Cover crops provide environmental services that can effectively reduce the negative impacts from otherwise highly productive row-crop systems in the US Midwest. In this context, winter rye [(Secale cereale sp.)] is the most commonly used cover crop among producers because it overwinters and produces considerable biomass in the spring. While the soil and water benefits of a maize-rye system are well documented, the extent to which these benefits change under different rye planting densities has not been fully explored. In particular, shoot-biomass of a fall-seeded rye cover crop is expected to respond to increasing plant populations (PP), influence maize system productivity overall, and provide additional income for growers to justify the higher establishment costs of the cover crop. Field data for a long-term biomass assessment is costly and hard to generalize, so we used 25-year weather records to run the field-scale model APSIM at three Iowa locations to: 1) Quantify the relationship between rye biomass and rye PP, 2) Test if this relationship is further controlled by maize Nitrogen (N) rates or vary across locations and soil types, 3) Investigate if changes in maize system outcomes, i.e. grain yield, nitrate leaching, soil erosion, and runoff are significantly related to rye biomass, and 4) Estimate changes in farm returns for maize operations that utilize rye biomass under alternative management scenarios (i.e. grazing). Overall, we found a positive relationship between rye biomass and PP, with spring biomass increasing by 30% when populations double. No evidence for a biomass plateau was found, although spring biomass differed by soil type and location. Relative changes in soil erosion and N-leaching were negatively correlated with rye biomass (−30 and − 25% change relative to no cover crop, p < 0.01). Further, for a 200-acre (≈80 ha.) maize-cattle operation, the rye cover crop was shown to impact maize yields minimally albeit reducing annual farm income across Iowa when its biomass is not grazed (−4149 to −5198 $. year−1); or even when grazed early (−1800 to −3321 $. year−1). Late grazed rye could help farmers to turn positive returns in central and southern locations (+2688 to +6902 $. year−1) but not in northerly areas. Results from this study indicates that cover crops could effectively benefit maize system performance overall although the economic incentives for increasing rye populations are not applicable to every location in Iowa.