Growing Returns

A new guide for farmers to boost profits through conservation

As the struggling U.S. farm economy continues to make the news, agricultural organizations, government agencies and conservation groups are rightly focusing their attention on the affordability of conservation adoption.

A 2018 report from EDF and agricultural accounting firm K·Coe Isom, Farm Finance and Conservation, found that farmers who adopt conservation practices such as no-till, nutrient optimization, cover crops and diverse rotations improved their profitability and were more resilient.

Despite these benefits, the costs of transitioning to conservation management practices can be a barrier to adoption. In addition, any change carries some risk, and farmers are likely to be reluctant to take on additional risk in the current economic climate.

For these reasons, it is more important than ever to provide farmers with practical guidance on how to minimize the costs and risks of conservation adoption. Fortunately, a new technical bulletin from the Sustainable Agriculture Research and Education (SARE) program at the U.S. Department of Agriculture does just that.

Cover Crop Economics: Opportunities to Improve Your Bottom Line in Row Crops [PDF] describes seven different management scenarios in which farmers can speed their transition to cover crops and achieve profitability more quickly — in some cases within the first year of adoption. Read More »

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How conservation can enhance a farm’s financial health — even in challenging times

With the U.S.-China trade war and flooding in the Midwest continuing to make headlines, national attention is focused on the increasing economic challenges facing farmers and their families.

After years of weak commodity prices, these financial stresses are adding up. In the Corn Belt, farm bankruptcies are at the highest level in over a decade.

Given this challenging economic outlook, some might assume that farmers will abandon conservation efforts and focus exclusively on their finances. However, many of the financial best practices cited by farmers and encouraged by farm financial advisers are the very same principles that can help farmers continue to improve environmental outcomes. Here are four examples. Read More »

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What food companies can learn from Smithfield Foods exceeding its grain sustainability goal

“Can you help us achieve this?”

That was the question that Smithfield Foods’ chief sustainability officer asked Environmental Defense Fund more than five years ago, after Walmart challenged the world’s largest hog producer and pork processor to improve sustainability in its feed grain supply.

At the time, very few food companies considered grain sustainability to be their responsibility, and even fewer were taking steps to improve that segment of their supply chain. But Smithfield responded to Walmart’s challenge.

In 2013, the company committed to work with grain farmers in its supply chain to adopt farming practices that would optimize fertilizer and build soil health on 75 percent of the area from which Smithfield directly sources grain — about 450,000 acres. EDF partnered with Smithfield to figure out how to reach this goal.

Smithfield announced today that it exceeded that goal, improving practices on 560,000 acres in 2018. Read More »

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How farmers’ business partners benefit from conservation

Most efforts to advance agricultural conservation focus on the farmer – with good reason, since conservation practice adoption is the direct result of farmers’ decisions, time and resources. They also focus, of course, on the environment, as the need to improve water quality and reduce greenhouse gas emissions from agriculture grows.

But conservation efforts must also recognize the relationships between farmers and their business partners. Agricultural lenders, crop insurers and landowners are critical to achieving widespread conservation adoption, and it’s in their financial interest to do so. Here’s why. Read More »

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How one company’s sustainability goal is poised to change an entire industry

Smithfield Foods, the world’s largest pork producer, has committed to a major increase in manure-to-energy projects. The company will invest in infrastructure and provide farmer incentives to install manure lagoon covers and digesters on 90 percent of its total hog finishing capacity, a standardized measurement that excludes sow and nursery farms, in North Carolina, Missouri and Utah over the next ten years.

This is a major step forward for the hog industry. Open lagoon and sprayfield systems of manure management are predominant in North Carolina and raise concerns about greenhouse gas emissions, water quality, odor and resilience to extreme rainfall.

There are currently only a few manure-to-energy projects in North Carolina. This commitment from Smithfield means they will become the new status quo.

The company’s largest source of greenhouse gases is methane emitted from open manure lagoons. Here’s how this commitment will turn that liability into an asset – and how we can ensure that it delivers the full potential benefits of the change. Read More »

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We can solve North Carolina’s manure challenges. Here’s how.

