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This week’s podcast, sponsored by Montag Manufacturing, features Jim Hoorman, Hoorman Soil Health Services, Ohio. Hoorman will discuss the costs of tillage and soil compaction, cover crop costs, the dollar value of soil organic matter and more.
The Cover Crop Strategies podcast series is brought to you by Montag Manufacturing. Montag precision metering equipment is helping producers achieve their yield goals while saving on seed and input costs. For establishing cover crops, Montag’s family of seed platform equipment adapts to a variety of major brand delivery systems that will conserve seed and nutrients along with soil and water. Explore new options for your production and conservation goals with your Montag dealer, visit www.Montagmfg.com or call Montag at (712) 517-2775.
The Cover Crop Strategies podcast series is brought to you by Montag Manufacturing.
Montag precision metering equipment is helping producers achieve their yield goals while saving on seed and input costs. For establishing cover crops, Montag’s family of seed platform equipment adapts to a variety of major brand delivery systems that will conserve seed and nutrients along with soil and water. Explore new options for your production and conservation goals with your Montag dealer, visit www.Montagmfg.com or call Montag at (712) 517-2775.
Full Transcript
Sarah Hill:
Welcome to the Cover Crop Strategies Podcast. I'm Sarah Hill, associate editor. Montag precision metering equipment is helping producers achieve their yield goals while saving on seed and input costs. For establishing cover crops, Montag's family of seed platform equipment adapts to a variety of major brand delivery systems that will conserve seed and nutrients along with soil and water. Explore new options for your production and conservation goals with your Montag dealer or on the Montag manufacturing website. Welcome to the Cover Crop Strategies Podcast. I'm Sarah Hill, associate editor. Today I'd like to introduce Jim Hoorman, Hoorman health services. Jim will be discussing the economics of cover crops. Welcome to the podcast, Jim.
Jim Hoorman:
Thanks for having me.
Sarah Hill:
To get us started, why don't you tell us a little bit about yourself.
Jim Hoorman:
I went to Ohio State University and I did get a bachelor science in agriculture. I also have a masters of science and agriculture economics and a master of arts in business. And if that wasn't enough, I also worked on a PhD in environmental sciences. Then I worked for a Ohio State as an extension educator for about 24 years. And then after that, I worked as a soil health specialist for the Natural Resources Conservation Service for three years. And now I have my own business Hoorman Soil Health Services.
Sarah Hill:
Fantastic. Well, welcome. So let's just jump right into our topic for the day. What do you see being the cost of tillage per acre?
Jim Hoorman:
Well, that kind of varies a little bit depending on what part of the country you're in and the price of fuel and the type of equipment and how many times you run across it. But on average, farmers are probably making several applications and it can vary from probably 50 to $60 per acre. Now with the price of fuel going up at least a third and equipment, it can be a little bit more than that. So on average, we're probably spending at least 50 to 60 bucks an acre
Sarah Hill:
And oil prices are definitely something that folks are concerned about right now. In addition to that, a lot of growers say that they use tillage to break up soil compaction. But when we look at the dollar values, what is the cost of soil compaction?
Jim Hoorman:
Soil compaction, first of all, it's going to burn up your organic matter and it actually causes compaction. So it's not a long term solution. It might take out a little bit of the compaction in that zone, so you can get it planted, but then it's just going to make it worse. And soil compaction can last nine to 10 years. Once you get it into soil. Some of the research we have from Ohio State shows that it reduces your corn yields about 3% a year and maybe 10% on soybeans. So let's just use an example. If we have corn at say 200 bushel and we have a 3% reduction, that's about six bushel and I'm just going to use round figures here.
Jim Hoorman:
Let's say corn is $5 a bushel. That's about $30 an acre, but that can be $30 an acre over about nine years. So it is a significant cost. It's going to hurt you more in a really dry year or it can also hurt you when you have a lot of water and you have standing water and everything floods out. If you look at soybeans 50 bushel, let's say 10% loss on that, that's five bushel. Let's just use $10. That's almost $50 an acre that you're losing for quite a few years. The other thing you got to remember is you're tying up a lot of nutrients or you're losing nutrients. We lose nitrogen with denitrification, phosphorus soluble reactive phosphorus is released when we have compacted soils.
