Medium-term economic impacts of cover crop adoption in Maryland

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 remains limited in the United States (US) (i.e., 4.7 % in 2022 (USDA-NASS, 2024)), 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. Specifically, the average net return per acre with cover crops is approximately $60-$90 lower for corn and around $60 lower for soybeans compared to fields without cover crops. This empirical finding suggests that public support through incentive payments may help further incentivize cover crop adoption in the US, which can then provide environmental and ecosystem services that are of benefit to the general public.

Keywords

• Q15
• Q24
• Q28