Previous literature has shown that cover crops have the potential to provide large-scale environmental benefits by reducing soil erosion, preventing nutrient leaching, sequestering carbon (C), and providing habitat for beneficial insects and pollinators (Snapp et al. 2005; Laloy and Bielders 2010; Castellano et al. 2012; Poeplau and Don 2015). In addition, cover crops can potentially generate private benefits to the farm operation by helping boost soil productivity (and subsequent cash crop yields), suppressing weeds, reducing fertilizer needs, and improving nutrient cycling (Bergtold et al. 2019; Myers and Watts 2015; Wittwer et al. 2017).
Given the potential economic and environmental benefits of cover crop adoption, cover crop acreage in the US grew from about 10.3 million ac (4.2 Mha) in 2012 to about 15.4 million ac (6.23 Mha) in 2017 (i.e., a 50% increase), based on data from the US Census of Agriculture (LaRose and Myers 2019). Nonetheless, even in light of these adoption increases, acres planted to cover crops only equal 3.9% of all US cropland in 2017 (Zulauf and Brown 2019) (figure 1). Although there are several possible reasons that overall cover crop adoption rates in the US remain relatively low, one of the main factors that influences the cost of adopting cover crops is cover crop seeds. For cover crops planted before corn (Zea mays L.) and soybeans (Glycine max [L.] Merr.) in the US Midwest, Plastina et al. (2018a, 2018b; 2020) find that cover crop seed is one of the main additional costs in using cover crops. Average seed costs reported in Plastina et al. (2018a, 2018b, 2020) ranged from US$14.17 to US$20.20 ac–1 (US$35.01 to US$49.92 ha–1; under various production scenarios), while the most recent CTIC et al. survey in early 2020 indicated that the median price range for seed reported by surveyed farmers was US$16 to US$20 ac–1 (US$40 to US$49 ha–1) (CTIC et al. 2020).
Proportion of cover crop acres relative to total crop acres in the United States based on the 2017 US Census of Agriculture.
With the importance of cover crop seed costs as a potential barrier in the uptake of cover crops, the objective of this paper is to examine the US cover crop seed industry, describe the potential seed demand and supply situation in the near future, and point to potential policy directions that can help the seed sector facilitate wider cover crop adoption in the country. As more farmers are planting cover crops, it is reasonable to expect that they will demand more cover crop seeds. Note that a recent survey by CTIC et al. (2020) suggests that 20% of the farmers who responded identified lack of available seed as a challenge in growing or using cover crops. Therefore, understanding of the cover crop seed industry, and its interactions with farmers who use it, is critical to developing policies that can help accelerate cover crop adoption and reduce the negative environmental footprint of US agriculture.
BACKGROUND: UNITED STATES COVER CROP SEED COMPANIES
Companies that sell cover crop seeds can be classified into three tiers based on the main clients they serve (figure 2). Tier 1 companies are those that sell exclusively to other companies (also called “B to B” companies). Tier 2 companies are those that sell to other companies and also to farmers (“B to B” and “B to C” companies). Finally, tier 3 companies are the ones that sell exclusively to the final user: farmers (“B to C” companies). Some of these companies exclusively sell cover crops, while others might sell forage, turf grass, and even cash crop seeds in addition to cover crops. Larger companies tend to be in tier 1 and 2. Currently, there are more than 40 companies in the United States in tiers 1 and 2 (table 1). The number of tier 3 companies is typically hard to accurately determine because it includes small local retailers. These companies are private, so there is no public record of the size of each company. In addition, the territory covered and served by a particular company can also vary from regional to international.
Typology and supply chain schematic of cover crop seed companies in the United States.
Sample of cover crop seed companies and locations in the United States, grouped by tiers. Content was provided by Jonathan Rupert, who works at Smith Seeds.
Besides paying for cover crop seed from seed growers, freight and storage are the largest costs incurred by cover crop seed companies for two main reasons. First, the locations where cover crop seeds are produced are often far from major cover crop using regions. This implies that freight costs are a major expense item for cover crop seed companies. Second, for many cover crop species, the seeds produced are typically not harvested in time for farmers to plant them in the same year they were produced. Hence, storage facilities are necessary, and companies need to invest and/or incur the cost of storing cover crop seeds (for at least one year). Note that there may be competition for warehouse space in this case because cash crop seeds (e.g., corn) also require storage and tend to be more valuable than cover crop seeds.
