University. Louisiana State. January Sugarcane. stubble cropp. cycle. could yields. crop out andd. plowing the. title page are five

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1 Staff Report No January Sugarcane Crop Cycle Length Evaluation Model Users Guide A Farm Planning/Decision Tool for Louisiana Sugarcane Grow wers Michael E. Salassi and Michael A. Deliberto Department of Agricultural Economics and Agribusiness Louisiana State University Agricultural Center Baton Rouge, Louisianaa The 2012 Sugarcane Crop Cycle Length Evaluation Model was developed to assist sugarcane producers in evaluating thee optimal crop cycle length for various tracts of sugarcane produced on farms in Louisiana. Costs and returns aree compared for sugarcane crop cycles through harvest of second and third stubble sugarcane crops. The Excel spreadsheet model contains worksheets which allow entry of data (total acres, planting method, planting ratio, raw sugar price, mill and landlord share, sugar yields, and variable production and harvest costs) used to determine projected costs and returns through alternativee sugarcane crop cycle lengths as well as the required breakeven sugar yield level for a third stubble crop. Breakeven sugar yield for a third stubble sugarcane crop is the yield at which total grower net returns above variable costs for a crop cycle through harvest of a third stubble crop would be equal to net returns from a cropp cycle through harvest of a second stubble crop, with adjustments to acreage, costs and returns for differences in requiredd seed cane acreage. If projected third stubble sugar yields exceed the estimated breakeven yield, farm/tract net returns could be increased by keeping the tract in production for harvest of a third stubble crop. If projected third stubble sugar yields do not exceed the estimated breakeven yield, farm/tract net returns would be greater by plowing the crop out andd replanting after harvest of the second stubble crop. The spreadsheet model contains six separate worksheet pages. Thee first worksheet page (Crop Cycle Comparison Intro) is a title page which briefly describes the three sections included on each of the following worksheet pages. Following thee title page are five identical worksheets (labeled Farm Land Tract 1 through Farm Land Tract 5 ). Each of thesee worksheets are identical with regard to dataa entry and costs and returns calculations made. Section 1 allocates farm landd tract acreage to various seed cane and production cane categories based on planting method and planting ratio values entered. Section 2 presents estimates of grower returns, variablee production costs, and net returns above variablee production costs for each crop cycle length. Section 3 allows dataa entry of variable cost items for various sugarcanee production phases. Total variable cost values for the various sugarcane production phases, calculated in Section 3, aree automatically transferred to the variable production expenses section of the costs and returns table in Section 2. Evaluation of the economically optimal sugarcane crop cycle length, harvest through third stubble versus harvest throughh second stubble, must include consideration of not only the projected net returns of f producing a third stubble crop, but alsoo the associated changes in equired seed cane acreage. This model incorporates those acreage relationships, byy determining required fallow, seed cane and production cane acreage for each crop cycle length in Section 1 of eachh worksheet and then using those acreages to determinee costs and returns in Section 2. Breakeven third stubble sugar yields per harvested acre are estimated as a function of several factors including: (a.) total farm net returns throughh harvest of a second stubble crop, (b.) plant cane crop revenue, (c.) first stubble crop revenue, (d.) second stubble cropp revenue, (e.) total farm variable cost through harvest of a third stubble crop, (f.)) raw sugar market price, (g.) grower ss share of sugarcane crop (after mill and landlord share deductions), and (h.) the percent of total farm acreage devoted too third stubble crop production. Dr. Michael E. Salassi, Professor, and Michael A. Deliberto, Research Associate, Department of Agricultural Economics and Agribusiness LSU Agricultural Center, Baton Rouge, Louisiana. Louisiana State University Agricultural Center Louisiana Cooperative Extension Service / Louisiana Agricultural Experiment Station

2 Title Page (Crop Cycle Comparison Intro Worksheet) : The first worksheet page in the model is a title page which briefly describes the various sections included on each of thee following crop cycle length evaluation worksheets. Five identical worksheets are included in the model, allowing for evaluation of up to five different land tract types on the farm. Each of the five worksheets has three sections. Section 1 allocates farm acreage based upon planting method and planting ratio. Section 2 calculates net grower returns abovee variable cost through harvest of second and third stubble crops. Section 3 allows data entry of variable cost items, withh the total variable cost of each production phase automatically transferred to the table in Section 2. Cells requiring dataa entry on the worksheets are identified with blue text and light blue background. These are the only cell in which data cann be entered. All other cells are protected. Tabs located at the bottom of the worksheet page provide access to each of the worksheets in the model. Starting at the title page (Crop Cycle Comparison Intro), clicking on the tab labeled Farm Land Tract 1 will take the user to the first worksheet. The remaining four worksheets can be accessed by clicking on the appropriate tab. Each of the five farm land tract worksheets are identical and independent of each other. Five land tract worksheets are provided to allow for computations on different types or tracts of land (e.g., light soils vs. heavy soils, high-yielding land vs. low-yielding land, variety A vs. variety B, etc.). 2

