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Economics of Soil Health Management Practices

The USDA-NRCS defines soil health as “the continued capacity of soil to function as a vital living ecosystem that sustains plants, animals, and humans”. They further state that “this definition speaks to the importance of managing soils so they are sustainable for future generations”.

Understanding soil health involves assessing and managing a soil’s inherent properties of fertility, structure, microbial activity, etc. so that it functions to support optimal plant growth, both now and in the future. This means that changes in soil health must be constantly monitored so that soil is not degraded, but rather is managed using a set of practices that are both agronomically and economically sustainable while promoting the maintenance or even improvement of soil health over the long term.

Soil is an ecosystem that not only holds and provides nutrients and water for plant growth, but also provides habitat for soil microbes that are an integral part of the soil’s interaction with plants that are growing in it. Many of the soil resources needed for a productive crop are derived from or enhanced by soil microbial activity. These microbes are key to decomposition of chemical and plant residues and resultant nutrient cycling, as well as being integral to soil components that affect soil structure, aeration, porosity, and water holding capacity. Thus, practices that promote soil health should be incorporated into crop production systems so that the soil environment is improved for these workhorses in maintaining soil health.

A change in management practices that will promote improvements in soil health must also result in the continued maintenance of or even improvement in the profitability from cropping enterprises. Otherwise, such changes 1) will not be adopted, or 2) if adopted but unprofitable, will result in a producer going out of business. Thus, management practices that are adopted to enhance soil health components should be economically evaluated to ensure that they will in fact maintain or even improve the economic return from the crop enterprise into which they are integrated.

Information in two articles titled “Economics of Soil Health: Contributions of Reduced Tillage and Cover Cropping” and “Economics of Soil Health: Farmer Experiences across Systems” that recently appeared in “Crops and Soils Magazine” as part of a Soil Science Society of America “Assessing Soil Health Series” [in partnership with The Soil Health Institute (SHI) and sponsored by The Walton Family Foundation] provides insight into the subsequent economics following the adoption of practices that were incorporated into cropping systems to enhance soil health. Both articles are authored by Dr. Archie Flanders, SHI Agric. Economist [clicking the above soil health series link will access all webinars in the series].

In the articles, Dr. Flanders provides results from SHI-conducted interviews with 100 corn and soybean farmers in 9 U.S. states who had adopted no-till, reduced tillage, and/or cover cropping for at least 5 years. The sample represented commercial-sized farming operations. Results from that survey follow.

•    Farmers participating in the survey interviews had practiced no-till/reduced tillage for an average of 19 years, and had been using cover crops for an average of 9 years.

•    Greater than 90% of the surveyed farmers stated that soil health management practices had improved crop resilience and field access, and they attributed this to improved water infiltration into the soil.

•    Partial budget analysis was used to determine the changes in net farm income that were due to adoption of soil health management systems (SHMS).

•    Reported changes in production inputs and yield increases were the difference between two time periods–the initial period of conventional tillage and the current period of SHMS adoption.

•    Adopting SHMS led to reduced production expenses and reduced additional expenses resulting from a change in production methods.

•    Increased yields due to adoption of SHMS were reported by 58% and 56% of the respondents for corn and soybean, respectively. Overall, average yield increases were 7.24 bu/acre for corn and 2.91 bu/acre for soybean.

•    Average revenue increases were $30.90/acre for corn and $29.25/acre for soybean. Adding this to the $20.70/acre and $15.64/acre reduced expenses for corn and soybean production, respectively, resulted in an average increase in net farm income of $51.60/acre for corn and $44.89/acre for soybean.

•    Aggregating the results from the multiple economic studies conducted using the survey data indicates that geography and climatic conditions are not significant limitations to prevent the successful adoption of SHMS.

•    In summary: 1) Data from the surveyed farmers indicate increased net farm income resulting from adoption of SHMS over the long term, and adoption of these practices resulted in only marginal changes to a conventional production system. 2) Transitioning to SHMS likely will be a gradual process, and thus will likely take many years to realize the benefits achieved by the respondents in this survey.

Take Home Message. The results cited above are from situations where SHMS have been in place for several years. Thus, it is generally accepted that results that mimic these will only be achieved where SHMS have been in place for several years. Conversely, it is not likely that results similar to these will be achieved where SHMS have been in place for only a few years. Thus, the benefits resulting from SHMS adoption in any cropping system at any U.S. location will likely only be achieved after such systems have been continuously in place for at least 10 years. The adoption of practices to improve soil health by producers of any crop at any location must be done with a long-term commitment in mind.

Composed by Larry G. Heatherly, June 2022,