Online tool for calculating ROI for cover crops

30-11-2018 | Tools & data | News

Iowa State University’s Sustainable Agriculture Research and Education Program (SARE) recently constructed a tool that helps farmers who don’t use cover crop evaluate the economics of cover crops.

This decision tool is intended to help farmers who do not currently use cover crops evaluate the expected annual net returns to cover crop adoption under alternative scenarios, and to serve as a benchmark for farmers who are already using cover crops and want to improve the return on their investment.

Low rate of adoption of cover crops

“The rate of adoption of cover crops in Iowa is low due to a variety of reason, including thin windows of opportunity to plant due to weather, uncertainty associated with adoption of new practices and low corn and soybean prices that limit the ability of farmers to use their own resources in conversation practices,” said Alejandro Plastina, assistant professor of economics and Extension at ISU.

According to SARE only 3% of Iowa’s farmland uses cover crops. Plastina led the study that found the average farmers in the sample incurred losses when using cover crops even after accounting for cost-share payments. Researchers do note that some farmers do profit from cover crops, but they didn’t represent the majority in this study.

Uncertainty about net returns

“Uncertainty about the net returns to cover crops has been a major barrier to adoption, and this new tool is intended to help farmers evaluate their own net returns and reduce uncertainty,” Plastina added.

He hopes the tool will help farmers identify ways to make cover crops profitable in their operations.

The tool was created in Iowa but can be used in any U.S. state. “Since the tool allows the user to create his or her own scenario using their own data it can be used by any farmer in the U.S. to evaluate the net returns to cover crops in a corn-soybean rotation,” he says.

Also read: Reversing organic matter loss using cover crops