Cover Crop Economics
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Cover Crop Economics

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I shared most of this presentation at a meeting Altoona IA on 12/14/2012

I shared most of this presentation at a meeting Altoona IA on 12/14/2012

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Cover Crop Economics Cover Crop Economics Presentation Transcript

  • Cover Crop Economics from outside the box Joel Gruver Western Illinois University
  • GREAT BOOK butNo chapter on cover crop economics !
  • Page 9 - The N value of legumes is the easiest cover crop benefit to evaluate, both agronomically and economically. This natural fertility input alone can justify cover crop use. • Hairy vetch boosted yield for no-till corn more than enough to cover its establishment costs, a three-year study in Maryland showed. Further, the vetch can reduce economic risk and usually will be more profitable than no-till corn after a winter wheat cover crop (1993 data). The result held true even if corn were priced as low as $1.80 per bushel, or N fertilizer ($0.30/lb.) was applied at the rate of 180 lb N/A Not exactly current View slide
  • From the Literature cited sectionOtt, S.L. and W.L.Hargrove. 1989. Profit and risks of usingcrimson clover and hairy vetch cover crops in no-till cornproduction. Amer. J. Alt. Ag. 4:65-70.Hanson, J.C. et al. 1993. Profitability of no-tillage cornfollowing a hairy vetch cover crop. J. Prod. Ag. 6:432-436.Lichtenberg, E. et al. 1994. Profitability of legume covercrops in the mid-Atlantic region. J. Soil Water Cons.49:582-585.Jackson, L.E. 1995. Cover crops incorporated with reducedtillage on semi-permanent beds: Impacts on nitrateleaching, soil fertility, pests and farm profitability. SAREProject Report #AW92-006.Western Region SARE.Logan,Utah. www.sare.org/projects View slide
  • ?
  • CC biomass and N credits should be predictable using canopy sensors
  • Cost accounting forcover crops
  • Direct costs vs. Indirect costs vs.Opportunity costs
  • DIRECT COSTS Material costs •seed •inoculant •herbicide •fertilizer Operational costs •establishing •terminating •managing residues
  • Results of cover crop seed price surveyVendor Cereal rye Annual Hairy vetch Medium red ryegrass clover1 (WI) 0.188 0.52 (0.69) 1.60 (1.98) 1.22 (1.62)2 (IL) 0.147 (0.179) 0.47 (0.63) 1.42 (1.65) Prices were obtained through direct3 (MN) communication with vendors via(1.90) or (1.84) 0.153 (0.171) 0.50 (0.56) 1.70 phone 1.664 (NE) email during September 2010. Prices 1.65 (1.95) 0.157 (0.179) 0.55 (0.65) 2.10 (2.50) represent cheapest variety available (often5 (IL) (0.213) (0.75) (2.20) (2.60) VNS). Wholesale and retail prices were6 (IL) 0.188 (0.214) (0.70) requested when available. Prices in7 (MO) 0.197 parentheses are retail prices. All other 1.21 0.46 1.478 (IL) (0.20) prices are wholesale (1.80) (0.60) prices. (1.75)9 (IA) (0.195) (0.62) (2.00) 2.0010 (IN) (0.239) (0.75) (2.20)11 0.125 0.48 1.05(ILfarmer)*
  • ?????
  • Cereal rye production statistics (USDA-NASS) Acres/1000 Acres/1000 Average Total planted for harvested yield production AverageYear all purposes for grain (bu/ac) (bushels*1000) price ($/bu)1950s 4060 1674 14.2 23907 1.231960s 4134 1460 20.9 30102 1.011970s 3236 987 24.8 24981 1.821980s 2496 700 28.3 20023 2.201990s 1555 380 27.2 10336 2.702000 1329 296 28.3 8386 2.602001 1328 250 27.6 6896 2.862002 1355 263 24.7 6488 3.322003 1348 319 27.1 8634 2.932004 1380 300 27.5 8255 3.222005 1433 279 27 7537 3.302006 1396 274 26.3 7193 3.322007 1334 252 25 6311 5.012008 1260 269 29.7 7979 6.322009 1241 252 27.8 6993 4.782010 1186 250
  • Performance over Price• Buy CC seed on value not price Vendor Cereal rye Annual Hairy vetch Medium red ryegrass clover WI 0.188 0.52 (0.69) 1.60 (1.98) 1.22 (1.62) IL1 0.147 (0.179) 0.47 (0.63) 1.42 (1.65) MN 0.153 (0.171) 0.50 (0.56) 1.70 (1.90) 1.66 (1.84) NE1 0.157 (0.179) 0.55 (0.65) 2.10 (2.50) 1.65 (1.95) IL2 (0.213) (0.75) (2.20) (2.60) IL3 0.188 (0.214) (0.70) MO 0.197 0.46 1.47 1.21 IL4 (0.20) (0.60) (1.80) (1.75) IA (0.195) (0.62) (2.00) 2.00 IN (0.239) (0.75) (2.20)(IL farmer) 0.125 0.48 1.05
  • How much is good technical support worth to you?
