Dairy farmers can reduce their purchased inputs without cutting into their profits. An ongoing twelve-year study of two forage rotations similar to those found on Wisconsin dairy farms compared a diversified, low-input system with a less diverse rotation requiring high levels of commercial inputs. While the two systems returned similar profits, the low-input system incurred lower variable costs.

This study covers the forage/grain cropping systems (CS 4 and 5) of the Wisconsin Integrated Cropping Systems Trial (WICST). WICST researchers want to find out if more complex crop rotations can decrease reliance on commercial inputs, improve profits, and reduce negative environmental impacts like soil erosion and water pollution. See Research Brief #43 for a complete discussion of the WICST project, and Research Brief #44 for an economic analysis of the cash grain rotations explored by this project.

Trial collaborators include the UW-Madison College of Agricultural and Life Sciences, the Center for Integrated Agricultural Systems (CIAS), the Michael Fields Agricultural Institute, UW Cooperative Extension, and farmers. The 12-year study is underway at two Wisconsin sites in Columbia and Walworth Counties.

The forage cropping systems

At both sites, the trial compared low- and high-input forage/grain cropping systems. The low-input system employs a three-year rotation: two years of alfalfa followed by one year of corn. Alfalfa is interseeded with oats and other crops, including ryegrass, red clover, and forage peas. Corn is grown without herbicides, insecticides, and commercial inorganic fertilizers. (See table below for a summary.)

The high-input system relies on high levels of inputs to establish alfalfa, control insects and weeds, and provide nutrients. This system follows three years of alfalfa with one year of corn.

Economic analysis

Gross margins

The two cropping systems provided similar gross margins returns within each site. CIAS economist Don Schuster and former CIAS Director Rick Klemme used a gross margins analysis to compare the profitability of the two cropping systems. Gross margins are calculated by subtracting variable costs of production, like seed, fertilizer, chemicals, repairs, supplies, and fuel, from gross revenue. Gross margins are the remainder available from revenue to cover the farmer’s cost of labor, land, management, and capital.

Variable input costs

Herbicide, insecticide, and fertilizer costs in the high-input system made the total variable input costs higher than in the low-input system (see table on reverse). However, seed costs were higher on the low-input system: the more rapid rotation of the low-input system required more frequent seeding.

Labor and machinery

Diversified systems with lower purchased inputs often require more labor, particularly for mechanical weed control. But in only three years at Arlington and one year at Lakeland did the low-input system have higher average labor hours. The additional labor to apply herbicides, insecticides, and fertilizer in the high-input system appeared to offset the extra time needed for mechanical weed control and increased seeding and tillage in the low-input system.

Wet conditions at Lakeland prevented some field work from being completed, resulting in lower average labor hours and equipment costs for both systems there. (Machinery costs were assigned to each site and cropping system based on the amount of time that the equipment was used.)

Machinery costs were similiar for both systems within each site. The budgets for both systems are based on an identical machinery set. This equipment set is based on a 150-acre, 60- to 80-cow dairy farm and was compiled by farmers and researchers on the WICST steering committee.

Labor costs were assumed to rise from $6.01 per hour in 1993 to $7.43 per hour in 1999. These costs are based on the National Agricultural Statistics Service’s Lake Region report.

Yields

Both of the cropping systems produced more hay and corn on the well-drained Arlington soils than the more poorly drained Lakeland site.

Corn yields averaged higher for the high-input system at both sites. Hay yields averaged higher for the low-input system than the high-input system at Arlington. One possible explanation for this, says Schuster, is that “winter kill of the alfalfa stands hurts the yield and gross margins on the high-input system. A four-cut system makes it difficult to maintain the third year of the stand.” Higher relative feed values for the haylage in the high-input system are, in part, the result of frequent cuttings.

The first cut of oatlage/haylage in the low-input system resulted in higher yields and lower relative feed values for that cutting compared to the high-input system.

Prices

Corn prices were based on the October regional averages reported by the Wisconsin Agricultural Statistics Service. Alfalfa prices were based on an average relative feed value of 144 for haylage harvested between 1993 and 1996, and a base price of $80 per ton of dry matter (tdm).

Each one-point change in relative feed value (RFV) resulted in a $1 per tdm change in forage price. For example, if the RFV of the hay was 160, the value of the haylage-$96 per tdm-was calculated like this: 160-144=16+80=$96/tdm. If the RFV was less than 144, the price was proportionally less than $80/tdm.

Cropping choices

In the future, the WICST steering committee will make some changes to the study. To match the growth of farms in the area, farm size will be set at 500 acres, with a 80- to 120-cow herd.

“The committee is adding a year of soybeans to the low-input system at the Lakeland site, to more closely resemble crop rotations used on farms in the area,” says Schuster. Matching the rotations more closely to what farmers are doing will provide more useful results for farmers and increase the probability that they give the systems a try.

Farmers can reduce purchased inputs while helping the environment by using a cropping system like the low-input system. And it doesn’t have to hurt their bottom line.

Contact CIAS for more information about this research.

Published as Research Brief #53
January, 2001