels of soybean, along with shortfalls in alfalfa products
and other feedstuffs. The production deficits are particularly large, within
a 200-mile radius of Polk County, indicating a potential market for these
crops if produced on the reclaimed phosphatic clay lands. However, it should
be noted that, due to the homogeneity of the competitive environment in the
feedstuff market, producers will be required to compete on quality and price
with crops from other parts of the nation. In assessing the economic
potential of the production of feedstuffs on the reclaimed phosphatic clay
lands, the following items should also be considered:
There have been unfavorable long-term price trends for virtually
all hay and grain crops. Further, technological advances such
as genetic engineering may result in increased production
efficiency in traditional growing areas, with little benefit
accruing to growing areas like Polk County. This could increase
feed supplies and lower market prices.
Phosphatic clay lands provide several production advantages for
feedstuffs, but some disadvantages as well. Richness in plant
nutrients and reduced need for irrigation may be offset by higher
labor and machinery costs. Research with minimum tillage has
been successful and offers promise of holding costs down.
Transportation costs enhance the competitive position on most
items. However, the transportation advantage is lost for
soybeans if they must be transported to a crushing mill for
processing into soybean meal because the nearest terminal market
is in north Florida. It is feasible to "cook" or "roast"
soybeans to enhance their feed value. This may be a viable
alternative for some Florida feeding operations.
Quality is another significant factor in determining market
opportunities. Aflatoxin and moisture levels in Florida-produced
corn and alfalfa hay are concerns to feed manufacturers. Most
were not concerned with radionuclides. However, radionuclides
may emerge as a negative factor, even though most evidence to
date indicates that food and feed products produced on reclaimed
mined phosphatic lands pose virtually no health risks.
Future production research should also attempt to objectively
measure the quality of hay and grain products from reclaimed
phosphatic clay soils.
Total production costs discussed in this report are understated
because land reclamation and preparation costs or rental rates
are not addressed. For milo, wheat and soybeans, imposition of
a modest land charge would result in negative returns.






43

Production costs and yields should be viewed as tentative because
they were derived from relatively small research trials over a
relatively short time period. Expansion to a commercial scale
and adoption of no-till or minimum tillage systems may yield
different results.
In conclusion, this study indicates that there is a ready Florida market
for the feedstuffs examined. Based upon the limited cost and yield data,
there appears to be greatest promise for economical production of corn and
alfalfa. However, as cultural problems on reclaimed lands are solved and as
additional data are obtained from research, costs and returns should be
reexamined for all feed items.








44

REFERENCES


Degner, R L. "Livestock," The Florida Handbook: 1989-1990. Florida people
and their government, compiled by Allen Morris, The Peninsular Publish-
ing Company, Tallahassee, Florida. 1989. p. 530.
Florida Agricultural Statistics Service. Florida Agricultural Statistics:
Field Crops Summary. Orlando, Florida. Various issues.
Florida Agricultural Statistics Service. Florida Aaricultural Statistics:
Field Crops. Orlando, Florida. January 24, 1990.

Florida Agricultural Statistics Service. Florida Agricultural Statistics:
Price. Orlando, Florida. January 4, 1990.
Florida Department of Agriculture and Consumer Services. Feed Registrant
List as of February 1989. Tallahassee, Florida. 1989.
Florida Feed Association, Inc. List of Membership of the Florida Feed
Association. Tampa, Florida. May 1989.
Harris, B. Jr. "Feed Facts," Southeastern Dairy Review. Dairy Farmers, Inc.,
Orlando, Florida. Monthly issues, 1976-1990.

McHardy, J. C. "Future Trends in Florida Phosphate Mining, Beneficiation and
Trailing Disposal," Mining Engineering. August 1983. pp. 1196-1200.
The Miller Publishing Company. "Ingredient Market," Feedstuffs: The Weekly
Newspaper for Agribusiness. Minnetonka, Minnesota. Weekly issues,
1976-1990.
Rahmani, M. D. P. Shibles, J. A. Stricker and T. G. Taylor. Preliminary Cost
Estimation for Selected Crops Grown on Phosphatic Clay. Staff Paper
353, Food and Resource Economics Department, Institute of Food and
Agricultural Sciences, University of Florida. April 1989.
Stricker, J. A. "Final Report: Mined Lands Agricultural Research/Demonstra-
tion Project, Prepared for Florida Institute of Phosphate Research."
July 1987.

AUnited States Department of Agriculture. Agricultural Prices. National
Agricultural Statistics Service, Washington, DC. Various issues.
United States Department of Commerce. Survey of Current Business. Bureau
of Economic Analysis, Washington, DC. Various issues.
United States Department of Commerce. 1982 Census of Agriculture. Bureau
of the Census, Washington, DC. July 1984.

