Ray Massey
Commercial Ag Program
Crops Economist
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I cannot give an answer of whether or not
growing cover crops are a good economic
decision!
What I can give
 Discussion of valuation of benefits
 Discussion of costs to consider
 A few interesting anecdotes on growing cover
crops.
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reduce soil erosion,
increase water infiltration,
decrease water runoff,
conserve soil water,
increase soil organic matter,
reduce soil compaction,
reduce nitrate leaching,
supply nitrogen to subsequent crops,
suppress weeds,
attract beneficial insects, and
other functions
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How much does a ton of soil not eroded
contribute to my net income?
How much does an acre-inch of rainwater
saved contribute to my net income?
How much does 1000 lady bugs attracted to
my field contribute to my net income?
How much does a pound of nitrogen supplied
to subsequent crops contribute to my net
income?
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Nitrogen saved or fixed from a cover crop that
reduces my fertilizer bill on the next crop.
Any harvestable material such as silage or
grazing.
Process: quantify the benefit and multiply it
times the market price of the item.
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Soil not lost eventually prevents my ground
from losing crop productivity.
Increased water infiltration helps me in most
years – maybe not 2009.
Increased organic matter may improve crop
yields or lower input costs.
Process –
 No market prices exist to use
 incorporate risk analysis and discount
future contributions to today
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Attract beneficial insects that I later kill with
my insecticide.
Reduce nitrate leaching (considering leaching
for leaching sake as opposed to saving N for
subsequent crop)
Process: ignore or seek an incentive that
makes the benefit worthwhile.
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An internal benefit is something that benefits
the person making the decision.
 Reducing soil erosion is good because it makes my
land more productive and valuable.
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An external benefit is something that does
not directly benefit the decision maker.
 Reducing soil erosion is good because it improves
fish habitat and reduces municipal water
treatment costs.
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Negative Externality – when the decision
maker imposes a cost on someone else
Positive Externality – when a decision maker
bestows a benefit on someone else.
External benefits (reducing soil erosion) are
considered negative externalities by society
(pollute the stream with soil).
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Regulation – force the decision maker to
manage in such a way that the cost is not
imposed on society.
Subsidy – incentivize the decision maker so
that he voluntarily chooses to manage in such
a way that the cost is not imposed on society.
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Practice 340: Cover Crop
USDA specifies
 what cover crops to plant
 The cover crop plant planting window
 The cover crop growing period
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Incentive: $38/acre
 Seed - Rye Grass: 9 lb/ac * $79/cwt =
 Planting cost =
 Subtotal
 Burndown (needed anyway) =
 Burndown (cover crop specific) =
$7.11/ac
$13.00/ac
$20.11/ac
$0.00
$15.00
 The $38/acre EQIP subsidy may completely pay for
the cover crop
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Definite costs:
 Seed purchase
 Planting expense
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Possible costs
 Fertilizer?
 Herbicide burn down or disking?
 Delays in planting due to cover crop?
 Other?
Tim Harrigan Michigan State University
Slurry
No-till
Oil seed radish
Tim Harrigan Michigan State University
Slurry
No-till
Annual rye grass
Tim Harrigan Michigan State University
Cover Manure Application? Sidedress
Crop? #N/acre
Nitrogen
#N/acre
No
No
151
Yes
No
151
Yes
112
90
Corn yield
bushels/acre
160
153
169
No
Yes
224
224
90
90
183
176
Yes
336
90
173
Source: J.W. Singer, J.L. Kovar, C.A. Cambardella, M.D. Tomer
and T.B. Moorman. USDA National Soil Tilth Lab.
Ray Massey
Commercial Ag Program
Crops Economist