Stop questioning if soil health pays. Instead, ask yourself how to measure the dollars and cents of your investments in soil health.
I frequently hear farmers say, “There’s no way to know if cover crops pay.” This is a lazy and antiquated response — and an excuse to not manage soil health like you manage other key areas of your business.
If the many variables of economic return in soil health is the question, how do we arrive at the solution?
START BY ASKING:
- What do you want to measure?
- What are your goals?
So, Shay, what should I be measuring? Organic matter (OM), cation exchange capacity (CEC), yield, nutrient efficiency, dollar use efficiency and straight-line cost savings are all great places to start.
A farmer in my area has tracked his OM levels since the late 1970s. He has watched it increase from 1.8% to more than 3.25% by reducing tillage, planting covers and rotating crops. This is tangible data tracking that has taken many years (decades) to compile, but it is measurable.
Building soil health and OM also tends to increase cation exchange capacity. This essentially improves the sites and efficacy of nutrient exchange, adding the ability for soils to retain and pass nutrients to plants as they need it. This increase in CEC leads to increased nutrient efficiency in macro- and micronutrients.
This nutrient efficiency is measured in the pounds of product applied to a field to achieve a target yield. As soil health increases, nutrient efficiency increases, allowing more yield per nutrient measurement. Of course, reducing fertilizer and nutrient applications for similar or higher yields will improve your bottom line every season and in the long term.
This is also a good juncture to add in that soil health is not just tied to OM, CEC, pH or fertilizer efficiency, but also to the microbial and biological activity in the soil. This is another reason the many products available today are gaining popularity.
CALCULATE SAVINGS
Finally, and perhaps most importantly, what are the exact cost savings of improving soil health? For this assessment, a farmer might simply look at a particular soil health practice and then follow the equation all the way through to assess how it impacts the bottom line.
Let’s look at cover crops. If Farmer Paul decides he’s going to seed cereal rye after corn harvest at a rate of 35 lb. per acre, he might have $12.60 per acre in seed cost. If a local applicator drills his crops for $11.95 per acre, he has $24.55 per acre of true cost.
What are his soil health benefits? The most tangible one might be a lower cost, or altogether eliminated, pre-emerge herbicide pass in the spring. Maybe this saves him $18 per acre, which would make him $6.55 in the red.
Then, he decided to enroll in a low-commitment carbon program for the year to try it out. Most programs are paying $7 to $20 per acre, with some as high as $40 to $50. Paul settles somewhere in the low end around $10 per acre. He is now $3.45 in the black on paper.
What else should Paul be thinking about?
- Did he eliminate one or two tillage passes moving into no-till or strip-till as a soil health outlook?
- Will the cover crop reduce excessive erosion?
- Does the root system eliminate nutrient leaching or run-off, improving nutrient use-efficiency in the next crop?
- Perhaps, most importantly, is there a yield advantage? Even 1 bu. makes a difference in today’s prices.
DID FARMER PAUL ACHIEVE HIS GOALS?
We don’t know that variable in this scenario, but you do on your farm, as there are ways to measure it.
As a business-driven farmer, cover crops and increasing soil health have an important place in my farm, and I’m confident they do on yours, too. Let’s step away from the silly stigmas that surround soil health and start putting pen to paper.
The soil health discussion isn’t going away, and you either start to understand cover crops, carbon programs and rotation in your system or you might get left behind. Our neighbors to the north and across the Atlantic are already feeling the pressures, and I don’t think we are immune from impending change.
As you evaluate soil health in the year ahead, ask yourself what your goals are, how you plan to measure progress and what success looks like in your operation. Cover crops, biologicals and changes in production practices aren’t for every acre but improving soil health is.
Good luck on your journey and reach out any time with questions.
The cover crop question is a complicated one, so we built a spreadsheet (surprise, surprise) to let you run your own thoughts, biases and assumptions on a true cost-of-production outlook. We prompt you with questions, but don’t care how you answer. Email shay@agviewsolutions.com or scan the QR code, and I’ll send you the tool.
Shay Foulk is a farm business consultant with Ag View Solutions, providing profit management and business analysis. He farms and runs a regional seed business with his wife and father-in-law in Illinois.
