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Rotating saves

Since 2003, Iowa State University agronomist Matt Liebman and other researchers have been comparing two-year corn-soybean rotations with two longer-term rotations on plots west of Ames, Iowa. Economic analysis shows one of those rotations – three years of corn, soybeans, and oats/red clover – had the profit edge in 2008 through 2010. The other long-term rotation in the study was corn, soybeans, oats/alfalfa, and a fourth year of alfalfa hay.

In those more recent years of 2008-2010, the study included both genetically modified (GMO) corn and soybeans and non-GMO corn and beans in the rotations. The top net return to land and management was a three-year average of $379 an acre for the corn, soybean, and oats/clover rotation with non-GMO corn and beans. The same rotation with GMO crops netted nearly as much – $376 an acre. The next two highest returns (also averaged from 2008-2010) were $343 per acre for the four-year alfalfa rotation with non-GMO crops and $336 per acre for the two-year GMO corn-bean rotation.

This fall, ISU Extension economist Craig Chase and program specialist Ann Johanns are releasing averages of a six-year summary of the same trials, from 2006 through 2011. It, too, shows the three-year rotation on top. Looking at just return to management, it netted $194 an acre. Two-year rotations netted $187 an acre, and the longer alfalfa rotation was last with a return of $171 per acre. They simplified the comparison, looking only at GMO crops in the two-year rotations and non-GMO crops in the longer rotations.

Crop resilience

In some years, the results were striking. During the drought of 2012, the alfalfa rotation looked attractive. “We already harvested, in three cuttings, $840 worth of alfalfa,” Liebman said in midsummer. “There's some advantage in diversity, even in a drought year.”

Also in 2012, the oat cover crop (planted with first-year alfalfa and with clover) averaged 118 bushels an acre. It was worth $3.90 a bushel.

In wet years, differences were dramatic, too. In 2010, fewer than 9% of the beans grown in three- and four-year rotations showed sudden death syndrome (SDS). GMO soybeans in the two-year rotations had 27% incidence of SDS. Nearly all (96%) of non-GMO beans in a two-year rotation were affected by SDS.

Why rotations pay off

At first glance, it might have seemed more profitable to raise corn and soybeans. Even a good oats yield was only about half that of a normal corn crop, and the prices were much lower. The red clover was plowed down as green manure for nitrogen and organic matter, not harvested. That last year in the three-year rotation certainly had lower revenue.

In fact, gross returns for GMO corn and soybeans were higher in all three years of the most recently published study of the ISU work. The two-year GMO crop rotation's revenue averaged $673 an acre. The three-year rotation with non-GMO corn and beans and oats/clover had the lowest average revenue of $576 an acre. Higher costs for the corn-soybean rotation made it slightly less competitive with the three-year rotation. Costs for corn and beans averaged $316 an acre, while the three-year rotation cost an average of $207 an acre. (These results were published this year in the journal Renewable Agriculture and Food Systems.)

Corn yields were slightly higher in the four-year rotations and were lowest in the two-year rotations. But the main reason the three-year rotation came out on top was lower input costs, especially fertilizer, Liebman says. Nitrogen fertilizer applied in the corn phase of the three- and four-year rotations was five times lower than in the two-year rotation. Corn in the longer rotations benefitted from applications of 7 wet tons per acre of composted cow manure and nitrogen fixed by clover and alfalfa.

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The oat/clover rotation had several cost advantages over the alfalfa rotation, too, including not having higher labor and machinery costs for cutting hay.

“The main one is the reduced cost of P and K fertilizer and the lack of removal of hay,” Liebman says. With alfalfa, manure applications didn't quite make up for P and K taken off in alfalfa cuttings. All crops received any needed P and K according to fall soil tests.

In their updated economic analysis, Johanns and Chase looked at cost savings another way. They calculated the fossil energy costs of seed, grain drying, field operations, pesticides, and fertilizer. For the corn-soybean rotation, just over 60% of the energy used to grow the crops was associated with fertilizer. Field operations required the most energy for the three-year rotation (44%) and the four-year rotation that included alfalfa hay (47%). When they converted those results to diesel fuel equivalents, it took 25.4 gallons for the GMO corn-soybean rotation, 10.2 gallons for the non-GMO three-year rotation with oats/clover, and 10.8 gallons for the non-GMO four-year rotation that included oats and alfalfa hay.

“That's a growing issue that people need to be aware of,” Johanns says. Whether or not long-term rotations are always the most profitable, they may be hit less by energy cost shocks.

Johanns and Chase also took a closer look at how the manure used in the long-term study was valued. The 2008-2010 study treated manure as a waste product that needed to be disposed of. It was considered free, except for the cost to apply it. When Johanns and Chase looked at net returns from 2006-2011, they came up with the same result: The three-year rotation with oats/clover was most profitable.

But Johanns and Chase also looked at net returns if a farmer had to pay for the manure based on its nutrient value. Doing that gave the two-year corn-soybean rotation a slight advantage. Even so, their study concluded that “including a third or fourth crop may be a viable option for some operations. Other benefits might include an outlet for excess manure, reduced erosion, increased soil health, and pest management.”

Economic realities

Liebman knows very well the economic conditions that favor the current corn-soybean rotation dominating the Midwest. For one thing, he says, “If you were to produce oats in central Iowa, you'd have trouble selling them.”

Corn and soybeans need less labor, too, requiring about 45 minutes per acre, while the other systems take twice that. “The simple system allows you to expand the number of acres you farm,” he says.

Liebman doubts that longer rotations will come back, unless public policy changes or consumers are willing to pay more for a differentiated product that's not organic but has fewer chemical inputs. Public policy could use penalties on chemicals that have environmental costs, or it could give incentives to plant forage crops.

“It's really going to come down to what kind of policy mechanisms we want to use,” he says.

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