Rice Farming

When Jackie Loewer wanted to see whether updating his base acres and yields under the new farm bill would be beneficial, he turned to a computer program developed by Louisiana State University.

He plugged his new yields and history into the spreadsheet, and the simple-to-use computer program developed by LSU AgCenter agricultural economics professor Mike Salassi promptly printed out the results.

“It would tell you what your new base would be and which of the two options would be better for you,” says Loewer, who farms near Branch, La. “[Salassi] hit it pretty much on the button.

“When I went into the FSA (Farm Service Agency) office, I didn’t have any surprises. The yields came out just about to the 10th. I could make a decision before I walked in.”

Loewer isn”t alone in turning to computer programs to help him figure out increasingly complex farm bill programs. Salassi’s program was used by growers throughout the Southern rice belt.

How much base should I plant?
In addition to Salassi, associate ag economics professor Kurt Guidry developed a computer program that helps producers decide what percentage of their base acres is the most profitable to plant.

The software’s development was in response to questions from growers and county agents.

“We started to get a lot of questions about what percent of my rice base acres should I plant and what percent of my rice base acres would be most profitable,” Guidry says.

This spring, he trained county agents in southwest Louisiana about how to use the program and also made several presentations about it at grower meetings.

While Salassi’s program was designed for one-time use before the April 1 deadline to update base acres, Guidry’s program can be used each year.

All you need to do is plug in the upcoming season’s expenses and income. It also is not specific to Louisiana and can be used by any producer.

Guidry’s software examines planting 100 percent base down to 15 percent base and presents the user with costs and returns under each scenario.

“With the way current market prices are, producers can’t really afford to plant any piece of land that doesn’t at least cover variable costs,” Guidry says.

To gain the most from the program, which is written in Excel, Guidry says growers should know both variable and fixed costs for each field within a farm number.

Variable costs include fertilizer, pesticides, water pumping costs and seed. Fixed costs include insurance, depreciation, and debt service such as combine and land payments.

The software also asks for family living expenses and other sources of income, such as those from a spouse who works off-farm.

Name, rank and profitability
The computer program also ranks each field within a farm number as to profitability and ranks each field among several farm numbers.

“It has the ability if there are 10 different tracks of land within that farm number to split that farm into 10 different tracks and rank those tracks within all of the farm numbers,” Guidry says.

If growers manage each farm as one entity, the software can still be used. But Guidry says it won’t rank individual fields among the farms as to profitability. It will just compare each farm as a whole.

“The only problem is the spreadsheet goes strictly by the numbers,” Guidry says. “If you start reducing base acres, it may totally eliminate a farm number because that farm number is less profitable than the other farm numbers the producer has.”

If the user had entered the data based on individual fields rather than individual farms, the results could possibly have shown that some fields would have been profitable to plant within an eliminated farm.
And the results are only as specific as the information that is entered.

“The spreadsheet doesn’t do anything other than manipulate the data that the producer puts in there,” Guidry says.

To update or not
Salassi’s program was developed to help growers decide whether to take advantage of the one-time provision in the 2002 farm bill that allows them to update base acres and yields. The deadline to update acres was April 1.

Under the 1996 farm bill, program payments were based on base acres and yields calculated on 1981-1985 production. But the 2002 farm bill allows growers to stick with their historic base and yields or update them based on 1998-2001 production. If they chose to update, then they had to do so for every crop on their farm.

Contact Vicky Boyd at (209) 571-0414 or vlboyd@att.net.

Internet Hotlink:

To download the Rice Production Options Spreadsheet, visit http://www.agecon.lsu.edu/Extension_Pubs/RiceProductionOptions3.xls

Into the computer age Programs help you make financial decisions under new farm bill
By Vicky Boyd Editor
When Jackie Loewer wanted to see whether updating his base acres and yields under the new farm bill would be beneficial, he turned to a computer program developed by Louisiana State University. He plugged his new yields and history into the spreadsheet, and the simple-to-use computer program developed by LSU AgCenter agricultural economics professor Mike Salassi promptly printed out the results. “It would tell you what your new base would be and which of the two options would be better for you,” says Loewer, who farms near Branch, La. “[Salassi] hit it pretty much on the button. “When I went into the FSA (Farm Service Agency) office, I didn’t have any surprises. The yields came out just about to the 10th. I could make a decision before I walked in.” Loewer isn”t alone in turning to computer programs to help him figure out increasingly complex farm bill programs. Salassi’s program was used by growers throughout the Southern rice belt. How much base should I plant? In addition to Salassi, associate ag economics professor Kurt Guidry developed a computer program that helps producers decide what percentage of their base acres is the most profitable to plant. The software’s development was in response to questions from growers and county agents. “We started to get a lot of questions about what percent of my rice base acres should I plant and what percent of my rice base acres would be most profitable,” Guidry says. This spring, he trained county agents in southwest Louisiana about how to use the program and also made several presentations about it at grower meetings. While Salassi’s program was designed for one-time use before the April 1 deadline to update base acres, Guidry’s program can be used each year. All you need to do is plug in the upcoming season’s expenses and income. It also is not specific to Louisiana and can be used by any producer. Guidry’s software examines planting 100 percent base down to 15 percent base and presents the user with costs and returns under each scenario. “With the way current market prices are, producers can’t really afford to plant any piece of land that doesn’t at least cover variable costs,” Guidry says. To gain the most from the program, which is written in Excel, Guidry says growers should know both variable and fixed costs for each field within a farm number. Variable costs include fertilizer, pesticides, water pumping costs and seed. Fixed costs include insurance, depreciation, and debt service such as combine and land payments. The software also asks for family living expenses and other sources of income, such as those from a spouse who works off-farm. Name, rank and profitability The computer program also ranks each field within a farm number as to profitability and ranks each field among several farm numbers. “It has the ability if there are 10 different tracks of land within that farm number to split that farm into 10 different tracks and rank those tracks within all of the farm numbers,” Guidry says. If growers manage each farm as one entity, the software can still be used. But Guidry says it won’t rank individual fields among the farms as to profitability. It will just compare each farm as a whole. “The only problem is the spreadsheet goes strictly by the numbers,” Guidry says. “If you start reducing base acres, it may totally eliminate a farm number because that farm number is less profitable than the other farm numbers the producer has.” If the user had entered the data based on individual fields rather than individual farms, the results could possibly have shown that some fields would have been profitable to plant within an eliminated farm. And the results are only as specific as the information that is entered. “The spreadsheet doesn’t do anything other than manipulate the data that the producer puts in there,” Guidry says. To update or not Salassi’s program was developed to help growers decide whether to take advantage of the one-time provision in the 2002 farm bill that allows them to update base acres and yields. The deadline to update acres was April 1. Under the 1996 farm bill, program payments were based on base acres and yields calculated on 1981-1985 production. But the 2002 farm bill allows growers to stick with their historic base and yields or update them based on 1998-2001 production. If they chose to update, then they had to do so for every crop on their farm. Contact Vicky Boyd at (209) 571-0414 or vlboyd@att.net. Internet Hotlink: To download the Rice Production Options Spreadsheet, visit http://www.agecon.lsu.edu/Extension_Pubs/RiceProductionOptions3.xls
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