Cover Crop Economics: Analysis from Studies Across Louisiana

Naveen Adusumilli, Wang, Hua

Naveen Adusumilli and Hua Wang

The U.S. Department of Agriculture Natural Resources Conservation Service widely promotes cover crops and conservation tillage and other conservation practices through technical assistance and financial incentives. Popular programs include the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). EQIP obligations amounted to $56 million in the fiscal year 2015 for cover crops alone. These practices aim to promote the mitigation of soil erosion and improve nutrient recycling in the soil profile. Despite the incentives, the implementation of these practices is still relatively low across the United States. Concerns reported include changes in yield, mostly downward, in the initial years of a no-till system and increased production costs in cover crop management affecting overall profits. Thus, the economic efficiency of incorporating these practices into a traditional farm production system is contextual and needs evaluation as new data become available. This report presents the net return estimates of cover crops and conservation tillage use as evaluated in Louisiana studies over the past few years. Management costs of the conservation practices were estimated using the Cover Crop Decision Tool, a Microsoft Excel-based tool developed by the LSU AgCenter.

Multispecies Cover Crops Combined with Tillage Treatments

This research at the Red River Research Station in Bossier City focused on incorporating cover crops in no-tillage and conventional tillage treatments with soybeans as the principal crop. The research included the evaluation of hairy vetch (30 pounds per acre) and wheat (90 pounds per acre). Three years (2016-2018) of field data on continuous soybean production (plots were in no-till since 2014) in a non-irrigated setting under different tillage and cover crop treatments were combined with price and input cost data to estimate net returns. Market prices, FY 2019, were used to estimate crop revenues. Table 1 includes the net return estimates by cover crop and tillage practice.

Net returns under the conventional tillage system are higher, albeit only for a no cover crop situation. It is well-documented that yields in initial years of the no-till system are lower. However, when the no-till method is supplemented with a cover crop, the yields are not significantly different between no-till and conventional till. The returns are estimated, accounting strictly for crop yield and cover crop planting, management and termination costs. No off-farm benefits were included in estimating the returns except Natural Resources Conservation Service incentive payments.

Although there is no significant increase in soybean yield, a significant increase in net returns in the hairy vetch system is attributed to incentive payments for adopting cover crops and a no-till system.

Nutrient Management in Corn Following Crimson Clover

A study of nutrient management in corn following a crimson clover cover crop planted at 17 pounds per acre was conducted in Beauregard Parish. The field trials were conducted in 2016-2017 and 2017-2018. Once corn reached the two-to-three-leaf stage, nitrogen was applied in separate plots at 100, 125, 150 and 175 pounds per acre. There were no differences in corn yields across all four nitrogen treatments (Table 2), although yields were slightly lower in 2017-2018 than in the previous year.

Farmers usually have different nutrient strategies. Current seasonal effects also reflect production practice choice. A production year with higher-than-average rainfall usually results in nutrients being washed away from the soil and warrants an aggressive fertilizer program the following production year. Thus, agronomic research highlights the potential effects of conservation on the soil. The economic component shows higher returns with proper management of nutrient use following cover crops. Table 2 presents the net returns for corn under four nutrient strategies following the crimson clover cover crop.

Effect of Cover Crop Seeding Rate on Dryland Conventional-till Soybean Profits Across Two Soil Types

A study conducted in central Louisiana during 2016-2018 evaluated the effect of cover crop seeding rate on conventional-till soybean profits across two soil types: Coushatta silt loam and Moreland clay. Three cover crop species with three seeding rates classified as low, medium and high were used for the field experiment design. The cover crop species include crimson clover, cereal rye and tillage radish. Table 3 shows the average soybean yield in silt loam and clay soils under different cover crop treatments and the corresponding net returns.

In the silt loam soils, the yield under fallow treatment when nothing was planted was significantly different from the yields under all crimson clover treatments, under cereal rye with high and medium seeding rates, and under tillage radish with high seeding rates. In the clay soils, the yield under fallow treatment was significantly different from the yields under crimson clover with low and medium seeding rates and cereal rye with the low seeding rate. In the silt loam soils, the tillage radish-medium, cereal rye-low and tillage radish-low are the three most profitable cover crop strategies. Whereas in the clay scenario, tillage radish-medium, crimson clover-low and tillage radish-high are the three most profitable cover crop strategies. The fallow treatment had the highest net return per acre due to no cover crop planting and management costs. The analysis sheds light on cover crop seeding rates as a crucial factor based on the soil type. Using a higher-than-recommended seeding rate will decrease net returns while a lower-than-recommended seeding rate will not provide the conservation practice's intended benefits. Table 3 highlights the production system under each soil type that resulted in the highest net returns (e.g., in silt loam soils, crimson clover-medium produced the highest net returns, whereas it is crimson clover-high in clay soils).

