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Match Made in Heaven:

Understanding the economics of integrated crop and livestock systems: for farmers & educators

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September 10, 2025

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Continuous Living Cover (CLC)�Roots in the Ground Year Round

Agroforestry Perennial Perennial Perennial Rotations-Cover

Biomass Forage Grains Crops-Winter Annuals

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Continuous living cover

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Funding support for this project

This material is based upon work supported by USDA/NIFA under Award Number 2023-70027-40444.

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Project team:

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  • Jane Jewett, Green Lands Blue Waters Livestock & Grazing Coordinator
  • Laura Paine, Wisconsin Grazing and Livestock Specialist
  • Jennifer Lutes, University of Missouri Extension
  • Gabi Bolwerk, University of Minnesota Extension
  • Jason Cavadini, University of Wisconsin Extension
  • Margaret Chamas, Practical Farmers of Iowa

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Why livestock integration?

  • Soil health principles
    • Keep the ground covered (soil armor)
    • Minimize soil disturbance
    • Increase plant diversity
    • Living roots year round
    • Integrate livestock

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Why livestock integration?

  • Diversity = Resiliency
  • Adding diverse crops and livestock to a farm can:
      • Increase soil health
          • Improve water regulation
              • Increase resilience to extreme weather
                  • Maintain crop yields (and sales) in challenging weather years

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What does livestock integration look like?

Match Made in Heaven Survey:

  • Conducted in 2023
  • 553 survey responses
  • 25 states represented
  • Average age: 49 years
  • Average years farming: 23
  • Average acres owned: 260 (range: 0 to 3000)
  • Average acres rented: 251 (range: 0 to 4000)

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Enterprise distribution and structure

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Livestock integration practices�Percent of respondents who have used or are currently using these practices

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Website resources:

Survey summaries

  • All respondents
  • By state
  • Beginning farmers
  • Experienced farmers
  • Crop + livestock farmers
  • Crops-only farmers
  • Livestock-only farmers

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https://greenlandsbluewaters.org/match-made-in-heaven-livestock-crops/#survey

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Website resources: Infographics and case studies

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https://greenlandsbluewaters.org/match-made-in-heaven-livestock-crops/#case-studies

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What livestock integration benefits have farmers seen?�% responding “quite a bit” or “a great deal”

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Crop and Livestock Integration Financials:

For crop farmers, when does adding livestock pay?

  • Are there long-term profitability benefits associated with diversified systems with multiple enterprises generating income?
  • Are there efficiencies gained in integrated systems that can save farmers money (e.g. fertilizer, ag chem costs)?

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What did we learn about financials of integrated systems?

  • Collected detailed financial information for 2024
    • Used the U-Minn FINPACK framework for data collection
    • 11 integrated crop and livestock farms
    • 4 states (Iowa, Minnesota, Missouri, Wisconsin)
    • Average size: 964 acres (32% Crop, 16% Hay, 51% pasture)
  • Compared with crops-only farms from FINBIN
    • Same states: MN, MO WI (no IA data available)
    • Same size range: 501-1000 acres
    • Approximately 610 farms

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Income categories (per acre basis)

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Source

Crops only

Crops and livestock

Crop total return

$620

$147

Livestock total return

$0

$538

Crop insurance revenue

$71

$17

Hedging & other income

$4

$59

Government payments

$35

$24

Total gross income

$730

$784

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Bottom line(per acre basis)

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Category

Crops only

Crops & livestock

Gross Total Income

$730

$784

Total Crop Expenses

$300

$105

Total Livestock Expenses

$0

$181

Whole Farm Expenses

$266

$156

Overhead Expenses

$161

$214

Total Expense

$722

$656

Net return

$7

$128

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Are there efficiencies gained in integrated systems that can save farmers money (e.g. fertilizer, ag chem costs)?