Jim Hoorman:
And we're also getting something called potassium induction which you can apply a potassium fertilizer but it gets tied up in the soil structure when you have compaction and then you're also tying up your micronutrients. One of the biggest things is we just have less water holding capacity due to all that poor soil structure and hard pans due to that compact. So there's a lot of hidden cost with soil compaction.
Sarah Hill:
Absolutely. When a grower is looking at maybe applying, say a legume cover crop species, what kind of cost per acre are they looking at?
Jim Hoorman:
Usually your legumes, the seed cost is just a little bit higher but you got to remember you're going to be getting some nitrogen out of that. And we're going to be using Rhizobium bacteria. So each species has its own Rhizobium that you need to be putting on there and that's really critical that you do that. Most of the time we're finding out that these Rhizobia only lasts maybe 12 to 48 hours. So it's really helpful if you can do that at planning. But let's just use an example, something like Balansa clover. That's kind of a new one out there. Seeding rates very low, four to five pounds per acre.
Jim Hoorman:
Prices kind of vary but it's probably going to go up this year. But like this last year, it was around three to $3.50 a pound. So you've got somewhere between 12 to maybe as much as $20 an acre in seed cost. You have to apply it. So add a cost for that, 15 to 20 bucks. And then if you have to terminate it, you might have another $20 in it. But you got to remember, at least with Balansa it has a real big leaf and you might get 200 pounds of nitrogen, up to 200 pounds of nitrogen. If we say that nitrogens are about a dollar, a pound, that's $200 that you might potentially bring in and all that nitrogen should be available to that corn crop the next year.
Jim Hoorman:
So let's take another example and that would be hairy vetch. Hairy vetch You're going to plant that at maybe 15 to 20 pounds to the acre. The cost really kind of varies, but say two to $3 an acre. You might have 30 to $60 just in the cost for the seed, got an application cost and you're probably going to have to terminate that too. So add those costs in. You get a 100 to 200 pounds out of that hairy vetch and at a dollar pound, that's probably going to pay for it and maybe gain you a little bit more. So all these legumes this year are quite valuable for reducing fertilizer cost.
Sarah Hill:
Absolutely. So how then does a grass cover crop compare cost wise per acre?
Jim Hoorman:
Generally, the grasses are a little cheaper, at least in the of seed cost but the seeding rates are probably a little bit higher. So probably the most common one that we have is cereal rye. Generally cereal rye has been kind of round 12 to $15 a bushel and that's generally 50 to 60 pounds. There's about 60 pounds in a bushel. So you would put on maybe 50 to 60 pounds on depending on and where you're at and how late it is. So later it is usually we have to increase the seeding rate about 10 to 20%. That is one that does over winter. So you're going to have a cost to terminate it. Right now Roundup is really, really expensive.
Jim Hoorman:
So a lot of guys are looking at crimper rollers and you can physically terminate that just by running the roller over it. But if you're going to be using Roundup, that is going to be a little bit more expensive this next year. I usually figure the price of the cover crop planted in two terminated about equals the cost of your tillage. So the difference is with cover crops, you're building soil organic matter and you're making more nutrients plant available to that crop. You're also improving your water holding capacity, adding soil organic matter, improving the soil structure and a big one is just keeping that soil in place.
Jim Hoorman:
So those fibers fruits really reduce the amount of erosion. Usually you got a really good cover crop. You won't hardly have any erosion. We're talking pounds not tons per acre. Average boss across the United States is probably well above four and a half to almost five tons per acre. So if you're saving that four to five tons of top soil, and I'm just going to put a value on top soil at $10 an acre, you're roughly saving about 40 to $50 just on the amount of soil that you're saving. Plus if you look at how much nitrogen and phosphorus is in that soil, that could be another a 100 to 150 bucks an acre. So it really does pay to have a good cover crop out there.
Sarah Hill:
It sounds like it adds up certainly over time and as you're doing it. Taking that a step further, can we put a dollar value on that soil organic matter as you're building it over time?
Jim Hoorman:
There is a way of doing that and probably the quick answer is it's going to be worth a lot more than what we can put a value on it. However, if we just look at what organic matter is worth just based on the price of fertilizer. So the amount of nitrogen, phosphorus, potassium, and sulfur and even some micronutrients that we can kind of estimate a value of what it's worth. Now, again, it's worth at least two to three times this number, there probably isn't an easy way to put it on there but it does give us a way to get an idea what organic matter might be worse.
