grain growing countries. High prices also reflect the high export demand for several major commodities. Commodity exports were $60.4 billion in 1996, up $4.6 billion from 1995, an 8-percent increase (table 3.4.3). This is the highest level of commodity exports in at least 10 years. Wheat, feedgrains, and oilseeds compose the largest share of commodity exports. The upward trend in commodity exports favors increased investment in farm machinery.

In 1996, idled land decreased to 34 million acres from a high of 77.7 million in 1988. As Conservation Reserve Program (CRP) contracts expire, some of that land will come into production, possibly spurring demand for farm machinery. Some farmers will still have the same complement of machinery that existed before they signed up for the CRP. Others who may have put the entire farm in the CRP and reduced their machinery inventories will need to obtain more equipment. The overall effect of reductions in CRP acreage should be some increase in demand for farm machinery.

Changes in Farming Practices and Machinery

Two major change factors influencing the farm machinery industry are the emerging interest in precision farming and the continuing adoption of conservation tillage and crop residue management practices.

Precision Agriculture

The newest innovation in agriculture is the trend toward computerized equipment that allows precise quantity and placement of inputs such as fertilizer, seed, and pesticides (Christensen and Krause, 1995). This new technology is known variously as precision farming, site-specific farming, soil-specific crop management, prescription farming, focused fertilizing, spatially variable controlled crop production, and site-specific nutrient management systems. Ideally, precision farming will improve input efficiency and reduce the use of chemicals and fertilizers.

However, unresolved questions need further research. For example, what size of farming operation will benefit most from precision farming? The complexity and expense of the machinery and operations may make precision farming more plausible by large-scale operations, perhaps further concentrating U.S. agriculture. On the other hand, the costs of yield monitors, global positioning computers, and other precision farming equipment is decreasing. And expensive variable-rate fertilizer, pesticide, and seeding equipment is being increasingly supplied by dealers on a custom or rental basis, forestalling large

investments at the farm level for equipment that will quickly become obsolete as newer technology is developed. The issue then becomes one of managerial time required to learn and apply the technology. Large-scale farmers may not be able to spend as much time on this technology as medium-scale farmers. Also, small-scale farmers who spend a lot of time working off the farm may not be able to devote much time to precision farming.

Precision farming generally employs satellite technology, which tracks equipment location within a few meters in a field. Site-specific information is important because crop yields can differ significantly throughout a field. Computers record crop yields, soil characteristics, and other data continuously within each field. Fertilizers and pesticides can then be specified from information in the computer data base. This information is used to vary seed, fertilizer, and pesticide quantities to site-specific field locations (Robert and others, 1992).

Precision farming is still in its infancy. Equipment is expensive; variable-rate fertilizer applicators cost as much as $250,000. However, prices are declining as manufacturers develop more efficient ways of producing the specialized computers, receivers, metering devices, and variable-rate seeders, sprayers, and fertilizing equipment. Farmers also face time constraints in learning precision farming. Few courses or training sessions are available and most of the subject matter is highly technical, involving computers and space-age locating, monitoring, and metering equipment.

Researchers at ARS (Agricultural Research Service, USDA) and several universities are investigating the relationships between soil conditions, moisture, nutrient balances, and crop yields, and how these relationships bear on input applications (USDA, NAL, 1994). The farm equipment industry also researches precision farming and has outpaced public research in many areas. Preliminary research indicates improved efficiencies in the use of fertilizers and pesticides. Instead of broadcasting nutrients and chemicals across the field, precision farming prescribes appropriate amounts by soil, moisture, nutrient balance, and other site-specific factors. In addition to improving input inefficiency, precision farming has the potential to lessen adverse environmental effects of current farming practices. By improving input efficiency, precision farming can reduce residual quantities that may otherwise enter streams and groundwater.

While precision farming more commonly refers to site-specific field tracking technology and computerized metering equipment, it may also apply to other innovations. Among the newest is a cultivator that tills between plants within a row (Paulson, 1995). It incorporates video cameras and computer technology with robotics to eliminate weeds to within one-third inch of the plant. It can operate at speeds of up to 10 miles per hour, can be used at night, and can distinguish between weeds and crops. While still in the testing stage, it has promise for the cultivation of row crops such as corn, cotton, lettuce and tomatoes. This technology could reduce the need for herbicides used to eliminate weeds.

Crop Residue Management

The other major change occurring in the farm machinery industry is the continuing development of conservation tillage machinery and equipment used for crop residue management. Tillage equipment used to practice conservation tillage involves several designs aimed at leaving at least 30 percent of the soil surface covered with crop residue. This new and innovative machinery goes by various names, including air drill, mulchmaster, mulch tiller, and conservation disk chisel. Machinery is designed to leave residue on the surface by tilling the ground under the past crop residue instead of turning the ground over and burying residue as was done with moldboard plows and large offset disks.

With conservation tillage, the ground is worked fewer times during a crop cycle than with conventional tillage, leaving more residue on the surface. Increased residue helps prevent soil erosion. No-till engages the ground just once, when planting the seed.

Other benefits of crop residue management (and fewer times over the field) are less machinery and equipment wear and lower maintenance. Capital expenditures are reduced as are fuel and labor costs. (See chapter 4.2, Crop Residue Management, for a discussion of trends in conservation tillage. See also USDA, ERS, 1994b, page 114, for a discussion of the effects of these trends on farm machinery purchases.)

Farm Machinery Trade

The United States had a trade surplus in farm machinery of $1.85 billion in 1996, up from $1.04 billion in 1995. Exports of farm machinery have exceeded imports for the last 7 years (fig. 3.4.4). Major export and import countries were Canada, the United Kingdom, Germany, and Japan.