Soil Health Economics: Real Numbers from 13,000 Acres

0:00 I'm going to go ahead and introduce our speaker. We're really honored to have Nick Jorgensen with us this evening. He is the CEO and CFO of Jorgensen Land and Cattle in Ideal, South Dakota.

0:11 Before returning to his family's farm in 2014, he earned his master's degree in business administration and economics. He studies the financial benefits of the soil health practices that his family uses to manage the operation's 13,000 acres and is determined that his family saves about a hundred dollars per acre and 350 dollars per head annually thanks to good soil health management.

0:35 So what he's going to talk about tonight is just the soil health and the economics of that. These two subjects that are not discussed really together, but they are linked. And so his presentation this evening will discuss how those two can work in tandem to improve the health of both your soil and the bottom line of your operation.

0:54 And with that, Keith, do you want to go ahead and kind of explain why we wanted Nick on this webinar and Green Cover Seeds connection?

1:01 Yeah, yeah, no thanks Noah. We've been working with Nick and his family for a number of years now, the Jorgensens up in Ideal, South Dakota. And Nick, frankly, I think your bio is way too humble. I don't think you give enough background information there. The Jorgensens, my understanding is you're the largest supplier of Angus genetics in the world, so their influence across the Angus industry is huge.

1:31 They also have a great hunting lodge if you like pheasant hunting. They've got probably the top hunting lodge in South Dakota if that's of interest to you as well. And they also were awarded the Leopold Award. Many of you are familiar with the Leopold Award, I think around 2015 they won that for South Dakota.

1:49 Nick has a really unique way of combining the soil health with the numbers. And you know, sometimes when you hear people talk about, well, you know, we made about a hundred dollars a head more this year than last year, you kind of take that with a grain of salt because you don't know who says that. But Nick's a numbers guy, and you'll see that as he goes through his presentation. He is not just saying that because it's about this or about that. It's lots of spreadsheet work, lots of financial analysis.

2:19 What Nick's going to be sharing with us—and I've seen him do this presentation a couple times and learn from it each time, look forward to learning more here this evening—it's real world stuff. It's not on 20 acres back behind the house. This is large scale soil health, real world application.

2:40 Looking forward to hearing it. Noah's going to be recording this, so my guess is a lot of you are going to say, oh, I wish so and so could have heard this. So make sure you get them the link to watch this recording.

2:51 With that, Nick, I'm going to hide myself and you take it away.

2:55 All right, thanks Keith. And thanks Noah. You know, I just like to let everyone know to start off—it's like, it's my honor to be here. I know Keith and Noah said they're honored to have me, but the truth is I'm just honored to have been asked to do this presentation and to get to speak with all of you tonight about a subject that I'm passionate about.

3:15 And I'm just going to, before I show this presentation, just going to echo off a few comments that both Noah and Keith made. You know, Noah said usually when we talk about soil health and stuff, it's philosophical, right? You know, we have these conversations about what it does to the health of the soil, and those are all great. I mean, trust me, the story is important and the principle and the philosophy is very important.

3:38 But I am a numbers guy. I got a master's in economics. And we're trying to do this soil health stuff at scale, you know, 13,000 acres of farm ground. We can't rely on just philosophy alone. Now the philosophy is what justifies the practice, but we need to ground truth it with numbers. So that's where I come in. And so what you're going to see me talk about here are, you know, let's take the philosophy and then see if the numbers actually justify it. And so that's what this presentation is going to be around.

4:12 I'm going to go ahead and share my screen here and I'm going to kick it right off. And I also appreciate the introduction from Keith about the operation with that bio and the explanation is pretty high level, but I'll go into a little more detail here about all that we do here at Jorgensen Cattle.

4:29 This presentation is about soil health and economics. The Jorgensen family has been in northern Tripp County, South Dakota, since 1909. My great grandfather Martin senior came to this part of the world with his wife in 1909. This is actually the yard we're on today. We moved here in the 30s. This barn right here is still here today. And this actually was our office—this white farmstead—was our office until 2016.

4:58 We farm 13,000 acres of 100 percent no-till cropland here in northern Tripp County. It consists of a pretty diverse rotation. I'm not going to go through all the details.

5:08 The whole list, but the key takeaways are here. We raise a lot of different crops. We're not just corn and beans. I would say it's actually primarily a winter wheat-based rotation. Everything kind of keys off winter wheat, and some of the more interesting stuff that we try here are the mixed species forage, which a lot of times gets chopped for silage. We do every acre of winter wheat gets followed with a cover crop that we graze, and then the last couple years we've tried more and more full-season covers, so cover crop that we graze that we plant primarily just to graze with no harvesting done with equipment.

5:47 We also have 8,800, it's probably more like 9,500 acres of native prairie pasture here in northern Shrimp County. So all told, we're managing about 22,500 acres up here. All this pastured land is rotationally grazed, and we manage about 850 head of Angus cows and 100 head of recipient females that we manage here. They get managed in about five, maybe six groups, and we're rotating those groups every two to three days in the spring, and then we stretch that interval out in the summer every seven to ten days. It's intensive grazing management, maybe not to the scale that you'd see a lot of places where they're moving cattle every day, but at the end of the day it comes down to logistics and people time. We don't have the resources to move a thousand head of cows in six different groups every day. It just doesn't work, so we do the best we can with our resources.

