Farming sustainably comes with a financial cost

By Jana Rose Schleis
 Missouri News Network

On a rainy Sunday afternoon at Big River Grain and Cattle in Cedar Hill, a rural enclave outside St. Louis, farmer Daniel Bonacker rolls up an electric fence and lets his herd of 80 beef cattle onto a 30-foot strip of fresh milo.

Milo is a stalky plant that resembles corn, but in place of a cob at the top, there’s a cluster of grain. This is Bonaker’s second year growing milo for his cows to graze, and at first the bovines didn’t know what to make of this atypical forage.

“But as you see, now they're getting with the program,” Bonacker said. “The cows and calves both are eating the grain heads.

Bonacker is using milo as a cover crop — a plant that isn’t harvested or sold but whose job it is to keep living roots in the soil to retain nutrients.
Grazing his Charolais and South Poll breed cows on those cover crops provides additional soil health benefits.
“Cattle are really good at breaking down the organic material and making it super available for the soil biology to then pull into the soil … and most of the nutrients go right back out the back end of the cow,” he said.
Utilizing cover crops and letting cows graze them and fertilize the fields as they go is a facet of regenerative agriculture, a movement that aims to reduce farming’s environmental impacts and revive the soil and, by extension, the small farm economy.
“I need to feed my cattle in the winter, and it's very cost-effective compared to feeding hay,” Bonacker said. “All the nutrients stay right in the field here, and then I'll grow another cash crop like corn or soybeans after this.”
Bonacker has been working to implement regenerative farming practices on his land for 10 years. It’s taken time because it also takes money.
To purchase, plant and terminate a cover crop, it costs Bonacker about $40 per acre. So planting cover crops on his entire 1,400 acres of row cropland costs $56,000 a year — all to cultivate a crop he can’t sell, although grazing his cows on those cover crops does save him an estimated $4,000 each year on feed costs.
To graze cattle on row cropland, a farmer needs few things, primarily fencing and water. That infrastructure cost Bonacker a total of $12,600.
Regenerative agriculture advocates say there are a variety of long-term benefits to adopting sustainable farming practices, but the upfront cost of the investments is a barrier for farmers.
The U.S. Environmental Protection Agency reports that agriculture accounts for 10% of global carbon emissions. Additionally, due to climate change, farmers are battling changing growing conditions and increasingly severe weather that damages crops — all of which put environmentally sustainable farming practices in the spotlight.
Sonya Hoo works on sustainable food system initiatives at the Boston Consulting Group. She surveyed nearly 100 Kansas row crop farmers and found many feel current crop insurance and subsidy policies favor conventional farming, which makes a switch to regenerative methods risky to their livelihoods.
Changing agriculture practices is an adjustment that can initially negatively impact crop yields and therefore farmer profits. Of the farmers Hoo surveyed, 45% cited potential transitional yield declines and upfront costs as their top concerns around adoption of regenerative agriculture methods.
“It just is too challenging to make an adoption or to change your practices, even though there might be benefits in the long term, because the costs are too daunting in the near term,” Hoo said.
However, over time, improving soil health can reduce a farmer's dependence on costly and environmentally damaging inputs such as herbicides, pesticides and chemical fertilizers.
Adopting regenerative practices and weaning off those inputs can take three to five years, where, Hoo’s research shows, farmers could see profits plunge 30% to 60%.
“When we look at the near term, it's not necessarily a profitable endeavor for farmers to adopt these practices,” she said.
But in the long term, Hoo said, after the transition period, regenerative farmers’ profits could rebound, with the potential for an additional 15% to 25% return on investment. Healthier, more fertile soil not only can reduce farmers’ input costs but also makes the land more resilient to severe weather caused by climate change by reducing erosion and improving water infiltration.
Hoo said there is a cost to inaction.
“Climate change is happening. We see that in the droughts and the floods that are happening. We see that in increased crop failures and so on,” Hoo said. “It is also about future-proofing your production.”

Support for Missouri farmers

In the past, Congress implemented a national policy to help farmers overcome the financial barrier to plant cover crops. During the pandemic, federal lawmakers authorized a program that gave farmers $5 per acre. However, the policy expired.
In February 2022, under the Biden administration, the U.S. Department of Agriculture launched the largest effort to date to address farm environmental sustainability — the $3.1 billion Partnerships for Climate-Smart Commodities program. Across the country, 141 projects received funding to expand markets for sustainable products, analyze carbon storage capabilities of agriculture and help farmers adopt regenerative methods.
In Missouri, the MU Center for Regenerative Agriculture was awarded a $25 million grant to help farmers get over the initial investment barrier. The center provides payments to farmers who implement regenerative methods like cover crops, but also rotational grazing, no-till, efficient fertilizer use, agroforestry and more.
Director Rob Myers said 70% of the grant funds, about $17 million, will go directly to farmers using or adopting climate-smart practices.
“The first couple of years it's costing the farmer money to do that practice, which is where these incentive payments come in to help them get through that period,” Myers said.
Myers said cost-share programs and grants remove some of the risk of the transition for farmers. So far, about 900 Missouri farmers have opted in for the temporary payments. The center’s goal is to reach 1,500 to 2,000 farmers over the course of the five-year project.
Myers said although there is an upfront investment, over time the economics of regenerative farming practices begin to improve, even increasing yields. Data shows it takes three years of using cover crops for farmers to break even and that in subsequent years they’ll achieve a net profit.
“By then, you don't need to keep up with the incentive payment,” he said. “The farmer should be sticking with it because of its own financial benefits.”

Daniel Bonacker grew up on the farm along the Big River that he now manages with his father. After graduating from college in 2015, he came back to the farm with the goal of expanding the regenerative agriculture methods his family began in 1983, when they implemented no-till.
After the drought of 2012, Bonacker’s father planted the farm’s first cover crop. Ever since, they’ve been working to utilize cover crops on all of the farm’s 1,400 acres of row cropland — half of which grows corn and the other half soybeans — planting them as soon as possible after harvest.
“A lot of times we're chasing the combine around,” he said.
But Bonacker said they’ve struggled to pair cover crops with corn. In the first few years the corn crop yielded less than usual due to the crops’ interaction with the cereal rye cover crop planted beforehand.
“We never messed with a whole lot (of) covers ahead of corn because corn is a little finicky in the springtime,” Bonacker said.
But, given the long-term soil health benefits that can come from cover crop utilization, Bonacker was determined to find a good pairing.
“My goal is to have a living root in the ground as many days out of the year as possible,” he said.
So when he heard of the MU Center for Regenerative Agriculture’s program to assist farmers with both the financial and technical challenges of cover crops and grazing, he signed up immediately. The funding helped them overcome the risk and cost associated with trying new cover crop strategies.
“It helps us experiment,” Bonacker said. “We can play with the seeding mixtures and rates and get out of our comfort zone a little bit more because there is that push.”
Ten years after planting the first cover crop, Big River Grain and Cattle is reaping the benefits. Bonacker said he’s using 25% less fertilizer, saving him $30 an acre — $42,000 per year.
“At the end of the day, the covers need to bring a return to the farm as far as profits go,” he said. “It's good for the environment, it's good for the soil. But it does need to bring money back if we're going to spend the money on it.”
He plans to keep spending money on regenerative farming methods and hopes to see an even greater return in the future.