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Pacific Northwest Conservation
Tillage Handbook Series No. 19
Chapter 10 - New Technology Access, Adaptation and Economics, December
2003
Economics of Alternative
No-Till Spring Crop Rotations In Washington's Wheat-Fallow Region
AUTHORS
Louis Juergens, Douglas Young, William Schillinger, and Herbert Hinman
L.A. Juergens, D.L.
Young, and H.R. Hinman, Dept. of Agricultural and Resource Economics,
Hulbert Hall 103, Washington State University, Pullman, WA 99164-6210,
and W.F. Schillinger, Dept. of Crop and Soil Sciences, Washington State
University, Dryland Research Station, Lind, WA 99341.
ABSTRACT
Winter wheat - summer fallow (WW-SF) is the dominant cropping system in
the low-precipitation (< 12 inch annual) region of the inland Pacific
Northwest (PNW). Intensive tillage during summer fallow often leaves soil
vulnerable to wind erosion. While no-till cropping is well known for wind
erosion control benefits, previous research in the inland PNW showed that
annual no-till hard red spring wheat (HRSW) trailed WW-SF in profitability
by $46 /ac/year. Our objective was to assess the agronomic and economic
feasibility of alternative no-till spring grain and oilseed rotations
in a 5-year experiment near Ritzville, Washington. Spring crops were soft
white wheat (SW), barley (SB), yellow mustard (YM), and safflower (SAF)
grown in three rotation sequences. Net returns from WW-SF on ten neighboring
farms during the 5-year period averaged $8.71 /ac /year. The most profitable
no-till spring cropping sequence was continuous SW that averaged net returns
of $4.90 /ac /year, statistically equivalent to WW-SF and much more competitive
than previous HRSW results. No-till SW-SB and a 4-year rotation of SAF-YM-SW-SW
averaged -$4.90 and -$12.73 /ac /year, respectively. Although all no-till
spring crop rotations had higher annual income variability than WW-SF,
positive net returns for continuous SW is the first economic “good
news” for continuous annual cropping using no-till in the low-precipitation
region of the inland PNW.
Abbreviations:
HRSW, hard red spring wheat; PNW, Pacific Northwest; SAF, safflower; SB,
spring barley; SF, summer fallow; SW, soft white spring wheat; WW, soft
white winter wheat; YM, yellow mustard.
INTRODUCTION
Potential for economic and environmental benefits is a driving force in
the gradual shift by dryland farmers to adopt reduced-till and no-till
farming methods. Despite several associated environmental problems, winter
wheat-summer fallow (WW-SF) is the dominant cropping system in the low-precipitation
zone of the inland PNW because it provides agronomic and economic advantages.
Farmers and bankers appreciate time-proven grain yield and income stability
of WW-SF and the system’s relatively uniform seasonal demands on
farm machinery and labor.
Environmental disadvantages
of WW-SF include recurrent wind erosion, especially during drought cycles
when straw production is low. Summer-fallowed fields in south-central
Washington were reported to have lost 1.6 to 3.9 inches (107 to 270 tons
/acre) of topsoil from wind erosion in one season. In addition to degrading
soil, blowing dust from summer fallow also inflicts substantial off-site
damage on human respiratory health, causes traffic accidents, and incurs
cleanup costs. Research in the PNW and elsewhere has shown that no-till
cropping controls soil erosion, builds soil quality, and reduces machinery
wear and fuel consumption when compared with tillage-based systems. More
diverse cropping systems than WW-SF also offer opportunities for weed,
disease, and insect control.
Nationwide, the advantages
of annual cropping in semiarid regions have led to substantial adoption.
Farmers in the USA reduced summer fallow acreage by 43% from 1964 to 1997,
with the largest reductions occurring in the Great Plains. In 2000, about
36% of total U.S. cropland was in conservation-till or no-till, whereas
in Washington state it was only 23%. In east-central Washington and north-central
Oregon, where annual precipitation ranges from 6 to 12 inches and WW-SF
cropping is practiced on 3.7 million acres, even minimum tillage is rare.
In Adams County, Washington, where this study is located, conservation
tillage is practiced on only 17% of the cropland.