3 Section 1 (Distribution of Seedcane Expansion Acreage and Total Farm Acreage): Section 1 of each worksheet allows for dataa entry of total farm acres in the tract to be evaluated, as well as entry of codess for planting methods and the associated planting ratios. Based on the planting method/ratios entered, total acreage onn the tract is automatically categorized into the required seed cane acreages and acreages harvested for sugar (plant canee and stubble cane) ). In terms of seed cane expansion, the assumptionn made here is that purchased cultured seed cane is planted with both the plant cane and first stubble crops harvested as seed cane, each being expanded twice before beingg planted as production cane which would be harvested for processing by the mill. A land tract name or id can be entered in cell I5 and the total farm or land tract acreage to be evaluated can be entered inn cell K6. Three planting method codes must be entered to representt the seed cane expansionn process. Those plantingg method codes are 1 = hand planting and 2 = mechanical planting. The planting method codes to be entered are for: (a.) planting of the initial purchased seed cane in cell K10, (b.) planting of the first seed cane expansion in cell K13, and (c.) planting of the second seed cane expansion in cell K15. Planting ratios for the first seed cane expansion are entered inn cells J13 and N13. Planting ratios for the second seed cane expansion are entered in cells K15 and N15. Section 1 results show comparison of the distribution of farm tract acreage to fallow, planted and harvested acreage for crop cycless through harvest of second and third stubble. Section 1 Data Entry: Data Entry Cell Reference I5 K6. K10 K13 J13 & N13 K15 J15 & N15 Data Entry Cell Value Description Farm land tract name or id Total farm acres in tract to be evaluated Planting method code for initial purchased seed cane planting [1=hand planted, 2=mechanical planted] Planting method code for first seed cane expansionn [1=hand planted, 2=mechanical planted] Planting ratioo for first seed cane expansion Planting method code for second seed cane expansion [1=hand planted, 2=mechanical planted] Planting ratioo for second seed cane expansion 3

4 Section 2 (Projected Farm Income and Expenses): Section 2 provides a costs and returns comparison for sugarcane cropp cycles through harvest of a second stubble versus a third stubble crop, based on the information entered for that farm land tract. Returns are based on grower s share of raw sugar sales; payments for molasses are excluded. User would enter values for raw sugar price, mill share, landlord share, as well as projected values of sugar per harvested acre yields for plant cane through third stubble. A breakeven third stubble yield is calculated, based on the costs and returns data entered. An option is included for production of an optional crop, such as soybeans or wheat, on sugarcane fallow land. Total grower s share of optional crop revenue wouldd be entered in this section. Production costss for optional crop production would be entered in Section 3 and automatically transferred to the costs and returns table in this section. Section 2 Data Entry: Data Entry Cell Reference E42 E43 H42 H47 H48 H49 L50 J59 & N59 C60 I66 & M66 E76 & E77 H76 & H77 I76 & I77 Data Entry Cell Value Description Raw sugar market price ($ / pound) Mill share of sugarcane crop (%) Landlord share of crop (%) [1/5 = 20.0%, 1/6 = 16.7%, 1/7 = 14.3%] Plantcane sugar yield perr harvested acre (lbs / acre) First stubble sugar yield per harvested acre (lbs / acre) Second stubble sugar yield per harvested acre (lbs / acre) Projected third stubble sugar yield per harvested acre (lbs / acre) Optional cropp revenue on fallow land, producer share ($) [Celll H107 multiplied by optional crop acres] Name of optional crop on fallow land Acres of sugarcane fallow land planted to optional crop (acres) Other variable cost item name Other variable cost value per acre ($ / acre) Acres applicable for otherr variable costs listed (acres) 4

5 Section 3 (Variable Costs per Acre for Sugarcane Production Phases): Section 3 allows users to enter data values to calculate variable production costs per acre for alternative sugarcanee production phases. Some variable production cost items can be entered as quantities and prices per unit (such as fuel or o fertilizer). Other variable production cost items can be entered as dollar per acre cost values (such as herbicides, labor or o repairs). Total variable costs per acre, calculated in each table of Section 3, are automatically transferred to the costs andd returns tables in Section 2. Eleven separatee variable cost tables are included on each worksheet, ranging from fallow fieldd operations to harvest. Cost values from the 2012 Projected Sugarcane Cost Report are included (references to table andd page numbers from the 2012 report are listed below each table in thiss section). Changes in these values can be made too more closely match production expenses on a given tract of land. All required data entry cells in this section aree highlighted in blue. 5

6 SECTION 3 - TABLES BELOW CAN BE USED TO ENTER VARIABLE COST VALUES WHICHH ARE TRANSFERRED TO THE SECTION 2 TABLE ABOVE. (continued) Each of the five worksheets in this sugarcane crop cycle length evaluation model are identical and independent of eachh other. Multiple worksheets are included to provide flexibility in evaluating optimal crop cycle length over an entire farm. A single worksheet could be used for the entire farm, or multiple worksheets can be used to evaluate optimal crop cyclee lengths on segments of the whole farm. Separate worksheets could be used to evaluate production by soil type, by landd productivity, by location, or by variety. Alll required data entry, as well as calculations, for comparison of crop cycles through harvest of a second stubble crop versus harvest through a third stubble crop are made within the same singlee worksheet. Louisiana State University Agriculturall Center Louisiana Cooperativee Extension Service / Louisiana Agricultural Experiment Station