Most people would agree that a thick layer of healthy topsoil is good for the environment, good for human health and helps stop erosion, but producers also want to know, is it good for the financial bottom line of their farming operations? Dr. Jason Ackerson, a research soil scientist and program director for the Soil Health Institute, thinks so and his opinion is backed up by a recent study that was conducted on 20 farms in Southcentral Nebraska where soil health practices have been adopted in recent years.
Speaking alongside Grand Island area farmer Zach Mader, Ackerson shared those findings at the Nebraska Soil Health Coalition’s (NSHC) celebration event near Bladen last month. Mader has made the transition to a soil health management system (SHMS) over the past several years and was one of the producers involved in the economic analysis study.
“What we saw across most of our growers is adopting soil health practices saves money through reduced expenses, and those reduced expenses often covered any additional expense – so things like seed costs and custom applications,” Ackerson said. “They were able to save enough money through labor, reduced inputs, reduced wear and tear on equipment, to cover those additional expenses.”
But Ackerson said the cost savings aspect is only half the equation.
“You often hear this colloquially as a boogeyman against adopting soil health systems, ‘Well, we’re gonna see a yield loss leading to reduced profits on the farm.’” he said. “But when we look at all of the growers we interviewed we did see reported increases in yield for corn and soybeans in the irrigated systems, and that resulted in increased revenue on all those fields.”
The livestock component
However, Ackerson said most of the increased revenue typically comes from the creation of new revenue streams.
“Across the board, increases in revenue comes from selling livestock and leasing grazing land,” he said.
Mader chimed in at that point in the conversation to say, “I raised a cereal rye crop that was harvested in July. I did oats this year for the first year… a whole bunch of different species, anything I can get my hands on for cover seed. It might be the neighbor’s soybeans, it might be corn that was spilled on the ground, you name it, it’s grazeable and it will grow. That is part of what I do every year and it will get me through the winter. I grow a quarter of milo every year, not because milo is a giant moneymaker. In fact, some years it’s a money loser. This year it definitely will be, but my cattle do very good on it for the winter months. There is a lot of plant left upright and if I give them access to corn and milo at the same time, they spend the majority of their time on the milo plants.”
Mader said beyond what they might pick up from the ground he doesn’t feed his cattle grain and unless the weather turns bad in the winter for a period of time, he doesn’t even feed them hay. He also noted that his average vet bill for the entire herd for the year is about $300.
Cost/benefit ratios
Ackerson showed tables comparing the costs and benefits related to the raising of corn and soybeans on 15 both irrigated and non-irrigated farms. On the irrigated farms the tables showed reduced expenses of $147.19 per acre of corn compared with only $61.74 in additional expense for adopting soil health practices. Meanwhile, those same acres saw $67.49 in additional revenue for a net change in farm income of plus $152.94 per acre of corn.
On irrigated soybean acres, the overall boost in farm income was less dramatic at $89.73 per acre, however, on non-irrigated acres the additional income for corn was $197.80 and for soybeans was $102.12 per acre. The analysis was based on 15 farms that had adopted a SHMS for irrigated corn and soybeans for at least five years. (Expense, revenue and net farm income units are $/acre in 2024 dollars)
Ackerson said the reduced expenses in irrigated corn and soybeans came partly from the fact that improved water infiltration led to more than a three acre-inch reduction in irrigation water applied for corn (29 percent reduction) and soybeans (28 percent reduction). He also said adopting soil health practices resulted in an average savings of $91 per acre to grow irrigated corn and $48 per acre less to grow irrigated soybeans.
Increased revenue came from the fact that most farmers included grazing of cover crops for both additional revenue and for the soil health benefits.
“If we look at our budgets for irrigated ground,” Ackerson said, “one of the things I found really exciting was that even if you ignore the revenue side of the equation, and just look at the other side of the table, there was enough reduced expense to increase on-farm income after the adoption of soil health, so you don’t need to necessarily increase yields or have that additional grazing revenue source to see the economic benefits of soil health… The savings are enough to be beneficial.”
The transition timeline
Asked later how much time it typically takes for a farmer to see the economic benefits of adopting SHMS, Ackerson it’s hard to give a definitive answer because every situation is different and would depend on factors like weather and the economy at the time.
“I think, a good starting point of like five years is probably the long end of that immediate transition,” he said. “There’s been other studies that have looked at that say two to three years being that transition. It’s so dependent on a lot of other factors. such as what practice are you implementing? Is it just going to reduce tillage? Well, that system is going to change quicker than if you’re doing reduced tillage and a cover crop. And I think what’s exciting about the producer learning communities here is that you have growers across that spectrum who can speak to those individual experiences probably better. But I would say, if you had to put a time frame on it, it would be two to five years… I also wonder about whether or not ‘transition’ is really the right thing to call it, because a lot of these guys don’t stop at five years. ‘Now my soil is healthy. It’s five years, okay. I know this works. I’ve proven it to myself and to my family. How do I keep making improvements to increase the health, increase the resilience, increase the sustainability of my system?’ So I would also say maybe thinking about the transition as having an end is maybe not the full story, because guys continue to evolve as they adapt.”
A diversified farm portfolio
Ackerson said incorporating livestock grazing into the system seems to be one of the keys to seeing increased profitability through adopting SHMS.
“That’s where we saw some of the largest changes to improvements in farm income, where they had that additional revenue source from grazing cattle or finishing cattle on cover crops,” he said. “So when growers can pull that system back in and have that new revenue stream, it improves the economic benefits of soil health adoption, because they have that additional revenue source.”
Ackerson said the amount those returns are also dependent on a number of factors, but the overall impact of incorporating livestock is positive.
“It’s so dependent on what you’re actually grazing,” he said. “Some people who are grazing sheep are seeing really high returns… But as a generalization, having that livestock integrated back into their system provided additional revenue, which just added more revenue on top of the economic benefits they were already seeing from reduced expenses… Certainly having more revenue from selling off livestock is beneficial, but it’s also that diversity component, the same way you want your investment portfolio to be diverse, having a diverse income stream on the farm means you’re less sensitive to shocks like changes in grain prices, if you can rely on livestock revenue as a different revenue source, it’s forced differently by global economic factors.”
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