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Crunching the crop rotation numbers
The majority of farmers seem content to stick to their normal crop rotations this year. But, a sizable chunk -- 27% -- say they'll be planting more corn this spring.
Those results from a recent Agriculture.com poll show there's at least some interest around the country in a more corn-heavy crop this year. But, how will that pay? Gary Schnitkey at the University of Illinois has crunched the numbers, and based on how things add up, whether you plant more corn this year should depend specifically on how many soybeans you had in the ground in 2011.
Based on crop budgets for central Illinois, Schnitkey says per-acre returns are within about $40 between a corn-soybean rotation, corn-corn-soybean rotation and continuous corn. But, the middle rotation ultimately comes out on top, yield-wise. That doesn't necessarily mean it's the same for income, though.
"The highest yielding rotation is corn-corn-soybeans. These rotations assume stability in plantings," he says. "Moving away from these rotations towards more corn can increase expected returns for one year."
But, after that first year of a more corn-heavy rotation, returns fall dramatically; in a continuous corn scenario, Schnitkey says you can expect just shy of $470/acre, assuming yield reductions typical of that system compared to a combination of both corn and soybeans. This is based on costs that net the following one-year returns, according to Schnitkey:
$578 for corn-after-soybeans,
$510 for corn-after-corn,
$467 for continuous corn,
$390 for soybeans-after-corn, and
$425 for soybeans-after-two-years-corn.
Now, go to the other extreme, a straightforward corn-soybean rotation with 50% of acres in each crop. Per-acre profits are slightly better here. "Given a stable cropping rotation over time, corn-soybeans has an average return of $484 per acre, the average of $578 for corn-after-soybeans and $390 for soybeans after corn ($578 + $390 / 2)," Schnitkey says.
Finally, take that rotation that's 2/3 corn and 1/3 soybeans where each field's in corn 2 years followed by 1 year of soybeans. This shows the most profit potential, Schnitkey says, at about $504 per acre.
There are a few other variables that can sway these numbers; for example, additional corn tillage narrows the gap between corn-soybean (484/acre) and corn-corn-soybean rotations ($499/acre). "The budgets assume that there are no additional tillage passes for more corn-after-corn and continuous corn rotations," Schnitkey says, noting each additional tillage pass amounts to about $15/acre more in cost. "Reliance on more tillage to continue with corn-heavy rotations will reduce the return advantages or more intensive corn rotations."
Then, factor in how the land is paid for. If you're cash-renting and unsure about the length of your future on that ground, the higher corn profit potential in the first year of a rotation may warrant a more corn-heavy rotation.
"It has been noted that cash rent arrangements that are short-term may encourage more corn production," Schnitkey says. "If a farmer believes that they will only be able to rent a farm for one year, there is an incentive to plant all corn so as to maximize profits in one year."
But, if you either own that ground or have a long future on it, it's a safe bet to keep soybeans in your rotation, if for anything, to get the most out of your corn yield potential.
"There are longer run return implications from cropping decisions made in the current year. Soybean production, while currently having return estimates below corn, has the benefit of leading to corn-after-soybean plantings in future years," Schnitkey says. "If significant yield reductions exist for corn-after-corn, the benefits of corn-after-soybeans in future years should not be overlooked."