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Corn+Soybean Digest

Time For A Rotation Change?

Should soaring energy and fertilizer prices prompt you to overhaul your corn/soybean rotation pattern?

A Purdue University economic model shows that continuous corn would have to yield 215 bu./acre to compete economically with a 50/50 corn and soybean rotation. That's based on a soybean price 2.4-2.6 times the corn price, with corn and beans in rotation yielding 180 and 55 bu./acre, respectively.

But that was last year, with about $1.85/gal. for diesel and 32¢/lb. for nitrogen (N). This year is a different story.

Plug in $3 diesel and 38¢ N, and continuous corn would have to yield around 235 bu./acre to remain competitive with a 50/50 corn and bean rotation, the Purdue model shows.

Farm financial consultant Anthony Barrett at Nebraska Farm Business, Inc. (NFBI), based in Lincoln, NE, says a good approach to the corn/soybean mix question is enterprise analysis in combination with a cash-flow analysis. Once you have that data, you have your cost of production — your break-even. About 50-60 of this farm financial consulting organization's clients approach crop planning that way.

A producer could also get at the question with cash flow analysis alone. “If done and used correctly, (cash flow analysis) it's going to be a big help,” he says.

But be careful. Barrett warns that cash flow can be easily manipulated. A small difference in yield or market price can change the outcome significantly.

A good starting point in the analysis is expected yield differ-ences between rotated and continuously cropped corn and soybeans.

In University of Wisconsin studies that began in the 1980s at two sites in Minnesota and one in Wisconsin, first-year corn and corn rotated annually outyielded continuous corn 15% and 13%, respectively.

By the same token, those studies show first-year soybeans and annual rotation soybeans outyielded continuous soybeans 18% and 10%, respectively.

Nearly 100% of the time, corn following soybeans enjoys a yield boost over continuous corn, University of Nebraska-Lincoln soil scientist Dan Walters says. The boost comes mostly from a variety of factors, such as less rootworm pressure and a reduction in disease vectors — not N effect, he says.

Soybeans don't add N to the soil, according to Walters. However, Nebraska studies have shown a 45-60 lb. N credit for corn following soybeans. That credit for corn following soybeans comes mainly from native soil N. Walters explains that soil microbes breaking down crop residue are first at the table to feed on soil N. Lower residue levels following a soybean crop result in less N tie-up by microbes than in corn following corn. So more native soil N is available to corn after soybeans.

At 35¢/lb., that 45-60 lb. N credit is worth $15-21/acre for corn in rotation vs. continuous corn.

But be prepared to carefully monitor N levels for second-year corn after soybeans, Walters cautions. Higher residue levels following corn result in more soil N tie-up by microbes.

Energy and fertilizer costs are certainly major considerations in analyzing cropping mixes, Barrett says. But he adds, “I'd rank marketing opportunities as a high consideration.” Producers located in a livestock feeding area, for instance, may have marketing opportunities different from those located elsewhere.

Water is another major issue. It may be as critical as energy and fertilizer costs, Barrett says, regardless of whether you're in an irrigated or dryland setting.

Interestingly, these three factors together — energy, fertilizer and water — have some NFBI clients plugging wheat into their corn/soybean rotations. Even in recent drought years in Nebraska, wheat produced a decent crop when corn and soybeans didn't.

Wheat can fit into irrigated operations as well, since watering time comes when corn and soybeans aren't being irrigated.

“And we're seeing excellent yields in wheat,” Barrett says, adding that 70 bu. wheat is not uncommon. Among the top one-third of NFBI clients earning the highest income statewide in 2004, wheat yields averaged 53 bu./acre. All clients statewide averaged just below 49 bu./acre last year.

“We've heard of a lot of people who raised wheat who hadn't for years,” Barrett says. This crop requires less fertilizer, fewer chemicals and the seed is cheaper.

Gene Watermeier, Unadilla, NE, says he thinks a lot of people are afraid fertilizer is going to cost a lot more. But he's not ready to be stampeded into significant changes in his crop rotation plan in southeastern Nebraska.

Watermeier no-tills soybeans, wheat, corn and alfalfa in his 800-acre operation. Grain sorghum has been part of his crop rotation in the past, but wheat gets the nod now. He farms with his son Dan of Syracuse, NE, a commercial alfalfa producer. The two maintain separate operations.

To make major changes in their crop rotation would be like going out and buying a different car as soon as gas prices increase, he says.

While he draws on economic analyses available to him through NFBI, to which he belongs, he tempers crop planning with other considerations. Rental agreements with landlords, spreading risk and accommodating long-term conservation goals can't be ignored, Watermeier explains.

Like the Watermeiers, Dave Nielsen, operator of Garr Creek Farms, Lincoln, NE, follows a no-till system. He grows corn, soybeans and wheat in rotation on 1,700 acres. Because he no-tills, he doesn't see major differences in energy requirements between corn and soybeans. “We're running pretty lean already,” he says.

He has bumped up wheat acreage to 200 acres from 150 in 2005. “Some of that is due to rising energy and fertilizer costs. Wheat is less expensive to grow. And I'm not sure we're out of this drought yet,” Nielsen says, noting that wheat has produced well in his all-dryland operation, averaging 73 bu./acre in 2005.

But he, too, doesn't stop with economic comparisons in dividing acreage among crops in his rotation. You have to temper that with other considerations, Nielsen says. “You have to look at the agronomic side and erosion control.”

Confronting rising fertilizer prices isn't limited to crop rotation adjustments, he continues. He contracts with the City of Lincoln for municipal sewage sludge for his fields. That, and encouraging livestock production with livestock waste available for crop use, needs more attention locally and nationally. That's especially true in the face of rising fertilizer prices. “We need to walk our grain out of our state on four hooves,” he says.

Among NFBI clients, the pro-portion of corn, soybeans and other crops in a rotation are all over the place, Barrett says. Part of that depends on where you're located. Growers with both irrigated and dryland acres tend to put corn on irrigated acres and soybeans on their dryland ground, because corn yield response to irrigation is greater than that of soybeans, he says.

However, he says those growers still must rotate to break the disease, weed and insect cycles. “But I don't think that's as big an issue as it used to be.” Much of the crop chemical cost for insect protection and weed control has been transferred to the seed, he says, citing genetically engineered corn and beans for herbicide tolerance and corn with rootworm resistance.

Threat of Asian soybean rust is another factor that figures into the corn/soybean rotation mix in the Corn Belt. That hasn't turned out to be as big an issue in Nebraska as some had feared, however. Barrett says he isn't aware of any NFBI clients who treated for it this past season.

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