Soil health practices boost profits for farmers

Does it pay to put soil health practices that can sequester carbon to work? That's the question the Soil Health Institute, headquartered in Morrisville, North Carolina, set out to answer when staff members interviewed 100 farmers in nine states who had been practicing no-till, using reduced tillage, or growing cover crops for at least five years.

After conducting a partial budget analysis of the economic data gathered from the farms, the institute found that the answer to the question was a resounding yes: Implementing soil health practices can indeed be profitable.

The nine states in the analysis are responsible for 71% of the corn and 67% of the soybeans grown in the United States. The states represented in the survey were Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, Ohio, South Dakota, and Tennessee.

In the study of farms where soil health practices have been used, net income increased for 85% of farmers growing corn and 88% of farmers growing soybeans. Some 67% reported achieving higher yields in all crops after adopting soil health practices than the yields they realized with their former conventional production systems. Farmers in the survey reduced the average cost to grow corn by $24 an acre and by $17 an acre to grow soybeans. Farmers surveyed increased net farm income by an average of $52 an acre for corn and $45 an acre for soybeans.

Increased resiliency

A significant contributor to the positive outcome related to sustained yields was the increased hardiness farmers observed in their crops after adopting soil health practices for a number of years: 97% of growers reported that their crops were more resilient to extreme weather.

"The farmers we interviewed typically reported that, under drought conditions, their crop yields don't suffer as much as they would under their previous, conventional management systems," says Archie Flanders, Soil Health Institute agricultural economist. "Because no-till and cover crops help soil structure, water infiltration into the soil is improved. Because the soil retains moisture, there's more water available for the plants to take up, and the soil moisture lasts for a longer period of time."

Economic viability

The institute undertook the investigation of the economic viability of soil health practices upon Car-gill's request for economic information. Institute staff found farmers to interview through a variety of channels.

"This work was not a random sampling of farmers," says Flanders. "We specifically sought out farmers who had been implementing soil health practices for a minimum of five years. The farmers were practicing either no-till or reduced tillage, with or without cover crops. About 60% of the participants were planting cover crops, and the balance were not. On average, the farmers we interviewed had been practicing no-till or reduced tillage for 20 years, and those who had been growing cover crops had been doing it for 11 years."

Farmers provided information for production practices that compared initial conventional methods and inputs with currently applied practices adopted for improving soil health. Thus, an analysis of each farm's data provided a before-and-after economic picture.

The key driver of increased net income resulting from soil health practices came from reduced costs of production. Increases in crop yield contributed, but not in all cases.

The decrease in overall production expense came from reduced costs in several categories, including fertilizer, pesticides, and equipment-related expense.

In Minnesota, for example, the 10 farmers interviewed reported an average cost savings of $23.10 an acre in less applications of fertilizer and other amendments for corn, and savings of $13.44 an acre in less fertilizer applications for soybeans. They incurred no added expenses in that category.

About 50% of the Minnesota farmers also reported a yield increase.

They practiced no-till on 54% of their acres and grew cover crops on 48% of the land they farmed.

The Minnesota farmers putting soil health practices to work increased net income by an average of $32.13 an acre for corn and $37.63 an acre for soybeans.

"The current adoption rates in Minnesota of 6% for no-till and 4% for cover crops suggest that many other farmers may improve their profitability by adopting soil health management systems," says Flanders.

In Nebraska, adoption rates for grow-ing cover crops are similar — running at 4% — but much higher for no-till; 56% of farmers in Nebraska have adopted no-till, according to USDA data cited by the Soil Health Institute.

Of the 12 farmers the institute inter-viewed in Nebraska, the majority reported yield increases along with cost reductions resulting from their soil health systems. The farmers reported average net-income in-creases of $67.68 an acre for corn, and $48.97 an acre for soybeans.

Increased soil organic matter also resulted from farmers implementing soil health practices. "Soil organic matter increased for 80% of South Dakota farmers who were monitoring their levels, with levels increasing by an average of 1.8% [from starting organic matter levels] due to the soil health management system," says Flanders.

"Research has shown that higher soil organic matter increases a soil's available nutrients and available water-holding capacity," he says. "This is consistent with reduced fertilizer application, increased crop resilience, and improved field access observed by these South Dakota farmers."

In Illinois, 36% of farmers interviewed reported increases in organic matter of an average of 1.5%. Farther west, 40% and 30% of farmers interviewed in Iowa and Minnesota, respectively, reported increased organic matter of some 1% as a result of putting soil health practices to work.

Farmers also reported that their soil health systems resulted in less water running off their fields, thus improving water quality in watersheds.

"Several Minnesota farmers indicated that adopting a soil health management system contributed to certification by the Minnesota Agricultural Water Quality Certification Program, thereby protecting their license to operate for 10 years even if new state water-quality rules or laws are enacted," says Flanders.

Multiple benefits

Improving soil health can help farmers build drought resilience, increase nutrient availability, suppress diseases, reduce erosion, and reduce nutrient losses," says Flanders. "Many soil health management systems that are built on a suite of soil health practices also benefit the environment by storing soil carbon, reducing green-house gas emissions, and improving water quality," he says.

Yet, farmers' cautious adoption of soil health practices has tended to center on the question of profitability: Does it pay?

"We believe our analyses have answered that question," says Flanders. "Yes, it does make economic sense to adopt a soil health system."

Learn more

• Archie Flanders
• 706/540-5814
• aflanders@soilhealthinstitute.org
• soilhealthinstitute.org/economics