Economics of flex-cropping in southwestern Saskatchewan

Abstract

The economic returns and riskiness of spring wheat (Triticum aestivum L.) production using fixed sequence rotations were compared to flexible cropping systems wherein the annual crop/fallow decisions are based on the level of available water at or near the time of planting. The study used 25 yr of data from a long-term crop rotation experiment conducted on a medium-textured, Orthic Brown Chernozemic soil at Swift Current, Saskatchewan. Fixed cropping systems included fallow-wheat (F–W), fallow-wheat-wheat (F–W–W), and continuous wheat (CW), while flex-cropping systems included 2YR–IF, 3YR–IF, and CW–IF. The 2YR–IF system permitted the entire farm to be cropped when available spring water in stubble was favorable, but if water was unfavorable, 50% of the area was fallowed. The 3YR–IF system permitted two-thirds of the land area to be cropped whenever spring water was favorable, but only one-third of the area was cropped if water was unfavorable. Under CW–IF, the entire farm was cropped in years when spring water was favorable; it was fallowed in years when water was not favorable. Each flex-cropping system was constructed using two decision criteria: (i) available soil water (0- to 120-cm depth) in stubble measured about 1 May (SSW), and (ii) SSW plus precipitation received from date of spring soil sampling up to 31 May (TSW). Five threshold levels of available water were defined for each decision criteria, with SSW ranging between 35 and 95 mm and TSW ranging between 65 and 125 mm. The systems were evaluated at wheat prices of $110, $147, and $184 t−1, calculated with and without all-risk crop insurance. Expected net returns were generally higher for the flexible systems at all wheat prices. Income variability for flex-cropping systems was usually much lower than for CW, and it was often as low as that of the traditional F–W system which is known for its low income variability. This was particularly true when flex-cropping was combined with all-risk crop insurance. The TSW decision criterion was usually superior to SSW, because it was more highly correlated with final grain yields than was SSW. Higher wheat prices would encourage profit maximizing producers to select the more intensive cropping systems (CW–IF) and to use lower threshold water levels on which to base their decisions. Producers with low to moderate aversion to taking risk would favor selection of cropping systems that maintained some land in fallow each year (e.g., 3YR–IF). Such producers would also choose higher threshold water levels on which to base their decisions to crop stubble areas and include all-risk crop insurance in their production plan. Only Producers who are moderate to highly risk averse would choose F–W and, to a lesser extent, F–W–W. In all cases the optimum flex-cropping systems used fallow less frequently than is the tradition in this region. The study concluded that widespread use of flex-cropping practices by producers in southwestern Saskatchewan could increase farm-level net returns and reduce risks of financial loss, while potentially reducing soil degradation. Key words: Yield, available water, fallow, net returns, riskiness, production costs