Wisconsin Integrated Cropping Systems Trial Project
 
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Productivity/Profitability

Topics:
Economic analysis

For our economic analysis we scaled up from acre plots to an appropriately sized whole farm. Gross margin analysis removed fixed costs from consideration—which varied greatly from operation to operation.  The gross margin represents the dollars available to cover overhead costs (capital, land, labor and management).  We estimate that a cash grain farmer would need approximately $200 to cover these costs.  Anything above that amount would be considered the farmer’s return to investment (profit).   

Continuous corn was the least profitable system studied.  Modest corn yields and very high costs resulted in continuous corn being the least profitable cropping system studied.

There was a modest difference ($17/a) between the gross margins of the standard no-till corn and soybean system (CS2) and the low-external-input corn-soybean-wheat system (CS3).  Although CS2 was more productive, its higher costs resulted in the two systems having only modestly different gross margins.

There was no difference in profitability between the “green gold” intensive alfalfa production system (CS4) and the low input, rapid-turn around dairy rotation (CS5). 

Systems based on forage rotations (CS4 and CS5) were more profitable than systems based on cash grain rotations (CS2 and CS3) at Arlington but were equal at Lakeland.

Variability associated with the gross margins was highest in continuous corn, lowest in the forage systems, and intermediate in the corn-soybean and corn-soybean-wheat systems.

During the 1990s, prices for corn, soybeans and wheat generally varied together, so that diversification had only a modest buffering effect on farm income.   While many believe that diversifying production will protect producers against price variability, we found that the prices of corn, soybeans and wheat were in fact highly correlated (Pearson correlation 0.88-0.93).

Labor analysis

Financial analysis only addresses part of the economic reality facing farmers.  Labor is a production input that is unlike others because it is more frequently subject to shortages.  Consistent labor shortages can usually be alleviated by hiring full-time help, decreasing acreage, increasing machinery size or hiring custom operators.

The labor analysis for the cash grain systems was performed assuming a 1,200 acre operation, a specific equipment set for each cropping system, and a maximum period during which certain field operations could be performed with acceptable agronomic outcomes.  Major conclusions are as follows.

The no-till corn and soybean system (CS2) used the least amount of labor (564 hr/1200 a).  This system resulted in a savings of nearly 20% compared to continuous corn (701 hr/1200 a).

When weed control of the low-input corn-soybean-wheat system (CS3) consisted of approximately 2 rotary hoeings and 2 cultivations, it required 925 hr/1200 a, or 64% more labor than the no-till corn-soybean system.  In addition, two bottlenecks occur in CS3: one in early summer while rotary hoeing and cultivating, the second in the fall when harvesting soybeans and planting wheat.

Cropping system yields

A frequent criticism of low-input and organic systems is that they result in unacceptably low yields.  Some observers believe that reducing agricultural inputs means setting yields back to where they were in the 1940s.  Defenders of low-input and organic systems, on the other hand, assert that claims of yield reductions under organic systems — once a 4-5 year transition is accomplished — are exaggerated or false, and that modern crop genetics and equipment make historical yields just that—historical, and inapplicable under modern production systems.

What do WICST’s data suggest about yields in systems with varying degrees of crop diversity, pesticide inputs and sources of plant nutrients?

Rotating crops can improve yields while enabling a reduction in inputs.  Simply rotating corn produced a 9 bu/a yield advantage over continuous corn.  Furthermore, our longest cash grain rotation (CS3) used very few purchased chemical inputs, and after the first two years generally achieved yields comparable to continuous corn.

Corn grown in forage rotations yields more than corn in cash grain rotations.  Growing corn following leguminous forages resulted in a 18 bu/a advantage over growing it in a cash grain rotation (comparing average yields of CS1-3 versus CS4-5).  We suspect that this is a result of the soil conditioning effects of the alfalfa and manure and its role in interrupting the lifecycles of corn pathogens and pests.

Very-low-purchased-input systems will, in our experience, result in somewhat lower average yields than moderate-purchased-input systems.  Average corn yields in CS3 were 84% of CS2 corn yields from 1992-1999 across both sites.  This is an important reduction, but it is not the dramatic loss that some observers have feared.  Soybean yields in CS3 were 89% of those in CS2.  Our CS3 wheat yields were 98% of the Walworth and Columbia county average (we presume that the county average reflects yields obtained in higher input systems).  Among the forage systems, corn yields in the low-purchased-input (CS5) system were 89% of corn yields in the higher-purchased-input CS4.  Most often, weeds were the cause of low yields in the lowest input systems.  Rainy weather which prevented timely cultivation and rotary hoeing was most often the cause of the weed problems.

The low input forage system (CS5) produced 78% of the dry matter of the high-purchased-input system (CS4) , and had a lower relative feed value.  However, the average economic return of both systems was very similar.  Overall, forage from CS4 had an average RFV of 147 (143-157) which makes excellent feed for high producing cows.  In CS5 the average value was lower (123) and the range greater (105-142).  Much of this feed would have been used for mid- to late lactating cows and growing heifers. Offtake from the grazed paddocks was lower than in the mechanically harvested systems and average feed quality was also lower (RFV of 122).

The systems were not substantially different in terms of yield variability.  This was an unexpected finding.  We predicted that yield variability would be greater in the lower input systems.  In fact, however, there was no statistical difference in the yield variability among corn, soybean or alfalfa phases, in spite of the fact that each system relied on very different input levels.

The benefits of redesigning a monocrop system are greater than the benefits of trying to fine-tune it.  We used Best Management Practices for continuous corn — which represents an improvement over the way it is often produced.  Input levels were high for comparatively unimpressive yields. If we can draw one unambiguous conclusion from the WICST project, it is that there is little yield justification for fine-tuning continuous corn.  We can do better, and we should.

