Cover crop economics: estimating a return on investment Liz Juchems and Jamie Benning.

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Presentation 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) (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 42303, MRTN Rate, 95% of acreage in Cover Crops, 34% of ag land in heavily tile drained land treated with wetland, and 5% land retirement 42501,2221,21458

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 ScenarioNo cover erosion rate Cover crop erosion rate DifferenceValue of retained soil by cover crop use 12 tons/acre1 ton/acre $6.06/acre 23 tons/acre1.5 tons/acre $9.09/acre 35 tons/acre2.5 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