Research indicates that farmers are more likely than the general population to experience certain types of cancer (e.g.,

Frey; Burmeister; Schuman, Mandel, and Blackard; Blair and Zahm). An ongoing study by the National Cancer Institute

(NCI) is addressing links between types of cancer and possible causes such as use of specific agricultural pesticides

(Alavanja, et al.). Moreover, chlorinated pesticides are suspected (but not proven) to be endocrine disruptors (Tilson, Keith).

The Endocrine Disruptor Research Initiative is analyzing chemicals suspected of being disruptors (EPA July 2003).

Atrazine: An Example Pesticide

This study will analyze the economic impacts of ceasing to use atrazine on a representative Kansas farm. Atrazine is

selected because it is widely used and because it has received scrutiny from the U.S. Environmental Protection Agency

(EPA) and from regulatory agencies in other countries. Atrazine is a triazine molecule that has chlorinated components.

National Agricultural Statistics Service (NASS 2006) data indicate that the average annual percentages of acres treated with

atrazine in their 29 program states were 68 percent of all corn and 69 percent of all sorghum. The EPA recognizes atrazine

as “one of the most widely used agricultural pesticides” with approximately 76.5 million pounds of active ingredient applied in

the U.S. annually (EPA January 2003a).

2007 JOURNAL OF THE A|S|F|M|R|A103

Abstract

A ten-year linear programming model of a representative dryland crop farm in North Central Kansas is used to develop and

illustrate procedures for analyzing economic impacts of the elimination of one or more pesticides on an individual

farm. Atrazine is used as an example pesticide because of its widespread use and because concerns about atrazine have

been expressed in the United States and in other countries. An important outcome is that impacts on grain sorghum

would likely be greater than impacts on corn because more alternative and effective herbicides are available for

corn.

Robert O. Burton, Jr. is professor, Ross M. Key is former graduate research assistant, and Bryan W. Schurle is professor

and Head, Department of Agricultural Economics, Kansas State University; David L. Regehr is Professor, Department of

Agronomy, Kansas State University. Key currently works as an Agricultural Loan Officer, Elberfeld State Bank, Elberfeld, IN.

Concerns addressed in EPA’s recent review of atrazine included dietary, residential, and occupational risks (EPA January

2003b) and associations between atrazine exposure and cancer, effects of atrazine on amphibians, and atrazine in

watersheds (EPA October 2003). EPA noted that it “will continue its review of all new data submissions,” including results

from the NCI study mentioned above (EPA October 2003). Concerns about atrazine have been addressed in several other

countries. Australian National Registration Authority for Agricultural and Veterinary Chemicals (NRA) concluded that

agriculture needs atrazine, but recommended its removal from non-agricultural/home garden use (NRA 2002, Australian

Pesticides & Veterinary Medicines Authority). NRA noted that some members of the European Union have discontinued

atrazine use (NRA 1997).

Problem Statement

If links between illnesses and causes become more firmly established, there will be a need for economic analysis of

impacts of avoiding those causes on individual farms. The purpose of this study is to develop and illustrate procedures for

analyzing economic impacts of the elimination of one or more chemicals on an individual farm. Atrazine use on a

representative farm in Kansas will be used as an example. The following questions will be addressed:

1) What is the representative farm’s return over variable costs with and without atrazine?

2) What is the representative farm’s capital carried forward with and without atrazine?

3) What is the representative farm’s cost of production with and without atrazine?

4) What is the representative farm’s number of acres of corn and grain sorghum farmed with and without atrazine?

5) What level of usage tax might cause producers to cease use of atrazine?

6) What effect does yield reduction have on a producer’s decision to eliminate atrazine?

Representative Farm

The representative farm was based on the 2003 average of crop farms in the North Central Kansas Farm Management

Association (KFMA). The farm owned 392 acres of land and rented 844 acres. All land was non-irrigated. Representative

proportions of crops produced were 40 percent hard red winter wheat, 24 percent grain sorghum, 20 percent soybeans, and

16 percent corn. Average non-farm income was $26,732 and average family living expenses were $39,652, including $4,133

for income taxes and self-employment taxes. Input costs for seed, fertilizer, and other expenses were based

on 2003 Kansas farm management guides (Kansas State University Agricultural Experiment Station and Cooperative

Extension Service). Cash rent of $39 per acre was based on 2003 data for North Central Kansas (Dhuyvetter and Kastens).

Machinery costs were based on 2003 custom rates for Kansas (KASS).

Herbicide programs and prices were suggested by Dave Regehr, Weed Science Extension Specialist. Dr. Regehr routinely

interacts with farmers, crop consultants, and other agricultural professionals. Therefore, he is an excellent source of

information about weed management and yield changes associated with alternative weed control programs. Herbicides

for wheat and soybeans did not include atrazine. Herbicide programs for corn and grain sorghum with and without atrazine

use trade names to identify products. No endorsement is intended, nor is any criticism implied of similar products not

mentioned.