Farmers in the WW-SF
region are slow to adopt conservation tillage summer fallow despite conclusive
research showing environmental benefits with no agronomic or economic
disadvantages when compared with intensive tillage summer fallow. Concerns
about economic risk and profitability appear to be a barrier to adoption
of reduced tillage systems.
Few farmers in the
PNW low-precipitation region practice continuous annual cropping. Two
recent multi-year experiments in Washington compared profitability of
no-till HRSW in 6-inch (Benton County) and 11.4-inch (Adams County) precipitation
zones. In Benton County, 1997-2002 net returns over total costs before
government farm payments averaged -$44 /ac /year for annual no-till HRSW
and -$5.70 /ac /year for WW-SF. In Adams County from 1996-2002, the values
were -$49 /ac /year for HRSW compared with $3.60 /ac /year for WW-SF.
The average shortfall of -$45.73 /ac /year translates into -$183,000 /year
for a typical 4000-acre farm in the region. The WW-SF system was not only
more profitable than annual HRSW in both studies, but also demonstrated
less annual income risk.
Given the unpromising
economic comparison of annual no-till HRSW to WW-SF, a need clearly exists
for alternative cropping systems that offer greater economic viability.
The objective of this study was to evaluate the economic performance of
three annual spring cropping systems involving soft white wheat, barley,
yellow mustard, and safflower and compare them with performance of the
WW-SF system practiced on neighboring farms.
MATERIALS
AND METHODS
Field Layout and Treatments
A 5-year study of no-till annual spring cropping systems was conducted
from 1997 to 2001 at the Ron Jirava farm near Ritzville, in Adams County.
Cropping systems were: i) a 4-year SAF-YM-SW-SW rotation; (ii) a 2-year
SW-SB rotation and; (iii) continuous SW. The experiment covered 20 acres.
The soil is a uniform Ritzville silt loam. Soil depth is more than 6 feet,
having no restrictive layers, and slopes are less than 1%. Average annual
precipitation at the site is 11.4 inches. The field where the experiment
was established had been planted to spring wheat in 1996 following decades
of WW-SF.
Experimental design
was a randomized complete block with four replications. Each crop in all
rotations occurred each year in 20- x 150-yard plots, making a total of
28 plots. During the first 3 years (1997, 1998, and 1999), all plots were
planted and fertilized in one pass directly into the undisturbed soil
and residue left by the previous crop using the grower's Flexi-Coil 6000
air-delivery no-till drill equipped with Barton II dual-disk openers on
7.5-inch spacing for simultaneous and precision placement of seed and
fertilizer in the same row. In 2000 and 2001, all plots were planted and
fertilized in one pass using a custom-built no-till drill equipped with
Cross-slot notched-coulter openers on 8-inch spacing for simultaneous
and precision placement of seed and fertilizer in the same row. Both openers
are low-disturbance and place fertilizer beneath and slightly to one side
of the seed. Glyphosate herbicide (Roundup) was applied 2 to 4 weeks before
planting at 16 oz/acre to control weeds and disease “green bridge.”
Seeding rate averaged across years was 70, 70, 21, and 9 lb/ac for SW,
SB, SAF, and YM, respectively. Solution 32 provided the base for liquid
fertilizer to supply an average of 36 lb N, 10 lb P, and 15 lb S /acre.
The quantity of available soil water and residual N, P, and S were measured
in all rotations each spring to determine fertilizer needs based on a
yield goal. Between the tillering and jointing phase of growth of SW and
SB, in-crop broadleaf weeds were controlled with 8 oz 2,4-D + 0.03 oz/acre
Harmony Extra. In-crop herbicides were not used in SAF or YM plots, as
no legally labeled broadleaf weed herbicides were available for these
crops in Washington.
All plots were harvested
with a commercial-size combine, and grain yield was determined on site
by auguring grain into a weigh wagon. When Russian thistle and other broadleaf
weeds were present at time of harvest in cereals (1999 and 2001 only)
and broadleaf crops (all years), 20 oz/acre Surefire (paraquat + diuron)
was applied 7 to 10 days after harvest to prevent seed production and
halt soil water use by these weeds. A complete list of field operations
and timing for each operation throughout the study is shown in Table 1.