6:46 And like Keith mentioned, probably the hallmark of our operation is purebred Angus genetics. We've been in the Angus breeding business since the late 1950s. My grandfather Martin started with it and built a really good reputation for our cow herd in the 60s and 70s, and today it's that reputation that allowed us to build our unique bull leasing program, which through that association we call Smart Bull Sales, which are mature bull sales. We'll market 3,500 plus Angus bulls annually, and that number is actually undersold by quite a bit. In 2020 here I fully expect we'll exceed 4,250 bulls marketed during the calendar year, so it makes us the largest seed stock producer in the United States, presumably the world. I don't have data to back that one up, but I do have data to back up the United States one.

7:39 And the whole program, the leasing program, is operated out of our feedlot here in northern Trip County, and we'll go into some of the economics about how we manage animals in this feedlot and on crop ground that really justify some of our practices. Keith didn't mention it, or he did mention it and I don't have a slide in here about the Lazy J Grand Lodge, but we have a lot of pheasants up in this part of the world and we offer hunts. Generally run 250 to 300 hunters a year through our 22-bedroom lodge, and it's a really nice side business for us in all truth.

8:12 So today I'm going to talk about the economics of soil health and how we integrate crops and livestock to improve our bottom line. Now I say bottom line because at the end of the day that's how we're measuring it, but the initial onus here is not to be financially better off. It's to improve the health of the soil and the animal, and what we found is you can do that and improve your bottom line at the same time.

8:35 So let's talk about economics for just a second. This slide really just goes in to say we are in a tough time in agriculture. We come off what we call the egg super cycle here in 2013, and since then things haven't been quite as rosy. There was more money made, I think, in probably six to seven years from 2009 to 2015 than probably had been made in generations past, and so we had a really good time in ag, and then things kind of leveled off. And there's still a lot of operations that are struggling to adjust to this lower price, lower income environment.

9:18 And the ultimate truth is the margins of straight-up corn and soybean production are not the best now. You look at the last quarter, the last several months, corn prices are up and soybean prices are pretty good, but for the last five or six years it has not been that way. Margins in traditional corn and soybean production have been break-even at best. We've been relying on high yields for profit, and to be honest, the margins in the cow-calf sector are even worse. COVID did not do us any favors this year. It beat up a lot of operations in the cow-calf and feedlot sector pretty good.

9:55 So why do I bring up this economics discussion? And I do it because, excuse me, I'm missing a slide. So we talk about economics and then we talk about soil health. So you got economics over here generally, and then soil health over here, and what I what we often see is they don't.

10:18 Here are your five principles of soil health. We talk about keeping cover on the soil at all times, we limit disturbance, we incorporate diversity into the crop rotation, keep a living root as long as you can, and integrate livestock whenever possible. On our operation we strive to meet all five of these principles whenever possible.

10:39 Now let's marry them together. We talked about how margins in ag are low and markets are volatile and things like that. And then you got the other side of the coin which is soil health, you know you can use to reduce costs and improve revenue. And we also know that diversity mitigates risk and helps deal with volatility. And so the point of this slide is to show that there are synergies here and these two things do work in tandem and there are practices that can improve the health of your soil and the health of your bottom line at the same time. And to me the focal point of this discussion where these two things come together, you boil it down and it really goes back to organic matter.

11:19 Let's talk about organic matter and why it matters. So to start that discussion let's talk about native prairie soils in Ship County, South Dakota, really before we had settlers here it was all native prairie, right? Native shorter grass prairie. It's a natural crop rotation out on this prairie land, right? We don't have to intervene. The species naturally rotate themselves, if you will. The diversity is extreme. You see organic matter somewhere between four and seven percent. It's a natural nutrient cycle. There's a constantly active root system. The soil is healthy and bioactive. And so when we talk about the five principles of soil health, all those things exist here naturally on the native prairie soil. You know it has proven sustainability with livestock integration. I mean this ecosystem worked with herds of buffalo that came in and then went out and helped, you know, harvest this grass and do what it needed to do with the hoof action to improve the soil to plant interaction by mashing organic matter into the soil and things like that.

12:26 So organic matter, let's take that prairie soil idea and take it back to the farmland. That's kind of the idea because prairie soil shows us what mother nature can do, right? That's what gives us our natural stable point, if you will. So when you have higher organic matter, more biology can be supported. You know organic matter is 52 to 56 percent carbon. Carbon supports life. The more biology there is in the soil, the more nutrient efficient the soil becomes. It inhibits, or excuse me, it allows more nutrient exchange between the plant and the soil when you've got that biology there and it allows for more nutrient uptake because of biology.

13:11 So to get a little more specific, for every one percent of organic matter that we have in the soil, it generally leads to 20 to 40 pounds of nitrogen available to the plant in the soil, right? So when you look at a native prairie soil, four to seven percent, so just call it five and a half on average, you know you're looking at somewhere between 100 and, you know, 150 to 200 pounds depending on how you want to do the math of nitrogen there in the soil for the plant to use. Additionally, when you have a one percent increase in organic matter we gain an inch of water storage. Organic matter is really good at holding water. And so what it does for us is has less runoff. We're in kind of a, I wouldn't call it an arid part of the world here in Trip County, but we get about, you know, 17 to 19 inches of rain a year and we need every one of those inches. We don't need them running off our fields. And so every inch of water we can hold with a percent of organic matter we'll take it. And finally, there you've got organic matter in the system. It functions as a buffer, right? It makes soil more resilient under stress. So when it gets dry you've got that water that was held in organic matter to help the plants. You're also, you've got some naturally available nitrogen there. You've got more biology active, more biological activity that allows for more nutrient efficiency in the soil. Functions as a good buffer to help that soil under stress.