Jim Hoorman:
So every 1% soil organic matter has about a thousand pounds of nitrogen and roughly these are very rough numbers, a 100 pounds of phosphorous. It actually could be like about 105 but we're just going to use round numbers, about a 100 pounds of potassium and about a 100 pounds sulfur. So last couple years I've been putting a value on this using fertilizer but the cost of fertilizer was that year. And the value's been somewhere around five 50 to $650 per acre. Well, don't have to tell you that fertilizer costs have gone way up. So now the value of that soil organic matter just based on the fertilizer value is well over a 1,000, close to $1,200 an acre. And again, it's probably worth at least two to three times that. So that's for every 1% soil organic matter you have in your soil.
Sarah Hill:
What about the productivity rate of that soil organic matter? Does that have a dollar value as well?
Jim Hoorman:
There's a really interesting study that I like to use that Michigan State University, they found that soil organic matter does increase yield and every 1% soil organic matter increased their yield by about 12%. So let's go back to our 200 bushel corn. If we increase that corn by 12%, 200 bushel times 12% increase, that's 24 bushel of corn and let's just put a dollar value of five bucks a bushel on that. That's $120 an acre. If you look at soybeans, 50 bushel. An acre times 12% increase in yield, that's about six bushel. And at let's say $10 a bushel for soybeans, you're roughly at $60 an acre.
Jim Hoorman:
So the key thing though is a lot of farmers want to know how much am I gaining per acre per year? And most covered crops are going to probably add about a 10th to a 10th and a half percent soil organic matter. So we take those numbers and take them times a 10th to 10th and a half. You're looking at maybe additional 12 to $18 in income on corn and maybe six to $9 an acre on soybean. May not seem like a whole lot but over time, a couple years, that can really make a big difference. And it's additive. So if you keep adding a 10th to a 10th and a half each year, you're going to start seeing some increases in bottom line.
Sarah Hill:
Especially in those years like this year when every dollar counts when you're looking at paying for inputs.
Jim Hoorman:
Yeah, that's right. That's exactly right.
Sarah Hill:
So water of course, is a major driving factor for using cover crops and those covers can help infiltrate more water. How much water can soil organic matter hold? And then how does that translate to the price tag that we put on soil organic matter?
Jim Hoorman:
You know, it kind of varies anywheres from about a half inch to almost two acre inches for every 1% organic matter. But again, that's per foot of soil. There's really good study by Dr. Berman Hudson that was done back in 1994. It's in the Journal of Soil and Water. And he found that on a sandy soil with 1% organic matter, that would hold about one acre inch of water. A silty loam holds about 1.9 and silty clay loam holds about 1.4 acre inches. Now what happens is, as you get more and more organic matter in your soil, the efficiency goes down.
Jim Hoorman:
So let's just go to the extreme and say, let's say a sandy soil. Now it's pretty hard to get 5%, but let's say you had 5% organic matter. We found that it held about 2.5 acre inches of water. So if you take 2.5 and divide it by five, that's about a half inch. So that's kind of our bottom. On your silty loam, it would hold about four acre inches of water. So four divided by five, that's about 0.8 inches and then silty clay loam was three acre inches divided that by five, that's about 0.6. So it really does add up to quite a bit of water when you start figuring out, especially as you go deeper into the soil. Now, generally the organic matters level's going to go down but that top soil is really good at holding water.
Sarah Hill:
We'll be right back to the podcast, but first I want to thank our sponsor. Montag precision metering equipment is helping producer achieve their yield goals while saving on seed and input costs. For establishing cover crops, Montag's family of seed platform equipment adapts to a variety of major brand delivery systems that will conserve seed and nutrients along with soil and water. Explore new options for your production and conservation goals with your Montag dealer or on the Montag manufacturing website. And now back to the podcast. That having that soil organic matter at the top of the soil profile, how does that influence oil temperature? And then how can that save growers money?
Jim Hoorman:
Well, the key thing is the soil organic matter kind of buffers your soil temperature. So keeps it cooler in the summer and warmer in the winter. And it's also very efficient at keeping that water around. So if we can add, use one acre inch of water, that translates into about eight bushels of corn, three and a half bushels of soybeans, and about six bushels of wheat. And one of the things that we kind of learned and this comes from Dr. Elwin Taylor, from Iowa State University is that every 10 degree increase in soil temperature relates to about a doubling of how much water that the plant needs.
