New SARE Resource Examines Economics of Cover Crops in Row Crops

New SARE Resource Examines Economics of Cover Crops in Row Crops

Farmers around the country are planting cover crops on millions of acres to protect and improve the soil. From 2012 to 2017, cover crop acreage increased 50%, according to the USDA Census of Agriculture. In Nebraska, cover crops were planted on almost 750,000 acres in 2017, the last year of the USDA Ag Census. (See where cover crops are planted in Nebraska.)

Cover of the USDA SARE resources on economics of cover crops

A new publication from USDA Sustainable Agriculture and Research Education (SARE), Cover Crop Economics: Opportunities to Improve Your Bottom Line in Row Crops (download | read online) looks at the economics of cover crops in corn and soybean rotations to help farmers answer that big question, when do cover crops pay?

 “The five years of national cover crop surveys showed us that cover crops do improve commodity yields over time as farmers gain experience with cover crops and the soil is improved,” says lead author Rob Myers, of the University of Missouri and North Central SARE. “We saw this pattern in all five years of the survey for both corn and soybeans.”

This 24-page publication addresses the kinds of economic returns that can be expected from cover crops and is particularly timely as growers look to plant cover crops into prevented planting and flooded acres. Because there is no one-size-fits-all answer to when cover crops start paying for themselves, this resource takes a holistic look at the question. It describes several situations when cover crops may increase profitability within a year or two and explores seven common management situations for commodity farmers when they will more quickly see a positive net return from cover crops. Those situations are when:

Some key findings from the economic analysis (see the full report for details on the calculations and assumptions underlying these conclusions):

  • When herbicide-resistant weeds are a significant problem, cover crops can be profitable in the first year of use.
  • When cover crops are grazed, they can provide a profit in the first year of use if fencing and water are already available.
  • When soil compaction occurs, cover crops can provide a profit by the second year of use.

For this report, the authors used $25 per acre as the cost of cover crop seed and $12 per acre as the cost of seeding (when hired), for a total of $37 per acre to establish cover crops. These figures are based on median data from the surveys. Experienced cover crop users often find ways to use them for less, the authors note.

Alan Weber, an ag economist who has used cover crops on his own farm and who co-authored Cover Crop Economics: Opportunities to Improve Your Bottom Line in Row Crops, says, “One of our key takeaways from the review we did of data and farmer approaches is that when farmers start to adopt cover crops, they frequently start to determine other ways to make their cropping system more economically efficient, finding they can save costs in certain areas such as fertility or weed control. For some farmers those cost savings from cover crops can be significant, particularly in certain situations with herbicide-resistant weeds. In other cases, those cost savings will be more minor, but the input savings generally increase over time. Some aspects of soil health respond quickly to cover crops, such as more earthworms and mycorrhiza, while other soil changes take longer.”

In the longer term, as aggregate soil structure starts to improve, cover crops in combination with no-till can allow farmers to get into the field a little earlier for planting or harvest in wet years, which can be another way that cover crops provide a positive economic impact. Several years of cover crop use can gradually start to improve soil organic matter, which can improve soil water-holding capacity and help improve the inherent fertility of the soil.

“Thousands of farmers are finding the profitability benefits of cover crops on their farm do improve over time," Myers said. "Depending on circumstances specific to each field and farm, cover crops may provide a relatively quick profit, such as from grazing, or may take two to three years to provide a return. It’s not unlike how applying ag lime can take two to three years to pay, or buying a new piece of equipment can take a few years to cash flow. However, if producers use cover crops to address problems specific to their farm, such as weeds, fertility, erosion, or compaction, they can quickly gain cost efficiencies with their commodity cash crops. The cover crops also provide a management tool to make soils more resilient to excessively dry or wet weather while building towards long-term improvements in profit.”

Cover Crop Economics: Opportunities to Improve Your Bottom Line in Row Crops includes profiles of farmers who have found cover crops to be a profitable addition to corn and soybean rotations, plus a short section on the off-farm impacts of cover crops and the potential economic gains associated with those impacts.

For more about this and other SARE resources, visit the national SARE website, the North Central Region SARE website, or the Nebraska SARE page. Nebraska Extension Educator Gary Lesoing is Nebraska SARE coordinator and a contributor to CropWatch.