Match Made in Heaven:

Understanding the economics of integrated crop and livestock systems: for lenders

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September 15, 2025

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
• Paul Dietmann, Compeer Financial

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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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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Project Question:

Does crop and livestock integration

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financial resilience?

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
• Average acres rented: 251

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

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

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What’s keeping farmers from integrating?

Perceived challenges =/= actual challenges

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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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Bottom line(per acre basis)

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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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Expense categories unique to livestock farms (per acre basis)

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Labor expense categories (per acre basis)

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Business expense categories (per acre basis)

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Bottom line(per acre basis)

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$427

$370

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

• We used cash income & expenses, split between crop and livestock enterprises
• The calculator depends on crop, hay, and pasture acreages. This example uses 7 farms from the study.

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Greater on gain side = net gain for farm

Greater on loss side = net loss for farm

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

7 farm average gains & costs from livestock

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Composite farm bottom line

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* Net gain from sum of crop + livestock enterprises

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 variables.
• Target variable is net crop + livestock income
• Changing variables 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

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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Indicators of long-term financial health

• A statement of cash flows provides another means of assessing financial health

• A farm financial scorecard can provide a snapshot of financial health

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Farm financial scorecard

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Farm financial scorecard

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Farm financial scorecard

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Farm financial scorecard

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Statement of cash flows, 2024

(11 integrated farms)

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Cash provided by operating activities

(11 integrated farms)

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Cash provided by investing activities

(11 integrated farms)

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Cash provided by financing activities

(11 integrated farms)

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Statement of cash flows, 2024

(11 integrated farms)

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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 diversification 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

Evaluation Survey: please fill this out!

z.umn.edu/Sept15_eval

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Conclusions

• Integrated crop and livestock systems are complex and varied
• Income & costs are diversified across enterprises
• For our farms, gross income was higher, costs were lower, yielding a significantly higher net income per acre
• Financial benchmarks suggest that integrated farms can be more financially resilient.

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• Finding processing
• Finding markets
• Livestock Infrastructure
• Finding Labor
• Time Management

Challenges

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