Jim Hoorman:
So let's say the soil temperature's at 75 degrees fahrenheit. That's an ideal growing temperature. You need about one acre inch of water. Soil temperature goes up to 85 degrees, that's 10 degree increase, now you double how much water you need. So it goes up to two acre inches of water. And if it gets up to 95, well, now you need four acre inches of water. So really goes back to how effectively that water is used. And we're finding out that the water is very effectively used when we have so organic matter and that can translate in the higher yields.
Sarah Hill:
That top soil, what is it valued at?
Jim Hoorman:
There's a couple ways of doing this but this is probably the easiest way. Again, we probably don't give it enough credit. It's worth a lot more but this is just one way of looking at it. Let's just say you base it on the price of land. And let's just say the price of land, just to make it easy is say $10,000 an acre. Now it's going to vary from each location a little bit but what we do is we say, how much of that land is for agricultural production? Because I might take a piece of land and I could scrape off all the top soil and it still has value. I could still build a house or put a building on it. And of course this is going to vary depending on how close [inaudible 00:18:28] in that.
Jim Hoorman:
But if we say maybe 50% of the value of that land is for agricultural production, that's about $5,000. And then if we look at the top three inches at the top soil, that's about a million pounds or about 500 tons. So if we take the $5,000 for the agricultural value divided by the 500 tons of top soil there, that's where we come up with about $10 an acre or $10 a ton for the top soil. And if we look at the average key value, that's the amount that NRCS says we can erode, don't really agree with that number because we can generally, we're only making about a half a ton of top soil a year. But if we take that four to five tons times $10, that's about 40 to $50 per acre that we can save by reducing the erosion on that soil. So with cover crop. So it does add up and that's per year. So that's about enough right there to pay for the crop loan, just the erosion savings.
Sarah Hill:
Some growers choose to apply lime to their soil for various reasons. Talk through a little bit about how that affects some of these costs.
Jim Hoorman:
One of the things about no tillers is generally we're seeing that if you're using no-till cover crops, we're not using quite as much lime. The calcium is less likely to be precipitated out. I always remember the saying about what was a poor man's way of liming a soil, and it was just to plow an inch deeper because the calcium is a small ion. It kind of precipitates out and it gets caught in the sub soil. And if you just plow a little deeper, you could bring it to the surface.
Jim Hoorman:
Now if you're trying to correct pH, it's the carbonate in there but we have the carbon dioxide in the soil which can actually turn into carbonate with the help of the calcium there. So if you can say one to two ton of lime say per acre, say $20 a ton, plus you got usually your spreading cost which is maybe 20, 25, $30 an acre maybe this year, your total lime cost might be 40 to 60, maybe even $70 per acre. And if you save that over say three to five years, you're saving somewhere between 10 and probably $20 and acre online. Again, it's not a big cost but at least a year that you're applying that lime, that is a fairly large cost.
Sarah Hill:
With cover crops, can we adjust their use to reduce the amount of drainage water coming out of the drainage tile?
Jim Hoorman:
Well, that's kind of an interesting thing to because here in Ohio, and it's not the same everywhere, but we have lake bed soils and we have enough tile to go to the moon and back about three times. That was in 1980. My guess is today, that'd be 40 years later, we're probably close to at least six or seven maybe even 10 times that we could go to the moon. So a lot of guys who here originally put in the tile at maybe 30, let's say 40 to 60 foot spacings, and now they're looking at splitting them. Now it's really critical that you have an outlet for the tile, but is there a way to make those tile work better? And the answer is, yes. You can just use the cover crop.
Jim Hoorman:
The cover crops can go down and they're going to open that soil up and allow the water to get to the tile. So let's say you're investing somewhere between a 1,000 to 15 and a $100 an acre for subsurface tile, usually tile has an economic life at least 20 years although we have some tile that have been put in close to beginning of the last century that are still working. But usually if you don't put in the tile, you're going to get poor yields. So you pay for it one way or the other. So you keep that $1,500 in the bank. And let's say you collect two to 3% interest on it, you can spend that interest on the of crops. And that might be 30 to $45 an acre, and that's going to pay for that tile over time.
