Corn-Soybean Planting Decisions and Longer Run Returns

Rotation Returns

Longer-run implications of current-year cropping decisions can be analyzed by calculating rotation returns given stable rotations. Rotation returns for three rotations are calculated:

1. Corn-soybeans. This rotation has 50% of its acres in corn and 50% in soybeans. The rotation is one year corn and the next year soybeans. Given a stable cropping rotation over time, corn-soybeans has an average return of $484/acre, the average of $578 for corn after soybeans and $390 for soybeans after corn (i.e., ($578 + $390) / 2).
2. Corn-corn-soybeans. This rotation has 2/3 of its acres in corn and 1/3 in soybeans. The rotation is corn in a field for two years, followed by a year of soybeans. Given a stable cropping rotation, corn-corn-soybeans has an average return of $504/acre (i.e., ($578 corn-after-soybeans + $510 corn-after-corn + $425 soybeans-after-corn) / 3).
3. Continuous corn. Continuous corn has a return of $467/acre. This assumes that yield reductions relative to corn after soybeans have occurred and corn averages 180 bu./acre over time.

For these three rotations, rotation returns are:

• $484 for corn-soybeans
• $504 for corn-corn-soybeans
• $467 for continuous corn

The highest-yielding rotation is corn-corn-soybeans. Again, these rotations assume stability in plantings. Moving away from these rotations toward more corn can increase expected returns for one year. This is illustrated for two situations: 1) corn-corn-soybeans to continuous corn and 2) continuous corn to corn-corn-soybeans.