14:38 Here's just a graphic of some soil test organic matter on all the crops on our operation, generally kind of where they've been at in the past. You know real winners for us are grass, naturally, because grass is what grows out here. And then you've got winter wheat and winter wheat cover and I'm going to drill into this. These two bars over here, just a little bit, to kind of go through the detail why we like organic matter and cover crops some more.

15:04 So we use cover crops as a tool to, well really ultimately build organic matter, but additionally there's a lot of other benefits on cover crops. They improve the soil structure, right? And they maintain an active and diverse soil biology. There's a living root in the soil at a time when we normally wouldn't have it. So this image is cover crop behind winter wheat. You know if that cover crop was not there...

15:29 Growing in that soil system, there wouldn't be an active living root. The winter wheat is dead, we've harvested it, and so we're using that cover crop to keep the biological interaction going. It uses excess moisture and captures excess nutrient, and we'll talk about that in a little more detail, but you know, let's just not forget nitrogen is a mobile nutrient. Anytime it's just in the soil, you run a chance of losing it, but if I can tie it up into a plant for a while, at least I know for some certain period of time that that nitrogen isn't going to get lost.

16:01 It also improves soil structure, like I mentioned. You know, just some kind of anecdotal evidence—we're generally out in the field planting corn because that's how we do this: we go winter wheat, cover crop, corn is the rotation. So we're generally out planting corn on fields with cover crops. You know, depending on how wet the spring is, we might be out two weeks earlier on ground that had cover crop compared to maybe ground that was just straight up stocks like mild stocks or corn stocks, so it mellows that soil out. It reduces cost of bowl development for us, and this could be amended to say reduce cost of animal development. We just say bulls because that's what we have to deal with what we've got numbers on.

16:43 And then cover crop also provides really good cover and food for wildlife, and I've got an image at the end that kind of goes really exemplifies that, but pheasants love it, deer love it. It's just good habitat, right? And so you're building just a healthy ecosystem, not just between the plant and the soil, but you know with other living organisms in the ecosystem—deer, pheasants, birds, bugs, all that kind of stuff.

17:10 So these are all the different blends of cover crop that we plan on our operation, and I have this graphic here not to go through each of the different blends. You know, this is we get a lot of these blends from green cover seed, as a matter of fact. The full season was a blend designed by green cover seed for us. But we do a lot of cover crops in a lot of different scenarios. We tried some in corn this year, in milo. Our silage mix really is technically probably a cover crop if you want to call it that. We had some full season cover this year, and then our winter wheat generally is always followed with some sort of cover. You'll notice if you really drill through this, a large majority inside of what you inside of the blends is oats. That's what we carry our cover crop blends with—if you want to call it a carrier, they're generally oat based. And we go with oats because we're a certified seed producer. And if we go with a carrier crop, if you will, of something like rye, that would make our lives really difficult. Rye probably is superior in all regards, other than it's a weed in the seed wheat world and we can't have it, so we go with oats.

18:26 So organic matter—when I mention that we use it to tie up nutrients, it really cover crops will help us tie up nutrients and build organic matter. So here's the breakdown of this image I showed before of organic matter levels in winter wheat and winter wheat cover. So when we find—we did a test several years ago—we took a quarter of wheat, sliced it in half, 280s. We did 180 with cover crop and 180 without, and what we found was we had a half a percent increase in organic matter where there was cover crop in the winter wheat, right? So that leads to that, what that ends up being, is 10,000 pounds of additional residue per acre by having cover crop out there. We gained, you know, by the math that I would like to use, about 20 pounds of nitrogen just by having that cover out there. We added a half inch of water holding capacity and improved soil structure. And we to date, and we've been doing this for over 10 years now, have never seen a negative impact on yield, you know, in that corn crop the next year. As a matter of fact, generally we see a positive because we can get out there earlier, you know, we've melded that soil out quite a bit. But you know, here's just some objective measures to show that cover crop will help us build organic matter.

19:50 And this is actually the slide where I talk about nutrient IO. This is the same field, same test, half/half, 80/80. And this is soil nitrate, six inches, you know, zero to six inches. And what you'll notice is where there's just winter wheat, we've got 55 pounds of nitrogen there in the soil, not being well used by the plant. There's nothing to use it during that time. When you look at the winter wheat cover, it goes down to 15. So all even effect done is tied up 40 pounds of nitrogen. And like I mentioned, nitrogen is a mobile nutrient. We don't know where it will be after the snow melts or after a big rainfall event because it generally follows water, but we do know that right now when we took this snapshot with the soil test, the nitrogen was tied up in the cover crop, and you can, I mean, the cover crop is where it is, right? It's going to sit on the soil.

20:44 I will decompose and it will release that nitrogen back into the soil profile. Right, and so let's not forget too that we're just measuring in here but we're tying up other nutrients as well that we want to make sure we know where they are.

21:02 This is also a really interesting slide as it pertains to cover crops. Same study again but this focuses around P1 phosphorus levels in the winter wheat. The winter wheat without cover our P1 levels was 11, we're 11. That's compared to nearly 18 winter wheat with cover. So where did that come from? Well, first of all remember phosphorus is not a mobile nutrient, it doesn't move with water. So we're not concerned about that, but where did it come from? We didn't apply any more phosphorus on the winter wheat cover. Where it came from was, you know, if you've ever taken a soil health or a soils course, you got P1 phosphorus and P2. P2 is more what they would call plant unavailable tied up phosphorus that a traditional agronomist would honestly tell you doesn't really mean anything because the plant can't use it well.