Jim Hoorman:
And then at the end of 20 years, you still got that $1,500 that you saved in the bank. So I think the cover crops do pay. They do help us with getting the tile work better. We're seeing more water come through those tiles when we have cover crops in them.
Sarah Hill:
Let's talk a little bit more about, in the similar vein of entities that cover crops can help us save money on that. That might not be thought of sometimes. For example, like insecticides, fungicides, and herbicides.
Jim Hoorman:
One of the big things with weeds, let's start with that one is, cover crops really help outcompete the weeds. And we're finding out that we don't have to put on nearly as much herbicide with that. So they're just out competing them for sunlight, water and nutrients. The other thing is cover crops improve soil health. So we're moving more nutrients, especially micronutrients into that plant to keep healthy. And we know that healthy crops have a lot less insects and insects generally open that plan up to disease. And so if you have less insect damage, you're going to have less disease damage. So generally, we can probably cut back at least on herbicides by a least one spray application and that might be 20 to $25 an acre.
Jim Hoorman:
Also farmers can still fight the pest even without the insecticides. Again, I'll just emphasize this. Those healthy plants, insects cannot attack them because they can't use the full proteins that are being generated by that plant. They can sense it. They can sense the frequency distance. Insects, only attack plants that aren't healthy. So again, you have healthy plants, you're going to have less insects and you'll have a lot less disease. We lose almost 30% of our crop each year on average to pest, weeds, insects and disease. So got good healthy soils. You're going to have a lot less of these pests.
Sarah Hill:
So what about cover crops as an additional income stream for growers? What does that look like?
Jim Hoorman:
Well, it's a couple ways. You can graze it, you can use it for forage or you can even grow a cover crop seed. So I often get asked what's the value of that forage for livestock. It's not uncommon to be able to get four to five dry tons of hay or haylage that we can use, that could that be grazed. Depends on the price of hay but it's pretty good quality. That could be worth anywhere from a 100 to $200 a ton. So depending on what value you put it on, it's somewhere around probably 400 to $1,000 per acre. It's a lot easier if you let the cows do it because then you don't have to spread the manure. If they can just go out there and graze it, even sheep, hogs, there's a lot of different things that we can use this for forage. So we do find that soil health improves where the farmers have livestock because we're completing that cycle putting the nutrients right back on where it should be.
Sarah Hill:
Awesome. So then if a grower does graze livestock on their cover crops, would the value of their manure be higher than say grain fed?
Jim Hoorman:
Really good question. And it's a tough question. I don't know that there's a lot of research on that, but just thinking logically the answer might be maybe. If those cover crop plants are improving the nutrient density and the manure is utilized a little more efficiently, yes, that manure might have even more value than off of a conventional farm. So it's not an easy question to answer but I think there could be a value, especially when we look at human health and the nutrient density, start looking at how that improves. Just getting more denser higher level of nutrients into a plant, I think has a big impact on our human health and that's good for everybody.
Sarah Hill:
Well, I had to throw in one tough question there. So we're about to the end here. Where can our listeners go more information about the economics of cover crops?
Jim Hoorman:
Well, I do have a website. And so you can go to hoormansoihealth.com and that's spelled Hoorman, H-O-O-R-M-A-N. It's all one word, soilhealth.com or you can always give me a call. My telephone number's 419-421-7255. So I am working on a grant with the University of Akron Research Foundation and we are doing some active teaching. I have a lot of resources on my website. So you're welcome to contact me at any time.
Sarah Hill:
Great. Well, thanks so much, Jim, I appreciate your time. For more information about all things cover crops, visit us online@covercropstrategies.com and be sure to register for the upcoming 2022 National Cover Crop Summit on Mar 15 and 16th. This virtual event will feature 12 speakers, including Jim, who you just heard, talking about all aspects of cover crops. So that's definitely something you don't want to miss out on. Once again, I want to thank our sponsor. Montag precision meter equipment is helping producers achieve their yield goals while saving on seed and input costs.
Sarah Hill:
For establishing cover crops, Montag's family of seed platform equipment adapts to a variety of major brand delivery systems that will conserve seed and nutrients along with soil and water. Explore new options for your production and conservation goals with your Montag dealer or on the Montag manufacturing website. For more information about all things cover crops, visit us online@covercropstrategies.com.
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