Diversifying for Soil Health

Covering Profitability in Times of Low Prices

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Brice Custer of Hays, Kansas, (left) and Jimmy Emmons of Leedey, Oklahoma, both spoke at the No-till on the Plains conference this week in Wichita, Kansas, about ways cover crops added profitability to their operations. (DTN photos/illustration by Chris Clayton)

WICHITA, Kan. (DTN) -- Brice Custer breaks down the economics of cover crops on his operation in western Kansas by comparing what his cover crops cost compared to how much he saves by not spraying weeds.

In northwest Oklahoma, Jimmy Emmons adds to the finances of cover cropping by showing the pounds per-head of cattle that are gained as they graze his cover crops.

While various institutes, universities and partnerships continue studying soil health and cover-crop practices to come up with economic models, farmers continue highlighting their savings or gains at conferences such as No-till on the Plains this week in Wichita.

So far, researchers might see initial cover-crop seed prices hurt farmers early in the use of cover crops, said Chuck Rice, a Kansas State University soil scientist and a board member for No-till on the Plains. But the farmers who have adopted soil-health practices on their own have a different story to tell.

"These other guys don't seem to think that's a problem so I don't know where the disconnect is," Rice said of farmer-speakers at the conference. "Maybe they are farther into the system and can cut back on their chemical use, which I would think from my view that you could."

Custer has been full no-till on his operation since 2005 and began experimenting with cover crops in 2008. Wind and water erosion were the main concerns, as well as trying to break up the hardpan in the soil. His first cover crop cost $70 an acre to seed, mainly peas and radishes. At that time, planting cover crops in western Kansas caused initial grief with local Farm Service Agency staff.

The complaint Custer heard in western Kansas is that cover crops take up too much moisture and hurt yields. Getting landlords to understand can be a problem, because everyone at the coffee shop thinks the field is full of weeds. Custer sends out newsletters to his 29 landlords every year to keep them informed on issues such as cover crops and rotations.

"It's not a quick fix. It takes time to get this system back going," Custer said. "Sometimes it does hurt yield. There's a give and take. I will give up five bushels of yield on wheat if I can get 25 later on."

COVER CROP VS. WEED CONTROL COSTS

One of the biggest moves for Custer was examining whether to move winter wheat out of the picture on a big chunk of his 4,000-acre farm. He began comparing the cost of planting a cover crop versus the cost to spray chemicals for weed control during the wheat fallow period, especially to manage kochia in western Kansas.

"We began to look at profitability and the entire rotation of our crops," Custer said. "What's my biggest expense in a no-till system? Spraying chemicals."

While wheat was losing money when Custer looks at the inputs it takes to generate the crop, he thinks winter wheat is partially ingrained in Plains farmers because it provides cash flow when they deliver the crop in July. "Can I afford to grow wheat? Kansas is the wheat state so you have to plant wheat, right?"

The wheat crop was averaging $205 an acre for inputs in 2015, but pulled in 38 bushels per acre at $4.50 a bushel, or $171 an acre. That's a $34 loss on the wheat crop followed by fallow. He compared that to spending roughly $51 an acre on cover crops and diversifying his rotation to profit off milo or barley while reducing the costs of chemical-fallow sprays.

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"We're so used to our planting structured that way and we're used to that cash coming in during the middle of the year rather than waiting until December to get revenue from your cash crop," Custer said.

Chemical costs in the fallow between summer wheat harvest and planting another cash crop next spring would lead to as much as $66 an acre for herbicide sprays during the fallow to keep down weeds such as kochia.

In another field, Custer planted milo in 2014, with 120 bpa, followed by milo again in 2015, at 90 bpa, and used a $36-an-acre cover crop that converted to a $187 per acre net on that ground in three years. That compared to $27 over three years in the wheat-fallow field.

