cover crop economics: estimating a return on investment liz juchems and jamie benning
TRANSCRIPT
Cover crop economics:estimating a return on
investment
Liz Juchems and Jamie Benning
Iowa Nutrient Reduction Strategy• Voluntary, science-based • State goal of 45% reduction of Nitrogen (N)
and Phosphorous (P)• Point sources achieve maximum biological
removal rate: 4% N and 16% P• Non-point source goal 41% N and 29% P
Cover Crops in the NRS
Nutrient Reduction Potential
31% reduction in nitrate
29% reduction in phosphorus
Example: Combination Scenarios that Achieve N and P Goal From Non-Point Sources
From Iowa Nutrient Reduction Strategy: Goals for Nonpoint Sources is 41% reduction on Nitrogen and 29% reduction on Phosphorus
Nitrate-N Reduction
Phosphorus Reduction
Initial Investment
Total Equal Annualized
Cost
Statewide Average EAC
Costs
Practice/Scenario% (from
baseline)% (from
baseline)(million $) (million $/yr) ($/acre)
MRTN Rate, 60% Acreage with Cover Crop, 27% of ag land treated with wetland and 60% of drained land has bioreactor
42 30 3,218 756 36
MRTN Rate, 95% of acreage in Cover Crops, 34% of ag land in heavily tile drained land treated with wetland, and 5% land retirement
42 50 1,222 1,214 58
Cost of Cover Crops
• Approximately $30+ per acre for seed, planting, and termination
• Costs offset by cost-share initially
• Can we estimate the value cover crops bring to the land?
How do you account for cover crop value in your operation?
Estimating the Value of Cover Crops
• Estimates of soil loss reductions
• On-farm research sites comparing cover and no-cover treatments
RUSLE2
• Input field management practices and compare cover vs. no cover treatments
• Obtain soil loss in tons/acre/year
Soil Erosion
• Most sites in this study are no-till corn-soybean rotations
• Initial calculations range from 20-40% erosion reductions for the cover crop sites
Value Estimates
• Estimating change in land value and lost nutrients
• Based on protecting the soil from erosion
Soil Comparison
• Tama County– Tama 120C – Tama 120C2
• Loss of 4” to change erosion phase
• 616 tons of soil per acre
Nutrient Value
• Topsoil is the most nutrient rich horizon
• Higher OM=higher nutrient content and value
Assumptions
• Nutrient value of soil just in the OM fraction ranges from $2-$10 per ton of soil
• In land value change calculations, cost of soil erosion averages $0.49 per ton
Tim Smith
Cover Crop Scenarios
Scenario No cover erosion rate
Cover crop erosion rate
Difference Value of retained soil by cover crop use
1 2 tons/acre 1 ton/acre 1 ton/acre $6.06/acre
2 3 tons/acre 1.5 tons/acre 1.5 tons/acre $9.09/acre
3 5 tons/acre 2.5 tons/acre 2.5 tons/acre $15.15/acre
How long does it take to observe a return on investment in terms of soil quality, erosion reduction, or other factors?
Project Funding and Partners
• State Soil Conservation Committee• Partners
– USDA-ARS National Lab for Agriculture and the Environment
– Practical Farmers of Iowa
Jamie Benning
Liz Juchems