United States Department of Commerce. 1987 Census of Agriculture. Bureau
of the Census, Washington, DC. April 1989.

Wood, C. "Reclamation: Can Agriculture Fill Economic Vacuum Created by Polk
County's Declining Phosphate Industry?" The Citrus Industry. July
1986. pp. 17-18.



































APPENDIX














Appendix Table 1.--Monthly nominal prices for corn, F.0.B. Atlanta, 1976-1988.


Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

(---------------------------------------Dollars per bushel--------------------------------------)


1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
Avg.
Index


2.77
2.74
2.51
2.67
2.90
4.01
3.02
2.90
3.90
3.19
2.96
2.00
2.37
2.92
0.98


2.80
2.76
2.55
2.70
2.98
3.84
3.02
3.13
3.81
3.23
2.90
1.94
2.45
2.93
0.98


2.84
2.72
2.67
2.80
2.99
3.80
2.99
3.33
3.98
3.23
2.83
1.97
2.48
2.97
1.00


2.82
2.68
2.90
2.88
2.93
3.88
3.13
3.60
4.07
3.30
2.87
2.07
2.53
3.05


2.96
2.61
2.93
2.95
3.20
3.84
3.21
3.66
4.07
3.24
2.99
2.29
2.58
3.12


3.12
2.48
2.84
3.30
3.04
3.58
3.19
3.73
4.10
3.23
3.01
2.36
2.58
3.12


3.17
2.32
2.55
3.25
3.12
3.69
3.12
3.80
3.94
3.19
2.65
2.22
3.72
3.13


2.86
1.99
2.39
3.19
3.67
3.36
2.85
4.16
3.53
2.83
2.32
2.04
3.30
2.96


2.85
1.95
2.36
3.17
3.73
3.05
2.62
4.16
3.44
2.64
2.04
2.05
3.37
2.88


2.62
2.12
2.51
3.15
3.73
2.91
2.46
3.97
3.20
2.62
1.90
2.20
3.32
2.82


2.45
2.48
2.65
3.06
3.94
2.95
2.67
3.98
3.14
2.78
2.09
2.31
3.23
2.90


2.59
2.51
2.59
3.11
3.97
2.89
2.81
3.89
3.13
2.96
2.10
2.34
3.20
2.93


1.02 1.05 1.05 1.05 0.99 0.97 0.95 0.97 0.98


Source: Feedstuffs, various issues.
















Appendix Table 2.--Monthly nominal prices for milo, F.0.B. Atlanta, 1976-1988.


Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

(---------------------------------------Dollars per cwt.---------------------------------------)


1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
Avg.
Index


4.80
4.08
4.10
4.18
4.50
5.63
2.63
4.73
6.55
4.95
5.00
2.76
2.34
4.33
1.01


4.83
4.20
4.05
4.25
4.55
5.65
4.74
4.74
6.40
5.00
4.98
2.75
2.40
4.50
1.05


4.93
4.20
4.05
4.23
4.54
5.65
4.70
4.75
6.40
5.08
4.95
2.75
2.43
4.51
1.05


4.89
4.19
3.73
4.20
4.60
5.65
4.56
4.92
6.52
4.90
4.88
2.75
2.50
4.48
1.04


4.87
4.15
4.34
4.21
4.60
5.61
4.39
5.25
6.70
4.90
4.55
2.56
2.55
4.51
1.05


5.03
4.11
4.41
4.25
4.57
5.29
4.46
5.16
6.70
4.90
4.30
3.50
2.91
4.58
1.07


5.14
4.00
4.30
4.36
4.64
5.60
4.18
5.21
6.70
4.90
4.80
4.50
3.49
4.76
1.11


4.44
3.65
3.95
4.43
4.70
5.72
3.45
5.25
6.70
4.90
4.06
2.55
3.24
4.39
1.02


4.80
3.20
4.00
4.33
5.06
5.38
3.63
5.25
6.70
3.88
3.40
2.30
3.33
4.25
0.99


4.61
3.10
4.08
4.47
5.28
4.83
4.08
5.63
5.62
2.32
3.20
2.21
3.27
4.05
0.94


4.27
3.46
4.10
4.50
5.33
2.75
4.14
6.55
4.90
3.95
2.93
2.28
3.21
4.03
0.94


4.13
4.05
4.15
4.50
5.60
2.71
4.56
6.55
4.90
4.92
2.84
2.31
3.18
4.18
0.97


Source: Feedstuffs, various issues.














