Cover Crop Economics

Farmers want to grow cover crops but say it costs too much and they do not see an economic return. They cite high seed costs, extra labor, chemicals, extra machinery trips to plant and kill the cover crop and lack of knowledge on how to manage cover crops as factors that prevent cover crops establishment. However, farmers are experimenting and starting to overcome some of these perceived problems.

Cover crop seed may cost as little as $5 to more than $50 per acre. On the low side, oats, bin run wheat, and soybeans can be used. On the high side, legumes (cowpeas and winter peas) used for homegrown nitrogen cost $.80 to $1.20/pound and at 40-50 pounds/acre, it gets a little pricey. Innovators are finding ways to reduce seeding rates and seed costs to $15 to $25/acre. Innovations with drilling seed, broadcasting with fertilizer, airplane or helicopter applications, and crop inter-seeding is making cover crop establishment less risky. As with any crop; understanding the life cycle, the limitations and benefits of each plant, and experience helps in growing a successful cover crop.

The benefits of growing cover crops vary tremendously from farm to farm depending on soil type, climate, and past management. Farmers want to know does it increase my yields or does it lower my costs? Unfortunately, crop yields and higher returns may be slow to improve until problems with soil management (drainage, soil compaction) improve. That’s why the cover crop’s perceived value varies from farm to farm.

Cover crops work best on farms that work closely with Mother Nature. Cover crops and no-till farming mimic the nature cycle of keeping plants growing year round. Cover crops feed the microbes which feed the following crop. Farms that grow more plants year round (livestock farms, hay, pasture, or wheat fields) will respond faster than a typical corn-soybean farm that only grows a cover crop once every 5 years. Livestock farms benefit economically from using cover crops as supplemental feed and manure benefits the soil.

Farms that plant only corn and soybeans, use conventional tillage, and a large amounts of commercial fertilizer and pesticides (herbicides, insecticides, fungicides) may react slower to the benefits of using cover crops because they are less reliant on microbial life for supplying nutrients to their crops. The reliance on chemical inputs comes at a price because the efficiency of commercial fertilizer decreases as the microbial life declines in the soil. So, while cover crops may not directly increase crop yields initially, they increase nutrient efficiency and decrease your input costs..

A common myth among farmers is that corn benefits directly from fertilizer. Most corn fertilizer is recycled through microbes first, so farmers actually fertilize the microbes and indirectly fertilize their corn. As fertilizer and fuel cost increase, cover crops and no-till are economical because tillage, fuel consumption, and chemical inputs (fertilizer and pesticides) become more expensive. Cover crops improve farm economics through:

Better drainage : If you are considering splitting your tile lines to improve soil drainage, plant a cover crop for several years. Let’s say it cost $800 per acre to split your tile lines on 40 foot spacing. Takes the interest on that money ($800 per acre @ 4% interest or $32 per acre) and invest it in cover crops that decrease soil compaction. Water can not flow vertically or horizontally to tile lines in compacted soils and cover crop roots create macropores to move excess water to your existing tile.

Decreased Soil Compaction: Deep rooted and/or fibrous grass cover crops break up vertical and horizontal soil compaction. Farmers typically deep rip their soils costing $30-$35 per acre. Spending the same money annually on cover crops adds soil organic matter and increases soil productivity. Research is showing that soil compaction is due to a lack of living roots in the soil.

Nutrient recycling : Soil compaction and poor drainage may account for 40 to 60 percent nitrogen losses through denitrification in silty clay soils. Cover crops improve microbial growth and nutrient recycling which accounts for the majority of nutrients supplied to crops. Cover crops act like an elevator to move nutrients from the subsoil and keep the nutrients recycling in the topsoil. Economically, every one percent soil organic matter is worth about $600 in soil nutrient (N, P, K, S). A good cover crop may add .05 to .1 percent SOM every year or $30 to $60 in stored nutrients. Several years of continuously growing cover crops may lower your fertilizer bill by 25 percent.

Pesticides: There are two ways to fight weeds. One is to try to kill weeds with herbicides; the other way is to compete with the weeds for sunlight, nutrients, and water by planting cover crops. Crop diseases like phythium, phyphthora, and rhizoctonia thrive where the soil is poorly drained due to soil compaction. Growing cover crops improves drainage and reduces soil compaction. Some insect infestations (cutworms, army worm, slugs) may increase initially with cover crops. Long-term no-till farmers with cover crops report cutting annual herbicide costs by one-third and reduce root disease problems but insect pest costs may increase slightly until natural predators are restored.

Environmental Cover Crop Benefits : If farmers start no-tilling with cover crops; less fuel, less tillage, and less machinery investment are needed which saves money. Cover crops reduce soil erosion and result in less nutrient runoff and less flooding. Increased soil organic matter increases the water holding capacity of soil which is an insurance policy against drought. Crops yields do increase with cover crops, however; the increased yields generally do not generally occur until the soil management problems (soil compaction, poor drainage) from excess tillage are corrected. In the long run, cover crops make farmers money by saving input costs, improving efficiency and eventually increasing crop yields.

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