With the central role of freight and storage costs in cover crop seed companies’ operations, the geographical location of the company is of extreme importance. A good location is critical so that the cover crop seeds can be strategically distributed and storage can be feasible for the companies. For example, the Willamette Valley in western Oregon is a region known as the “grass seed capital of the world” (Larson 2019). The region is also known for seed production of different clover (Trifolium) species. On the other hand, other cover crop seeds are produced in specific regions of the country. Winter pea (Pisum sativum) seeds are commonly produced in Washington and North Dakota. Note that tier 1 companies are in key locations between seed production and distribution hubs. In addition, cover crop seed companies typically strive for producing smaller seeds to make storage and transport more efficient. Since seed size can affect initial growth and biomass, research and breeding efforts to minimize seed size while keeping biomass are needed (Chacón and Bustamante 2001; Aparicio et al. 2002).
Cover crop seed companies can either grow their own seed, contract production with farmers, buy from other companies, or buy on the open market using a broker. The seed purchase source will vary widely among companies, some getting most of their seed through contract production and others using various methods. To contract with a farmer, the company needs to make sure the farmer has the equipment needed, the knowledge of the crop, and that the cover crop seed price is competitive with other crops that the farmer could be planting. For example, if the farmer could plant winter wheat (Triticum aestivum) instead of producing cover crop seeds for the company, then the cover crop seed price offered by the company to the farmer must be at least the same as the expected winter wheat price, or often a little more given the greater risk of growing a less familiar seed crop. That being said, some farmers like to grow cover crop seed on a portion of their land in order to diversify their crop rotation even with lower revenue. In addition, if the farmer has the proper equipment, they will probably handle cover crop seed cleaning. If not, then the company will likely do the cleaning and processing.
Notwithstanding the tier of a particular cover crop seed company, some companies commonly sell more than 20 species and may have more than one option available for some of the species. However, unlike cash crops, a significant number of cover crops on the market are sold as “common” or “variety not stated.” This means that there is no rigorous control and oversight on the seed’s genetics, even though genetic purity standards are established by state seed laws and seed certification agencies to assure growers that the seed they buy is labeled accurately by crop and variety (White 2014). For example, seed sold as “Austrian winter pea,” which is a winter hardy pea type, could be a spring type, which could lead to a very poor performance depending on where/when it was planted. Not knowing the true genetics of a cultivar can result in a farmer having a bad experience with cover crops, making them less likely to plant cover crops in the future. If the seed sold is a named and registered cultivar (that meets genetic standards), the company knows where the selection was made, the characteristics of that material, and can therefore give better recommendations to the consumer.
The seed companies can also be more competitive in the market by being the only ones to offer a specific cultivar. There are a few breeding programs that focus on cover crop species and uses, mostly in Europe and in the public sector. In the United States, there is a recent nationwide effort to breed plants that can be used as cover crops (i.e., through the Cover Crop Breeding Network). Some smaller public programs that look at local adaptation of particular species can also be found. The companies that license cultivars developed on another continent can also perform trials to ensure performance in the United States. Nonetheless, domestic testing of foreign cultivars does not necessarily mean that the cultivars provide the best possible genetics for the country.
It is also important to mention here that farmers sometimes will also sell seeds to other farmers. This is more common in cereal rye (Secale cereale), for example, because equipment to plant and harvest cereal rye is the same as for wheat and rye is widely adopted. Although there is no official record or account of this farmer-to-farmer selling practice, a recent CTIC et al. survey reported that 19.1% of the 2019 to 2020 respondents purchased at least some of their seed from another farmer (CTIC et al. 2020). Farmer-to-farmer selling can help farmers earn some extra income (White 2014), but there is also typically no seed label to guarantee purity, germination, or genetics, which may lead to a bad experience for the end-user farmer. However, note that some cover crop seed companies also offer the service of cleaning farmer-produced cover crop seeds (i.e., clean them from impurities and weed seeds, so the farmer can sell their own seed more effectively).
To meet a variety of cover crop seed demands, with various soil health enhancing characteristics, a mixture of species can be planted by cash crop farmers in the same field (referred to as cover crop “mixes”). Examples of common cover crop mixes are peas and oats (Avena sativa), annual ryegrass (Lolium multiflorum) and crimson clover (Trifolium incarnatum), and/or mixes that contain several species such as clover, pea, rye, and canola (Brassica napus). Some companies sell only premade mixes, while others can have a specific mix “prescription” made based on the farmer’s goals and may allow the farmer to choose their own mix. The practice of using mixes, and the fact that companies normally have a plethora of species and cultivars, can sometimes mitigate seed shortage of a specific cover crop cultivar or species, especially if the particular seed with a shortage can be replaced with another species that can give similar benefits. For example, both oats and barley (Hordeum vulgare) can give high biomass, and cowpeas (Vigna unguiculata) and mung beans (Vigna radiate) are legumes that can both add nitrogen (N) to the soil.
