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ECONOMIC ANALYSIS

The Profitability and Risk of Long-Term Cropping Systems Featuring Different Rotations and Nitrogen Rates

^a Monsanto Company, 1920 Fifth St., Davis, CA 95616
^b Dep. of Agronomy, 1575 Linden Dr., Univ. of Wisconsin, Madison, WI 53706
^c Dep. of Agricultural and Applied Economics, 427 Lorch St., Univ. of Wisconsin, Madison, WI 53706. Funded by CSREES project WIS0 142-4897

^* Corresponding author (trenton.floyd.stanger{at}monsanto.com).

Yield comparisons do not provide the appropriate basis for decision-making regarding cropping systems. The dominant factor influencing the adoption of cropping systems is economics. The objective of this 15-yr study was to evaluate the long-term effect of four N fertilization treatments on the economic returns of seven crop rotations in Wisconsin, based on annual market prices and production costs. The seven crop rotations were continuous corn (Zea mays L.) (CC), continuous alfalfa (Medicago sativa L.) (AA), corn-soybean [Glycine max (L.) Merr.] (CS), corn-alfalfa (CA), corn-corn-corn-alfalfa-alfalfa (CCCAA), corn-corn-oat (Avena sativa L.) with alfalfa seeding-alfalfa-alfalfa (CCOaAA), and corn-soybean-corn-oat with alfalfa seeding-alfalfa (CSCOaA). The four N treatments were 0, 56, 112, and 224 kg N ha^–1 for the corn phase. Across all crop rotations, the average return was greatest for the 112 and 224 kg N ha^–1 treatments, which returned on average $32 and $85 ha^–1 more than the 56 and 0 kg N ha^–1 treatments, respectively. Across all N rates, average returns were highest for the CS rotation. The CS rotation returned $58 ha^–1 more than the CSCOaA and CCOaAA rotations, $129 ha^–1 more than the CCCAA rotation and AA, $224 ha^–1 more than the CA rotation, and $269 ha^–1 more than CC. Under second degree stochastic dominance, the stochastically efficient treatments were CS at all N rates and CC at 224 kg N ha^–1. All other cropping systems were inefficient relative to these five treatments (i.e., they would not be chosen by a risk-averse decision maker). This research shows that the most profitable systems (CS) remain the most efficient when risk is taken into consideration. However, these results also show that when 224 kg N ha^–1 is added, risk can be reduced for continuous corn. Individual circumstances will dictate the optimal choice among the efficient rotations.

Abbreviations: AA, continuous alfalfa • CA, corn-alfalfa • CC, continuous corn • CCCAA, corn-corn-corn-alfalfa-alfalfa • CCOaAA, corn–corn–oat with alfalfa seeding–alfalfa–alfalfa • CS, corn–soybean • CSCOaA, corn–soybean-corn-oat with alfalfa seeding-alfalfa • FDSD, first-degree stochastic dominance • N, nitrogen • NASS, National Agricultural Statistics Service • SDSD, second-degree stochastic dominance. Italics in a rotation code indicate the phase of the rotation under discussion.