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Conservation and a farm's bottom line: An inside look

Tyler Harris Cereal rye and corn
TARGETED ADOPTION: For cover crops, the adoption curve is usually different than for conservation tillage. Many farmers in the study started with a few acres of cover crops before gradually expanding to other areas of their farm.
Groups partner with farmers to study costs, revenue and adoption of conservation tillage and cover crops.

Since 2015, the Soil Health Partnership, a part of the National Corn Growers Association, has worked with farmers to evaluate the benefits of a number of soil health management practices through on-farm research throughout the Midwest. In 2020, SHP partnered with the Environmental Defense Fund and the accounting firm K-Coe Isom, as well as seven participating farmers in five Midwestern states, to evaluate the impact of different conservation practices on a farm’s bottom line.

As part of the virtual 2021 Commodity Classic, Maria Bowman, SHP lead scientist, and Vincent Gauthier, research analyst at the Environmental Defense Fund, shared results from this study.

K-Coe Isom developed an Excel-based tool to gather operational information, information on conservation practices, and farm-level financial information broken down by crop and conservation practice. Throughout 2020, Bowman and Gauthier gathered direct expenses and revenue for fields in the study, made accrual adjustments to measure the reported data across the same crop cycle, and compared those numbers across three groups: fields under conventional tillage without cover crops, fields with conservation tillage and no cover crops and conservation tillage field that included cover crops.

Less time in cab

Gauthier noted that, unsurprisingly, conservation tillage reduced operating costs for cornfields in the study. This means direct costs of seed, chemical, fuels, equipment and labor.

"For the cornfields in our study, conservation tillage without cover crops had the lowest cost per acre at $404, while the fields that use conservation tillage and cover crops brought that number up to $435 per acre. Conventional tillage had the highest per acre costs at $448 per acre," he  said. "In those fields that use conservation tillage, the biggest savings included equipment cost savings, repair and fuel costs. There were some additional costs found in fields using conservation tillage, including burndown [applications], as you may expect."

For soybeans, the fields with conservation tillage also had lower costs per acre.

"The fields using conservation tillage without cover crops had greater costs of $217 compared to $311 for conventional tillage and conservation tillage with cover crops," Gauthier  said. "The greatest savings were mostly in the same categories with equipment repair and fuel costs. Again, some added costs for those using conservation tillage, including burndown and machinery hire."

Gauthier and Bowman also shared the results from one farmer, Brian Ryberg, who farms in Minnesota, and uses strip till, no-till and cover crops.

"He attributes his transition to conservation tillage to having reduced his field passes by 25%, which has reduced his fuel consumption by 60% [saving $52.50 per acre]," Gauthier  said. "He changed from using two, four-wheel-drive tractors at a rate of 400 hours per year to now using one of those tractors at a rate of 200 hours per year, which provided him with significant cost savings at approximately between $25 and $37 per acre, representing $100,000 of savings per year."

No one size fits all

There's no one-size-fits-all approach to cover crops, and participating farmers varied in their experience. The project separated farmers by those with less than and more than five years of experience with cover crops. Bowman noted the more experienced cover croppers had some of the highest net returns in the study, particularly in soybeans.

"This was driven primarily by lower input costs," Bowman said. "Experienced cover crop adopters had net returns for soybeans that were equal to conservation tillage acres with no cover crops. And those net returns were a lot higher for the experienced adopters relative to the recent adopters."

For corn, average cover crop seed costs were about $9 an acre lower for experienced cover croppers, while total fertilizer costs were about $25 per acre lower. In addition, experienced cover croppers paid $2.21 less per acre in planting costs, $10 less per acre for repairs, and $26 less per acre in equipment costs, although burndown costs averaged $14 more per acre.

"I think what we're seeing here is farmers are dialing in their cover crop system over time, and they're finding efficiencies in that system," Bowman  said.

Bowman gave an example in Iowa farmer Chris Gaesser. Gaesser has reduced his costs by switching from aerial seeding to drilling and broadcasting himself, and reducing the amount he spends on seed.

"They spend about $7 an acre on seed, and part of the reason it's that cheap is because they grow their own cereal rye seed on about 100 to 150 acres, and they sell what they don't use," Bowman  said. "Just to give a ballpark comparison, cereal rye seed costs for other SHP farmers that are working with cereal rye are around $13 an acre. So this would be pretty low."

How farmers adopt

Bowman and Gauthier emphasized three key findings regarding how participating farmers approached adopting new conservation practices:

1. Clear goals. In most cases, farmers had clear end goals they hoped to achieve through conservation practices. These goals usually involved improving soil health and structure for erosion control or water management benefits, and reducing labor, machinery and overhead costs.

2. Varied approaches. There are different approaches to how farmers adopt conservation tillage vs. cover crops. Many growers understand the cost savings that can be realized by switching to reduced or conservation tillage, and make the switch fairly quickly. However, for cover crops, the adoption curve is different. Many farmers in the study started with a few acres before gradually expanding to other areas of their farm, allowing them to dial in management and reduce costs.

3. Combination of practices. Farmers take a targeted approach to using specific combinations of practices, and to incorporating practices with certain time or weather constraints, and labor availability.

"They weren't just going to no-till across their whole operation or applying the same cover crop. Their decisions depended a lot on the rotation or the land that they were working on, sometimes depending on whether they rented or owned that land," Bowman  said. "There are a lot of different moving pieces that farmers are weighing in every growing season and every different location on their farm in order to make this work for them."

For more on the project, visit soilhealthpartnership.org.

 

TAGS: Tillage
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