1. Long-term Rotations ……
Viable Alternatives?
Craig Chase, Field Specialist
Farm & Ag Business Management

2. Let’s Start with Organics: Is it profitable?
Based on the Neely-Kinyon research (with modifications) to reflect Iowa averages
Comparison of Two Production Systems
Conventional corn-soybean rotation
Organic corn-soybean-oat/alfalfa-alfalfa
Organic Rotations are assumed to be certified
Returns do not include direct or counter-cyclical payments

3. Yields by Crop and Rotation

4. Returns to Land, Labor, & Management by Crop and Rotation
Prices: Conventional - $2.15, $6.00; Organic - $4.50, $13.60 wt; $2.30, $90

5. Returns to Management by Crop and Rotation

6. Summary of Findings
Average production costs for the organic rotation were lower than the conventional C- Sb rotation.
Yields for organic crops were assumed to be less than the conventional crop yields.
Returns to land, labor, and management and returns to management were significantly higher in organic rotations.

7. Summary of Findings (cont’d)
Organic rotations held an economic advantage over the C-Sb rotation despite exclusion of organic premiums and wage rates (not shown in these slides).
Organic budgets are outlined in FM Can be downloaded at:

8. Non-Organic Long-Term Rotation: Is it Profitable?
Based on the Marsden research (with modifications) to reflect long-term oat yields
Comparison of Two Production Systems
Conventional corn-soybean rotation
Reduced input corn-soybean-oat/alfalfa-alfalfa
Returns do not include direct or counter-cyclical payments
Do not compare these results to the organic results – they have different assumptions…

9. Yields by Crop and Rotation

10. Returns to Land, Labor, & Management by Crop and Rotation
Prices: Conventional - $2.15, $6.00; LT - $1.60, $60 straw, $85 alfalfa

11. Returns to Management by Crop and Rotation

12. Quick Note
The C-Sb rotational studies illustrated here had a difference of $102 per acre return to management for corn. Why? Two reasons…
Yield difference of 30 bushels per acre would increase returns about $60 per acre
Differences in fertility assumptions were the other $40. Marsden study used actual applications – no annual P and K whereas the first budget assumed annual removal rates.
The two soybean budgets were $12 apart…

13. Summary of Findings
Average production costs for the long-term rotation were lower than the conventional C- Sb rotation ($185 vs. $133).
Yields for long-term crops were assumed to be higher than the conventional crop yields.
Returns to land, labor, and management were significantly higher in the long-term rotation ($66 per acre higher).

14. Summary of Findings (cont’d)
Labor requirements for the long-term rotation were about .67 hours per acre higher. At a $10 per hour wage rate, the increase in labor would be $6.70 per acre.
Prices were held constant across the rotations. If a premium for low-input products could be received, profitability would increase.

15. Can Long-term Rotations Compete?
Crops selected for long-term rotations should be chosen for agronomic and economic reasons.
Inclusion of a high value crop, such as alfalfa, is critical to higher average rotational returns. (Note: average alfalfa return to LLM was $297 per acre versus $252 and $210 for conventional corn and soybeans.)
Integrated crop-livestock systems allow producers to supply on-farm compost, which is important to long-term rotations’ economic advantage.

16. Organic Transition Yields by Crop & Rotation
Neely-Kinyon

17. Transition Returns to Land, Labor, and Management by Crop & Rotation
Prices: Conventional - $1.80, $5.20; LT - $1.40, $60 straw, $85 alfalfa
Neely-Kinyon

18. Organic Transition Summary of Findings
Note: Actual prices for corn and soybeans were below loan rate at that time so loan rates were used. Other prices were actual Iowa averages.
Average production costs for organic rotation were lower than the conventional C-Sb rotation.
Corn yields for organic crops were substantially lower than conventional crop yields. Soybean yields were similar.
Returns to land, labor, and management were about $12/acre lower in organic rotations.

19. Organic Transition Summary of Findings (Cont.)
Growing organic crops is a classic risk/reward system. Higher risks for the transition years for potential higher returns after certification.
Can you start out the transition years with 2 years of alfalfa or oats followed by alfalfa?
Once nutrients and soil health are in place, corn yields tend to increase. The first certified year you could be selling higher valued crops such as corn.

20. Last Thoughts
For non-organic transitions - weed management, fertility, and soil health are equally important.
Picking the right product mix to minimize production costs while enhancing yields is key to transition profitability.

21. Thank you for this opportunity!
Questions?
Thank you for this opportunity!
Craig Chase, Field Specialist
Farm & Ag Business Management