Perennial Groundcover and the Future of US Corn Production: Market and Policy Implications from a Global Land-use Perspective

By Sagar Dahal and Amani Elobeid

The United States remains a dominant force in global corn markets, accounting for roughly one-third of global production and more than one-third of exports. Maintaining productivity while addressing environmental concerns is therefore not only a domestic priority but also a global issue with implications for trade, food security, and agricultural sustainability. Conventional production practices support high yields but are associated with environmental challenges, including soil degradation, water quality concerns, and greenhouse gas emissions. As a result, interest has grown in production systems capable of sustaining yields while improving environmental outcomes.

Perennial groundcover (PGC) represents one such strategy. Unlike traditional cover cropping, which often faces logistical and economic barriers, PGC integrates annual crops with ecologically complementary perennial species to maintain continuous ground cover. This approach has the potential to improve soil health, reduce erosion, enhance water quality, and increase system resilience while remaining compatible with existing production systems. Despite growing interest, questions remain regarding how widespread adoption might influence agricultural markets and global land use.

In this article, we use CARD’s Long-Run Land Use (LRLU) model to evaluate the potential global market impacts of adopting perennial groundcover in US corn systems. The LRLU model is a deterministic, partial-equilibrium framework that analyzes global agricultural markets by solving for market-clearing prices across multiple commodities and regions. 

We examine two scenarios reflecting optimistic and pessimistic assumptions about production costs and yield effects of using Kentucky Bluegrass as a cover crop.1 The optimistic scenario assumes a short-term increase in production costs of 7% in the first year followed by modest (1.15%) cost reductions without yield impacts. The pessimistic scenario assumes higher initial costs (11.8% increase in the first year) followed by a 0.36% decrease combined with sustained 15% reduction in yields from year two onwards. We evaluate model results relative to a business-as-usual baseline projection and express impacts as percentage deviations from baseline outcomes.

By comparing simulated outcomes to a baseline projection, we assess how adoption could influence production, prices, and trade flows over the next decade. The results highlight how economic outcomes depend critically on the balance between environmental benefits and potential productivity impacts, offering insights for policymakers, researchers, and industry stakeholders considering the role of PGC in future agricultural systems.

Production impacts

Results indicate that market outcomes depend critically on the relationship between production costs and yield performance. Under the optimistic scenario, global market impacts remain limited. US corn production declines slightly in the initial year of adoption as producers respond to higher anticipated costs, but output returns to baseline levels as cost pressures ease. Internationally, changes in production are minimal, suggesting that PGC adoption under favorable agronomic conditions can occur without substantial disruption to global supply.

In contrast, the pessimistic scenario produces significant adjustments. US corn production declines persistently relative to baseline, reaching more than 17% below baseline levels by the end of the projection horizon. As US production falls, and in response to the resulting higher corn prices, competing producers, including Brazil, China, the European Union, and India, expand output modestly, reflecting standard market responses to changing relative prices and profitability (figure 1).

Two bar graphs showing the effects of PGC adoption on corn production under optimistic and pessimistic scenarios. In the optimistic scenario, US production increases by less than 0.5% by 2033, while production in China, Brazil, the EU, and India fall by less than 0.5%. In the pessimistic scenario, US production falls by over 15% by 2033, while production in China, Brazil, the EU, and India increases by less than 5%.
Figure 1. Impacts of PGC adoption on corn production (% change from baseline) under optimistic (left) and pessimistic (right) scenarios.

Trade and price effects

Changes in regional production generate corresponding shifts in global trade patterns (figure 2). Under the optimistic scenario, trade effects are relatively small and global corn prices remain stable. US exports initially decline as producers adjust to new cost structures but recover as production stabilizes. Other exporters experience temporary gains, while import demand in major markets adjusts modestly.

Four bar graphs showing net corn imports and exports under optimistic and pessimistic scenarios. In the pessimistic imports scenario, China’s imports fall over 60% before leveling off to just over 40% lower by 2033 while EU imports fall by roughly 20% and remain there through 2033. In the pessimistic exports scenario, US exports fall over 80% by 2033 while exports from Brazil and India grow by just under (Brazil) and just over (India) 40% by 2033. In the optimistic imports scenario, China's net imports increase by roughly 2% by 2033, as do those of the European Union. In the optimistic exports scenario, US exports increase by less than 5% by 2033, while Brazil and India see exports fall by roughly 1% by 2033.
Figure 2. Impacts of PGC adoption on trade (% change from baseline) under pessimistic (top) and optimistic (bottom) scenarios. 
Note: China and the European Union are the net importers in baseline and the United States, Brazil, and India are net exporters in baseline.

Under the pessimistic scenario, global trade dynamics change more substantially. US exports decline throughout the projection period, while competing exporters expand market share. Rising global prices driven by reduced US supply contribute to increased production incentives abroad. Model results suggest that sustained yield reductions could alter the United States’ role in global corn markets, highlighting the importance of maintaining productivity alongside environmental improvements. 

Price responses reflect these supply dynamics. In the optimistic scenario, global prices remain largely stable, indicating that the market can absorb modest cost adjustments without significant disruption. In contrast, the pessimistic scenario reduced supply and adjustments in international trade flows drive notable price increases (figure 3).

A bar graph showing the price impacts of PCG adoption on corn prices in the optimistic and pessimistic scenarios. In the optimistic scenario, prices fall less than 1% from the current baseline while prices grow by roughly 9% by 2033 in the pessimistic scenario.
Figure 3. Impacts of PGC adoption on corn prices (% change from baseline).

Policy implications

These findings illustrate that the economic viability of PGC depends primarily on its effects on yields and production costs. When yield performance is maintained, PGC adoption appears compatible with stable market outcomes while offering potential environmental benefits. However, scenarios involving substantial yield reductions introduce risks for producers and may contribute to higher global prices and shifts in trade patterns.

From a policy perspective, continued investment in research and development is critical to improving agronomic performance and reducing adoption costs. Incentives that offset initial transition costs or reward ecosystem services could facilitate adoption while limiting economic disruption. In addition, exploring complementary revenue streams, such as biomass utilization or emerging carbon markets, may improve the economic attractiveness of PGC systems.

Conclusions

Perennial groundcover offers a promising pathway for improving environmental sustainability in US corn production, but its broader market impacts depend heavily on agronomic outcomes. Model results suggest that adoption can proceed with minimal market disruption when productivity is maintained, whereas yield losses could significantly alter global production patterns, trade flows, and prices. As interest in sustainable production systems grows, policies that support innovation while preserving economic competitiveness will play an important role in shaping the future of agricultural markets.

Footnotes

1. We obtain data on yields and production costs under a PGC system from a study by Bartel et al. (2024) conducted as part of the RegenPGC project supported by Agriculture and Food Research Initiative (AFRI) Competitive Grant no.2021-68012-35923 from USDA National Institute of Food and Agriculture (NIFA).

References

Bartel, C.A., K.L. Jacobs, K.J. Moore, and D. Raj Raman. 2024. “Anticipatory Technoeconomic Evaluation of Kentucky Bluegrass-Based Perennial Groundcover Implementations in Large-Scale Midwestern US Corn Production Systems.” Sustainability 16(16):7112. https://doi.org/10.3390/su16167112

Suggested citation

Dahal, S., and A. Elobeid. 2026. “Perennial Groundcover and the Future of US Corn Production: Market and Policy Implications from a Global Land-Use Perspective.” Agricultural Policy Review, Winter 2026. Center for Agricultural and Rural Development, Iowa State University. https://agpolicyreview.card.iastate.edu/winter-2026/perennial-groundcover-and-future-us-corn-production-market-and-policy-implications