Appendix Table 3.--Monthly nominal prices for wheat, F.0.B. Atlanta, 1976-1988.


Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

(--------------------------------------Dollars per bushel--------------------------------------)


1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
Avg.
Index


3.27
3.50
2.85
3.65
4.15
4.90
3.50
3.26
4.15
3.68
3.35
2.75
3.00
3.54
1.03


3.26
3.66
2.88
3.62
4.38
5.00
3.50
3.24
4.05
3.70
3.45
2.93
3.29
3.61
1.05


3.50
2.85
3.00
3.62
4.30
5.00
3.40
3.20
4.01
3.75
3.39
2.96
3.40
3.57
1.04


3.50
2.85
3.06
3.62
4.30
4.70
3.40
3.40
4.15
3.71
3.32
2.90
3.40
3.56
1.04


3.45
2.72
3.09
3.91
4.43
4.25
3.36
3.67
4.01
3.59
3.23
2.93
3.31
3.53
1.03


3.40
2.45
3.14
3.80
4.00
3.69
3.25
3.56
3.67
3.13
2.81
2.56
3.29
3.29
0.96


3.37
2.41
3.10
4.16
4.10
3.48
3.15
3.66
3.53
3.22
2.61
2.50
3.53
3.29
0.96


3.21
1.98
3.07
3.98
4.28
3.56
3.05
3.91
3.46
2.95
2.53
2.50
3.50
3.23
0.94


3.14
2.37
3.05
4.19
4.19
3.56
3.11
4.25
3.48
2.92
2.60
2.55
3.70
3.32
0.97


3.05
2.33
3.29
3.93
4.40
3.50
3.03
4.04
3.51
3.05
2.61
2.90
3.82
3.34
0.97


2.92
2.46
3.54
4.10
4.85
3.50
2.86
4.02
3.50
3.25
2.70
2.95
3.90
3.43
1.00


2.40
2.70
3.65
4.22
4.96
3.50
3.18
4.10
3.58
3.40
2.70
2.99
3.80
3.47
1.01


Source: Feedstuffs. various issues.




















Appendix Table 4.--Monthly nominal prices for alfalfa hay, F.O.B. Tampa, 1986-1989.

Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

(----------------------------------Dollars per ton----------------------------------------)

1986 130 135 125 135 135 120 120 125 120 125 135 140

1987 130 130 135 130 130 130 130 130 130 135 130 135

1988 135 140 140 140 155 155 155 155 165 165 160 165

1989 165 160 165 180 165 165 165 165 165 165 165 175

Avg. 140 141 141 146 146 143 143 144 145 148 148 154

Index 0.97 0.98 0.98 1.01 1.01 0.98 0.98 0.99 1.00 1.02 1.02 1.06

Source: Southeastern Dairy Review. various issues.







Appendix Table 5.--Cost of producing one acre of dryland corn on reclaimed
phosphatic clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Seed lb. 15.00 $ 1.48 $ 22.20
Fertilizer (N) lb. 130.00 $ 0.22 $ 28.60
Herbicide acre 1.00 $20.40 $ 20.40
Insecticide lb. 15.00 $ 1.63 $ 24.45
Tractor (135 hp) hr. 2.00 $ 7.18 $ 14.36
Truck, pick-up mi. 20.00 $ 0.10 $ 2.00
Truck, 2-ton mi. 20.00 $ 0.15 $ 3.00
Other machinery hr. 2.00 $ 1.62 $ 3.24
Hired labor hr. 2.00 $ 5.50 $ 11.00
Combine hr. 0.33 $13.88 $ 4.58
Total $133.83
Interest on cash expenses
(11% for 6 months) $133.83 0.055 $ 7.36
Total cash expenses $141.19
Fixed costs
Tractor (135 hp) hr. 2.00 $ 9.10 $ 18.20
Truck, pick-up mi. 20.00 $ 0.15 $ 3.00
Truck, 2-ton mi. 20.00 $ 0.21 $ 4.20
Combine hr. 0.33 $47.20 $ 15.58
Other machinery hr. 2.00 $ 2.51 $ 5.02
Total fixed costs $ 46.00
Total cost of producing one acre of dryland corn $187.19

Break-even Corn Prices at Various Yields
Yield Price
(bushel per acre) (dollars per bushel)
60 3.12
80 2.34
100 1.87
120 1.56
140 1.34