21:57 What happened here was we've got biology in the soil system that is in there breaking down these P2s into plant available P1 because we've got a living root in that system keeping that biology alive. Therefore giving us eight additional pounds of phosphorous that I did not have to pay a dime for to get applied or buy or anything like that. All we had to do was plant a cover crop. Right, and so not only does it capture nutrients but it makes more nutrients available in the soil profile.

22:25 Before I move on, I want to jump back to this slide right here where we talk about organic matter. I did a video here just a while back where we talked about carbon sequestration, right? And I'm not going to get into the political side of the debate about climate change, but you know societally there's a lot of concern about carbon. What do we do with carbon, right? And really production agriculture generally doesn't get the best rap when it comes to what we do for carbon because people don't understand what we're doing at the very most simple level when we're raising crops. I mean, what do crops pull out of the air? They pull CO2. That's what they live on. They emit oxygen. So what are they doing? They're tying up carbon. And so, you know, I mentioned earlier organic matter is 56, I think you could roughly call it 56 to 60 carbon. So when we tie up a percent, when we add a percent of organic matter to our soil, we have added 12,000 pounds of carbon. We have sequestered 12,000 pounds of carbon from the atmosphere into the soil profile. That is, that's six ton, right? And let's talk about adding a half percent farm wide on a 13,000 acre farm. That's rough math and I'm going to get lost here but three thousand, you know, excuse me three tons per acre. Adding a percent on 13,000 acres is almost 40,000 tons of carbon that we're sequestering on our operation. I don't know how much carbon we emit here but I don't think it's 40,000 tons. And so it just goes back to say, you know, what we're doing here by nature is a positive thing for the environment when we're focusing on soil health.

24:14 So now let's talk about grazing livestock, right? Because we're raising these cover crops, one of the things that we try and do whenever possible is get cattle out on those acres to graze. Why is that? Well, cattle are a natural nutrient residue cycler, right? That's what they do. They eat grass, they eat forages and stuff, and then they cycle them. They'll utilize cover crops or excess residues that we would otherwise leave out in the field. And the initial thought when you think through that is well then you're reducing organic matter because you're taking that organic matter off the soil and you're turning it into protein in an animal. Well, I'll jump to my last bullet point here. We found that that isn't the truth. As a matter of fact, we can build organic matter faster when we incorporate livestock. And to me it probably, if you want to be honest, it goes back to the inefficiency of the grazing animal. There is a certain amount of residue and you know cover crop if you will that's out there that they won't eat because they'll mash it into the ground. They can't go all the way to the ground to take everything. And so naturally they're actually incorporating organic matter into the soil by the nature of being out there.

25:23 We can also lower the feeding cost for that animal and I'll go into some more detail on that one. It's a key factor in overall soil health improvement. We have found this in our operation again and again and again. There are some negative side effects if you raise livestock on farm ground. Farm ground incorrectly you can have compaction problems and things like that, but if it's managed right it really can improve your soil health and it makes the animal healthier. And I've got some slides to talk about that as well. So let's go into organic matter because I'm going to hit on this again. Again, it's focusing on organic matter in our operation that's led us to improve our bottom line and.

25:59 Improve our soil health. Here's two sets of soil tests. We soil test every acre on our farm. This is a subset, but we test every acre of farm ground or every field of farm ground every year. So we've got year over year over year tests. And the two graphs next to it are soil test organic matter on some grazed winter wheat. In 2019 when the winter wheat was planted, this specific field here had a great organic matter level of 3.7 percent.

26:29 During that calendar year from January 8, 2019 to April 8, 2020, we grazed that winter wheat with cattle. And this is a cherry-picked field right, and so I wouldn't say these results always happen quite like this, but look at the organic matter a year later. We doubled it. We nearly doubled it. And to me that's an extreme example. We don't see that consistently, but it goes back to we graze this. We didn't harvest it. We didn't have. We didn't raise this crop to harvest it for grain. It was all for cattle grazes. And look what we did to our organic matter levels here.

27:08 Additionally, on this, on the right side, we've got a full season cover soil test. Same deal. Soil test taken at the same time. And we saw a one percent increase in organic matter. This was also grazed by cattle, was not harvested. We improved organic matter. Here's farm wide. So we soil tested 800 acres of property. So it's not quite all of our farm ground in 2020. So this is the April 8, 2020 soil test that you saw on the last slide. Of those 800 acres, 2,300 of them had been grazed by cattle the prior year, and then 6,500 acres had not been grazed right.

27:50 The dark green bar on the chart is the graze. The average organic matter of the 2,300 acres of grazed land. And the light green is the average organic matter of the 6,500 acres of not grazed land. On average we added a half a percent, over a half a percent of organic matter by grazing cattle. Now once again, what does this go back to? In my opinion, the cattle aren't bringing anything out there. They're not adding anything new. It's they're cycling what's there. They're incorporating into the soil so soil profile quicker. They're using their hoofs to incorporate some of that stuff and getting it in the soil where it can get utilized. That's what's happening here. And I'm going to call it a positive because anywhere we can pick up organic matter is a positive thing.