Our analyses used the following per acre herbicide programs: for corn, 1 quart of Glyphomax Plus as a burndown application

followed by 2.4 quarts of Lumax (s-metolachlor, atrazine and mesotrione) in a pre-emergence application, and 1 ounce of

Spirit as a post-emergence herbicide. For sorghum, 1 quart of Glyphomax Plus as a burndown followed by 2.1 quarts of

Bicep II Magnum in a pre-emergence application, and 2 pints of Buctril+Atrazine (1 pt. Buctril and 1 pt. atrazine) as a

postemergence herbicide. Herbicide programs per acre without atrazine were as follows: for corn, 1 quart of Glyphomax Plus

as a burndown followed by 12 ounces of Epic (Balance and Define) as a pre-emergence application, and 6 ounces of Distinct

as a post-emergence herbicide. Costs of these herbicides for use in corn were $50.37 with atrazine and $53.33 without

atrazine. Thus, corn herbicide costs without atrazine were $2.96 (5.88%) higher than corn herbicide costs with atrazine. For

sorghum, 1 quart of Glyphomax Plus as a burndown followed by 1.6 pints of Dual Magnum as a pre-emergence application

and 1.5 pints of Buctril as a post-emergence herbicide. Costs for weed control on sorghum were $41.37 with atrazine and

$44.72 without atrazine. Thus, sorghum herbicide costs without atrazine were $3.35 (8.10%) higher that sorghum herbicide

costs with atrazine. These costs represent a 2003 price level and include appropriate adjuvants. Herbicide application costs

were the same for corn and grain sorghum with and without atrazine. Weed scientist Regehr stated that a 10-20 percent

yield reduction in sorghum can occur when the program changes from using atrazine to not using atrazine. No yield

reduction is expected when the corn program changes from using atrazine to not using atrazine. This study accounts for

sorghum yield reductions by analyzing reductions of 5, 10, and 20 percent. Revenue from the crop activities included crop

sales and government payments. The average yield for 1992-2003 for Mitchell County Kansas was used. A twelve-year

average was used because the data were readily available (NASS 2004). The county average for 1998-2001 established the

government program yields for this analysis. Government payment data were obtained from the Farm Service

Agency (FSA). Target prices and loan rates for each commodity were established through 2007. Direct, counter-cyclical

(CCP), and loan deficiency payments (LDP) were calculated in accordance with FSA guidelines. We assumed that the

government program will not change over the 10-year time period modeled. We know that farm programs change more

frequently than this. However, at the time this study was prepared, details of future farm programs were unknown and we

wanted to use a ten-year time period to model how capital carried forward might be affected over time. Prices were based on

historical data and price estimates from the Food and Agricultural Policy Research Institute (FAPRI).

The FAPRI 2003 price level estimates for 2004-2013 were used as national price levels for the analysis. For the calculation of

the loan deficiency payment portion of the government program, it is necessary to have county-level price information.

County prices were established by calculating the 12-year average price basis (1992-2003) between national and county

prices obtained from NASS for each commodity and subtracting this basis from the FAPRI prices.

Capital Carried Forward

Capital carried forward was investigated to determine how the amount of capital available at the end of each year was

affected by elimination of atrazine. Capital carried forward was calculated by subtracting fixed costs of land and buildings,

adding non-farm income and subtracting the cost of living from return over variable costs.

Fixed Costs

For machinery costs, this analysis used custom rates which include variable and fixed costs for machinery and labor.

However, to calculate capital carried forward, fixed costs of land and buildings are needed. Initially fixed costs for land and

buildings were calculated by multiplying the total value of land and buildings by a rent-to-value percentage of 5.1 percent,

established by Dhuyvetter and Kastens, plus 0.5 percent for building depreciation (based on KFMA data) and another 0.4

percent for insurance and any miscellaneous expense. In preliminary model runs, when fixed costs for land and buildings

were estimated as 6 percent of value, capital carried forward was negative in all 10 years. For most operations, not all fixed

costs are cash costs and not all farmers consider all economic cost when evaluating their operations. Therefore, for this

study, fixed costs of land and buildings were estimated as three percent of value.

Linear Programming Model

The linear programming (LP) model of the representative farm maximizes return over variable cost for a ten-year period. Crop

production activities included corn, grain sorghum, soybeans, and wheat. Constraints included owned and rented land and

rotation restrictions. In order to measure the economic impacts associated with ceasing to use atrazine, the amount of

capital available without borrowing was set at a high level to ensure that acres farmed in all model runs would be the same

as total acres for the representative farm. Labor and machinery constraints are not included because all machinery

operations are custom hired. The LP model was run in Excel using the simplex solver. The model included corn and grain

sorghum production activities with atrazine and with the alternative weed control program.

2007 JOURNAL OF THE A|S|