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Category (per acre)

Crops only

Crops and livestock

Seed

$90

$32

Fertilizer

$116

$39

Crop chemicals

$57

$24

Crop insurance

$26

$6

Drying expense

$10

$0

Storage & consultants

$1

$5

Total

$300

$105

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Expense categories unique to livestock farms (per acre basis)

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Category

Crops and livestock

Feeder livestock purchase

$153

Purchased feed

$13

Veterinary

$7

Supplies

$3

Bedding

$5

Total

$181

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Labor expense categories (per acre basis)

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Category

Crops only

Crops and livestock

Custom hire

$12

$36

Hired labor

$17

$76

Total

$29

$112

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Business expense categories (per acre basis)

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Category

Crops only

Crops and livestock

Land rent

$173

$38

Depreciation

$54

$14

Interest

$42

$14

Farm insurance

$14

$15

Taxes

$8

$10

Marketing, dues

$7

$11

Total

$298

$102

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Bottom line(per acre basis)

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Category

Crops only

Crops & livestock

Gross Total Income

$730

$784

Total Crop Expenses

$300

$105

Total Livestock Expenses

$0

$181

Whole Farm Expenses

$266

$156

Overhead Expenses

$161

$214

Total Expense

$722

$656

Net return

$7

$128

$427

$370

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Crop and Livestock Integration Financials:

For crop farmers, when does adding livestock pay?

  • Are there long-term profitability benefits associated with diversified systems with multiple enterprises generating income?
  • Are there efficiencies gained in integrated systems that can save farmers money (e.g. fertilizer, ag chem costs)?

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Using a partial budget analysis

  • A partial budget helps us evaluate the financial effect of incremental changes. We used cash income & direct expenses.
  • It only includes resources that will be changed. It does not consider the resources in the business that are left unchanged.

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Gains

Losses

Income gained from the new enterprise

Direct costs of the new enterprise

Costs avoided because of the new enterprise

Income lost due to the new enterprise

(Income gained + Costs avoided) > (New costs + Income lost) = NET GAIN

(Income gained + Costs avoided) < (New costs + Income lost) = NET LOSS

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Composite scenario, 7 farms: �Basic crop costs and income summary�

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Corn: 137 acres

Soybeans: 123 acres

Winter wheat: 90 acres

Hay: 170 acres

Other crops: 17 acres

Pasture: 561 acres

120 cow/calf pairs

2024 prices:�Corn: $4.40/bu

Soybeans: $11/bu

Wheat: $5.52/bu

Hay: $140/ton�Feeder calf: $2.70/lb

Bred heifer: $3315/hd

Cull cow: $1220/hd

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7 farm average gains & costs from livestock

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Livestock added income

Livestock added costs

100 feeder calves @ 550 lbs

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Including veterinary, purchased feed, seed, labor, equipment, fencing, watering, housing, etc.

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10 bred heifers

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6 cull cows

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Total

$232,889

Total

$125,352

Cropping expenses saved due to livestock

Crop income not realized (used for livestock)

Less crop production cost on hay/pasture

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Grain fed to animals instead of sold

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Value of manure as fertilizer $45/dry ton

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Hay fed to animals instead of sold

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Value of soil retained on perennial acreage

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Less opportunity cost of crop sales from tillable hay or pasture acres

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Total

$55,234

Total

$78,302

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Composite farm bottom line

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Bottom line

Whole farm

Gain from livestock

$232,889 + $ 55,234

Costs from livestock

$125,352 + $ 78,302

Net gain from livestock

$84,469

Crop enterprise losses

($31,695)

Net gain*

$52,775

* Net gain from sum of crop + livestock enterprises

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What does a sensitivity analysis tell us?

  • Sensitivity analysis is a financial model that determines how target variables are affected based on changes in other key variables.
    • Target value is net income from livestock + crop enterprises
    • Variables that are changed are commodity prices of crops and livestock

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Green = combination of livestock + crop enterprises is profitable

Red = combination of livestock + crop enterprises is unprofitable

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Green = combination of livestock + crop enterprises is profitable

Red = combination of livestock + crop enterprises is unprofitable

* 30-year averages: Corn: $3.64, Soybeans: $8.97

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Livestock: net benefit or drag on the overall farm cash income?

Purple area = conditions in which net cash gains from livestock + crop enterprises overcome and exceed potential gains if all tillable acres were in cash crops

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Farm with livestock loses money: more loss than if all tillable acres were in cash crops

Farm with livestock loses money: less loss than if all tillable acres were in cash crops

Farm with livestock makes money: less gain than if all tillable acres were in cash crops

Farm with livestock makes money: more gain than if all tillable acres were in cash crops

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Farm with livestock loses money: more loss than if all tillable acres were in cash crops

Farm with livestock loses money: less loss than if all tillable acres were in cash crops

Farm with livestock makes money: less gain than if all tillable acres were in cash crops

Farm with livestock makes money: more gain than if all tillable acres were in cash crops

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Crop and Livestock Integration Financials:

For crop farmers, when does adding livestock pay?

