CTC Economics

Jennifer Hahn, Middle Minnesota Watershed planner with the Redwood County Soil Water Conservation District and Brain Pfarr, farmer and resource specialist, presenting at the 2019 Conservation Tillage Conference.

ST. CLOUD, Minn. – After a year of difficult weather and low commodity prices, farmers everywhere are cutting back on costs. At the Conservation Tillage Conference (CTC) in December, many growers looked at the economics of reduced tillage/no-till and cover crops, and whether or not those management practices really pay off.

“The biggest thing you want to look at are what your net returns are, that's where the rubber hits the road,” said Jennifer Hahn, Middle Minnesota Watershed planner with the Redwood County Soil Water Conservation District, during her presentation at the CTC with Brian Pfarr, farmer and resource specialist. “On conventional till, the guys I worked with are netting $5.25 an acre, on no-till and cover crops, $112 an acre.”

Hahn works with growers in her area to help them budget their expenses and track their income using a profit zone manager (PZM) program. The net return and cost production (without land costs) per acre that she cited during her presentation is an average of the farmers she works with for 2016-18 on-farm data collected in the PZM.

The cost per acre for conventional tillage, this includes all input and equipment cost without land cost as they are extremely variable, on average over the three growing seasons was $545.38 per acre. For the no-till/cover crop growers Hahn works with, costs were $457.45 per acre.

“Statewide FINBIN data shows about the same thing – we're $535 (conventional tillage), $480 for strip-till and $477 for no-till and cover crops,” said Hahn.

FINBIN data on net returns per acre show a loss of $50.95 per acre with conventional tillage and a profit of $6.52 per acre with no-till and cover crop management practices.

Profitability does not necessarily mean higher yields. For growers in the PZM program, conventional tillage average yield on corn was 195 bushels per acre while no-till/cover crops yielded 196 bushels. FINBIN statewide data shows conventional tillage yielding 206 bushels per acre and no-till/cover crops yielding 195 bushels.

“We don't like promoting that you're going to increase the yield by using no-till and cover crops, because everybody's different and everybody's management is different,” she said. “Yields matter, but economics matter a lot more.”

The profitability of no-till and cover crops goes back to the input costs. According to Hahn’s PZM data, growers spent on average $15.00 per acre on cover crop seed, but they saved $31.95 per acre by not tilling.

Other savings included reduced pesticide and herbicide applications, reduced costs during planting and reduced fertilizer costs.

Herbicide costs were cut in half, $24 on no-till and cover crops versus $50 with conventional tillage.

Cereal rye, planted in the fall after corn and then establishing itself in the spring does an excellent job of out-competing a variety of weeds such as water hemp, ragweed and lambs’ quarter.

The difference in fertilizer costs was $160 per acre for conventional and $65 for no-till/cover crop.

“Every percent of organic matter can give you 20-25 pounds of nitrogen, 5.5 pounds of phosphorus, and 2.5 pounds of sulfur per 1 percent of your organic matter,” Hahn said. “As we improve our soils, it actually improves the nutrient cycling within the soil.”

Which allows growers to reduce their fertilizer costs and increase their fertilizer efficiency.

Hahn is currently working with a grower that is raising corn on 0.6 pounds of nitrogen per bushel without a loss in yield.

Prevented erosion also means prevented fertilizer and nutrient loss. On average, a conventionally tilled field will lose about 5.2 tons of soil per acre per year due to wind and water erosion. That soil can contain, on average, 14.6 pounds of nitrogen, 65.7 pounds of phosphorus and 21.9 pounds of potassium.

No-till and cover crop management can reduce erosion to 0.1 tons per acre per year.

At the end of the season, growers are looking at ways to save money, reduce costs and improve their economic position. Reducing tillage and adding cover crops has reduced costs and increased profits for many growers across the state and region.

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