PGC Enterprise Budget

Overview

Many conservation practices look appealing – until cost is considered. Our team wanted to better understand the range of costs that farmers would incur using a Kentucky bluegrass (KBG) perennial groundcover (PGC) approach. This paper details those efforts and estimates the cost to the farmer of KBG perennial groundcover adoption and maintenance.

We found that optimized PGC systems can be cost competitive with business-as-usual practices. This is because groundcover establishment costs — which are incurred in the first year — are recovered in the second year and onward, leading to cost savings and improved profitability in the long run. Specifically, we found that under optimistic assumptions, PGC could pay for itself in 5 years, and that was without crediting PGC with potentially less herbicide, greater stover sales, or yield benefits from improved soil quality and drought mitigation.

Because PGC systems should allow higher levels of sustainable corn stover harvest, our modeling showed that PGC systems in locations with a stover market are even more economically attractive. In the optimistic assumption case, PGC systems with a $50/ton stover market paid back at the end of the second year, and then generated extra revenue going forward!