Appendix Table 6. --Cost of producing one acre of milo on reclaimed phosphatic
clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Seed lb. 5.00 $ 0.75 $ 3.75
Fertilizer (N) lb. 120.00 $ 0.22 $ 26.40
Herbicide acre 1.00 $11.00 $ 11.00
Insecticide lb. 1.00 $18.00 $ 18.00
Tractor (135 hp) hr. 1.75 $ 7.18 $ 12.57
Truck, pick-up mi. 20.00 $ 0.10 $ 2.00
Truck, 2-ton mi. 20.00 $ 0.15 $ 3.00
Other machinery hr. 2.00 $ 1.70 $ 3.40
Hired labor hr. 1.75 $ 5.50 $ 9.63
Combine hr. 0.50 $13.88 $ 6.94
Drying ton 1.25 $ 8.00 $ 10.00
Total $106.68
Interest on cash expenses
(11% for 6 months) $106.68 0.055 $ 5.87
Total cash expenses $112.55
Fixed costs
Tractor (135 hp) hr. 1.50 $ 8.67 $ 13.01
Truck, pick-up mi. 20.00 $ 0.15 $ 3.00
Truck, 2-ton mi. 20.00 $ 0.21 $ 4.20
Combine hr. 0.33 $47.20 $ 15.58
Other machinery hr. 1.50 $ 3.03 $ 4.55
Total fixed costs $ 40.33
Total cost of producing one acre of sorghum $152.87

Break-even Grain Sorghum Prices at Various Yields
Yield Price
(cwt. per acre) (dollars per cwt.)
40 3.82
50 3.06
60 2.55
70 2.18
80 1.91







Appendix Table 7.--Cost of producing one acre of wheat on reclaimed
phosphatic clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Seed lb. 1.50 $ 9.00 $ 13.50
Fertilizer (N) lb. 90.00 $ 0.22 $ 19.80
Fungicide acre 3.00 $ 1.75 $ 5.25
Tractor (135 hp) hr. 1.75 $ 7.18 $ 12.57
Truck, pick-up mi. 10.00 $ 0.10 $ 1.00
Other machinery hr. 2.00 $ 2.92 $ 5.84
Hired labor hr. 1.75 $ 5.50 $ 9.63
Combine hr. 0.50 $13.88 $ 6.94
Total $ 74.52
Interest on cash expenses
(11% for 6 months) $74.52 0.055 $ 4.10
Total cash expenses $ 78.62
Fixed costs
Tractor (135 hp) hr. 1.50 $ 8.67 $ 13.01
Truck, pick-up mi. 10.00 $ 0.15 $ 1.50
Combine hr. 0.33 $47.20 $ 15.58
Other machinery hr. 1.50 $ 6.34 $ 9.51
Total fixed costs $ 39.59
Total cost of producing one acre of wheat $118.21

Break-even Wheat Prices at Various Yields
Yield Price
(bushels per acre) (dollars per bushel)
30 3.94
35 3.38
40 2.96
45 2.63
50 2.36
55 2.15










Appendix Table 8.--Cost of producing one acre of soybeans for local markets
on reclaimed phosphatic clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Seed bu. 0.80 $11.00 $ 8.80
Inoculant pkg. 1.00 $ 1.25 $ 1.25
Herbicide acre 1.00 $20.00 $ 20.00
Insecticide acre 1.00 $17.00 $ 17.00
Spraying (air) appl. 3.00 $ 4.00 $ 12.00
Scouting fee acre 1.00 $ 3.00 $ 3.00
Tractor (135 hp) hr. 2.00 $ 7.18 $ 14.36
Truck, pick-up mi. 20.00 $ 0.10 $ 2.00
Truck, 2-ton mi. 20.00 $ 0.15 $ 3.00
Other machinery hr. 2.00 $ 1.70 $ 3.40
Hired labor hr. 2.00 $ 5.50 $ 11.00
Combine hr. 0.50 $13.88 $ 6.94
Total $102.75
Interest on cash expenses
(11% for 6 months) $102.75 0.055 $ 5.65
----------------------------- -------------------------
Total cash expenses $108. 40
-------------------------------------------------------------------
Fixed costs
Tractor (135 hp) hr. 1.50 $ 8.67 $ 13.01
Truck, pick-up mi. 20.00 $ 0.15 $ 3.00
Truck, 2-ton mi. 20.00 $ 0.21 $ 4.20
Combine hr. 0.33 $47.20 $ 15.58
Other machinery hr. 1.50 $ 3.03 $ 4.55
-------------------------------------------------------------------
Total fixed costs $ 40.33
-------------------------------------------------------------------
Total cost of producing one acre of soybeans $148.73