Hurricane Florence caused more than $1.1 billion in agricultural losses, according to the latest estimates from the North Carolina Department of Agriculture and Consumer Services. Row crop losses total nearly $990 million. Livestock, poultry and aquaculture damages total $23 million, and include the deaths of 4.1 million chickens and 5,500 hogs.

Many farmers and friends have confided to me that flooding from Florence has been worse than the flooding caused by Hurricane Floyd, which until now had been North Carolinians’ point of reference for agricultural devastation wrought by too much water. Florence also followed on the heels of 2016’s Hurricane Matthew, which caused flooding that many communities in North Carolina’s coastal plains had only just recovered from.

The losses for farmers, their families and rural communities are staggering. This devastation underscores the need for action. Solutions exist to help the agricultural sector build resilience and long-term prosperity, but the private and public sectors can’t delay implementing them any longer.  Read More »

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Farmers open their books to show financial impact of conservation

Farm accountants have a lot more to offer than advice on how to maximize tax returns. In fact, they play a pivotal role in scaling conservation.

Environmental Defense Fund and K·Coe Isom AgKnowledge, a managerial accounting service for farmers and ranchers, teamed up with three Midwestern grain farmers to study how the adoption of conservation practices affects farm budgets.

These farmers, based in Iowa, Kansas, and Ohio, have all adopted some combination of no-till, crop rotations, cover crops and nutrient management. They were generous enough to open up their books so that AgKnowledge could analyze the financial impact of these conservation activities.

The full report will be out later this year, but initial results show how conservation can benefit farmers’ bottom lines. Here are three lessons we learned from this analysis. Read More »

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3 reasons animal agriculture should be leading the way on supply chain sustainability

Earlier this month, the U.S. Department of Agriculture predicted that Americans will eat a record-breaking amount of meat in 2018 [PDF] – 223 pounds per person of chicken, pork and beef. That’s why I went to Atlanta last week to speak to environmental managers for the nation’s largest meat companies at a conference held by the North American Meat Institute.

My message for those I met? Animal agriculture should be leading the way in addressing the full impacts of their supply chains, from feed grain production all the way to the consumer.

Read More »

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3 steps to close the conservation data gap between farmers and investors

Farmer Scott Henry stands in a soybean field with a tablet computer.

Sustainable agriculture must be economically viable. Photo credit: Leslie Von Pless

In addition to benefiting the environment, on-farm conservation practices tend to create economic value for farmers and surrounding communities. Anecdotal examples of these benefits abound – fertilizer efficiency saves farmers money; no-till lowers labor and fuel expenses; and buffers and wetlands reduce downstream flood risk and drinking water treatment costs.

Quantifying them, however, remains a major challenge. The resulting data gap limits broader adoption of conservation measures.

Farmers care about stewardship, but many conservation practices require large upfront investment or take too long to produce returns. At the same time, investors want to help farmers generate financial and environmental benefits, but a lack of economic data holds them back, according to a study from Encourage Capital [PDF] and the USDA Natural Resources Conservation Service. Read More »

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How an innovative corn supply chain model can empower companies to help farmers

Grain elevator. Credit: Flickr user Wilson Hui

A new study out this week in the Proceedings of the National Academy of Sciences suggests that trying to make supply chains more sustainable is not for the faint of heart, especially when it comes to food – and corn in particular.

Companies are keenly aware that consumers care about where their ingredients come from and how they were grown, and that improving efficiencies along the supply chain can be good for business. But the raw ingredients at the end of those chains are typically produced by a vast network of farmers who bring their corn to regional grain elevators and then sell their crops to grain traders. This is just the start of a lengthy and complicated process that can be challenging for food companies to disentangle and understand, let alone influence to become more sustainable.

That’s why the new study, which focuses on a corn supply chain model developed by the University of Minnesota’s Northstar Initiative for Sustainable Enterprise (NiSE), can be an important tool for empowering food companies with information that can help them tackle the tough job of supply chain sustainability.  Read More »

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