(Photo: Iowa Soybean Association)
The yield trap
April 10, 2025 | Kriss Nelson
High yields don’t guarantee profitability.
Low commodity prices and high input costs have resulted in some of the worst income years for farmers since 2000. As farmers navigate these economically rough waters of tighter margins, they may want to pay extra attention to inputs and profitability versus achieving high yields.
A Farmdoc webinar hosted by the University of Illinois Extension last week included a discussion of this subject by Sarah Sellars, South Dakota State University assistant professor and Extension specialist, and Laura Gentry, Illinois Corn Growers Association director of water quality and science.
The online event, "The Yield Trap" featured Sellars and Gentry’s presentation of three studies’ results to aid farmers in profit maximization.
“Price projects for the next year show little indication they will go up unless there is a higher demand shock in the market, so we can expect this period of tighter margins to continue in the immediate term,” says Sellars. “To see a profit without government intervention, the cost side of the equation must come down. We must shift the mindset to getting the highest return possible because the highest yields don’t always bring the higher returns.”
Reducing costs and risks
Gentry says in their research, the maximum return to nitrogen (MRTN) was most profitable in five out of the eight years. In those three remaining years, the MRTN over-estimated nitrogen.
To help find their MRTN in their fields, farmers can learn more by using a Corn Nitrogen Rate Calculator tool or N-Fact (Nitrogen Fertilizer Application Consultation Tool).
“Farmers often criticize MRTN because they think it is too low,” she says. “Studies show farmers should feel confident they are not under-applying nitrogen when they use the MRTN.”
Sellers posed these questions in her study of nitrogen rate and timing for MRT):
- Do farmers who follow the MRTN have a higher yield or profits than farmers who do not?
- Which nitrogen timing results in the highest yield and returns?
In the study, 68% of the fields received a nitrogen application above the MRTN profitable range.
“We found fields that received an application of nitrogen above the MRTN does increase yield, but it does not increase the returns on the fields compared to fields with nitrogen applied within the MRTN profitable range,” says Sellars.”
Regarding reducing direct costs, Gentry says nitrogen fertilizer is an obvious input to help save money by considering the right rates and timing of applications.
“In lean years, in-season applications are more profitable,” says Gentry. “Nitrogen applications of 50% pre-plant and 50% post-plant are the most profitable and seem more important in these years of not being a good financial environment for farmers. So, in years like 2025 is shaping up to be, applying nitrogen more in-season is a good strategy.”
Reducing power costs
Reducing direct costs, such as nitrogen fertilizer, is one option to fight tightening margins, but farmers should reduce power costs.
“High-efficiency, low-cost farmers are the ones that will be rewarded in this more challenging environment,” says Gentry.
This study included an examination of a variety of tillage practices, including:
- Strip-till for corn production
- One pass light (this involves very light soil disturbance using a light tillage implement such as a harrow or a vertical tillage implement)
- Two pass light (involves two passes across the field using lighter tillage equipment.)
- Two pass moderate (involves one tillage pass with a lighter implement and one pass with a heavier tillage implement such as a chisel plow.)
“The study showed farmers are paying a minimum of $11 per acre for tillage, so anything you can do to eliminate tillage passes is saving you money,” says Gentry.
Research on the highest-producing corn fields shows that one-pass light and two-pass light tillage practices consistently showed the most profitable tillage strategies, bringing a $365 operator and land return per acre.
When studying lower productivity soils for corn production, there was a big difference in operator and land return for a two-pass light tillage, nearly $27 up to $38 per acre in those low soil potential rating (SPR) soils.
“That is such a big difference for corn production, Gentry says. “Although a two-pass light tillage practice will not get any conservation payments or awards, it appears to be most profitable.” Gentry notes there is more research to be done in this area.
In soybeans with lower SPR soils, research shows farmers using no-till and consistently yielding 63 to 64 bushels to the acre receive average values of $369 per acre.
“In this case, those farmers using no-till can be confident it is a profitable strategy for them,” says Gentry.
Tillage and cover crop effects on soybean fields
To answer the question of how tillage and cover crops affect yield and profit, researchers looked at conventional, non-manure soybean fields from 2015 to 2022. Data represented 370 farmers, 3,074 fields and 5,292 field observations.
A study of no-till, one-pass, two-pass, and three-or-more-pass tillage practices revealed that no-till systems reduced yield by one bushel per acre but did not show evidence of reduced profit.
Three or more tillage passes were the only systems to show a statistically significant profit decrease, resulting in $27 less per acre in profit compared to a single pass.
In terms of cover crop’s impact, Sellars’ research revealed no statistically significant yield difference between fields with and without them.
“When we looked at their effect on profit, we found cover crops decreased profit by $40 an acre,” says Sellars. “If we are not seeing a statistically different yield effect from cover crops and seeing higher costs incurred from planting cover crops, it is difficult to see a profit increase if we are not seeing a yield increase to help cover some additional costs from cover crops.”
Even without a yield increase, Gentry considers cover crops a great conservation practice.
“They are excellent for reducing soil loss, improving water quality and reducing nutrient losses,” she says. “However, if you are new to cover crops, this may not be the best financial environment to try them, unless you can do it with some financial incentive. You may overcome yield penalties using conservation payments from NRCS or private programs.”
Engage with the Iowa Soybean Association’s Research Center for Farming Innovation
Iowa farmers and landowners can receive assistance from the Iowa Soybean Association’s (ISA) conservation agronomists in identifying, planning and implementing water quality and soil conservation practices, such as cover crops, to boost productivity and profitability. For more information, contact ISA’s Conservation Agronomy Lead, Mike Gilman, at 515-577-5600 or mgilman@iasoybeans.com.
Iowa farmers benefit from ISA’s research agronomists’ unbiased advice and the results of their coordinated statewide on-farm trials. To find a research agronomist in your area, contact Alexander Litvin, PhD, ISA research agronomy lead, at 515-334-1044 or alitvin@iasoybeans.com.
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