Growing Returns

Selected tag(s): farm finance

Farm budget analysis finds 3 ways conservation affects the bottom line

Soil health practices can provide many public environmental benefits including reduced soil erosion, increased soil organic carbon and improved water quality. However, adoption of soil health practices such as no-till and cover crops only represent 26% and 4% of U.S. farmland respectively.

Still, we know farmers can be rapid adopters of new technologies, including new seed varieties and equipment, when presented with a profitable solution. Read More »

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“Success first.” How one ag retailer is helping farmers adopt conservation practices, profitably.

Missouri-based ag retailer MFA Incorporated is a regional farm supply and marketing cooperative representing 45,000 farmers and ranchers. It has 130 locations throughout Missouri and in parts of Kansas, Iowa and Arkansas. The co-op’s priority is neither “sales first” nor “conservation first,” but “member success first.”

With this priority in mind, MFA Inc. and three state conservation agencies — Missouri Department of Conservation (MDC), Missouri Natural Resource Conservation Service (NRCS) and Missouri Department of Natural Resources — teamed up to help farmers manage for both profitability and environmental sustainability.

The innovative public-private partnership is featured in a new report prepared for Environmental Defense Fund by Datu Research, Helping Farmers Find Profit and Sustainability: A Case Study of MFA Inc. Shows How Conservation Can Support the Bottom Line. Read More »

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Federal Reserve warns of financial risks from climate change. Agricultural banks must act fast.

Climate change poses a multitude of financial risks and financial leaders are increasingly calling for the measurement, disclosure and mitigation of these risks.

The Federal Reserve recently highlighted climate change in its annual financial stability report, warning that climate-driven weather events could cause price instability and other significant financial system vulnerabilities. The Fed’s report adds momentum to a growing wave of attention being paid to climate-related financial risk. Read More »

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How can we measure the profitability of healthy soils? There’s a new guide for that

Any investment, from Wall Street to a local park, requires investors to establish expectations for the costs, benefits and timing. They dedicate significant resources to researching and identifying these expectations to optimize their investment decision.

Investing in soil health should be no different.

Read More »

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Could catalytic capital help shape the agriculture of tomorrow?

Investing in climate-smart agriculture is a hot topic. Startups in plant-based meats and dairy alternatives are taking the market by storm. Major food companies are setting sustainability targets and investing in soil health practices.

Yet farmers face poor farm economic conditions stemming from trade disputes, COVID-19 supply chain disruptions, and increasingly frequent, extreme and destructive weather events.

Farmers across the U.S. have felt the pain of extreme weather in 2020, from the derecho that wreaked havoc in the Midwest to the destructive wildfires that continue to rage out West. (Photo credit: National Weather Service).

It’s clear that more innovation is needed to make the food system fit to face 21st century challenges, and fast. Catalytic capital can help.

Read More »

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3 takeaways from my testimony to Congress on climate-related financial risks to U.S. agriculture

Highlight: EDF’s Maggie Monast testified at a hearing of the House Select Committee on the Climate Crisis, “Creating a Climate Resilient America: Strengthening the U.S. Financial System and Expanding Economic Opportunity.” Watch here.

It’s becoming impossible to ignore the risks that climate change poses to financial markets, including those that support U.S. agriculture.

Increased temperatures and more frequent droughts and extreme precipitation events threaten crop productivity across the nation. In 2020 alone, we have seen ample evidence of these impacts, including destructive storms in the Midwest, hurricanes along our coasts, and wildfires and smoke in the West.

These physical risks of climate change create risks to the U.S. financial system, which was the topic of last week’s hearing held by the House Select Committee on the Climate Crisis, entitled “Creating a Climate Resilient America: Strengthening the U.S. Financial System and Expanding Economic Opportunity.”

I testified to the committee on climate risks to the agriculture finance system — and opportunities to build resilience. Read More »

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Financial leaders release climate risk report calling for agricultural resilience

A report released today by a subcommittee of the U.S. Commodity Futures Trading Commission, Managing Climate Risk in the U.S. Financial System, examines the threat that increasingly extreme and volatile weather poses to the stability of financial markets, including U.S. agricultural markets. Representatives from EDF served on the 35-member panel.

The report found climate risks pose a wide range of threats to U.S. agriculture — including heat stress on farmworkers, livestock and crops, soil and water quality degradation, more frequent supply chain disruptions and productivity declines. Read More »

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3 steps for agricultural lenders to mitigate climate risk and finance resilience

Farmers in the U.S. are facing severe challenges including poor economic conditions, extreme weather and disruptions from the COVID-19 pandemic. These risks also impact farmers’ financial partners, including agricultural lenders.

While some of these risks are difficult to anticipate and plan for, there are growing opportunities and resources available for farmers and their lenders to better understand their vulnerabilities related to climate change — and take steps to build resilience.

A new report, Financing Resilient Agriculture: How Agricultural Lenders Can Reduce Climate Risk and Help Farmers Build Resilience, finds that lenders can reduce risk by supporting farmer investments in conservation practices like no-till and cover crops that are known to build climate resilience.

This report provides a path forward for lenders to support a more productive, profitable and resilient agricultural system.

Read More »

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Anticipating sharp declines in 2021 farm profitability, experts suggest cost savings from fertilizer efficiency

Farmers across the country may not see profitable conditions for some time as the effects of COVID-19 suppress already meager profit margins.

Projections from the University of Illinois and the University of Missouri show that farm profits could fall significantly in 2021, and economists are recommending farmers examine fertilizer application and tillage passes for the potential to provide highly needed cost savings. Read More »

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As if things weren’t already hard enough, farmers must brace for another wet spring

Farmers have already been dealing with tough economic conditions exacerbated by a trade war, extreme weather and now the coronavirus. Unfortunately, the latest 2020 spring flood outlook shows that farmers in the Midwest could be facing yet another wet year.

Although projected to be less severe than 2019, the U.S. Spring Flood and Climate Outlook for 2020 predicts widespread flooding across 23 states with severe flooding in North Dakota, South Dakota and Minnesota. As a result of the 2019 floods, soils across the Midwest are full of moisture this spring, increasing the likelihood of flooding in 2020. Source: NOAA 

Making American farmland resilient to growing weather shocks like flooding requires greater adoption of conservation practices such as no-till and cover cropping practices that improve water infiltration and reduce erosion and field runoff. Despite the financial benefits of these practices, adoption remains low across the country. In 2017, only 3.9% of U.S. farmland adopted cover crops.

How can we scale conservation practice adoption to reduce risk and boost resilience of the agricultural sector? Read More »

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