Economics of Dryland Cropping Systems in the Great Plains: A Review

Abstract

Dryland wheat (Triticum aestivum L.) in the Great Plains generally is planted in a wheat- fallow (WF) rotation. Wheat grown in rotation with a summer row crop like corn (Zea mays L.), sorghum [Sorghum bicolor (L.) Moench], or sunflower [Helianthus annuus var. macrocarpus (DC.) Ck11.] increases cropping intensity, allowing a crop to be produced annually on 67 to 100% of tillable acres. A review of economic analyses of dryland cropping systems in the Great Plains was conducted to compare net returns, production costs, financial risk, and compatibility with the 1990 Farm Bill. Seven of eight studies reported that net returns were greater from a more intensive crop rotation than from WF when reduced-tillage (RT) or notill (NT) were used following wheat harvest and prior to the summer crop planting. With government program payments, WF was more profitable with conventional tillage (CT).than with NT. Production costs increased as cropping intensity increased and tillage decreased. Economic risk analysis showed that wheat-sorghum-fallow (WSF) was less risky than WF in Kansas. Cropping systems using more intensive rotations with less tillage had higher production costs than WF, but also had increased net returns and reduced financial risk, while remaining in compliance with 1990 Farm Bill provisions. Research Question Wheat-fallow (WF) is the major dryland crop rotation in the Great Plains. More intensive crop rotations using less tillage should increase grain production per tillable acre. The objectives of this study were to examine available reports of research into various crop rotations to determine if cropping alternatives more profitable than WF exist and how alternative cropping systems affect net returns, production costs, financial risk, and government program compliance. Literature Summary Harvested acres of dryland fallow winter wheat in western Kansas, western Nebraska, and eastern Colorado averaged 6.6 million acres from 1991 to 1993 compared with less than 1.6 million acres of dryland spring and summer crops (Fig. 1). The ratio of wheat acres to spring and summer crop acres has been fairly consistent during this time. Thus, WF is the major crop rotation on dryland acres in the Central Great Plains. Several studies of dryland cropping systems in the Great Plains using reduced tillage (RT) or no tillage (NT) or more intensive crop rotations were compared with WF in terms of reduced soil erosion, increased grain yield, and increased water use efficiency. Although considerable research has been conducted on the agronomics of dryland cropping systems, only a few studies have analyzed the costs and returns to these systems. Figure 1Open in figure viewerPowerPoint Harvested acres of dryland crops in western Kansas, western Nebraska, and eastern Colorado. Applied Questions Are there cropping systems more profitable than WF for dryland producers in the Great Plains? Crop rotations producing a crop on 67 to 75% of tillable acres on an annual basis using RT or NT were found to be more profitable than WF in the Central and Southern Great Plains. Continuous cropping was more profitable than WF in the Northern and Southern Great Plains; however, continuous cropping was less profitable than WF in the Central Great Plains. Did reducing or eliminating tillage in a WF rotation increase profitability? Results were mixed as some studies reported that decreasing the amount of tillage in WF increased profitability, whereas others showed no economic benefit. However, if reducing tillage in WF is necessary to remain in compliance with NRCS residue requirements for government program eligibility, RT and NT would be more profitable than conventional tillage (CT). Did reducing or eliminating tillage in more intensive crop rotations increase profitability? Reducing or eliminating tillage after wheat and prior to a summer crop increased returns compared with CT. However, reducing or eliminating tillage prior to planting of wheat reduced net returns. How did alternative cropping systems affect capital requirements? Capital for operating costs increased as cropping intensity increased because more acres were planted. Per acre costs increased as tillage decreased, because herbicide expense increased more than tillage expenses decreased. However, if NT allows less machinery investment or more acres to be farmed, spreading fixed costs over more acreage could decrease total costs per acre. Was financial risk greater with alternative cropping systems than with WF? Alternative cropping systems using proven technologies and locally adapted crops with viable markets can have less financial risk than WF. If the alternative cropping system incorporates a high risk crop, the risk of the entire rotation will be increased and could be higher than that of WF. Can alternative cropping systems be incorporated within the framework of the government program? The flex acres provision and elimination of cross-compliance in the 1990 Farm Bill allowed more planting flexibility than previous farm bills, making altenative cropping systems possible while remaining in compliance. Recommendation To increase returns and remain eligible for government payments, we recommend that dryland WF producers in the Great Plains increase their cropping intensity by incorporating a summer crop(s) into their crop rotation and use less tillage to conserve moisture and control erosion.