Costs and Benefits of Cover Crops: An Econometric Analysis of the Impacts of Cover Crops on Cash Crop Yield on Central and Northeastern Indiana Farms

With a growing global population and society’s increased awareness of the negative environmental impacts of intensive row-cropping agriculture, conservation practices in agriculture are becoming more prominent and important. Cover cropping is one such conservation practice that has generated a lot of interest in the agricultural community in recent years. While the use of cover crops has been increasing, the large majority of farmers in the United States do not implement a cover crop into their rotations. While there is growing evidence of the agronomic and environmental benefits that cover crops can provide, including reducing erosion, increasing soil nitrogen content, and weed control, reliable long-term economic information on cover crop use is minimal. Knowing that farmers would be more likely to adopt cover crops if they had access to reliable information on how they can benefit the farm financially, our study sought to determine how cover crops influence cash crop yield. To perform an economic analysis on the benefits and costs of cover crops, we gathered data from farmers from Central and Northeastern Indiana in corn-corn or corn-soybean rotations. We obtained data from both cover crop and non-cover crop farmers. They were asked to provide five years of data on their fields, their cash crop management and yield, their cover crop use, and demographic information. This information, combined with monthly precipitation and daily temperature data by county, was then econometrically analyzed using a fixed effects model to determine the yield differences between cover cropped and non-cover cropped fields, as well as to determine other significant yield-determining factors. The study included 95 fields supplied from 20 farmers. This number was smaller than initially desired when recruiting farmers to participate in the study. The dataset needs to be larger to obtain conclusive results, requiring more fields in general, more cover cropped fields, and more fields that have been using cover crops on a long-term basis. While the dataset was smaller than initially hoped, the study did find some interesting results. The study also found evidence that farmers who already use another form of conservation practice, such as no-till, are more likely to adopt cover crops. The near homogeneity of no-till in the cover cropped fields may suggest that the use of no-till is already capturing several of the same benefits that cover crops can provide. The farmers in this study who used cover crops also had a higher average slope when compared to non-cover crop farmers, implying that farmers who have less productive fields that are more susceptible to erosion are more likely to adopt cover crops because they have more to gain from their use. Finally, it was found that the cover crop farmers applied less fertilizer to their soil, although we cannot confirm that cover crops are the cause of the lower levels of applied fertilizer. The dataset available to us provided some interesting results, but ultimately failed to show a significant increase in yields due to cover crop use. This could be due to the size of the dataset, or a contradiction of the literature that says cover crops increase yield. The lack of a significant impact could also be due to the fact that cover crops have different impacts on different fields, under different management strategies, and using different cover crop species. The lessons and takeaways learned from the methods used to gather and analyze information in this study can also be used to influence further research efforts sand methods