Break-even Soybean Prices at Various Yields
Yield Price
(bushels per acre) (dollars per bushel)
15 9.92
20 7.44
25 5.95
30 4.96
35 4.25
40 3.72







Appendix Table 9.--Cost of producing one acre of soybeans for north Florida
markets on reclaimed phosphatic clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Seed bu. 0.80 $11.00 $ 8.80
Inoculant pkg. 1.00 $ 1.25 $ 1.25
Herbicide acre 1.00 $20.00 $ 20.00
Insecticide acre 1.00 $17.00 $ 17.00
Spraying (air) appl. 3.00 $ 4.00 $ 12.00
Scouting fee acre 1.00 $ 3.00 $ 3.00
Tractor (135 hp) hr. 2.00 $ 7.18 $ 14.36
Truck, pick-up mi. 20.00 $ 0.10 $ 2.00
Other machinery hr. 2.00 $ 1.70 $ 3.40
Hired labor hr. 2.00 $ 5.50 $ 11.00
Combine hr. 0.50 $13.88 $ 6.94
Custom hauling' bu. various $ 0.75 --*
Total $ 99.75
Interest on cash expenses
(11% for 6 months) $102.75 0.055 $ 5.49
Total cash expenses $105.24
Fixed costs
Tractor (135 hp) hr. 1.50 $ 8.67 $ 13.01
Truck, pick-up mi. 20.00 $ 0.15 $ 3.00
Truck, 2-ton mi. 20.00 $ 0.21 $ 4.20
Combine hr. 0.33 $47.20 $ 15.58
Other machinery hr. 1.50 $ 3.03 $ 4.55
Total fixed costs $ 40.33
Total cost of producing one acre of soybeans $145.57

Break-even Soybean Prices at Various Yields
Yield Price
(bushels per acre) (dollars per bushel)
15 10.45
20 8.03
25 6.57
30 5.60
35 4.91
40 4.39

*Custom hauling to nearest north Florida terminal markets; charges do not
accrue interest.









Appendix Table 10.--Cost of establishing one acre of alfalfa on reclaimed
phosphatic clay (excluding rent).

Items Unit Quantity Price Cost



Variable costs
Seed bu. 18.00 $ 3.00 $ 54.00
Inoculant pkg. 1.00 $ 1.00 $ 1.00
Boron or Mn. lb. 2.50 $ 1.00 $ 2.50
Herbicide acre 1.00 $20.40 $ 20.40
Insecticide acre 1.00 $14.00 $ 14.00
Tractor (80 hp) hr. 5.00 $ 4.37 $ 21.85
Truck, pick-up mi. 20.00 $ 0.10 $ 2.00
Equipment hr. 5.00 $ 2.68 $ 13.40
Hired labor hr. 5.00 $ 5.50 $ 27.50
Total $156.65
Interest on cash expenses
(11% for 6 months) $156.65 0.055 $ 8.62
Total cash expenses $165.27
Fixed costs
Tractor (135 hp) hr. 5.00 $ 5.30 $ 26.50
Truck, pick-up mi. 20.00 $ 0.15 $ 3.00
Equipment hr. 5.00 $ 3.68 $ 18.40
Total fixed costs $ 47.90
Total establishment costs $213.17








Appendix Table 11.--Cost of maintaining and harvesting one acre of alfalfa
hay on reclaimed phosphatic clay (excluding rent).

Items Unit Quantity Price Cost

Variable costs
Herbicide acre 1.00 $10.00 $ 10.00
Insecticide lb. 1.00 $ 8.00 $ 8.00
Tractors and machinery acre 1.00 $60.00 $ 60.00
Twine acre 1.00 $12.00 $ 12.00
Truck, pick-up mi. 60.00 $ 0.10 $ 6.00
Hired labor hr. 9.00 $ 5.50 $ 49.50
Total $145.50
Interest on cash expenses
(11% for 6 months) $145.50 0.055 $ 8.00
--------------------------------------------------------------------
Total cash expenses $153.50

Fixed costs
Tractor (80 hp) acre 1.00 $45.00 $ 45.00
Truck, pick-up mi. 60.00 $ 0.15 $ 9.00
Establishment costs (pro-
rated over 3 years) acre 1.00 $71.06 $ 71.06
--------------------------------------------------------------------------
Total fixed costs $125.06
-----------------------------------------------------------------------
Total cost of producing one acre of alfalfa hay $278.56

Break-even Alfalfa Hay Prices at Various Yields
Yield Price
(tons per acre) (dollars per ton)
3 92.85
4 69.64
5 55.71
6 46.43
7 39.79
8 34.82




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