28:37 So let's talk about just more specifically the interaction of cattle and crops and carbon. Once again, a half a percent of organic matter on 2,300 acres of ground is a lot of tons of carbon. If we're going to be adding three, you know, sequestering three tons per acre, that's what is that, 7,000 tons of carbon that those cattle helped us sequester. And so from an environmentalist perspective, I'll talk about this all day long because what we're doing out here is positive.

29:10 So let's get into some economics of grazing livestock on cropland because this is the hallmark of where we found we can. I've already shown we can improve soil by improving organic matter by grazing livestock. Now let's talk about economics and the actual bottom line. So in our operation, the majority of what we graze is bulls. We have 4,000 bulls, which gives us a lot of opportunities to graze them. And so generally, you know, we try and get as many 18 to 24 month old bulls out grazing during the winter as we possibly can.

29:49 In 2019, we grazed 750 bulls between October 1st of 2019 and March 1st of 2020. It amassed to over 100,000 grazing days on cropland and residues because of those bulls. And with the bulls, we grazed 358 acres. Here's a chart of our turnout dates on bulls. So what you'll notice here is we kind of do it in groups of 200. We started out with 400 there on October 1st. We turned out two groups, then turned out another 200 basically November 1st, another 100 basically December 1st, and then we start to bring them back in with the last group coming in around March 1st. That's kind of our timeline when we really try and hit this hard.

30:34 And it's important to note here because this is dormant season grazing right there. We don't rotationally graze these bulls because there's no point to doing it this time of year. Point of rotational grazing is to give grass rest time so it can regrow and not sacrifice the root. We're not out here to do that. All we're out here to do in the winter is take advantage of some of those residues and cheapen the cost of development for us on the bull side.

30:58 So here's just a cost example, and I apologize this is going to be for those of you that don't appreciate numbers like I do, this is going to be a little tough to look at, but this is one of our grazing zones. It was a total of 960 acres, of which I would say 300 of them were possible acres. And what I mean by that was there was crop out here that we harvested with the bulls. The rest of those acres, you know, basically the 600 acres that I don't have as cost acres were things like corn stubble or you know milo stubble.

31:30 Where that whole cost scenario is taken care of with the harvesting of the crop. That's what we did it for, so everything else after that there's no cost associated with it. But the cover crop, like here, you know, that fifty dollars an acre, we're harvesting it with these bulls and these food plots, you know, we hunt pheasants with them, but we're harvesting them with the bulls. So on this 960 acres we had about 30 thousand dollars in cost. And when I say 30,000, that is all in cost. That is allocated labor, that has equipment time, that is rent, that is insurance, that is all the seed, all the herbicide, all the fertilizer, everything. So I'm not glossing at these costs. And this is an all in cost. Out here for these bulls, that's their feed cost basically, thirty thousand dollars.

32:17 We graze it for 95 days with 300 bulls. That means we amassed 28,500 grazing days. To get your cost per head per day, take the cost of available feed divided by the head days, and you end up with a dollar six. It costs us one dollar and six cents to feed these bulls for 95 days. Right, so here's that there it is again, a dollar six.

32:46 If I take that same set of bulls, those 300 bulls, and I leave them in our feedlot and ideal and I deliver feed to them every day that has been harvested, taken into our kitchen we call it, we prepared for them, it cost us 2.75. So in effect we have saved ourselves basically a dollar and 70 cents ahead a day by turning these animals out and grazing them. Which doesn't sound like a lot, you know, 1.70 doesn't seem like a big deal until you do that 28,500 times and that turns into big numbers pretty quick. And so just in this subset of our 2019 grazing we saved ourselves fifty thousand dollars in feed costs, more or less, which equates to a hundred and sixty dollars per head or fifty dollars per acre, if you, depending on how you want to measure it.

33:34 And these results are not inconsistent with what we have seen in the past. I would say our average savings from grazing is about a dollar, probably 1.70, right where we're looking. So this is not something that is an aberration. We've been doing this in a big way for about six years now. And I have seen this cost per day of grazing get as low as 75, 80 cents, and I've seen it be as high as where feeding them in a feedlot maybe made more sense. But on average we're saving ourselves about a dollar seventy, which adds up in a big way. And it adds up in a big way when you look at it like this.

34:10 Here's our overall grazing results in 2019. So this green bar is grass pressure, right? This is our mother cows, our females outgrazing grass. What I want to focus on though is the grass and cover crop and the residues. In total we, that's 140,000 grazing days, right? 140,000 grazing days that on average cost us 1.47. So we are saving ourselves a dollar 25 times 140,000. That is a large number on our operation. It's probably been the difference for us some years, about, you know, whether we're making money or not. Our practices like this. And so this is something that's tried and true and has made a big difference for us.

35:02 Now let's not forget this is just straight up analyzing this from a cost of grazing perspective. What I am not accounting for here is the improvement in organic matter we've seen, which leads to lower input costs, you know, better yields, however you want to look at it, more profit potential. That's not factored into this. This is just straight up animal grazing savings. So we're improving our bottom line there and we're improving soil health, and I haven't even measured all the bottom line stuff yet.

