Dynamic Crop Rotation with Field-Level Heterogeneity: Estimating Yields and Profits

Mark Agerton, James Keeler and Matthieu Stigler

No 404688, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Crop rotation shapes agricultural productivity, input use, and environmental outcomes, yet estimating its effects is complicated by unobserved heterogeneity in crop choice and field productivity. We develop and estimate a dynamic structural model of corn-soybean rotation that jointly identifies the yield gains from rotation, the distribution of field-level heterogeneity, and the profit function governing crop choice. Using satellite-derived data on crop choices and yields for approximately 620 thousand fields in Illinois, Iowa, and Indiana over 2005–2019, we find economically significant rotation effects and substantial heterogeneity in field productivity. The estimated correlation between corn and soybean fixed effects is positive but well below one, leaving meaningful dispersion in the ratio of corn to soy yields across fields. We derive conditions on the variances and correlation of corn and soy productivity under which fields with greater comparative advantage in corn are, on average, also more productive in both crops in absolute terms, and find mixed empirical support: the condition is satisfied in our levels specification but violated at the lower bound in logs.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 23
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404688

DOI: 10.22004/ag.econ.404688

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