Overall, because cover crop companies are private and the financial information about the markets they serve are proprietary, one can only provide estimates of the size and magnitude of the cover crop seed industry using publicly available data. According to the 2017 Census of Agriculture, there were 17 million ac (6.9 Mha) of cover crops planted in the United States. Based on typical cover crop seed cost estimates ranging from US$16 to US$20 ac–1 (US$40 to US$49 ha–1), the size and extent of the US cover crop seed market would be about US$272 to US$340 million in 2017. If we expect that the cover crop seed market will grow between 2017 and 2022 by 50%, the same rate as between 2012 and 2017, we could potentially see the size of the cover crop seed market to be around US$510 million by 2022, and it could in theory become a billion dollar market by the end of the decade.
EXPECTED COVER CROP SEED DEMAND AND SUPPLY
The cover crop seed supply industry is still in its infancy, and yet demand for cover crop seeds by cash crop farmers is rapidly increasing over time. For example, in an informal interview, Jonathan Ruppert, who works at Smith Seed with marketing and sales, reported that cover crop seed sales have tripled (on average) over several years in his company. Therefore, it is important for cover crop seed companies to estimate potential demand for particular cover crop seeds in the future and prepare for eventual fluctuations in the supply-demand calculus. (Cover crop demand by farmers is also largely influenced by weather fluctuations. For instance, the spring of 2019 was extremely wet in the Midwest, which resulted in a large number of cash crop acres not planted on time. In this case, farmers with crop insurance coverage for the cash crop typically filed a “prevented planting” claim and, instead of planting the cash crop late, some planted cover crops. This lead to an unexpected increase in demand for cover crop seeds that the cover crop seed companies were not able to effectively meet.) Oats, cereal rye, radish (Raphanus sativus), and vetch (Vicia sativa) are commonly used in the Midwest, where corn and soybean crops are grown, and where the potential for market increase is large. Availability of financial incentives for farmers can also increase cover crop acreage according to response from farmers that do not currently use cover crops in the 2017 and 2020 CTIC et al. surveys (CTIC et al. 2017, 2020). It is expected that cover crop acreage will increase in proportion to the steady rise of investment in public cost-share programs (Wallander et al. 2021).
To better contextualize the additional cover crop seed production area that is likely needed to meet future demand, Runck et al. (2020) conducted an analysis to estimate land use requirements that would adequately supply total US corn production area with cover crop seed. Table 2 draws from the analysis in Runck et al. (2020) and shows estimates of how many acres would need to be dedicated to cover crop seed production (of different species) to supply all 91.7 million corn ac (37.1 Mha) planted in 2019. The estimates in table 2 suggest that, on average, about 3.5 million ac (1.4 Mha) in cover crop seed production is needed (~3.77% of all US corn area) to have enough cover crops seeds to serve the number of acres of US corn grown in 2019. Admittedly the estimates in table 2 may be too “ambitious” in the sense that it may be unrealistic to target 100% of corn acres to be planted with cover crops. Nonetheless, even if the goal is 50% of corn acres to be planted with cover crops, this would still entail an additional 1.75 million ac (0.7 Mha) of new cover crop seed production.
Different species of cover crop average seeding rate, seed yield, acres yield, acres needed for seed production, and percentage of corn area needed for cover crop seed production. Adapted from Runck et al. (2020).
Therefore, taking the conservative 1.75 million acres (0.7 Mha) of new cover crop seed production needed, and assuming that at a minimum US$300 ac–1 (US$741 ha–1) is needed to contract with farmers to produce cover crop seeds, this means that cover crop seed companies need to collectively invest US$525 million in seed production contracts alone (plus the needed additional investments in the storage and freight infrastructure, as well as other costs). These figures imply that cover crop seed companies likely need to make large investments in the future in order to meet the rising demand for cover crop seeds. However, making substantial investments in a volatile cover crop seed market (that is still in its infancy) is considered to be a risky proposition and may have limited expansion of the cover crop seed supply industry to date. Government policies that can help alleviate the inherent risks in investing in the cover crop seed supply industry might help facilitate increased availability of cover crop seeds to meet future demand.
POTENTIAL POLICY DIRECTIONS
Increasing awareness about the direct benefits of cover crops to farm productivity and the environment, plus availability of more subsidy-based financial assistance that encourages adoption, would likely result in further growth in demand for cover crop seeds. However, several policy enhancements are likely needed for the cover crop seed industry to successfully meet this future demand and ensure sustainable growth in cover crop use in the United States. We discuss several of these potential policy directions below.