35:31 Now let's talk about the health benefits of grazing animals versus having them in a feedlot. So once again we have a lot of bulls, and if those of you on this webinar you know have cattle and have dealt with bulls in the past, I'm sure you're aware they are, they're not fun to deal with. They're, I'm not going to say they're mean, but you know, 24 month old bull is sort of like a 17 to 18 year old kid. When you get two or three hundred 24, you know, 18 year old kids together, you get a lot of, you know, fighting, rough housing, things like that. Bulls do the same thing. We steam and test all of our bulls every year. We have to do that, we know we're sending out a good product to our customers. And here's what we found: in 2019, we semen and tested about 1,350 24 month old bulls. Of those 1,350, we had 500 of them got out to graze and 850 didn't.

36:31 And what I'm going to focus on here is the pass rate. The semen test pass rate of our bulls that grazed on cover crop was four percent higher, just a raw four percent higher than had we left them in the feedlot. These two over here are some semen health indicators: percent normal cells and scrotal circumference. There's really no significant difference there. So what's going on here is these animals are physically getting injured less when they're out grazing. And you think through that for a second: when they're confined in the feedlot.

42:22 Into the water supply, which is a big problem for a lot of city folk. I wish I could bring someone from Los Angeles out here and sit them down in this field of cover crop and say, just listen to this for a second. We did this on 700 acres. We're a large farm. What is wrong with this? Tell me what's wrong with it. And the answer is there's nothing wrong. What we're doing out here is right, guys. I'm not trying to pat our own back. We're not the only people doing this, but we're making a difference. It's this kind of movement that I think needs to be shared more with people that don't like ag. Because to me, it's the way of the future and it's beautiful. It really is.

42:59 So with that, I left 15 minutes for question and answer. I hope that's all right, guys. And I'll stop sharing my screen and maybe we'll jump right into questions.

43:12 Wonderful. Well, thank you so much, Nick. That was great. With that, like you said, we do have about 15 minutes worth of time here for some questions if you guys have any. So I'll let you guys either type those out in the chat or you can do that on Q&A. And then if you're watching on Facebook as well, I know we've got several people on there. I am watching the Facebook feed as well. So if you guys have comments, we will try to get to those first. Question from Dale. He says, why cover crop before corn instead of cover crop, soybean, and then corn?

43:51 Cover crop, soybean, and then corn probably comes down to a rotational setup, to be honest. I'm going to get caught off guard with that question because I've never thought of it that way. Here's why. Here's why we do winter wheat, cover crop, corn. We raise a lot of winter wheat. And there's a big dormant period for us. We harvest that stuff on average, you know, we got all the weeds out by August 1st. And that ground is going to sit bare from August 1st until May or June 1st when the corn emerges the next year. So that's about nine months—probably our widest window of a non-living root in the soil system. So it was a natural fit for us. In August, we can still get something planted and have it come up and do really well. So that's the justification for why we do what we do, if that's a fair answer.

44:43 Question from Doug: How do you get cover crop to grow after winter wheat, and how do you graze all winter? Well, we get it to grow by praying for rain, first of all, because that's probably the biggest thing for us. If we can get a crop in and get it up by August 1st, you know, that gives us 60, maybe 90 days before we get a really hard freeze, which is ample time to get a good cover crop up, right? It's just whether we get the rainfall or not. You know, historically in South Dakota, you might not get those August rains. There's years we do. There's years we don't. So the short answer is we pray for rain. And then how do we graze all winter? That's another wild card that Mother Nature plays. We kind of rely on that. If we don't have three feet of snow on the ground, we will graze all winter long. Those bulls and cattle, really in general, will pick through a certain amount of snow, right? You know, they'll dig through six or eight inches or maybe even a foot of snow to get down to those turnips and those radishes and all that stuff on the ground. But we have had years where we've had to cut that grazing short because, you know, we got a three-foot blizzard. As a matter of fact, 2019—excuse me, the year before last—was a really good example of our grazing season just getting hammered because we got a blizzard on December 1st. So the short answer is we're reliant on Mother Nature for all of that. If she does things right for us, it can work really well.

46:15 Henry asks, when you get to 4.5 organic matter, what do you expect the following year? So if you look historically for us, we've been tracking soil organic matter in our soil since I've got soil tests going back to 1998. We're going to add, you know, half a percent on average—that's not normal in like a year. It's not usually that much. We're probably more like, if you were to look at it over the last 20 years, it's probably more like a tenth or maybe a fifth—point 0.15 organic matter a year. So the answer is, when you get to 4.5, I would expect, you know, with the stuff we're doing, there's nothing stopping us from going to five or five and a half. You know, that takes time—another 10 to 15 years, I would imagine. At some point, those would level out, and there's probably a point in time when, you know, six or seven is awful high, but four and a half isn't some sort of barrier that I would be watching.

47:26 Kind of along those same lines, at what depths have you been taking your soil

47:29 Organic matter tests zero to six, zero to six is where we're watching them.

47:39 Caleb Johnson asks how can you get winter wheat in after corn? Yeah, I think that's a question we got. I need to explain that better so we don't do winter wheat after corn. We do corn after winter wheat, it's flipped. Winter wheat, cover crop in between, and then corn the following growing season.

47:59 Now we've experimented with some other cover crop concepts, especially this year 2020 we tried a lot of different stuff. We interceded corn, we interceded cover crop into 60 inch row corn, right, so we did skip row corn and then air seeded a cover crop in between. We did the same thing on milo. There's a lot of other opportunities to try these things. Full season covers is another one, but for us the big ticket cover crop has always been behind winter wheat.

