Influence of Wheat-Feed Grain Programs on Riskiness of Crop Rotations under Alternate Irrigation Levels

Abstract

Declining groundwater levels in parts of the Great Plains could lead to reduced irrigation and a decline in the economies of those areas. Improved irrigation efficiency has helped slow the rate of decline in aquifer levels but adoption of limited irrigation and water conserving rotations could slow the decline even more. The objective was to estimate the riskiness and profitability of these alternatives with and without farm commodity programs. Three water levels-rainfed, limited irrigation (6 in./yr water allocation) and full irrigation (meet crop evapotranspiration demands) were established for continuous corn (Zea mays L.), winter wheat (Triticum aestivum L.)-corn-soybean [Glycine max (L.) Merr.], and corn-soybean rotations. The profitability of each rotation under each water level was estimated using results of field experiments conducted since 1981 in west central Nebraska and cost estimates based on a typical center pivot irrigation system covering 126 acres. Stochastic dominance techniques were then applied to the data by using combinations of prices for corn, wheat, and soybean to generate cumulative distribution functions. Profitability and riskiness were estimated with and without participation in the wheat and feed grain programs and with alternate acreage conservation reserve (ACR) levels. Results showed that the government program improved income levels and reduced income variation for each water level and all rotations. Program participation did encourage monoculture corn under full irrigation and under limited irrigation with low ACR requirements. Under rainfed conditions the relative ranking of the three rotations was not changed by program participation.