What is in this article?:
Caveats and Implications
Key to the above calculations are the assumptions concerning yield drags for corn after corn and continuous corn. Lower yield drags will cause the profitability of more intense rotations to increase.
The above budgets assume that there are no additional tillage passes for more corn after corn and continuous corn rotations. If one additional tillage pass with a cost of $15/acre is included for corn after corn and continuous corn, rotation returns become:
- $484/acre for corn-soybeans
- $499/acre for corn-corn-soybeans
- $452/acre for continuous corn
Reliance on more tillage to continue with corn heavy rotations will reduce the return advantages or more intensive corn rotations.
Budget above use projected 2012 commodity prices ($5.35/bu. for corn and $11.85 for soybean). These prices likely are higher than what prices will average over the next five years. Estimates of these long-run prices are $4.50 for corn $10.50 for soybeans. At these prices, rotation returns become:
- $362/acre for corn-soybeans
- $364/acre for corn-corn-soybeans
- $299/acre for continuous corn
Actual costs vary across farms. Hence, each farm should use their own projected costs in rotation considerations.
It has been noted that cash rent arrangements that are short term may encourage more corn production. 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.
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. If significant yield reductions exist for corn after corn, the benefits of corn after soybeans in future years should not be overlooked.