48:30 Christina says have you monitored changes in your infiltration rate? Have we monitored changes? I don't think so. We have looked at our infiltration rate, and to be honest with you, I'm going to fall off my knowledge here. Brian is the one who has gone through those tests before, and I'm going to speak off memory here, it could very well be wrong, but we've had done those soil infiltration tests where we're taking an inch of water in like five minutes, which is something just outrageously fast that you would not expect. And to me it goes back to, we're no-till, we've got that organic matter out there, and good soil texture because of it, and you get good infiltration.

49:20 Okay, this kind of goes back to the issue of grazing all winter, how much snow is too much snow to get through, when do you know that it's time to pull them off? I would say probably anything over a foot gets kind of tough. If you got a foot of snow cover on average, but the bigger thing we key off of really the animal will tell you when there's when they're out of feed or they can't get to it because the first thing they'll do is they'll hit the fence lines. And you can tell they'll be standing at the fence. As a matter of fact a bull, not only will he stand at the fence but he will physically hit the fence line and he'll be out, and then at that point you kind of know it's time to either get some hay to him or get him back in the lot. That's what we key off is the animal itself sending us a signal.

50:10 Okay, Jonathan asked kind of a different topic here but what is your advice for first generation farmers? Obviously you have been a part of something that's been around for a long time, but how would you suggest talking with older non-family farmers about renting land and putting these types of regenerative techniques into practice when they see themselves growing conventionally?

50:33 Yeah, and you know, this I've had other people tell me this is a tough one. You get a landlord that maybe isn't bought into the concept of what you're doing right, they don't see the value in playing a cover crop. I saw a comment over here about we're worried about using up too much moisture, which to a certain point is a valid concern, right. Additionally tying up nutrients can be another one, hurting yield is another valid concern. And I guess my advice could be, I've got some economics I've done here on our operation. I mean I'm an economist but don't let me fool you into thinking this is hard math you guys, it's not. It doesn't take, it's by all accounts back of the envelope, very quick math that I'm doing on this stuff right, it's not complex, it's not complicated. You just have to know your cost. The big thing is once you know your cost, figuring all this out is easy. And I'm saying that to tell you that as a first generation operator trying to get into these soil health practices, take a resource like me. There's a lot of people who are a lot smarter and have done more work, and show them. I mean this isn't, we're to the point now in this soil health movement, if you want to call it that. I wouldn't call it movement, I mean I think it's just a natural progression of we're finding out that this makes sense on operations. Take the results and show them hey, you don't need to be worried about yield because I mean look at what all these operations or these universities have found is that you don't have yield problems, right. I'm not going to hurt your ground, as a matter of fact I'm doing you a favor because I'm building organic matter on ground I'm leasing from you, right? I mean I'm making your soil better, which helps me as the operator right. I'm looking at better yield, more moisture retention, less nutrient loss, but at the end of the day you are building, you're improving.

52:27 Someone else's resource is what you're doing. To me that should be the easiest cell in the world as a landlord.

52:33 That'd be a piece of advice. You know, I, to be honest with you, we don't have a lot of issues with our landlords knowing coming across as concerned. Frankly, I kind of hold the opinion that once you lease land at someone you kind of give up the right to tell them what to do, but I'm not going to get into that any more than that.

52:51 Yeah, and I would kind of even just add to that as far as, like Keith mentioned, we've got these webinars recorded and you know show them this or take notes from a presentation like this. Give them the numbers that show not just that you're improving your own yield, because that doesn't necessarily affect the farmer or the landowner, but the issues of organic matter and how you're improving that asset for the next person that wants to lease that ground.

53:19 On the topic of yield not being as important, what is your typical yield for winter wheat and corn if you don't mind answering? Yeah, average yield for winter wheat out here is probably 60 bushel an acre, somewhere between 60 and 65. This year it was 70. We had a phenomenal year for winter wheat. For corn, I think the county average yield is probably 100 to 110. And I would say we fall right in that average. This year we did 125. We didn't get more moisture than normal, but we got it at the right times. And so you know, that's kind of where we're at yield-wise there.

53:58 Just a real quick yield comparison on the 60-inch corn study we've done. Now a lot of people have asked me, you know, what what ended up happening. You know, you got 60, so we planted like a 24,000 five population on average in this part of the world, right. So what we did was we took that 24,5 and we turned it into a 49,000 and a 60-inch row, right. So we doubled the population in the 60-inch rows, but we left the amount of fertilizer in the row the same. So we were effectively half-rating the nitrogen. And then growing another crop in between these rows. On the 400 acres that we did a 60-inch corn, our yield loss was eight percent. It was eight percent yield loss. It averaged I think 111 in the 30s and like 103 or 102 in the 60s. Now you're going to look at that and you're going to think, well, all right, it doesn't make a lot of sense until you realize that we had an eight percent yield loss on half the nitrogen and we grew a cover crop in the meantime. And so where I kind of see this going, frankly long term, is that's a real good scenario for like a silage corn if you're going to try and graze stuff, take silage corn off the first of September when your cover crop's still green, and you've just gotten a pile of grazing out there, an immense amount of grazing that you can consolidate those numbers and probably make a bang-up economics case for that practice. So something to be happy with there.

55:28 Yeah, absolutely. In fact, we have a comment: focus on profit, not yield. I think that's exactly what you're talking about. Bingo. Too often we focus on how much did you make, and it's like, well, that whether or not that's paying the bills and you're truly making profit. And like you said, knowing your costs is the only way to really know if you're making any money. And so that's huge. We've got two questions here.