Economic
Methodology
The machinery complement of farmer cooperator Ron Jirava was used for
cost estimation: a 250-hp John Deere 4wd tractor; 30-foot-wide Flexi-Coil
6000 no-till drill with attached air cart; 150-hp John Deere 2wd tractor;
80-foot-wide sprayer with 850-gallon capacity tank; John Deere 8820 combine
with 24-foot cutting platform; single-axle 300-bushel capacity grain truck;
850-bushel capacity tractor-trailer semi, one-ton pickup truck; and utility/service
vehicle. The age, used or new purchase price, size, use, and service life
of machinery were considered typical of the area.
Total cost of production
was estimated using standard enterprise budgets that identify fixed and
variable costs. For a given land and machinery base, fixed costs do not
vary with number of acres planted. Machinery fixed costs are depreciation,
interest, taxes, housing, and insurance. Land fixed costs include property
taxes and net land rent. Net rent is money paid for rented land or rental
income foregone for using owned land. In the study region net rent is
based on the prevailing one-third landlord and two-thirds tenant crop
share with the landlord also paying land taxes and one-third of fertilizer
expense. Other fixed costs include farm-wide insurance, legal and accounting
services, and overhead expenses.
Variable costs include
any costs that vary proportionately with the area planted. Machinery repair,
fuel, labor, custom hire of services, seed, fertilizer, pesticides, and
crop insurance are typical variable costs. The actual operations and input
rates for the 5-year experiment were used in computing variable costs.
Soft white wheat
and feed barley prices used in this analysis are $3.36 /bushel and $84.10
/ton, respectively. These are the regional average 1997-2001 farm gate
prices. Safflower and yellow mustard price of $0.12 /pound is the average
contract price that regional farmers received during the period.
Net returns include
only market returns, excluding government payments or crop insurance indemnities.
Although government payments have been and are a very important source
of farm income, our study compared rank in market profitability of different
rotations, not total farm income. Adding recent predetermined government
payments will not change the economic ranking of different treatments.
Inclusion of government payments requires assumptions on historic grain
yields and base acreage of individual “representative farms.”
These histories vary from farm-to-farm, and government programs vary substantially
annually and from farm bill to farm bill. Readers may add government payments
to base market returns reported here consistent with their particular
assumptions if desired.
Net return per rotational
acre is used to correctly measure profitability of different crop rotations.
Net returns for each crop year in the rotation are summed and divided
by the number of years in the rotation, thereby standardizing all rotations
to a 1.0-acre basis. For example, a rotational acre of WW-SF includes
0.5 acres of winter wheat and 0.5 acres of fallow. This approach also
correctly portrays annual income of farmers who commonly allocate 1/n
of their land to each crop in an n-year rotation. This annual diversification
also reduces annual income risk by growing a “portfolio” of
crops and permits more efficient use of machinery and labor over time.
Safflower was discontinued
from the 4-year rotation in 2001, but the remaining crops of the original
4-year rotation were planted in the original sequence. To permit estimating
profitability of the 4-year rotation for 2001, the profit for SAF was
estimated based on its historic yield relationship with YM.
Although WW-SF was
not included in the replicated experiment, economic comparison of this
traditional system to the experiment’s no-till annual spring crop
rotations was accomplished by conducting a multi-year grain yield survey
of 10 WW-SF farmers within a 5-mile radius of the experiment site. A one-page
mailed questionnaire was used with telephone follow-up as necessary. The
sample size of 10 farmers represents 53% of the original mailing to 19
farmers. The 10 neighboring farmers had climate and soils similar to those
on the experiment site. Of the 10 participating farmers, one reported
on three different fields, with varying yields. This farmer’s data
were added independently, increasing the sample size to 12.
The survey approach
permitted observing variation of winter wheat yields over time and across
farmers, as well as deriving average yields. Reported grain yields from
the survey were divided into top, middle, and lower thirds to permit comparisons
of each group with spring crop rotations from the experiment. Typical
fixed and variable costs for WW-SF were computed from standard enterprise
budgets developed for WW-SF for Adams County.
RESULTS AND
DISCUSSION
Variation in annual precipitation had considerable effect on spring crop
yields (Table 2). Crop-year (1 Sept. to 31 Aug.) precipitation was 20.3,
11.1, 7.9, 9.1, and 8.0 inches for 1997, 1998, 1999, 2000, and 2001, respectively.
