A new study from a multidisciplinary team led by Iowa State University agronomists shows significant portions of Iowa farmland consistently lose money and could influence farmers to change how they use some of the acres they devote to corn and soybeans.

Elke Brandes, a postdoctoral research associate in agronomy and lead author of the new study, says spotty soil conditions and other agronomic challenges in fields across the state reduce yields enough to make some acres unprofitable. From a strict dollars and cents perspective, Brandes says the low yields produced on those acres fall short of the cost of inputs such as fertilizers and herbicides.

UNDERPERFORMING AREAS: Many fields have small pockets that consistently lose money planted to corn and soybeans. Some of these areas can be addressed through improved management or physical changes such as drainage. But others can’t.

“One might ask, ‘well, why are farmers still farming with row crops with corn and soybean if these high input costs don’t really make a profit?’” Brandes says. The answer is that crop insurance and high grain prices in recent years obscure the fact that some acres are a net drain on the bottom line. This new research may help farmers make more informed decisions about land use and perhaps get them to consider some alternatives, she says. 

Software program analyzes profitability in small zones in fields
The ISU team, working with the Ames-based company AgSolver, gathered publically available data from USDA and combined it with data from the annual ISU Land Values Survey. They crunched the numbers for the years 2010 through 2013 and projected results for 2015 as well. The findings, published in the peer-reviewed academic journal Environmental Research Letters, are available at iopscience.iop.org/article/10.1088/1748-9326/11/1/014009. 

An interactive map of Iowa subfield profitability is available at mesonet.agron.iastate.edu/GIS/apps/profit/.

AgSolver has developed a new online software program called Profit Zone Manager or PZM. It analyzes profitability in 3-meter quadrants based on multiyear yield data, as applied fertilizer and as-planted seeding rates, along with actual production costs. 

Small pockets unprofitable in 2010 and 2013 have expanded
The data from the earlier years included in the ISU study often show unprofitable stretches of land tucked away in small pockets of fields that largely turn a profit. But the small pockets of acres that didn’t turn a profit between 2010 and 2013 expanded dramatically to encompass vast stretches of farmland in 2015, according to the team’s projected findings. Results look much different for 2015 because input costs remained steady but commodity prices fell far short of the highs of preceding years. 

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The researchers projected that 2.5 million hectares of Iowa farmland lost $250 or more per hectare last year. Around 6.2 million acres, or about 27% of all Iowa farmland devoted to row crops, are expected to have lost $100 or more per acre. 

Some acres don’t yield high enough to cover input costs
Emily Heaton, agronomy professor and co-author of the study, says the researchers hope their work will encourage farmers to consider alternate uses for unprofitable land. Converting some of those acres to perennial grasses, for instance, would have environmental benefits such as curtailing erosion and providing habitat for wildlife.

But convincing farmers, whose livelihoods depend on producing crops, to shift some land out of corn and soybeans is a heavy lift. Showing farmers that some acres don’t produce high enough yields to make up for input costs, however, is a piece of the puzzle.

Heaton says data from the ISU STRIPS program, which stands for Science-based Trials of Rowcrops Integrated with Prairie Strips (prairiestrips.org), has consistently shown a 40% to 95% improvement in environmental metrics while using only between 5% and 20% of farm fields. 

Perennial grasses for energy biomass can be planted in strips
While Heaton’s research centers on using perennial grasses for energy biomass, there are clear parallels between diverse prairie and dedicated energy crops. Heaton’s team is working with the University of Iowa Biomass Fuel Project to use perennial biomass in the UI power plant, providing a direct market for perennial-derived biomass in addition to environmental benefits. Lisa Schulte Moore, a STRIPS researcher and associate professor of natural resource ecology and management who co-authored the study, also contributed to the power plant project.

“We’re blurring the lines between conservation and production,” Schulte Moore says. “Our data indicate we can improve ecosystems while simultaneously protecting or even increasing profit. By working together, we hope to present a range of options to producers, from diverse prairie strips to whole fields of a dedicated energy crops like miscanthus.” Heaton adds, “Landowners and managers can work with ISU personnel to identify goals for their cropland and develop integration strategies tailored to individual operations.”

NOTE:  A video of ISU research associate Elke Brandes explaining the findings of the study is available at news.iastate.edu/news/2016/01/21/unprofitableacres.