Optimal cotton acreage allocation for machinery complements under weather uncertainty

Field efficiency and capacity are two equipment characteristics that farmers consider when deciding acreage allocation and machinery complements. As machinery becomes larger and/or more efficient, optimal decisions for acreage allocation changes given expected weather uncertainty, financial constraints, and market outlook. Field efficiency has substantially increased for cotton harvesting equipment. Some planting and tillage equipment have become large enough that field efficiency has decreased while working rates have increased. Assuming the local farmland market within a given farmer's geography is active enough to allow farmland acreage to expand to farmer-chosen size, we evaluated the risk that farmers face due to uncertain weather events during planting and harvesting time for 13 cotton-producing states. Historical days suitable for fieldwork (DSFW) for fieldwork from USDA are used to develop a probability distribution used to determine the number of acres that can be planted and/or harvested in a given year. Bad, typical, and good years were set to probabilities levels of 20^th, 50^th, and 80^th percentiles, respectively. Results indicate that when farmers with the most efficient equipment allocate their acreage such that cotton can be planted and harvested in a typical year, they have increased risk in bad years. In general, there are excess hours available to plant cotton relative to the number of hours available at harvest given the typical equipment set. In Arkansas, farmers typically plant cotton from April 30 to May 23 and harvest cotton from September 29 to November 6. Therefore, Arkansas cotton farmers usually have 24 calendar days to plant cotton, with 13.8 DSFW (in the median year) or 138hours. At harvest time, Arkansas cotton farmers have 33.8 median DSFW for fieldwork or 304 hours during the 35 calendar days to pick cotton. Standard sized planters can cover about 2,500 acres during planting dates while standard cotton picker harvesters can cover about 1,900 acres during typical harvest dates.