Increase Farm Profit with Intercropping
Now that the practice of intercropping has gained traction, there is enough research and data available to create financial projections and to forecast return on investment (ROI) comparisons.
For a typical commercial grain farm, intercrop combinations like pea-barley and chickpea-flax are profitability home-runs. The drivers of this are reduced pesticide and fertilizer applications.
Author’s Note: Crop budgets show considerable variation from one farm to the next. This research is based on collaborations with farmers and grassland agroecology consultants from across the northern Plains conducted since 2017. The financial estimates and projections provided here are based on individual data points from a variety of farms.
The critical difference between monocropping and intercropping is philosophical.
With intercropping, the overarching goal is not to maximize the yield of either crop. It is to generate the greatest economic revenue off the field and to minimize inputs. According to new research on intercropping in Saskatchewan, “estimates show that a 25 per cent rate of recommended N results in similar outcomes.”
Consider the budget impacts for the example of peas and oats:
Gross revenues would be 15 bu/ac pea yield * $11/bu = $165/ac + 75 bu/ac oat yield * $3.50/bu = $262.50/ac.
The typical experience is each crop’s yield comes in 40-80% of the potential that could be achieved in a high-input monocrop system.
Gross revenue comes in close to the same as from growing either of the crops on its own.
The improvement in margin from the reduction in fertilizer depends on a number of factors:
The price of nitrogen.
The soil nutrient profile.
If the intercrop combination includes a pulse.
The farm’s fertilizer application setup.
Too much nitrogen can actually reduce yield potential. Firstly, ample applied nitrogen tends to make plants lazy… and the role of the pulse to feed nitrogen to the companion crop is central in the intercrop system. The harder the plants have to work to naturally fix atmospheric nitrogen, and to establish strong root systems, the more effective is the intercrop to provide nutrition for itself.
According to regenerative farming expert John Kempf, “Excessive nitrogen increases a plant's water requirements by upwards of 30% and can cost as much as 20% of total photosynthetic synthetic energy. It is also important to know that only 40% of commercially applied nitrogen is actually absorbed by the crop, most is bleached or bound up in the soil.” Learn more on this topic in AEA’s April 2023 webinar, which had over 1,000 registrants last week.
Fewer herbicide options exist (making it important to start with a clean field). The higher plant density creates natural competition for weeds that would otherwise be controlled with an in-crop spray application.
Fungicide can be reduced or avoided. Disease spores in the air tend to settle in simpler, weaker environments (neighboring monocrop fields). The complexity of differing plant pheromones and phytochemicals makes the intercrop less welcoming.
Similarly, insect pests prefer monocrops over intercrops. In a tour of ten advanced regenerative farms across the Canadian Prairies in the summer of 2022, none sprayed for grasshoppers. Plants with elevated sugar content - a result of enhanced photosynthetic activity - can be more difficult for insects to digest.
Regenerative farmers tend to drop insecticides early on in the journey, so as not to hurt helpful soil biology or contribute to the loss of bird species.
Overcoming the Hurdles in Intercropping
Achieving all the profit potential of intercropping requires quantifying and strategizing around the challenges too.
Cleaning and Marketing: A real problem is separating the crop after harvest for marketing. Many different individual farm setups have been tried, but the work is miserable and the investment can be significant.
Mobile cleaners are an option in some areas, as long as they do a good enough job to satisfy the terms of the grain contract. Also, seed farms can provide a toll-cleaning service, separating and returning each crop along with the dockage back to the farmers; this usually costs around $30/t.
Crop Insurance: This week, a widely read newsletter is calling out the gaps in crop insurance allowances for intercrops, reinforcing the difficulties of institutional redesign. The agencies that support agriculture face not only cultural, but also strong mathematical mandates, that all work together to preserve the status quo. Crop insurance limits to adoption are a major barrier to the expansion of intercropping.
For some early adopters, dropping crop insurance and ramping up intercropping acres put their farms on a speedier path to increased profitability. Agronomically, intercropping provides a degree of crop insurance in and of itself.
Networking: Peer support for intercropping, like grazing croplands, is difficult to find. And it’s considered one of the key criteria for successful adoption of intercropping, according to research completed last year by leading regenerative consultant Joel Williams.
Informal peer groups exist, often in the form of a loosely-organized following of pioneering soil health educators like John Kempf and Joel Williams. Members of these groups tend to attend the same events, visit each other’s farms, and communicate on platforms like Facebook and Whatsapp to troubleshoot and share ideas.
More formally, professionally managed farm peer groups can be established to ensure that the time everyone invests is focused, consistent and productive. Peer groups are tried and true models for knowledge exchange across farms in different geographies. When run by management consultants, peer groups can also be used to create business templates to leverage the group’s common interests and shared knowledge in new farm financial applications.
Interested? Contact hello@prairieroutes.ca to learn more about the new farm business planning tools available to successfully transition farmland into intercropping.