PARTIAL BUDGET $(10$ points total$)$

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 $$150$ per acre each year, but you wonder if it would be more profitable to put it into hay production and have it custom farmed.

Provisions:

Your expected yield if you grow hay is $5$ tons per acre, and the long$-$run expected selling price is $$110$ per ton, at the farm.

Variable costs of production are about $$120$ per acre every $4$ years to reestablish the seeding $($hint: divide by four$),$ plus fertilizer costs of $$160$ per acre each year.

You can hire a custom operator to harvest and store the hay crop for you for $$30$ per ton.

If you take the land out of the CRP program, you will no longer have to spend $$800$ per year to control weeds, but you will give up the $$150$ per acre annual payment from the USDA.

Complete the partial budget. $(8$ points$)$

Proposed Change: Let CRP contract expire and produce hay as a cash crop.

$\backslash$table$[[$A$.$ Increased Revenues $(+),$C$.$ Decreased Revenues $(-)$