The 5-year average annual precipitation of 11.3 inches was near the long-term
average of 11.4 inches. Substantial variation in year-to-year precipitation
is common in the region and underscores the importance of using several
years’ data to accurately compare cropping systems. Yellow mustard
exhibited relatively high yield variation, having a standard deviation
(S.D.) of 518 versus a mean of 544 lb /acre. Grain yield of YM ranged
from 1430 lb /acre in 1997 to 110 lb /acre in 1999 (Table 2). Safflower
displayed relatively low yield variation with a S.D. of 339 and a mean
of 896 lb /acre. We theorize that SAF experienced lower yield variation
because it extracted soil water below the 6-foot depth (data not shown)
with its long taproot. Although deep overwinter soil water recharge is
rare, recharge occurred to a depth of 6-foot or greater during the wet
1996-1997 winter (data not shown). Spring wheat does not extract soil
water below 5 feet, thus residual water below 5 feet was available to
SAF during the first 3 years of the study.
Exceptionally high
precipitation in the 1997 crop year resulted in high yields for all crops,
but yields of all crops except SAF fell sharply during the low precipitation
years. For example, SB yield fell 85%, from 2.3 ton/acre in 1997 to 0.35
ton/acre in 2001. Wheat following oilseeds in the 4-year rotation fared
the worst of all crops in 2001, yielding only 8 and 6 bu/acre.
Results of a 1997-2001
WW-SF farmer survey are shown in Table 3. The WW-SF yields were obtained
from farms within a 5-mile radius of the study site for the spring crop
yields reported in Table 2. Soils of the surveyed farms are similar in
texture and depth to those of the study site and are all classified as
Ritzville silt loam. The weather station at the experiment site was located
at the center of the 5-mile radius and is considered representative of
the surveyed farms. Like the spring crop yields in Table 2, WW yield varied
with annual precipitation. Highest yields were recorded in 1997 when precipitation
was almost double the long-run average, and lowest yields occurred during
the 2001 drought year. Over all farms and years, reported winter wheat
yields averaged 56.8 bu /acre with a S.D. of 14.5 bu /acre. Average 5-year
yields ranged from 50 (farmer 5) to 67.6 (farmer 4) bu /acre. Yield variation
among farms is likely due to management and possibly to minor differences
in microclimate. Annual average winter wheat yields ranged from 35.5 to
72.3 bu /acre. Comparison of Tables 2 and 3 reveals somewhat less annual
yield variation over 1997-2001 in surveyed WW-SF yields than in the experiment’s
spring crop yields. Dividing the WW-SF farmers into upper, middle, and
lower thirds gives average yields of 65.6, 56.3, and 48.6 bu /acre. Standard
deviations ranged from 12.9 to 14.7 bu /acre and are positively correlated
with average yields.
Table 4 shows annual
net returns per rotational acre for all no-till spring crop rotations
and for the different yield groups of surveyed WW-SF farmers. Five-year
averages and S.D.’s of net returns also are reported for each rotation.
The WW-SF survey results were excluded from formal statistical comparisons
of mean profitability because the survey results were not part of the
replicated randomized complete block design of the experiment. Since the
surveyed farmers represented more than 50% of the population of all WW-SF
farmers within a 5-mile radius of the experiment, average returns WW-SF
are treated informally as point estimates of the population means for
this group of neighbors. Statistical comparisons of S.D.’s of profitability
between the spring crops and WW-SF were not possible, but these S.D.’s
permit useful informal comparisons of the economic riskiness of the different
cropping systems.
Among the spring
crop rotations, continuous no-till SW had the highest average net return
at $4.90 /ac /year followed by SW-SB and SAF-YM-SW-SW at -$4.90 and -$12.73
/ac /year, respectively (Table 4). An LSD0.05 of $12.62 /ac /year indicates
that the 4-year rotation was significantly less profitable than continuous
SW. In addition, continuous SW exceeds SW-SB in mean profitability at
the LSD0.10 level. Using this LSD to compare SW to WW-SF, with (assumed
population) mean of $8.71 /acre, indicates equivalent net returns (Table
4). However, the top one-third of WW-SF farmers exceeded the average profit
for continuous annual SW. Equivalent average profitability between no-till
annual SW and WW-SF is a welcome result given the -$45.75 /ac /year shortfall
in profitability of previous research comparisons of no-till HRSW with
WW-SF.
