Is there an advantage to more corn acres in your rotation?
click image to zoom Table 2 represents data from the dry spring, early planting and dry summer year of 2012. The Over 75% group shows the greatest accrual revenue advantage of the five years at $125.83. The crop insurance harvest price of $7.50 per bushel no doubt had an impact if one assumes that a revenue based crop insurance policy was in place. Even though the Total Cost for the Over 75% group showed the greatest disadvantage for the year, the management return advantage was the highest for the Over 75% group.
click image to zoom 2011 data (wet spring, warm summer and early onset of maturity) in Table 3 indicates no yield disadvantage at the higher corn percentage levels and a slight yield disadvantage at the lower corn percentage levels. Crop returns increase as the corn percentage increases as do fertilizer, pesticides, seed costs and power and equipment costs. The management return advantage decreases as the corn percentage increases with the exception of the 66% to 75% Group.
Data in Table 4 from 2010 (April planting and high temperatures during pollination) show the largest yield disadvantage to higher corn percentages of the five year period. The crop return advantages are much lower in 2010 than the other four years. The cost disadvantages for the two higher corn percentage groups are at lower levels than most of the other years.
click image to zoom 2009 conditions were wet spring, cool summer and a late/wet harvest. The crop return advantage at the higher levels of corn percentages was more muted that in the recent three years. The fertility, pesticide, and seed cost disadvantages all increase as the percent of acres devoted to corn increases. The power and equipment cost advantage decreases as corn acres increase with the exception of the Over 75% group. Management returns are general lowest at the higher corn percentages.
Four of the five years data indicate that while there is an advantage to revenue that is associated with an increasing percentage of corn. The data also suggest that there is a cost (total economic cost) disadvantage that overcomes that accrual revenue advantage especially at the highest percentage of production devoted to corn.
Crop Returns - cash income adjusted for the change in inventory from beginning to end of year; includes accrual adjusted FSA and crop insurance income.
Management Returns - accrual net farm income less interest on equity capital and less an allowance for upaid labor.