Is Regenerative Agriculture More Profitable?

April 30, 2021

Investing in soil health is good for the land, but do farmers get economic benefits, too?

When my family transitioned our livestock operation to holistic grazing practices, we were surprised. Not only did the land produce better grass, but we could also graze our cows off the land for three more month per year. This extended grazing cut our hay input costs and boosted our profitability by $40 per acre. This left me wondering: are these economic benefits a fluke, or do other producers experience them, too?

Regenerative agriculture is such a loaded term. What does it mean? What’s regenerative vs. sustainable vs. conservation? At FarmRaise, we think of regenerative in terms of improving farm soil health, including practices like cover crops, rotational grazing no-till, crop rotations, and more efficient nutrient management.

Transitioning a farm to these practices takes time, effort, and unsurprisingly, money. Programs like EQIP and innovative capital can help to de-risk a farmer’s transition, but farmers may still have lower yields with these practices. Still, lower yields doesn’t necessarily mean lower profits.

A 2018 study by the Ecdysis foundation found that farmers who invest in these soil-health improving, regenerative practices have higher profitability than farmers who use conventional practices. In fact, these regenerative farmers were nearly 80% more profitable!

Why? For one, regenerative farmers were able to capture premiums at market through certifications like Organic or Grass Finished. But equally intriguing, these farmers lowered their input costs (because they relied less on chemical inputs) to capture more of their income.

Transitioning to cover crops, low-till, holistic livestock management, and other soil health practices isn’t an easy shift. This move requires education (often provided by the local Extension Agent or Technical Service Provider or even YouTube!), funding, and patience. It may even require paperwork if the producer wants to go after a certification label or apply for a grant. Despite the challenges, the payoff may be worthwhile to many producers, especially as they capture this benefit year over year.

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