Alternative Cropping Systems…

Comparison to a Conventional C-Sb

Rotation

Craig Chase, Field SpecialistFarm & Ag Business ManagementAnn Johanns, Extension Program Specialist

Yields by Crop/Rotation

C-Sb C-Sb-O C-Sb-O/A-A0

50

100

150

200

250

193.73 198.80 202.43

50.27 54.73 56.93

CornSoybeans

Rotation

bu/a

cre

NOTE: The C-Sb-O rotation includes red clover

Production Costs (exc labor and land)

2006 2007 2008 2009 2010 20110.00

100.00

200.00

300.00

400.00

500.00

600.00

Corn-Sb

Corn-Sb-O

Corn-Sb-O/A-A

C-Sb (avg)

C-Sb-O (avg)

C-Sb-O/A-A (avg)

Years

Dolla

rs p

er a

cre

Things to Note

• Soybean varieties used in the 2 year rotation differed from the other rotations beginning in 2006; corn hybrids used in the 2 year rotation differed from the other rotations beginning in 2008.

• Main difference between rotations is fertilizer and pesticide applications. The LEI rotations have significantly less fertilizer and pesticide applied.– Used different herbicides and applied by banding– Only cost associated with manure in initial study is the cost to

apply• Prices for 2011 are USDA NASS average for October-

December 2011.

‘Technology packages’ used for corn and soybean

Bottom Line

• Production costs for LEI corn is approximately $150-175 less per acre; $25-50 less for LEI soybeans.

• This spread has widened as fertilizer and pesticide costs have increased.

Returns to Management

2006 2007 2008 2009 2010 2011$0

$100

$200

$300

$400

$500

$600

$700

$800

Corn-Sb

Corn-Sb-O

Corn-Sb-O/A-A

C-Sb (avg)

C-Sb-O (avg)

C-Sb-O/A-A (avg)

Years

Dolla

rs p

er a

cre

Inclusion of oats and alfalfa

• Strongly-held belief: inclusion of oats and alfalfa make the organic rotation not competitive with the conventional C-Sb rotation.

• Let’s take a look…

Return to Management

2006 2007 2008 2009 2010 2011

-200.00

-100.00

0.00

100.00

200.00

300.00

400.00

500.00

O (C-SB-O)O/A (C-SB-O/A-A)C-Sb

Years

Dolla

rs p

er a

cre

Things to note…

• 2010 was a huge year for revenues for conventional corn and soybeans.

• Production expenses increased at a higher rate than revenue from 2008-09 for conventional corn and soybeans.

• The LEI system had its highest economic return in 2011 (3-yr and 4-yr) led by corn, and hasn’t seen any negative or low numbers (below $69/ac) from 2006 on.

Things to note…

• Fertilizer is added on an as-needed basis– Purchased fertilizer was added on every

rotation in 2010 resulting in lower than expected economic returns compared to 2011.

Focus on the right number…

• Just because you bring in more money doesn’t mean you are keeping any more of it yourself…

• So focus on economic returns, not prices or revenue... Family living and other personal bills are paid out of net returns not gross revenue.

Another look at returns to management

2006 2007 2008 2009 2010 2011$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

C-Sb (avg)

C-Sb-O (avg)

C-Sb-O/A-A (avg)

Years

Dolla

rs p

er a

cre

Average Return to Management, 2006-2011

2yr 3yr 4yr-$50

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

CornSoybeansOatsAlfalfa (2nd yr)

Rotation

Retu

rn p

er A

cre

Average Returns to Land, Labor, and Management by Crop Rotation, 2006-2011

Return to

Land, La

bor, and M

anag

emen

t

Return to

Land an

d Man

agem

ent

Return to

Man

agem

ent

$0$50

$100$150$200$250$300$350$400$450

C-SbC-Sb-OC-Sb-O/A-A

Fertilizer makes all the difference…

• Used fertilizer equivalents from manure analysis and the annual costs to calculate economic returns had the manure been purchased.

Average Returns to Land, Labor, and Management by Crop Rotation, 2006-2011 – with fertilizer equivalents for manure applied

Return to Land, Labor, and Management

Return to Land and Management

Return to Management$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

C-SbC-Sb-OC-Sb-O/A-A

Management practices used for corn and soybean in each rotation system, 2008-2010

Average Returns to Land and Management, by Crop Rotation, GE comparison

Average Returns to Land and Management, by Crop Rotation, GE comparison

Production costs as affected by rotation and management, 2008-2010

* Does not include land, does include laborSource: Gomez et al., in review

Net returns to land and management as affected by rotation and management, 2008-2010

Source: Gomez et al., in review

Energy Usage by Rotation• Measured usage in energy within the field, and energy

available for purchase (solar energy not included).• Doesn’t take into consideration energy for seed,

storage, delivery, etc.• Corn takes the bulk of the energy usage in all

rotations.• Fertilizer is the leading category in the 2-year rotation,

but as might be expected, field operations are the highest usage category for the 3 and 4-year rotations.

Energy Input per Crop for Individual Rotations 2006-2011 average for each rotation

2yr 3yr 4yr0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

CornSoybeansOatsAlfalfa (2nd yr)

1,00

0,00

0 BT

U p

er A

cre

Distribution of Energy Inputs in Cropping Rotations by Selected Energy Categories, 2006-2011

C-SB C-SB-O C-SB-O-A -

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Grain DryingField OperationsPesticidesFertilizer

1,00

0,00

0 BT

U p

er A

cre

Diesel Fuel Equivalents2006-2011

C-SB C-SB-O C-SB-O-A0.00

5.00

10.00

15.00

20.00

25.00

30.00

Gallo

ns p

er A

cre

*Assumed 138,690 BTU per gallon of diesel fuel. (EIA)

Bottom Line

• Conventional prices and revenues are historically high.

• Fertilizer, pesticides, seed, etc. costs have increased dramatically reducing net economic returns to conventional production.

• LEI systems allow for equal to higher returns with less purchased inputs.

Questions…..

Any questions or comments?

Thank You for This Opportunity!

Craig A. ChaseFarm Management Field Specialist

312 Westbrook LaneAmes, IA 50014(319) 238-2997

cchase@iastate.edu

http://www.extension.iastate.edu/agdm/fieldstaff/cchase.html