Policies for Genetic Standards, Seed Monitoring, and Testing. The same seed labeling law that is followed by corn and soybeans should apply for cover crop seeds. However, this is not always followed and there are no policies that ensure genetic standards in cover crop seeds. Farmers need to be aware that buying “variety not stated” seed is riskier than buying named varieties since no one can attest to the performance or quality of it. Transparency about seed genetic characteristics (and whether or not they meet standards) gives the farmer appropriate information for making seed choice decisions and allows them to have peace of mind that the cover crop seeds they purchase have been tested. Therefore, policies and rules that enforce the inspection of seed bags and labels are still needed. An institutional structure should be put in place so that companies that do not adhere to seed label laws are penalized.
Reporting of Cover Crop Seed Price Information and Developing Market Forecasts. To date there is no public institution responsible for tracking seed prices across the United States, for cash crops or cover crops. This means that each company tracks their own price and needs to make their own forecasts of future demand. Without public information, it is difficult to track cover crop seed prices, and companies can charge different prices for the same cultivar depending on location (Krueger 2019). To overcome this potential informational barrier, and advocate for better prices, farmers started the Farmers Business Network, a platform that has evolved through the years but started as a self-reporting seed price tool where other farmers could see how much their colleagues were paying for seeds at different locations. Thus, for sustainable growth of the cover crop seed market, we believe that it would be beneficial for a public agency, such as the USDA, to create a unit responsible for tracking the prices of cover crop seeds. Having a cover crop seed price database could help stakeholders, farmers, researchers, and the private seed companies better understand the variables that affect demand and supply of cover crop seeds. Consequently, more precise forecast models could be constructed, which would likely result in more market stability and less risk for the cover crop seed growers and companies.
Financial Incentives for Cover Crop Companies. As discussed in the previous section, cover crop seed companies have to absorb substantial risks when investing in the cover crop seed industry. Hence, to encourage further investment in the cover crop seed market it may be important to provide financial incentives for cover crop seed production companies. Some possible ways of financially helping the cover crop market include tax benefits to companies, direct subsidies to new cover crop seed companies entering the industry, and cheaper financing that would allow seed companies to invest in key machinery, storage, and freight infrastructure. Another option would be to have the government subsidize seed stock up to three years, so seed would be available in high demand years due to weather fluctuations. Financial incentives for cover crop companies may also help encourage them to diversify the number of growing regions where cover crop seeds are produced (i.e., contracting with cover crop seed farmers in new locations closer to cover crop seed users).
Private-Public Cover Crop Seed Collaboration and Information Dissemination. The dissemination of information about best seed practices and the importance of having named cultivars from accredited locations would benefit the farmer and the industry. Private and public agents can work together to conduct research, provide training programs, and generate information campaigns about cover crop seeds. Currently, partnerships exist in the form of the four regional Cover Crop Councils, whose priorities include policy, communication, research, outreach, and fundraising (e.g., the Midwest, Southern, Northeast, and Western Cover Crop Councils). These kinds of public-private partnerships can also help disseminate information about the importance of cover crop seed quality, labels, genetics, and seed sources.
Support for Cover Crop Seed Breeding and Seed Production Research. To date, there has been little private capital and government support dedicated to improving plant species to be grown specifically for cover crop use. Breeding programs that focus on cover crop use and perform multiple years of testing, as it is done for cash crops, will ensure that the farmer gets the best cover crop performance possible, and can result in more adoption in the future. A public effort to increase availability of cultivars bred specifically for cover crop use started in 2015, with what is now called the Cover Crop Breeding Network. The network currently focuses on hairy vetch, crimson clover, and winter peas, and consists of more than 10 public institutions that include universities, USDA, Public Material Centers, and farmers. Although the network has been successful in securing a modest amount of funding through grants, a long-term, secure funding source would give stability and help the network expand their efforts to provide the best varieties for the farmers. Improved breeding for higher cover crop yields would help reduce the amount of land needed for cover crop seed production that would meet future demand. Moreover, continued support for cover crop seed production research would allow for development of better agronomic practices for cover crop seed production and may help expand the areas where cover crop seed could profitably be produced (i.e., expand major cover crop seed production areas beyond the Northeast United States).
SUMMARY
Cover crops are increasingly becoming a key component in the development of sustainable farming systems in the United States. With continued demand for cover crops in the future, it is important to have a robust cover crop seed sector that can adequately and consistently supply farmers year-after-year. Pursuing the policy directions described above can help facilitate further strengthening of the cover crop seed industry and would likely improve cover crop adoption in the future—generating benefits for farmers, the environment, and the overall economy.
ACKNOWLEDGEMENTS
The authors wish to thank Keith Berns, Green Cover Seed; Jay Brandt, Walnut Creek Seed; Dan Foor, LaCrosse Seed; and Jonathan Ruppert, Smith Seed, for sharing their time and knowledge about the topic. Your insight and experiences were essential.
- Received August 20, 2021.
- © 2021 by the Soil and Water Conservation Society
In this issue
Jump to section
Related Articles
Cited By...
- No citing articles found.