Investment Analysis of Cover Crop and No‐Tillage Systems on Tennessee Cotton

Core Ideas Investment into no‐till reduces risk. Risk averse producers prefer no‐till over tillage. Cover crops increased risk compared to no cover crops. Upland cotton (Gossypium hirsutum L.) fields have minimal amounts of soil surface crop residue after harvest, exposing soil and increasing the risk of erosion. This is especially challenging in the Mid‐South United States where cotton is commonly grown on soils naturally prone to soil erosion. Winter cover crops and no‐till planting are two practices that can mitigate soil erosion by increasing soil surface biomass, but there is uncertainty on how these practices impact producer profits and risk. The objective of this study was to determine the profitability and risk of winter cover crop (no cover crop, winter wheat [Triticum aestivum L.], and hairy vetch [Vicia villosa L.]) treatments and tillage (no‐till and till) treatments in cotton production. Simulation models were developed to generate net present value (NPV) distributions of investing into the long‐term use of cover crop and tillage systems. Data were collected from a 29‐yr cotton N fertilizer, tillage, and cover crop experiment in West Tennessee. Profit‐maximizing N rates and yields varied across cover crop and tillage combinations. Risk neutral, profit‐maximizing producers would prefer till planting and not planting a cover crop. Risk averse producers prefer no‐till planting with no cover crops. These results indicate that no‐till planting can reduce cotton producers’ exposure to risk. The NPV approach and the long‐term dataset provides unique insight into the economic benefits from investing into continuous cover crop and no‐till systems in cotton production.