  • http://www.greencoverseed.com/
  • What does it cost to inoculate?
  • +20 lbs N/a
  • University of Illinois Machinery Cost Estimates “Adding 5 to 15 percent to estimated costs is appropriate for determining custom rates”
  • Per acre costs of cover crop planting operations based on custom rate surveysField operation IA* IL IN* MO*Fertilizer buggy 4.15 (1.50-7.50) 4.72 (3.07-6.37) 4.97 (3-15) fert 6.02 (3.50-15) fert+seed Harrowing 8.10 (4-12.50) 6.78 (3-12) Cultipacking 6.55 (3-10) 8.50 (5-15) Broadcast w/ 10.35 (8-12) 7.44 (3-12.50) ATVConv. grain drill 13 (7.50-20) 11.40 15.89 (13.63- 13 (8-24) sg 18.15) s 14.09 (10-24) gcNo-Till grain drill 15.35 (12-25) 14.60 14.47 (10.80- 14.80 (10-24) s 18.14) 14.25 (5-25) sg Air seeder 16.40
  • IA and IL Aerial Applicator Survey (May-June 2010)Name Location Experience w/CC Cost no exp., no customerCady Aerial Spray Rock Falls, IL interest $8.00/a norm app $8.50/a ccBenoit AerialSpraying Kankakee, IL turnips and rye $8.00/a norm app $10.00/a ccFranks FlyingService Morrison, IL ryegrass and c. rye $8.00/a norm app $10.00/a ccReeds Fly-on yes, c. rye, small partFarming Mattoon, IL of business $8.00/a norm app $12.00/a ccKilliam Flying rye, wheat on beans, $8.00/a norm app $10.00/acService Carlinville, IL rye on corn or 10/lbCurless FlyingService Astoria, IL ryegrass and turnips $8-15.00/a all app.Klein Flying St. Francisville, ~$12.50/a cc, $9.00/a liquidService IL annual rye and turnips appAgriflite Services Wakarusa, IN rye, wheat, ryegrass ave $15.00/a for cc app.Als Aerial $10-15.00/a cc $10.00/aSpraying Ovid, MI rye and wheat liquid
  • Examples of total cover crop management programs ($/ac) Costs Program 1 Program 2 Program 3 Program 4 Seed 11.25 7.50 11.25 9.00Seeding operation 4.15 15.00 10.00 10.00Seed incorporation 6.50 Herbicide 2.00 2.00 Termination 6.50 6.50 operation Total 30.40 31.00 21.25 19.00Program 1 Program 2Seed: 90 lbs/ac cereal rye Seed: 60 lbs/ac cereal ryeSeeding operation: spread w/fertilizer buggy Seed bed preparation: noneSeed incorporation: rolling stalk chopper Seeding operation: no-till drillHerbicide: 24 oz. glyphosate Herbicide: 24 oz. glyphosateTermination operation: 90’ boom spray rig Termination operation: 90’ boom spray rigProgram 3 Program 4Seed: 90 lbs of cereal rye Seed: 3 bushels of bin-run oatsSeed bed preparation: none Seed bed preparation: noneSeeding operation: aerial seeding Seeding operation: aerial seedingHerbicide: no added cost, burn-down standard Herbicide: none – winter-killTermination operation: no added cost, burn-down standard Termination operation: none – winter-kill
  • Illinois NRCS cover crop specifications
  • Indirect costs Costs associated with challenges created by the addition of cover crops to cropping systems. Examples include cover cropresidues hindering establishment of succeeding cash crops due to slow soil warming or delayed organic N release and cover crops that become weeds.
  • CCs affect many agronomic factors simultaneously Control erosion Feed livestock Cover Crops Adapted from Magdoff and Weil (2004)
  • Not all effects are positive Host pests Tie up N ? ? Become a weed Interfere w/ equipment performanceSuppress crop growth Cover Crops Dry out soil Prevent excessively soil drying Add cost Increase management Adapted from Magdoff and Weil (2004)
  • Match CC objectives with species Grazing GRAZING = #1 way to make cover crops pay! brassicas, clovers, small grains, a. ryegrass, sorghum-sudan Nutrient scavenging/cycling brassicas, small grains, annual ryegrass Bio-drilling brassicas, sugarbeet, sunflower, sorghum-sudan sweet clover, alfalfa N-fixationclovers, vetches, lentil, winter pea, chickling vetch, sun hemp, cowpea, soybean Bio-activation/fumigation brassicas, sorghum-sudan, sun hemp, sesame Weed suppression brassicas, sorghum-sudan, cereal rye, buckwheat
  • Do you think that these cows arehappy to have more than corn stalks for lunch today?