  • Are there long-term profitability benefits associated with diversified systems with multiple enterprises generating income?
  • Are there efficiencies gained in integrated systems that can save farmers money (e.g. fertilizer, ag chem costs)?

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Farm financial scorecard

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If all your bills showed up tomorrow, do you have the cash to cover them?

Liquidity

For every $1

Crops only farms

Crops & livestock farms

Current ratio

of bills due: $ available

$2.11

$5.94

Working capital to gross revenue

in income: $ in cash reserve

$0.52

$0.47

Working capital to operating expense

spent on expenses: $ in cash reserve

$0.62

$0.68

Vulnerable

Moderate

Strong

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Farm financial scorecard

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If you sold everything today, how much would be left after paying the bank?

Solvency

For every $1

Crops only farms

Crops & livestock farms

Farm debt to asset ratio

of assets: $ owed to bank

$0.38

$0.14

Farm equity to asset ratio

of assets: $ owned by farmer

$0.62

$0.86

Farm debt to equity ratio

owned: $ owed to bank

$0.61

$0.16

Vulnerable

Moderate

Strong

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Farm financial scorecard

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Vulnerable

Moderate

Strong

For every $100 of sales, how many dollars do you really keep?

Profitability

For every $100 in

Crops only farms

Crops & livestock farms

Rate of return on farm assets

assets: $ earn/ lose

-$0.40

$3.30

Rate of return on farm equity

equity: $ earn/ lose

-$3.40

$3.50

Operating profit margin

sales: $ profit or loss

-$1.00

$20.00

Asset turnover rate

assets: generates $ in sales

$26.00

$16.00

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Farm financial scorecard

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Vulnerable

Moderate

Strong

Do you have enough leftover cash flow to cover what you promised the bank each year?

Repayment Capacity

For every $1

Crops only farms

Crops & livestock farms

Debt coverage ratio

needed for payment: $ available

$0.70

$6.23

Term debt coverage ratio

of long term debt due: $ available

$0.64

$7.75

Replacement coverage ratio

needed to replace equipment: $ available

$0.50

$3.58

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Farm financial scorecard

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Out of every $1 earned, how many cents are swallowed by costs before you see a profit?

Financial Efficiency

For every $1

Crops only farms

Crops & livestock farms

Operating expense ratio

of sales: $ to expenses

$0.84

$0.69

Depreciation expense ratio

of sales: $ is depreciation

$0.09

$0.02

Interest expense ratio

of sales: $ pays interest

$0.07

$0.01

Net farm income ratio

of sales: $ is profit

$0.01

$0.28

Vulnerable

Moderate

Strong

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Crop and Livestock Integration Financials:

For crop farmers, when does adding livestock pay?

  • Are there long-term profitability benefits associated with diversified systems with multiple enterprises generating income?
  • Are there efficiencies gained in integrated systems that can save farmers money (e.g. fertilizer, ag chem costs)?

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Challenge of Diversification

One enterprise likely to be less profitable than the other; provides temptation to specialize.

Tradeoffs between the long-term, risk reducing effects of diversity and the perceived short-term economic loss of allocating resources to the less profitable enterprise.

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Short Run analysis

Long Run analysis

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Evaluation Survey: please fill this out!

z.umn.edu/Sept10_eval

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Conclusions

  • Integrated crop and livestock systems are complex and varied
  • Income per acre is typically higher than for crops-only farms
  • Cost of production is significantly higher on a per acre basis
  • Financial benchmarks suggest that integrated farms may be more financially resilient.

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  • Finding adequate & premium markets
  • Fence & Water
  • Housing
  • Labor
  • Time Management

Challenges

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Conclusions

  • Farms with livestock see these as less challenging

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Continuous Living Cover (CLC)�Roots in the Ground Year Round

Agroforestry Perennial Perennial Perennial Rotations-Cover

Biomass Forage Grains Crops-Winter Annuals

Questions? Comments?

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Continuous living cover

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https://greenlandsbluewaters.org/match-made-in-heaven-livestock-crops