55:54 I will take an eight percent reduction in yield for a 25 percent reduction in cost. Yeah, you know, I mean that's an absolute no-brainer from an economics perspective. You are better off there.

56:09 We got two questions involving compaction as far as the high risk of when your soils are wet, when it's not frozen. Do you have any advice for these time periods? Do you pull them off to feed them hay? And Jim asks, have you checked your compaction with a penetrometer? No, I have not checked compaction with the penetrometer. So I can't say that we physically measured it. Now all I have is observational examples from a yield map, right. And we, I mean I'm going to be honest, we have had places where it was obvious that those cattle were, generally it happens along fence lines and around waters, right. You know, if they got a place that they're congregating or 200 bulls are going to go to get water, you'll see compaction. And then as you get further away it gets better. So we've seen places where it has hurt our yield. I mean, there's no doubt about it. It comes down to a management thing, and you know, for us, we should have caught that earlier and moved them off, got them back in the feed lot, or fed hay somewhere to get them to not congregate as much.

57:16 But back to the soil, you know, the moist soil thing where we run into that problem most is the full season grazing when we're grazing cattle like in May, you know, on farm ground. That's one where we have delayed our grazing time because we're wet, or we have moved animals off farm ground back onto pasture simply because we knew we were going to have a mess from a compaction perspective. You know, the other thing that's important to remember about that too is when we graze bulls they're not

57:46 They're not intensely grazed if you will right. I mean this is 300 bulls on 900 acres. They're not packed in there. When we're rotationally grazing on winter wheat in May, we'll take 300 heifers and put them on 40 acres because that's the idea right, is small paddocks, short grazing intervals and you move them right. And so your compaction risk is a lot higher when you're packing them in tight like that and we have canceled plans before to make it better off.

58:19 Are you penalized at all by crop insurance using those cover crops? I mean so on the corn and the milo where we inter-seeded yes you do. You do get, you can't insure it right now. The cover crop behind winter wheat, that's one that doesn't matter because it's off before the corn, before the corn starts to grow. But yeah, like the inter-seeded stuff is a challenge and then like a lot of the full season covered, you know you're not insuring that. Our mixed species forage we're not ensuring that so the short answer is yes, we are.

58:57 I'm looking at the thing here, the left coast comment, and I apologize about that. I wasn't trying to be insensitive. I was more getting at the point of there are a lot of people that don't see EAG in a positive light. That was probably what I meant there. And to be honest with you it does come from the urban, coastal part of the United States. I mean that's just the honest to goodness truth. You know, that's what EAG is losing there in some cases. Right, I'm not going to say 100 percent. I'm sure there are places where it's understood but if you're going to have someone who's got a bad impression on EAG it's going to be there and that was kind of the point. So I apologize for being a little bit snarky with that.

59:42 It is 6:30 so I think we're probably going to wrap up but I do want to get to this last question from Jerry Daniels. Can you explain your water needs for the cattle in winter grazing? Yeah, so we try and do it where we've got a rural hydrant close. We do have some artesian water which is real deep, warm water that works better but that can be the hardest part. What we try and get ourselves is some energy-free insulated waters. There's a lot of companies that make them that don't freeze right. They're small reservoirs like a 10 gallon reservoir that's just constantly refilling so it doesn't have a chance to ice over. Big open waters, they stink in the winter and they're just terrible to deal with. But when you go back to the slide where I talked about 800 acres of ground soil tested, only 2,300 grazed, the reasons we didn't graze the other 6,500 is because we don't have fence or we don't have water and it's just honestly going to shoot. So we're only grazing where we've got a good insulated water. You know, we're not going to be hauling water to cattle, that's not something that is fun to do. So energy-free insulated stuff is what we go for.

1:00:53 Yeah well if there's anything I know there's a couple questions we didn't get to. If you guys want to get those answered you can email them to me and I will pass them on to Nick. My email is just my name, Noah, n-o-a-h@greencoverseed.com or you can follow the Jorgensen Landing cattle. They've got a website as well as some Facebook pages for the hunting as well as the cattle operations. So I have posted the links to those in the chat if you guys want to go and follow them and learn more about what Nick is doing with that.

1:01:25 Nick, I really do appreciate the time that you took to give this presentation for answering questions. Is there anything I guess that you want to hit on before we get out? Just thanks again for having me. It's an honor to do this. You know, I like sharing the story of what we're doing. You know, I'm not going to say everything we're doing is right by any means. But you know we're out here to learn. You know, that might be something to bring back to that first generation guy that asked the question. Be in this to learn. Don't be in this to do what everyone else has always done right because the only way we're going to get better off is to try things and fail at them sometimes in the means of innovation and improvement.

1:02:05 I really do appreciate it's been an honor. Yeah well like I said, we enjoyed having you on and it was an honor for us to be able to have your expertise and your knowledge and not just the knowledge but honestly the cats as the story aspect of why you're doing what you're doing. So we appreciate that.

1:02:26 With that we have so much, yeah no problem. I will have this recorded. We'll try to get it posted later this week. I'm not sure exactly what time that'll come out with Thanksgiving, but I would love for you guys to share this with anybody that you think would benefit from using this data and using this information to improve their operation as well. So thank you guys so much for tuning in. Next week we will have our webinar at the same time. I believe it's Adam Doherty next week so that'll be at 5:30 Central Time. Thank you guys for watching and we'll see you next week.