A three-year on-farm research project by Practical Farmers of Iowa is putting a price tag on the forage produced by cover crops. Two years of data from an ongoing study show that the practice of grazing cover crops, combined with cost-share funding, provides positive returns within the same year cover crops are planted.

This finding is significant because some of the benefits of cover crops may take a few years to manifest, and the costs can be hard for farmers to justify in the short term, when profit margins are shrinking.

The PFI data, however, shows that with proper management, grazing cover crops is a prime means by which farmers can realize sizable profits within the first year. Three cow-calf producers in the North Raccoon Watershed — Wesley Degner of Lytton, Bill Frederick of Jefferson and Mark Schleisman of Lake City — are participating in the project, which started in 2015 and will run through May. The project is supported by the Iowa Department of Agriculture and Land Stewardship.

Key findings from the research include:

• The total net economic gain from feeding cover crops to cattle ranged from $355 to $40,192 per year (or $2 to $60 per acre).

• All farmers received cost-share assistance. While some farmers participating were profitable regardless of the cost share, other farmers needed the cost-share funds to remain profitable in that same year.

• The degree to which farmers were profitable directly relates to each farmer’s level of experience with planting and grazing cover crops — a finding that underscores the importance of proper management.

• When cover crops are properly planted and managed, grazing cover crops has enormous potential for livestock farmers to see profit in the first year of adopting cover crops.

The full report — “Economic Impact of Grazing Cover Crops in Cow-Calf Operations” — includes detailed economic analyses from each farm.

Determining feed value
For the study, the participating farmers seeded cover crops of their choosing, intending to graze the forage produced. Cattle grazed on cover crops in the fall, and some continued to graze into the winter and spring.

While water, minerals and some supplemental feed were all provided when needed, cover crops and crop residue comprised the vast majority of each herd's ration. At the start of each cover crop grazing season, the farmers estimated how much feed their cattle would need based on animal weight and daily dry matter requirements.

This value, minus any supplemental feed provided, was considered the amount of feed farmers could offset by grazing cover crops. A conservative value of $80 per ton was assigned to the amount of feed saved. While the price of grass hay varies, it can often cost $90 to $140 per ton.

CASH CROP: The way to make a cover crop into a cash crop is to graze it, says Mark Schleisman. He’s been grazing covers for 10 years on his northwest Iowa farm.

“When cattle are in the field grazing the covers, we don’t feed cows their normal ration, which saves us money,” Degner says.

Economic analysis offers proof
The second component of the project was an economic analysis to determine the actual economic impact of grazing covers. The participants tracked all expenses throughout the study and entered the data into a spreadsheet developed by an economist at Iowa State University that estimates the forage value of cover crops. This tool will soon be available for free on ISU’s Ag Decision Maker website.

Across the three farms, the value of cover crop forage ranged from $28 to $61 per acre, before costs were removed. Costs included establishing and killing the cover crop, labor, fence and water.

In some cases, costs exceeded forage value — and in these cases, the cost-share dollars made up the difference.

Cost-share helps
All three farmers received cost-share assistance for their cover crop acres, either from their county Natural Resources Conservation Service or from the Iowa Department of Agriculture and Land Stewardship. Cost-share payments ranged from $11 to $41 per acre, and were included in the economic analysis.

Once factored in, the total net economic gain from feeding cover crops to cattle ranged from $355 to $40,192 per year (or $2 to $60 per acre). This variance can be attributed to the farmers’ different levels of experience with cover crops and their understanding of issues related to cover crop planting and grazing management.

Degner, for instance, had never planted or grazed cover crops before this project. He says the experience gave him the confidence to increase his cover crop acres from 85 to 293 acres. “I’m still learning,” he says, “but I think grazing both in the fall and spring will help me remain profitable.”

Cost-share funding can be especially helpful for farmers, like Degner, who are new to certain farming practices. The funds let farmers try unfamiliar practices and hone their skills while providing a financial buffer against mistakes.

Grazing helps cover crops pay their way
Mark Schleisman, by contrast, has over 10 years of cover crop grazing experience and has figured out ways to remain profitable regardless of cost-share dollars. “We started planting cereal rye because it was easy to calve in," he says. "Now, our cover crops are grazed, which is a way to justify the costs."

He adds that he is most excited about the role cover crops have played in allowing him to expand the size of his herd. “My dad ran 200 cow-calf pairs on the same acres that we now run 360 pairs on. Because we can graze cover crops, we’re producing more on the same amount of land.”

For more information on this study, contact Meghan Filbert at 515-232-5661 or [email protected].

Jones writes for Practical Farmers of Iowa.