Short-run net returns to a cereal rye cover crop mix in a midwest corn–soybean rotation

Abstract

Unsubstantiated economic returns are a major contributor to producers’ reluctance to adopt cover crops. The objective of this study is to evaluate the direct short-run net returns to the producer of implementing a predominantly cereal rye (Secale cereal L.) cover crop mix into a Midwest corn (Zea mays L.)–soybean [Glycine max (L.) Merr.] rotation. Experimental agronomic data from field experiments in Lexington, IL, are used to calibrate economic simulations of the costs and benefits of cover crop adoption. Results indicate that net returns to cover crops, including current cost-share payments, were routinely negative. Returns to the soybean phase of the rotation were higher than corn given that the cover crop significantly reduced corn yield in 1 of 2 yr but did not significantly affect soybean yield. A scenario where cover crop biomass was hypothetically harvested and valued as a livestock feedstuff increased returns. However, further research is needed to validate the agronomic assumptions underlying this scenario. Finally, the breakeven subsidy that would make the producer indifferent to planting cover crops was estimated to be US$13–$23 kg–1 of nitrate saved from leaving the field each year (or approximately $195–$345 ha–1). This is higher than current cost-share payments ($140 ha–1). In the short-run, incentivizing producers to adopt cover crops will likely require (i) improved recommendations for cover crop best management practices to eliminate current downside risk and (ii) higher cost-share payments or established markets to internalize cover crop benefits that accrue to society.