Cover Crop Business Infrastructure Growth project grows in second year

Adding more cover crop acres to the landscape is becoming easier for Iowa farmers through a program focused on growing the farm-based, cover crop industry infrastructure. Led by the Iowa Soybean Association’s (ISA) Research Center for Farming Innovation (RCFI) and Practical Farmers of Iowa (PFI), the program worked with ten farmers in 2020 to establish and grow these farmer-owned, cover crop-related businesses.

The program, financially supported by the Walton Family Foundation, has been approved for funding in 2021.

The participating farmers in 2020 each have cover crop businesses and are providing cover crop services such as growing, processing, and selling cover crop seed and custom seeding of cover crops. The project incentivized the growth of custom seeding and seed across the 10 businesses with a per-acre financial incentive. Overall, participating businesses saw growth in acres in 2020 over their 2019 acres in both categories.

Custom Seeding:

• Incentive acres: 15,081
• All 2020 acres: 49,728
• Acreage increase from 2019: 8,307 

Seed Production:

• Incentive acres: 2,920
• All 2020 acres: 3,933
• Acreage increase from 2019: 1,918

Assuming a 40 bushel per acre yield and a seeding rate of 1 bushel per acre, the 3,933 acres of seed grown by these businesses will seed approximately 157,000 acres of cover crops.

Equipment purchase incentive

This project also supported business growth by providing an equipment purchase incentive. If the farmers made equipment purchases for their cover crop businesses, they could receive an incentive, depending upon their business’ focus (custom seeding vs. seed production/retail). Through this option, the project provided $34,000 in incentives in response to the purchase of a wide variety of equipment including grain drills, vertical till machine with air seeder, scale and conveyor system, bulk storage, and trucks for hauling seed. In total, these ten businesses invested $841,781 in equipment in 2020. There is a significant local economic impact to this type of investment.

In total, $75,842 in financial incentives were provided to these participating businesses.

Finally, each business worked with a contractor to develop a business and marketing plan, valued at $7,500. The majority of the ten businesses indicated that this was a very valuable portion of the project. Some of the businesses have already taken business improvement steps recommended through this process.

Opportunity for 2021 

The Walton Family Foundation has approved a second year of this project allowing ISA and PFI to work with 10 more businesses and continue some business planning support for the current group of businesses.

Farmers who want to expand or start a cover crop-related business, should contact Heath Ellison, ISA senior field services program manager at (515) 334-1045 or hellison@iasoybeans.com.