The economics of no-till farming

Every producer will find that the cost of producing crops rises much more steeply than the purchase price of the crops. This can be seen in the Looking at KSH data when looking at the extent to which different prices have risen.

Compare, for example, how feed wheat has developed over the past 10 years (purchase price) and ammonium nitrate (production cost) (Tables 1, 2):

2014201520162017201820192020202120222023
455334562538683421694679248328523596892712467874529
1. Feed wheat price increase (Ft/tonne), 2014-2023
20162017201820192020202120222023
6920075207769907350068750208030368990160410
2. Ammonium nitrate quarterly data (Ft/tonne), 2016-2023

Through this simple example, we can see that the rate of increase of one important input (ammonium nitrate) is sharply out of line with the expected increase in the selling price per tonne of our crop. This trend is becoming less cost-effective in the long term and is threatening the secure profitability of farms.

How can we address this problem?

One logical solution is that the selling price will increase significantly and catch up with the cost of production. However, based on our experience so far, this outcome is highly unlikely. The second, more viable solution is to reduce the cost of production while keeping our economy profitable.

Autumn sowing with soil preparation vs no-till

The cost of preparing the soil before sowing autumn cereals at contract labour rates - which include the cost of our own labour and the depreciation of machinery - is around 25,000 Ft/ha. For no-till this cost is 0!

The current benchmark is that the average income per hectare of Hungarian agriculture is the amount of area aid. In better areas it is more and in worse areas it is slightly less, but broadly speaking this is a reasonable average. Including AÖP (Agro-ecological Programme), this figure averages around HUF 80,000 per hectare. If we look at it this way, we can increase our profitability by up to 30% by using no-till technologies, as we save 25,000 HUF in tillage! For our other crops, especially spring crops, the difference is even greater, but successful no-till sowing of these crops is a much greater professional challenge.

Which machines can be used when applying no-till technology?

The experience is that autumn crops respond well to direct seeding and there are many brands to choose from when it comes to seed drills. Many farmers have the perception that the initial cost of a direct drill is too high, so it's not worth getting started. There are counter-examples to this, but it is also worth considering how much money we have spent on all the machinery we have bought so far.

3 metre seed drills are available for under 10 million, suitable for direct sowing in difficult conditions and with low horsepower requirements

You can already find direct launchers on the market for under 10 million HUF, which is a worthwhile investment in terms of long-term results. This also shows that if you have the determination to make the switch, no-till seeding can be done effectively, resulting in a more positive production outcome than what is currently considered conventional farming.

"Minimising soil disturbance is an important element of regenerative agriculture, but it is by applying other elements that are important for soil health that we can achieve truly outstanding results."