How Does Reducing Tillage and Adding Cover Crops Impact Farm Income?

This article was adapted from “Economics of Soil Health: Contributions of Reduced Tillage and Cover Cropping” first published on April 4, 2022, in Crops & Soils magazine. 

The short answer: Changing practices on the farm to include reduced tillage and cover crops will increase expenses in some areas and cut costs in others. Overall, though, the Soil Health Institute discovered that net farm income increased for farmers who have adopted soil health practices for at least five years.

Break it down: Based on a partial budget analysis of 100 farmers in nine states, the Soil Health Institute discovered corn growers increased net farm income by $51.60 per acre, and soybean growers increased net farm income by $44.89 per acre.

• The partial budget analysis was based on input from farmers who had been using no-till, reduced tillage, and/or cover cropping for at least five years.
• If you’d like more detail about the expenses, revenue, and categories captured by the partial budget analysis, check out this article or dive into the report from SHI.

Let’s talk about the results of SHI’s interviews with farmers.

For corn:

• Reduced expenses were $20.70/ac greater than additional expenses, with fertilizer and amendment expenses reduced by $21.22/ac.
• With reduced or no-till and cover crops, corn farmers were able to reduce their N fertilizer application rate and expenses.
• 58% of farmers reported increased yield, with only 2% of farmers reporting decreased yield after adopting cover crops and reduced/no-till.

For soybean:

• Reduced expenses were $15.64/ac greater than additional expenses, with fertilizer and amendment expenses reduced by $8.95/ac.
• 56% of farmers reported increased yield.

Why did over half of these farms report increased yield?

• Adopting these conservation practices can have positive impacts on soil health over time, SHI reports.
• Reducing tillage and implementing cover crops improves soil structure over time.
• As soil structure improves, so too does root exploration, plant-available water storage, organic matter cycling, and timing and efficiency of plant-available nutrients.

How did over half of these farms reduce their expenses?

• For both corn and soybean, fertilizer and amendments was the category with the greatest net reduction. Most farmers also established and maintained soil testing programs to monitor soil nutrients.
• Decreasing nutrient application not only reduces fertilizer expenses, but reduces the risk of nutrients leaving the farm through surface water, groundwater, and the atmosphere.
• Reducing tillage also cuts the cost of labor, fuel, repairs, and fixed costs of equipment ownership. Potential additional expenses for chemical applications that replace tillage are less than these reduced expenses.
• For cover crops, additional expenses include the cost of seed, planting, and termination. However, farmers who planted cover crops saw an increased corn yield of 2.80 bu/ac over reduced/no-tillage without cover crops. Likewise, 1.45 bu/ac of soybean yield increased in fields with cover crops and reduced/no-till, compared to fields without cover crops.

One thing to note: these changes do not happen overnight.

• Farmers participating in the interviews had practiced no-till/reduced tillage for an average of 19 years, and those planting cover crops had done so for an average of 9 years.
• Most farmers adopt soil health practices by first reducing tillage then adding cover crops.
• And it’s key to remember that changes in management must take local soil and climate into account.

In short, it takes time to see these physical, chemical, and biological properties respond to farm management practices. But it is entirely possible to adopt cover crops and reduced or no-till and see soil health improvement, yield benefits, and profitable farms.

Photo by Edwin Remsberg and USDA-SARE.