Economics of Different Crop Rotations in New York

The 1996 Federal Agriculture and Improvement Act decouples support payments from acreage so grain producers must now devise rotations based on market prices. Economic analysis of rotation studies can identify profitable rotations. The objective of this study was to determine short‐term economic consequences of three rotations: (i) continuous corn ( Zea mays L.), (ii) soybean [ Glycine max (L.) Merr.]‐corn, and (iii) soybean‐wheat/red clover ( Triticum aestivum L./ Trifolium praetense L.)‐corn. Field‐scale trials were conducted from 1993 to 1996 on four farms in New York, and participating farmers performed field operations. Rotated corn yielded greater (140 bu/acre) than continuous corn (127 bu/acre), whereas soybean and wheat yielded 47 and 55 bu/acre, respectively. The soybean‐corn rotation had greater net returns ($101/acre) than the continuous corn rotation ($78/acre), despite net returns of $54/acre for soybeans, because rotated corn had greater net returns ($149/acre) than continuous corn. Wheat had negative net returns (−$40/acre) so the soybean‐wheat/clover‐corn rotation had the lowest net return ($54/acre). Harvesting and marketing of wheat straw would increase net returns of the soybean‐wheat/clover‐corn rotation to $84/acre. Sensitivity anaiysis for an 800‐acre farm indicated that a soybean‐corn rotation had the greatest whole‐farm return at 1987 to 1996 New York prices ($55 721). Continuous corn had the lowest whole‐farm return ($16 848). With the decoupling of support payments from acreage, New York grain farmers should adopt the soybean‐corn rotation to maximize profit. New York grain farmers who market the wheat straw should consider the inclusion of wheat/clover on some of the soybean‐corn acreage because close to maximum profit can be achieved while reducing potential pest problems. Research Question The 1996 Federal Agriculture Improvement and Reform Act decouples agricultural support payments from acreage. Consequently, farmers must make cropping decisions based on expected market prices. An economic analysis should be the dominant factor in evaluating cropping practices, especially when more than one crop is grown. The primary objective of this study was to determine short‐term economic consequences of three potential crop rotations for New York cash crop producers: (i) continuous corn, (ii) soybean‐corn, and (iii) soybean‐wheat/clover‐corn. Literature Summary Continuous corn and soybean‐corn rotations had the same net returns under moldboard plow tillage in a northeast Iowa study. In the same study, the soybean‐corn rotation compared with continuous corn had $9/acre greater return under chisel tillage. The soybean‐corn rotation compared with continuous corn had greater net returns regardless of tillage systems in an Iowa Farming for Maximum Eficiency (MAX) program. In an Indiana study, a linear programming model predicted the greatest net farm income with about 55% of the acreage in a soybean‐corn rotation, 25% in continuous corn, 15% in a soybean‐wheat‐corn rotation, and 5% in continuous soybean. Study Description A rotation by tillage study was established on four farms in New York. Participating farmers performed all field operations including tillage operations, planting, spraying, fertilizing, and harvesting. Three crop rotations (continuous corn, soybean‐corn, and soybean‐wheat/clover‐corn) were evaluated under two tillage systems (moldboard plow and chisel). Production costs were calculated for each crop and then for each rotation. Seed, fertilizer, and pesticide costs were determined by multiplying the average variable inputs at each site by the average prices for seed, fertilizer, and pesticides, obtained from local agribusinesses. Machinery operation costs, as well as drying and hauling costs, were determined using custom rates. Miscellaneous costs included interest on operating capital, crop insurance, and land rental. Management and overhead costs were not included in production costs. Marketing year weighted average prices and yield data were used to calculate the gross returns for each crop and then for each rotation. Net returns for each crop and each rotation were calculated as the difference between gross returns and production costs. A sensitivity analysis was also conducted for a typical 800 acre cash crop farm in New York. Different scenarios were evaluated based upon varying the acreage for each rotation and average crop prices during the study (1994 to 1996) and during the previous 10 yr (1987–1996). Applied Questions Which crop rotation had the greatest net return? When averaged across years and sites, the soybean‐corn rotation had the greatest net return ($101/acre) compared with continuous corn ($78/acre) and the soybean‐wheat/clover‐corn rotation ($54/acre). A combination of a 12 bu/acre greater corn yield and lower production costs for corn following soybean ($300/acre) vs. continuous corn ($332/acre) resulted in the greater net return for the soybean‐corn rotation, despite lower net returns for soybean ($54/acre) vs. continuous corn ($78/acre). The negative net return of wheat (−$40/acre) reduced profitability, resulting in the low net return for the soybean‐wheat/clover‐corn rotation. Harvesting and marketing the wheat straw would add an additional $90/acre net return to the wheat crop, resulting in a similar net return for the soybean‐wheat/clover‐corn rotation ($84/acre) and continuous corn. What crop rotation(s) provided the greatest whole‐farm return based on 1987 to 1996 average crop prices in New York? Sensitivity analysis indicated that, on a typical 800 acre cash crop farm in New York, the soybean‐corn rotation on the entire 800 acres provided the greatest whole‐farm return at 1987 to 1996 crop prices ($55 721). The continuous corn rotation had the least whole farm return ($16 848). If the wheat straw were harvested in this study, the inclusion of wheat/clover in the soybean‐corn rotation on one‐third of ihe acreage would result in a whole‐fann return of $51 393. With decoupling of agricultural support payments from acreage, New York growers should apparently adopt a soybean‐corn rotation and eliminate continuous corn rotations to maximize profits. New York growers who market the wheat straw should consider adopting the soybean‐wheat/clover‐corn rotation on some of the acreage because close to maximum profits can be achieved while reducing potential pest problems. How effective were the farmer‐researcher partnerships in evaluating the economics of the different rotations? The farmer‐researcher partnerships in this study were very effective in evaluating the economics of the different crop rotations. The farmers managed each site precisely, arid kept diligent records of management inputs and machinery operations. The farmers also participated in field days and some winter workshops sponsored by Cornell Cooperative Extension. We believe that this study had a significant impact because of the farmer‐researcher partnership, which contributed in part to the increased adoption of soybean‐corn and soybean‐wheat/clover‐corn rotations in New York.