  • Coming soon to a farmer’s market near you…
  • Opportunity costs Income foregone when less profitable crops are included incrop rotations (e.g., small grains)or cover crops are grown at times when cash crops could be in the field (e.g., cover crops following wheat vs. soybean double crop)
  • Internal costs vs. External costs aka On-site costs vs. Off-site costsOn-site benefits vs. Off-site benefits
  • The economics of off-site erosion Karl L. Guntermann, Ming T. Lee and Earl R. Swanson - 1976 Erosion and sedimentation in agriculture has traditionally been thought to result in substantial costs to the producerimplying that voluntary measures at soil conservation would be in the individuals and societys interest. The research reported here indicates that off-site sediment damages are far greater than the on-site productivity effects of erosion and that there is considerable justification for stronger public policies in this area. The development of the efficient production frontier reveals that conventional production techniques are quite inefficient compared to procedures that could be adopted.
  • There are no silver bullet solutions thatsustainably balance environmental quality with productivity and profitability in agriculture! A better silver strategy is . . . buckshot! Silver buckshot is a concept promoted by a collaboration of agencies and orgs called GREEN LANDS BLUE WATERS
  • Winter cover crops Perennial-based crop rotationsPermanent pasture systems Perennial bio-energy crops
  • Reductions in long-term costs! Impact of the 2008 floods on IA soils20 tons per acre average soil loss across 2,284,000 ac! Conservation structures needing repair 12,157 Grassed Waterways 8,137 Terraces 3,375 Water and Sediment Control Basins 800 Grade Stabilization StructuresFields with combinations of two or more conservation practices (e.g., no-till + cover crops) performed much better than fields with a single practice
  • Have any of you priced one of these?
  • The science is clear - cover crops can reduce nitrate leaching at lower cost than most other practices! Bare fallow Kaspar et al. J. Environ. Qual. 36:1503-1511
  • …while alsoimproving soil health
  • Same soil type and landscape positionCROP SOD Students in my Soil Properties class each analyzed paired soils from their farms
  • Research has documented yield increases even in very high yield environments
  • What do you see in this photo?
  • Which compaction alleviationstrategy is more cost effective?
  • Precision radishes w/o peasPrecision planted radishes w/ peas from 5 ft of row
  • Precision planted radish on 30” rows w/ peas
  • About a month ago
  • We are playing with lots ofprecision planting options on a small scale
  • Brassicas appear Nutrient cycling: Phosphorus to be particularly adept at 150 solubilizing P Soil Test P Wye,loam at Wye, fall 2003 Silt Fall 2003 Soil test P, mg/kg 120 Means for top 18 inches Means for 0-45 cm a 90 a 50% b increase bc Biological 60 pumping + c organic acid root exudates 30Third year of cover crop 0treatments in a corn- e e l ad ad ap Ry ntro r rsoybean rotation R co ge ed fora o ils e Cover crop treatment
  • Fall 2003Oilseed Radish cover crop greatlyincreased non- parasitic nematodes in June 2004 soybean field. > non-parasitic nematodes ↓ > N cycling
  • Corn following cover crop experiment in 2011 Relative Cover crop system corn yield Volunteer oats 79% Radishes planted on 30” 99% Radishes drilled on 7.5” 91% Corn planted on radish rows
  • We have also documented negative yield effects
  • Wow...cover crops are not idiot-proof! Cover crops require more managementthan broadly adapted off-the shelf technologies
  • Can you think of any agtechnologies that substitute for management skill?
  • ?
  • Corvus Atrazine WIU student project this fall FlexstarLexar Halex
  • A recent survey by Farm Futures magazine of morethan 1,000 farmersfound those on the cutting edge ofconservation were actually more profitable than other farmers. In short, it ispossible to be both green and gold!
  • • Only 11% used cover crops within past 5 years.• Only 8% planted cover crops on their farm in the fall of 2005. Only 4.8% in IA.• 43% using conservation practices with cost sharing, 57% w/out.• 56% said they would use cover crops with cost-sharing
  • Real financial data for thousands of farmers across the Midwest
  • WHY DO SOME FARMS CONSISTENTLY HAVE HIGHER PROFITS THAN OTHER FARMS? $148!
  • Moving beyond cover crops as add-ons to new cropping systems
  • Cover crops should not be viewed as the missing puzzle piece(s) in current cropping systems!
  • ~ 160 profiles since 2008New economics Qs this year
  • WIU Organic Research farm Spring 2012 Fall 2012 Some things are priceless :-> Student’s home farm