Economic benefits of variable rate technology: case studies from Australian grain farms

Abstract

In this study we attempt to quantify the economic benefits of the adoption of variable rate application of fertiliser on six case study farms from the Australian wheatbelt. The farm case studies covered a range of agro-climatic regions (Mediterranean, uniform, and summer-dominant rainfall patterns), cropping systems (wheat–lupin, wheat–canola, and winter and summer crops), farm sizes (1250–5800 ha cropping program), soil types (shallow gravels to deep cracking clays), and production levels (average wheat yields from 1.8 to 3.5 t/ha). The farmers had been practising some form of variable rate technology (VRT) management of fertiliser for 2–10 years. Capital investment in VRT equipment ranged from $37 000 to $73 000, which is at the medium to high end of investment for Australian farmers, and when expressed as investment per cropped hectare it varied from $11 to $30/ha. All farmers were able to quantify benefits of VRT, ranging from $1 to $22/ha across the six farms, and a break-even analysis showed that the initial capital outlay was recovered within 2–5 years. On a per paddock basis, benefits ranged from –$28 to +$57/ha.year, and reasons for this wide range could be explained by fertiliser management practices and the degree of within-paddock yield variation. Where VRT benefits were able to be estimated across a run of seasons for a given paddock, it was noticeable that benefits, albeit diminished, still occurred in below-average yielding years. This suggests that, once zones have been defined, benefits from VRT will occur in most seasons. This study demonstrates that the participating Australian grain growers have adopted VRT systems that are profitable and recover the initial capital outlay within a few years. The use of, and benefits from, VRT technology vary farm to farm, in line with farmer preferences and circumstances.