Medium-term economic impacts of cover crop adoption in Maryland

Authors: ZHANG, YIFIEI - North Carolina State University; CHE, YUYUA - Texas Tech University; REJESUS, RODERICK - North Carolina State University; Cavigelli, Michel; White, Kathryn; AGLASAN, SERKAN - University Of Arizona; LYNN, KNIGHT - US Department Of Agriculture (USDA); Dell, Curtis; DAVID, HOLLINGER - Retired ARS Employee; LANE, ERIN - US Department Of Agriculture (USDA); Mirsky, Steven

Submitted to: Soil Security
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 9/24/2024
Publication Date: 9/28/2024
Citation: Zhang, Y., Che, Y., Rejesus, R.M., Cavigelli, M.A., White, K.E., Aglasan, S., Lynn, K.G., Dell, C.J., David, H., Lane, E.D., Mirsky, S.B. 2024. Medium-term economic impacts of cover crop adoption in Maryland. Soil Security. 17. Article e100170. https://doi.org/10.1016/j.soisec.2024.100170.
DOI: https://doi.org/10.1016/j.soisec.2024.100170

Interpretive Summary: Cover cropping has the potential to generate farmer income while providing environmental benefits to society. However, farmer adoption of cover crops remains low in the United States (3.9% in 2017), primarily due to farmer concerns of implementation costs, especially in the short term (1-3 years). This study investigates the medium-term (5-7 years) economic impact of cover crop adoption using data from field experiments in Maryland. Results show that cover crops do not have a significant effect on crop yield, or fertilizer and pesticide costs, but they increase field operation and seed costs. As a result, the costs of adopting cover crops is not offset by direct benefits to farmers in the medium term (5-7 years) in Maryland, which highlights the value of the Maryland cover crop cost share program to incentivize cover crop adoption. These results will be of interest to farmers and policymakers.

Technical Abstract: Cover cropping has the potential to generate private economic benefits to farm operations as well as larger-scale environmental benefits to the broader community. However, cover crop adoption rate remains limited in the United States (US) (i.e., 3.9% in 2017), primarily due to uncertainty in economic outcomes, with several studies showing potentially negative net returns from cover crop use in the short term (1-3 years). This study investigates the medium-term (5-7 years) economic impact of cover crop adoption using plot-level data from field experiments in the state of Maryland. The empirical analysis employs ordinary least squares (OLS) statistical models and partial budgeting techniques to achieve the study objective. Our results show that cover crops do not have a statistically significant effect on crop yield, fertilizer costs, or pesticide costs, but we find that cover crop use statistically increases field operation and seed expenses. As a result, the private net return from cover crop adoption in the medium term is generally negative based on the Maryland field trial data used in the analysis. This empirical finding highlights the importance of cost-share payments to further incentivize cover crop adoption in the US.