An agricultural economist and an agronomist walk into a room … and a point-counterpoint debate ensues.
“Cover crops are time-consuming and don’t provide economic returns,” the economist says, pointing to a survey of farmers not currently using cover crops.
The agronomist shoots back, “Cover crops reduce nitrogen-fertilizer costs and reduce nitrate loading downstream. And nationally there’s been a 133 percent increase since 2011 in acres planted to cover-crops.”
Who has the better argument is open to debate.
It’s complicated, according to both Shalamar Armstrong, an agronomist, and Nathan Thompson, an agricultural economist, both professors at Purdue University. They recently spoke about the agronomic, economic and environmental considerations of cover crops at Purdue University’s Top Farmer Conference.
Thompson cited a study led by Alejandro Plastina, an Iowa State University-Extension agricultural economist. The study found that return on investment may be the biggest hurdle to overcome for widespread adoption of cover crops.
“We have a substantial body of research that shows cover crops have positive long-term benefits for water quality, soil health and the environment,” Plastina said of the study. “And farmers can take advantage of cost-share programs. But it’s likely the number of acres planted won’t substantially scale up if the practice doesn’t at least break-even in the short term.”
Plastina and his team analyzed field data collected through focus groups conducted in three Midwestern states, an online survey with responses from 11 states and a survey mailed to 1,250 farmers in Iowa. The researchers compared costs and revenues from fields where cover crops were and weren’t used. They found substantial variability in net returns, driven by costs of planting and terminating cover crops, feed-cost savings from grazing cover crops, cost-share program payments, and the difference in yields obtained in fields with and without cover crops.
Farmers who grazed livestock on cover crops or harvested them for forage or biomass generated sufficient additional revenue or cost savings to result in overall positive returns, the researchers found.
Improved guidelines to help row-crop farmers minimize yield drag on corn and soybeans while containing cover-crop planting and termination costs would be helpful, Plastina said. Public policies that provide incentives to adopt cover crops – such as more cost-share payments, subsidized seed, discounted crop-insurance premiums or tax credits – could help make cover crops more economical, he said.
Whether cover-crop benefits could be monetized would depend on governments and consumers, Armstrong and Thompson said. Consumers as well as food companies might be willing to pay greater prices for commodities produced with certain agronomic practices such as cover crops. Longer-term societal demands may lead to government regulation.
Cereal-rye economics weighed
Many farmers have planted cereal rye as a cover crop. But direct short-term economic returns from a cereal-rye cover crop are generally negative. Negative and uncertain impacts on corn yield are a primary issue, Thompson said.
Armstrong said results from a yield study of cereal rye planted as a cover crop in corn and soybean systems showed changes in revenues, costs and profits as well as breakeven costs. While there were negative short-term economic returns to using cereal rye as a cover crop – particularly in corn – applying starter nitrogen at planting and reducing inclusion rate of cereal rye prior to a corn crop could improve yield.