Weeds, weed seeds, and weed management

Most farmers and researchers have long believed that letting a large weed seed bank build up in the soil will doom a field to heavy weed pressure — and alternatively, that controlling the buildup of weed seeds in the soil is a major part of prevention of weed problems.  These related beliefs have probably prevented some producers from experimenting with lower-purchased-input production systems. 

WICST has intensively studied weed seed and weed populations in the six cropping systems, and has determined that the relationship between weed seedbanks and weed pressure is not as simple as many believe.  We have also experimented with various weed control techniques, comparing various ways of rotary hoeing and the value of post-emergence herbicides in CS3.  Here are our major conclusions.

Weed seed numbers in the soil are only weakly correlated with subsequent weed pressure.  Plots with outstanding (and non-chemical) weed control have occurred in soils with heavy weed seed banks and plots with heavy weed seed banks have seen seed numbers fall over time even with no herbicide use.  Our three cash grain systems have very different levels of weed seeds in the soil, but weed control in soybeans in both CS2 and CS3 is usually good to excellent.  The lowest input system (CS3) does often have more weed pressure in the corn than the higher input systems do, and corn yields have sometimes been reduced as a result.

There are many factors affecting the relationship between the number of seeds in the soil and eventual weed pressure in a field. 

  • The cropping system we choose:  A system like continuous corn must rely on fairly aggressive weed control measures, including herbicides, cultivation and tillage.  In a more diversified system, one or more of the crops planted may compete well with weeds or effectively interrupt the buildup of some weed species.  It is important that the crops be of different growing patterns, offering a change of environment for the weeds, for this to work well.  We note that a forage phase works particularly well to reduce weed pressure.  Mechanical weed control in the corn years of our forage systems is as effective as chemical weed control in our cash grain systems.
  • The way the crops are managed:   We plant wide-row soybeans in our lowest input cash grain system so that we can cultivate them.  We also delay planting of corn and soybeans to permit better pre-plant mechanical weed control.  In our no-till corn-soybean system this is not an option, so we plant narrow row soybeans to better compete with the weeds. 
  • The producer’s expertise with mechanical weed control:  Our ability to rotary hoe and row cultivate improved markedly over time.
  • The weather:  This is the big factor we can’t control. Our most variable weed control occurs in our lowest input cash grain system.  We have had years of outstanding weed control, and years when weed pressure definitely affected yields because early summer rains interfered with the mechanical weeding operations.

With a good crop rotation and aggressive mechanical weed control (generally 2 rotary hoeings and 2 cultivations) producers could avoid using herbicides a majority of the time.  However, there are some years when cultural and mechanical weed control cannot prevent significant weed problems.  In these cases, use of post-emergence herbicides can offer a reliable weed control back-up plan that reduces the risks of low-input production. 

In order to measure the economic costs of exclusive reliance on mechanical weed control, we superimposed post-emergence spraying on subplots within CS3 corn and soybeans for four years at both locations.  In four of the 16 crop situations, returns to post-emergence herbicide was high (>$35/a), in four situations returns were modest (>$5/a but < $35/a) and in half of the cases, returns were low (<$5/a) or negative. The higher prices for organic crops can however offset yield losses due to weeds. Over the past few years certified organic premiums have been $5-10/bu for soybeans and $1-1.50/bu for corn, as well as for wheat.

Modifications to the low-purchased-input cash grain system (CS3)

We initially envisioned CS3 as a low-input system, relying on no synthetic fertilizers, but using post-emergence herbicides to prevent major crop losses when cultural and mechanical weed control failed.  As we gained experience with this system, we decided to try several modifications on satellite plots.

The “chem-lite” option: In this system, we lowered the barrier to herbicide use, using a post-emergence herbicide as soon as it appeared that it would be profitable to do so.  We also applied sidedress nitrogen if a soil test indicated it would increase economic returns.  For example, if cover crops performed poorly the year before, or if the early growing season conditions were slowing nitrogen release from the cover crops, we applied sidedress nitrogen based on results from the pre-sidedress test.  We ran the comparison between CS3 and the chem-lite modification from 1995 to 1999 at Arlington.

Corn yields averaged 19 bu/a higher in the chem-lite system (1% significance), soybean yields were four bushels better (10% significance) and wheat yields were similar.  In the case of both corn and soybeans, yield variability was reduced due to the addition of modest levels of inputs.  In the case of the cool spring of 1996, nitrogen additions to the chem-lite corn resulted in far better yields than CS3 corn (150 vs. 74 bu/a), and due to abundant rain in the spring of 1999, post emergence herbicide in the chem-lite system resulted in better soybean yields than we were able to achieve with mechanical weed control (50 vs. 32 bu/a).

The chem-lite system produced sufficiently more grain than CS3 to pay for the additional inputs.  In fact, the net return to labor, management, and capital for a 1000 acre chem-lite Farm was $14,000 more than for the same size CS3 Farm ($34,092/yr. versus $20,043/yr.).  Sensitivity analyses showed that fertilizer N prices would have to increase nearly 6-fold to reduce the chem-lite return to the level of the CS3 Farm.  For an organic system to match the net returns of the chem-lite system would require price increases of 6% across the board. Actual certified organic premiums in SE Wisconsin have been much higher and range from 25 to 50% for corn and wheat to 200% for soybeans.

The organic option: We note that organic premiums for some crops can make the agronomic risks of organic production more tolerable today than they were in 1989.  Starting in 1999 we decided to run CS3 as a completely organic system; we will report results in the future. 

 

 

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