Farm conservation, economics converge

BLOOMINGTON, Ill. — Achieving high yields and the higher input costs that goal often requires may not be the best economic or conservation model for farms and farm families.

That’s the Precision Conservation Management program’s message in its new summary of data collected over the first seven years of the program.

“To truly utilize the economic benefit of conservation practices, you must suspend the belief that higher corn and soybean yields equal increased profitability. As farm organizations, we believe this quest for higher yields has been ‘baked’ into farmers’ psyche for generations,” PCM added in its report summarizing the program’s 2015-2021 dataset.

PCM, a free service for farmers, combines precision technology and data management with farm businesses and financials to help farmers manage, adopt and adapt efficient conservation practices long-term to help improve the bottom line.

PCM is funded by the Illinois Corn Growers Association and the Illinois Soybean Association and grants from the U.S. Department of Agriculture’s Natural Resources Conservation Service, The Nature Conservancy, Pepsico, the National Fish and Wildlife Foundation, The Walton Family Foundation and the Environmental Defense Fund.

Laura Gentry, PCM program co-founder, ICGA’s director of water quality science and University of Illinois adjunct faculty member, summarized the program’s seven years of farm income and environmental outcome data in a recent webinar.

Here are the aggregated data findings from 2015 to 2021 on the income side of the ledger.

Non-Land Costs

Gentry first compared non-land costs for cover crops and no cover crops ahead of soybeans from seven years of data.

The 2015 to 2021 average total non-land costs per acre costs ahead of soybeans was $266 for farmers with no cover crops, $290 for those with overwintering cover crops and $276 per acre growing winter terminal cover crops.

Non-land costs include cover crop seed and planting, overhead, other power costs and other direct costs, fertilizer, pesticides, cash crop seed, drying, storage and transportation.

The average additional costs for cover crop seeds and planting were $23 per acre for overwintering and $29 per acre for winter terminal cover crops.

The primary difference in expenses was in the other power costs category that includes a spring termination. Other power costs averaged $84 per acre where no cover crops were planted, $90 per for overwintering cover and $70 per acre for winter terminal cover.

“This is for our higher productivity fields. We will be providing costs for fields with lower productivity on a website in the future,” Gentry said.

Returns

The average per acre operator and land return from 2015 to 2021 in soybean fields was $376 per acre across 588 fields with overwintering cover crops, $399 across 28 fields with winter terminal cover and $420 per acre across 3,066 fields with no cover crops.

Fields with cover crops averaged 68 bushels per acre, and those without averaged 70 bushels per acre.

“That 2 bushels per acre is very important for the total profitability for cover crops. It’s also important to mention that the total gross revenue and operator and land return values do not reflect any cost share that farmers in the PCM program are getting as a result of any kind of carbon market, ecosystem market or a cost-share opportunity,” Gentry noted.

“This suggests if farmers want to be profitable while growing cover crops, they need to at least get some cost-share assistance that is equivalent to the value of any lost yield and seed costs.

“Obviously, this data set is showing that soybean farmers on these high productivity soils on average are making less money per acre than their peers who aren’t growing cover crops.”

Gentry emphasized a couple of facts that aren’t reflected in the data.

“We’re not demonstrating (in this data) any cost-share that our farmers are making, and that does bring these numbers much closer together,” she said.

“Also, most farmers in this program are new to cover crops and their fields are new to cover crops. They’re largely doing this for the first time. They’re doing it because they have this cost-share opportunity a lot of times.

“So, it is important to know that experience is such an important piece of being successful with cover crops, and we do believe that after two, three, four years, farmers have really refined that system. And by about the fourth growing season of growing cover crops, they have a system that is more profitable for them than it was in the first and second years.

“I also want to mention that the $376 (per acre return for overwinter cover crops) and $399 (per acre return for winter terminal) generally have about a $50 per acre spread or standard deviation around the cover crop net return values.

“So, the most profitable farmers in our database are making about $25 more than the value shown in these number and the least profitable farmers are making about $25 less than what we’re showing here.”

Tillage

Thirty-three percent of farmers in PCM did one light tool — example, vertical till — pass, 18% were no-till, 17% were strip-till, 17% did two medium passes, 12% did two light passes and 3% did two-plus passes in corn fields.

In soybean fields, 51% used no-till, 15% one light pass, 15% two medium passes, 11% two-plus passes, 7% two light passes and 1% strip-till.

Highly productive soybean fields from over seven years were led in profitability by the two moderate passes with an average operator and land net return of $423 per acre, followed by $422 with one light pass and $419 using two light passes.

The net return for two-plus passes was $406 per acre, no-till garnered a $405 per acre net and strip-till was $396.

“Strip-till had the highest average yield at 73 bushels per acre across 76 fields. The problem is that they also had the highest total non-land costs. We’re working with (U of I Extension farm management specialist) Gary Schnitkey to reevaluate the total cost for strip-till and that cost may come down over time, which would make this value go up to better reflect strip-till,” Gentry said.

Non-land per acre costs for the various tillage practices over six years averaged from $260 for no-till to $284 in a two-pass moderate system.

“The total direct costs are similar among tillage classes. What’s really critical here is to keep your costs down, but keep your yields up with no-till and farmers are doing that very profitably,” Gentry added. “No-till was the most profitable in six out of seven years.”