Multispecies Cover Crops Evaluated Under Various Planting Times Combined with Fertilizer Treatments in a Soybean Production System

A study was conducted with multispecies cover crops evaluated under various planting times combined with fertilizer treatments in a soybean production system. Established in fall 2017 at the Ben Hur Research Station in Baton Rouge, the treatments included three planting dates (September, October and November) and control with 15 pounds per acre of phosphorus and potassium as starter fertilizer or no starter fertilizer. All plots were no-till soybean plots.

There was a significant effect on soybean yield based on planting date and fertilization. The November planting of cover crops negatively affected yield (Table 4); however, the same November planting without fertilizer treatments had no significant yield difference with all other planting times. The net returns were higher for no cover crop treatments, which are attributed to not having cover crop planting and management costs. The net returns from the October cover crop planting was not significantly different from a no cover crop treatment, emphasizing that net returns from cover crops and no-till were not lower than net returns from the conventional tillage and fallow system.

Agronomists and soil specialists point out that cover crops and tillage practices improve soil health over time by gradually increasing soil organic matter, water holding capacity and other factors. As those properties improve, so do the productivity and consequently, profitability. In most cases, farmers adopt cover crops and conservation tillage to address specific problems on their farms. Therefore, it is likely that farm profits vary depending on when those concerns are fully addressed. Some costs related to these practices are realized as savings in input costs, whereas some of the costs are recouped through increased farm productivity and farm revenues. These analyses accounted for the Natural Resources Conservation Service incentives but not for any grazing revenues associated with cover crop use. Nevertheless, it is important to recognize that profitability is not compromised when conservation practices are added to the system.

Naveen Adusumilli is an associate professor, and Hua Wang is a research associate in the Department of Agricultural Economics and Agribusiness.

Acknowledgments: Natural Resources Conservation Service, Louisiana Soybean and Grain Research and Promotion Board, LSU AgCenter Master Farmer Program and the following scientists from the LSU AgCenter who are conducting this research: Syam Dodla, associate professor and agronomist, Red River Research Station, Bossier City; Daniel Fromme, the Tom and Martha Burch and Delta and Pine Land Co. Endowed Professor in Cotton Production, Dean Lee Research and Extension Center, Alexandria; Lisa Fultz, assistant professor, School of Plant, Environmental and Soil Sciences; Donna S. Gentry, extension agriculture and natural resources agent; Brenda TubaƱa, professor, and Jose Mite, graduate student, in the School of Plant, Environmental, and Soil Sciences; James Hendrix, extension conservation agronomist; and Craig Smith, agronomist, NRCS-Louisiana.

(This article appears in the fall 2020 issue of Louisiana Agriculture.)

Two men sitting at computer with masks on.

Naveen Adusumilli, at right, associate professor in the Department of Agricultural Economics and Agribusiness, and Hua Wang, research associate, analyzed the economic consequences of use of cover crops in Louisiana agriculture. Photo by Olivia McClure

Table 1. Soybean crop yield and net returns by cover crop and tillage practice.

Cover CropNo-till Yield (bu/acre)No-till Net Return ($/acre)Conventional-till Yield (bu/acre)Conventional-till Net Return ($/acre)
No cover crop43.3$59.148.3$91.7
Hairy Vetch47.9$104.850.9$112.2

Table 2. Nitrogen rates, average corn yields and net returns.

N (lbs./acre)Yield (bu/acre)Net Return ($/acre)

Table 3. Soybean yield and net returns under two soil types and three seed rates.

Production SystemSilt Loam Yield (bu/acre)Silt Loam Net Return ($/acre)Clay Yield (bu/acre)Clay Net Return ($/acre)
Crimson Clover Low48.6$76.548.08$59.1
Crimson Cover Medium50.4$86.247.52$49.4
Crimson Clover High49.4$72.445.80$29.9
Cereal Rye Low52.2$117.442.42$23.1
Cereal Rye Medium48.9$90.645.88$51.8
Cereal Rye High47.2$65.646.25$45.7
Tillage Radish Low50.9$114.545.33$55.1
Tillage Radish Medium53.5$132.746.92$64.3
Tillage Radish High44.2$50.246.55$57.5

Notes: For crimson clover 22, 26 and 30 pounds per acre are its respective low, medium and high seed rates. For cereal rye, those seed rates are 7, 10 and 13 pounds per acre. For tillage radish, the corresponding seed rates are 13, 56 and 88 pounds per acre.

Table 4. Soybean yields and net returns by fertilizer treatment and planting treatment.

Planting monthWith fertilizer yield (bu/acre)Without fertilizer yield (bu/acre)With fertilizer net return ($/acre)Without fertilizer net return ($/acre)
No cover crop55.957.3$309.6$349.0
12/20/2020 7:38:03 PM
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