AN ECONOMIC ANALYSIS OF ROTATION CROPS IN THE MAINE POTATO CROPPING SYSTEM

Authors: Halloran, John; Griffin, Timothy; Honeycutt, Charles

Submitted to: Agronomy Journal
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 4/1/2005
Publication Date: 6/1/2005
Citation: Halloran, J.M., Griffin, T.S., Honeycutt, C.W. An economic analysis of rotation crops in the maine potato cropping system. American Journal of Potato Res. 82:115-122.

Interpretive Summary: Over the last half-century Maine's potato yields have been virtually stagnant. The lack of increased productivity in Maine potato production puts its growers at a competitive disadvantage relative to growers in other regions. Producers recognize the benefits of increased rotations, but the economics of producing a high-valued crop, such as potatoes, create incentives for continuous potato production. Research at the USDA-ARS research site in Newport, ME is evaluating the agronomic and economic impacts of five crops in two-year rotations on potato production and whole-farm profitability. The rotation crops are barley, sweet corn, green bean, soybean, and canola. Enterprise budgets and historical prices and yields were used as inputs to an economic simulation model in order to determine the impact of rotation crops on whole-farm profitability and income risk, as measured by income variability. The results of the simulation model showed that inclusion of rotation crops greatly reduces the variability in net income when compared to continuous potato. Rotation crops also greatly reduced the chance of having an economic loss compared to continuous potatoes. Growing sweet corn or green beans as rotation crops led to higher incomes than continuous potatoes. In one case, canola had a positive impact on the following potato yield - leading to increased returns from the potato crop. These results support the premise that adopting new rotation crops in the Maine potato system can reduce grower's income risk and, in some cases, lead to higher net returns. The work also suggests that longer rotations and different rotation sequences may offer growers options to improve potato production, increase net income while reducing income risk, and improve the sustainability of the system.

Technical Abstract: Potato cropping systems in Maine include both continuous potatoes and short-term potato rotations with small grains. Producers recognize the benefits of increased rotations, but the economics of producing a high-valued crop, such as potatoes (Solanums tuberosum L.), create incentives for continuous potato production. Research at the USDA-ARS research site in Newport, ME is evaluating the agronomic and economic impacts of five crops in two-year rotations on potato production and whole-farm profitability. The rotation crops are barley (Hordeum vulgare L.), sweet corn (Zea mays L.), green bean (Phaseolus vulgares L.), soybean (Glycine max L., Mer.), and canola (Brassica napus L.). Enterprise budgets for the five crops were developed. The budgets and historical prices and yields were used as inputs to a Monte Carlo simulation. The simulation was conducted to determine the impact of rotation crops on whole-farm profitability and income risk, as measured by income variability. Net incomes of the five rotation sequences were compared against continuous potatoes. Two rotation crops, sweet corn and green beans, resulted in an increase in net income relative to continuous potatoes. All rotation crops were found to greatly reduce income risk. Even when the rotation crop led to decreased yields in the following potato crop, income variability and likelihood of economic loss was still superior to the continuous potato rotation. These findings provide support for including rotation crops as a method to improve potato production and sustainability, increase whole-farm profitability, and reduce income risk.