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please help! You are a retired landowner whose Conservation Reserve Program (CRP) contract for 100 acres will expire next year. You can renew your contract
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You are a retired landowner whose Conservation Reserve Program (CRP) contract for 100 acres will expire next year. You can renew your contract for another ten years and receive a payment of S130 per acre cach year, but you wonder if it would be more profitable to put it into hay production and have it custom farmed. Provisions: 1. Your expected yield if you grow hay is 5 tons per acre, and the long-run expected selling price is $100 per ton, at the farm 2. Variable costs of production are about S120 per acre every 4 years to re-establish the seeding, plus fertilizer costs of $160 per acre each year. 3. You can hire a custom operator to harvest and store the hay crop for you for $30 per ton. 4. If you take the land out of the CRP program, you will no longer have to spend $800 per year to control weeds, but you will give up the $130 per acre annual payment from the USDA Proposed Change: A. Added Income C. Added Costs B. Reduced Costs D. Reduced Income Net Change - A + B + - D Step by Step Solution
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