The WW-SF system
also was the least risky rotation over 1997-2001 with a S.D. of $14.96
/ac /year compared to $36.70 for SAF-YM-SW-SW, $40.86 for continuous SW,
and $41.69 for SW-SB (Table 4). Farmers and lenders generally prefer cropping
systems that sustain profitability and reduce economic risk. Results show
that during 1997-2001 WW-SF had this advantage.
Low relative variance
of SAF-YM-SW-SW is attributable to consistently negative, but slightly
more uniform, net returns throughout the study period. In contrast, the
other two spring crop rotations enjoyed positive net returns in 1997,
1998, and 2000 (Table 4). Yields in Table 2 drive the annual profit variation
in Table 4. Drought depressed yields in 1999 and 2001 decreased average
profitability and increased the economic riskiness of the three spring
crop rotations (Table 4). While net returns for WW-SF were not immune
from the 1999 and 2001 drought years, this rotation was able to withstand
yield reductions to a greater extent when compared with annual spring
cropping, especially in 1999.
The upper, middle,
and lower thirds of the WW-SF survey showed average net returns over total
costs per rotational acre/year of $18.51, $8.09, and -$0.49, respectively.
Under the possibly untenable assumption that continuous SW yields could
hold at average levels on the lower third of WW-SF farms, then continuous
SW would exceed the estimated average profitability of WW-SF by $5.39
/ac /yr ($4.90 – [-$0.49]) on these farms.
SUMMARY AND
CONCLUSIONS
The most promising
result of this study was that continuous annual no-till soft white spring
wheat was economically competitive with traditional winter wheat-summer
fallow. Results may be somewhat robust considering that the 5-year study
contained 4 years of below average precipitation and 2 major drought years.
Two previous multi-yr studies in east-central Washington showed that no-till
HRSW lagged WW-SF by $45.73 /ac /year.
Continuous no-till
SW showed considerably more economic risk when compared with WW-SF. Future
production and breeding research should focus on improving the yield stability
of spring wheat under variable precipitation. Targeted agricultural policies
such as “green payments” for no-till farming in areas vulnerable
to wind erosion could also help tip the scale toward adoption of these
soil conserving cropping systems. Subsidized crop insurance for farmers
adopting no-till could also reduce their economic risk. A negative $47.19
/acre net return for SW, as evidenced in 2001, is an unacceptable risk
for farmers, even if long-run average prospects are positive.
Given the potential
for continuous annual no-till SW to markedly reduce dust emissions when
compared with WW-SF, the equivalent profitability of these two systems
provides the first reported potential “win-win” solution for
no-till farmers and the environment in the low-precipitation zone of the
inland PNW.
ACKNOWLEDGMENTS
The authors gratefully acknowledge the cooperation of Ron Jirava on whose
farm the research was conducted. Appreciation is extended to Washington
State University agricultural research technicians Harry Schafer and Steve
Schofstoll for their excellent support. Funding for the research was provided
by the Columbia Plateau Wind Erosion/Air Quality Project and the Solutions
to Economic and Environmental Problems (STEEP) Project.
Pacific Northwest
Conservation Tillage Handbook Series publications are available online
at http://pnwsteep.wsu.edu They are jointly produced by the University
of Idaho Cooperative Extension System, Oregon State University Extension
Service, and Washington State University Extension. Similar crops, climate,
and topography create a natural geographic unit that crosses state lines
in this region. Joint writing, editing, and production prevent duplication
of effort, broaden the availability of faculty, and reduce costs for the
participating states.
Issued by Washington State University Extension, Oregon State University
Extension Service, the University of Idaho Cooperative Extension System,
and the U.S. Department of Agriculture in furtherance of the Acts of May
8 and June 30, 1914. Cooperative Extension programs and policies are consistent
with federal and state laws and regulations on nondiscrimination regarding
race, sex, religion, age, color, creed, national or ethnic origin; physical,
mental, or sensory disability; marital status, sexual orientation, and
status as a Vietnam-era or disabled veteran. Evidence of noncompliance
may be reported through your local Extension office. Trade names have
been used to simplify information; no endorsement of products or chemicals
is intended. Washington State University Extension, University of Idaho
Cooperative Extension System, and Oregon State University Extension Service
are Equal Opportunity Employers and Educators. Published December 2003.
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