Management systems that produce both grain and biomass coproducts could enhance the profitability of the novel perennial grain crop Kernza intermediate wheatgrass [Thinopyrum intermedium (Host) Barkworth & D.R. Dewey] (IWG). Harvesting IWG for grain typically results in a straw harvest; in addition, vegetative biomass can be cut in spring, fall, or both for hay production. We evaluated the interacting effects of defoliation and row spacing on yield, forage quality, and economic return across the 3-yr life of a conventionally managed IWG stand in St. Paul, MN. We measured straw and hay yield and forage quality and then used recent hay auction results to model forage price and total potential value. We then used estimated production costs to calculate potential net return from straw production alone and with additional hay harvests. Overall, straw was more valuable than hay, despite being of much lower quality, since yields were 3–4 times greater. Straw potential value was similar to the cost of producing both straw and grain, greatly reducing the financial risk in Kernza grain production. Hay production was almost always profitable. Straw and hay yield and value were greater in 15- and 30-cm rows than in 61-cm rows. Defoliating in both spring and fall led to lower hay and straw yields in the third year. Our results indicate that the best strategy for achieving consistent high net return to biomass production is to plant in 15- or 30-cm rows and only cut hay in the fall.