Transitioning from a conventional cropping system to a conservation system that uses both reduced tillage and cover crops will change the economics of your farm operation. Partial budgeting and enterprise budgets are two tools described in this chapter that can help estimate how changes in management practices might affect the bottom line. Partial budgeting isolates a proposed change in the farm operation, such as a new management practice or new technology, and assesses the change in revenue and costs associated with it. An enterprise budget looks at the revenues, costs and returns associated with a single crop or livestock enterprise on the farm. Conservation systems can lead to lower costs for labor, fuel, herbicides and fertilizers, and can improve the long-term productivity of the soil, but they can also create added costs due to increased pest pressures, new capital investments and new management activities such as the termination of winter cover crops. Studies that compare crop yields in conventional and conservation systems have showed mixed results, and while cover crops come with their own costs, they tend to pay for themselves through savings in other areas. To help farmers pay for the adoption of conservation systems, a number of financial support programs are available, in particular those available through NRCS. Overall, conservation tillage systems that incorporate cover crops have the potential to improve farm profitability through a combination of lower costs and higher productivity. To realize this potential, it is necessary to carefully analyze the economics of switching to a conservation system as relates to the specifics of your operation.
