Study: Rethinking how to use farmland

A new Iowa State University study shows significant portions of Iowa farmland lose money in the current era of low commodity prices and high input costs.

The research may help farmers make more informed decisions about land use and perhaps get them to consider environmentally friendly alternatives to corn and soybeans, said Elke Brandes, a postdoctoral research associate in agronomy and lead author of the study.

'We hope the study will help identify farm parcels where conservation practices can be cost-effectively installed and start conversations with landowners concerned about profitability and environmental impact,” said ISU agronomist and study co-author Emily Heaton.

Commodity prices and input costs - primarily seed, fertilizer, herbicides and farmland rent - are the two most influential factors in determining farmland profitability, Heaton said.

Using publicly available data from the U.S. Department of Agriculture and the annual ISU Land Values Survey, the researchers found that even in years with high commodity prices, many farms contain pockets of unprofitable land.

When corn and soybean prices drop sharply, as they did last year, the pockets of unprofitable acreage expand dramatically to encompass vast stretches of farmland, the researchers found.

The researchers analyzed subfield profitability for corn and soybean fields from 2010 to 2013 - four of the most profitable years in recent history - and projected results for 2015.

From 2010 through 2013, hardly any Iowa cropland lost as much as $100 per acre, they found.

In 2015, however, they projected that about 6.2 million acres devoted to row crops would lose $100 or more per acre.

'We didn't use individual yield monitoring data, but most farmers have a good feel for what yield monitors show. Some of those low-yield areas are never going to perform well and are good candidates for alternative uses,” Heaton said.

Similar analysis supported the city of Cedar Rapids' recent decision to plant perennial vegetation on 67 acres of farmland near The Eastern Iowa Airport, according to John Yeomans, who manages the farmland for the city.

The acreage, in four separate plots, was planted with miscanthus and strips of prairie.

While the city's main goal is to reduce nutrient runoff, the vegetation will be harvested and burned as biofuels, said Yeomans, a farm manager and real estate agent with Farmers National Co. of Iowa City.

The areas selected for conversion to perennials, he said, were chronically wet or otherwise difficult to farm and did not yield well.

Both Heaton and study co-author Lisa Schulte Moore, an ISU researcher and associate professor of natural resource ecology and management, are working with the University of Iowa Biomass Fuel Project to use perennial biomass in the UI power plant.

'We're blurring the lines between conservation and production. Our data indicate we can improve ecosystems while simultaneously protecting or even increasing profit,” Schulte Moore said.