Outside of cover crops, Custer also has taken fields and planted barley in the fallow period and taken it to cash. That, too, has worked out; he said he got enough out of the barley crop, $100 an acre, to offset wheat planting costs. He noted that he went into his wheat planting needing only 20 bpa to break even on the wheat crop. He got a 50 bpa crop on that field and squeezed in a fourth crop in a three-year rotation on that field

"So these are some of the new rotations we are messing with," Custer said.

GETTING PAID IN POUNDS

Jimmy Emmons told a packed auditorium at a No-till on the Plains general session, "My name is Jimmy Emmons. I'm a recovering tillage addict ... I grew up on that."

Emmons pointed to a photo of heavy wind erosion coming off a tilled bare field in Oklahoma, saying it's a common problem that remains widespread in the Southern Plains. "We're a lot better than we were, I want to point that out, but driving up here I could have taken several more shots of similar things, maybe not quite as dramatic as this," he said. "We have to change that."

Would no-till with cover crops work in northwest Oklahoma? That was a big question at first for Emmons. Now Emmons is farming no-till with cover crops and livestock. "And when we got to that point, that's when things started really changing," he said.

Emmons sees soil degradation as the primary problem holding back profitability. The soil is degrading anytime it is vacant of a living root. It is an incomplete system. It also opens up for weed pressure, he explained. Livestock are a "soil-health accelerator" that feed the soil while also adding revenue to the operation.

"We're going to plant something then we harvest something," he said.

With a 15-species cover-crop mix, Emmons will graze his covers during the summer. He gave an example of putting 90 head of cattle on 60 acres of covers for 30 days in an "adaptive multi-paddock" system. That led to an average daily gain of 2.4 pounds in a time period when temperatures can be more than 100 degrees Fahrenheit. "That's a pretty good rate of gain in western Oklahoma summer," he said.

At 35 cents a pound, that generates about $37.80 an acre in feed value from the cover crops.

With 45 heifers later grazing wheat and sales from a 58-bpa wheat crop in a county that averaged 34.1 bpa, Emmons generated $361.51 per acre revenue from $217.17 an acre expenses for that cover crop-wheat rotation. That breaks down to a profit of $144.34 an acre.

"I don't do this exact rotation all the time, because I've got multiple crops in my rotation, but this is just a snapshot of what we can do in northwest Oklahoma in an average of 20- to 22-inch rainfall."

Emmons added, "I never go to the coffee shop. I don't want to hear that it won't work because I know it works."

However, Emmons' farm has now gone 116 days without rain and he expects the production and numbers won't be as good because the farm has little to no wheat pasture. Dewey County is in severe drought and just on the outside of extreme drought conditions in western Oklahoma, according to the latest U.S. Drought Monitor.

LOOKING TOWARDS THE FARM BILL

Like Custer, Emmons points out the first year of converting to a cover crop will likely be a challenge. It takes time. Cover crops don't work well in the beginning because the soil also has to adapt and begin to build. That's a challenge because a lot of farmers may not see themselves as being in a position to take that risk.

"It's going to be complex," Emmons said. "You are going to have to think harder. The easy button is no longer available ... If you can get to three and four years, then you are going to start to see some magnificent things coming, because you are going to know what to look for. Just remember -- where the animals go, the nutrients flow."

Both Custer and Emmons are also watching policy decisions in Washington. Custer took time over the past year to visit with congressmen and staff from the White House Office of Management and Budget about conservation farming as well. Custer said the Conservation Stewardship Program was critical for him to help begin intensive cover cropping on his operation. "That funding was very helpful to me," Custer said. "The seed costs amount to about what I get paid, so at least it offsets some seed costs."

Still, wheat fallow rules with the Risk Management Agency currently hinder cover crops. The rules require a 90-day termination time before planting the next cash crop. "We want that to change to follow ... NRCS's termination guideline for cover crops, instead of 90 days," Custer said.

Emmons also said, "We do have a farm bill coming up and we want more soil health in the farm bill and we want more flexibility with cover crops."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(ES/CZ)

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Chris Clayton