ILSOYADVISOR POST

PCM Financial Analysis of Tillage Operations for Soybean Production

We’re excited to introduce ILSoyAdvisor readers to Precision Conservation Management (PCM).

PCM is a farmer service program in Illinois and Kentucky that helps farmers scale use of conservation practices like reduced tillage, nutrient management and cover crops in a way that focuses on impact to farm income. PCM was launched by the IL Corn Growers Association in 2015 and has grown rapidly, now serving around 350 farmers and representing over 300,000 acres of farmland in Illinois.

Following the exciting announcement that the Illinois Soybean Association is joining IL Corn Growers as joint partners in PCM, this seems like a good time to begin mining the PCM dataset for some timely takeaways around soybean production and conservation practices. After all, PCM is a data driven effort and much of its strength and value come from collecting, analyzing and reporting data in a way that brings value back to our farmer cooperators and, in an aggregated way, to the Midwest agricultural industry. The goal of PCM is to use farmer data to serve farmers’ best interests and to be objective and transparent about our analysis.

This post is mainly to introduce the program and share a few of the key takeaways we’ve learned so far. Fair warning: most of our analysis to date has focused on corn production. So it’s high time we started taking a closer look at the thousands of field-years’ worth of soybean data in our program and that’s exactly what we’ll be sharing with you in future blog posts over the course of 2021 and beyond. We welcome your feedback on this series of posts and we hope to engage you in conversations around the value of conservation practices.

PCM Background, Data Collection and Analysis

PCM serves a 16-county region in Illinois broken up into four regions covering the central part of the state. The region is comprised of about 55 percent higher productivity soils and 45 percent lower productivity soils (soil productivity ratings greater than or equal to 165 are considered “high SPR” and below that are considered “low SPR”).

When a farmer enrolls in PCM, the PCM Specialist in their region makes an appointment to visit them and collect their farm management data in our secure web-based data collection platform, the Farmer Portal. PCM does not collect receipt-based information about farm financials. Instead, we use the information we collect for each field pass—for each crop and each year—and then assign costs to the operation (machinery, fuel and labor) and inputs used in each pass across the field. Our cost determinations are made by working closely with PCM partners at the University of Illinois Office of Agricultural and Consumer Economics and Farm Business Farm Management (FBFM). In this way, we generate engineered economic cost tables that reflect the costs of different management decisions, practices and programs.

A few final important comments: in PCM, we consider all management decisions that go into producing a crop to be the farmer’s “program.” Programs are composed of the sequence of passes across the field for each crop and are reusable across years and fields but are “tweakable” to reflect all the large and small changes that farmers make from year to year. Most farmers have somewhere between one and five corn programs and the same for soybean and wheat.

In PCM, we talk a lot about “meaningful comparisons.” Comparisons are borne out of more than just curiosity for farmers; comparison is critical. Farm businesses ultimately prosper or perish as a result of the management decisions farmers make and we all make the best decisions when we have the benefit of others’ experiences to add to our own set of personal experiences. To allow farmers to compare their programs to those of other farmers in an aggregated, anonymized way, we created “practice standards” in PCM for Tillage, Nutrient Management and Cover Crops. Each farmer program is assigned to a class within our practice standards and with this system, they can compare their own programs with those of farmers using similar practices and those using different practices. 

Key Takeaways from PCM Corn Data Analysis:

  • Tillage for corn production on high soil productivity rating (SPR) soils: moderate tillage—specifically, 1 to 2 passes with light-intensity tillage (e.g., vertical till)—is consistently more profitable than no-till and 2+ tillage passes.
  • Tillage for corn production on lower SPR soils: an extra tillage pass had a better chance of paying for itself on lower SPR soils than on higher SPR soils, but the highest net returns still came from 2 tillage passes with light equipment.
  • For both high and lower SPR soils, when we extract the top 25% most-profitable corn fields,       1-pass light tillage is, by far, the most frequently used tillage system.
  • Nitrogen management for corn production on high SPR soils: Fields receiving more than 40 percent of the total N application in the fall applied a higher total N rate, had higher total costs, and did not produce higher yields than the in-season nitrogen application classes and therefore was the least profitable of all N application strategies in our dataset.

 

PCM is a joint effort of IL Corn and the Illinois Soybean Association. For information about PCM such as  the program’s origination or our 30+ partners, visit precisionconservation.org. For more information regarding annual PCM Data summaries, PCM-data based articles and webinars, visit ilcorn.org/pcm.


Laura Gentry


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