With their income on the line, farmers can be reluctant to try new practices. Income guarantees can ease the transition.

In 2006, the BMP CHALLENGE program provided a safety net for 43 farmers in five states, covering performance of nutrient management and reduced tillage practices. The program uses side-by-side comparison strips in farmer fields to evaluate both yield and net returns. Fertilizer or tillage cost savings are factored in to determine the net economic return to the farmer.

Participating farmers work with a local crop advisor, Extension or other expert to develop their nutrient or tillage recommendation, following local university protocols for their state. They select a field up to 160 acres in size to test the new approach. A carefully located check strip receives the farmer's conventional practice. At harvest, the farmer and advisor assess and report yields and fertilizer or tillage costs. If net returns decline versus check strip performance, the farmer receives a cash payment to make up the difference.

BMP performance

Although nutrient management yielded an average of seven bushels less than higher fertilizer application rates, net return was a positive $0.76 per acre (table below). This means the extra bushels did not pay for the extra fertilizer applied to the check strip. These results are consistent with prior years' results on over 5,041 acres, which show a positive net return with university nutrient application rates.

In 2006, the first year BMP CHALLENGE program was offered for reduced tillage, tillage cost savings did not overcome an average yield reduction of 19 bushels per acre. In particular, farmers and advisors reported challenges with weed management. Reduced tillage may have risks with adoption, but if mistakes are made or conditions are right the income guarantee can be an important tool. First-time reduced tillers have their income protected while learning how to make conservation tillage profitable in their fields. The 2006 participants are all looking forward to continuing the program in 2007.

For additional information, including applications for the 2007 season, visit BMP CHALLENGE online or call (608) 663-4697.

What happens to corn yields when you reduce nitrogen rates below university recommendations?

Is this a strategy that could be used in watersheds severely impacted by excess nutrients?

Over time, will factors such as drought, that can limit yields regardless of nutrient application rates, work to reduce the economic impact of lower fertilizer rates?

In 2005 through 2006, 18 corn producers in Pennsylvania piloted this enhanced nutrient management approach to help provide answers. Working with Team Ag, a crop consulting firm based in Lancaster County, producers applied nitrogen at rates up to 15 percent below university recommendations on an average of 94 acres per farm. Overall, nitrogen reductions totaled 45,720 pounds across 1,688 participating acres.

Yields decreased by 15.6 bushels per acre for corn grown for grain and 2.3 tons per acre for corn grown for silage. After factoring in an average of $9.26 per acre in nitrogen fertilizer cost savings, farmer net returns decreased by $25.32 per acre for corn for grain and $36.58 per acre for silage. Net returns guarantee payments from the BMP CHALLENGE compensated farmers for these losses.

The region received nearly 10 inches of rain in June of 2006, which may have impacted the results. "We'll be repeating this experiment in 2007 and hopefully beyond," reports Brian Brandt, director of risk management programs for American Farmland Trust which coordinated the project. "We'd like to see how the rates perform over time under a variety of conditions, and what the average net returns will be, to evaluate this approach to keeping farming profitable and improving water quality."

Funding for crop consulting services, farmer incentives and the net returns guarantee were provided by the Pennsylvania Delegation of the Chesapeake Bay Commission and the National Fish and Wildlife Foundation.

Both yield and nutrient or tillage costs are factored into the equation when calculating net economic returns for farmers participating in the BMP CHALLENGE.

Yield Assessment

Yields are determined at harvest by using a weigh wagon, portable scale or yield monitor for the conventionally managed check strip and the immediately adjacent BMP-managed strips. Performing the yield assessment on adjacent strips helps minimize potential impacts of within-field variability on results.

Yields are converted to dollars by using base corn prices set by the USDA Risk Management Agency. The 2007 price for corn grown for grain is $3.50 per bushel. Silage prices are set regionally, at $25.00 per ton for Iowa, Minnesota and Wisconsin and $30.50 per ton in Pennsylvania and much of the east coast.

Cost Savings

Nutrient costs are based on actual farmer costs. Tillage operation costs are estimated, using figures from the Purdue MAX software program which is updated annually or other state- or region-specific reference costs from a recognized authority such as a land-grant university in the state.

An example of a net returns calculation for the Nutrient BMP CHALLENGE is provided below, using the base price of $3.50 per bushel for corn for grain.

In this example, the farmer saved $22.50 per acre in fertilizer costs and achieved comparable but slightly lower yields. The extra fertilizer applied to the check strip was not worth the extra cost to the farmer.