Want to grow another crop? Try carbon.
Looking to diversity your crop income stream? The answer may lie below your feet.
Carbon markets are booming, and practices that sequester carbon in the soil and slice greenhouse gas emissions may mean more money for farmers.
“What excites me is that we have the opportunity in agriculture to define what this space looks like,” says Jim Hedges, vice president of seed for WinField United. Hedges and others discussed carbon markets at this week’s virtual Commodity Classic.
Carbon Market Boom
Carbon markets pay farmers to raise crops or livestock in ways that sequester or reduce greenhouse gases that fuel climate change: carbon dioxide, nitrous oxide, and methane. Although many farmers have typically viewed manmade climate change with skepticism, that’s not the case in today’s corporate boardrooms.
“A lot of Fortune 500 companies have made carbon-negative pledges to investors and Wall Street,” says Hedges. “As those promises are made and they want to fulfill them, it creates a lot of demand for carbon.”
One recent example was a partnership announced last month when Microsoft formed a working partnership with Truterra in a program called TruCarbon. Microsoft is the first secured buyer in this program to purchase carbon in 2021, which will help meet the company’s commitment to be carbon negative by 2030, say company officials. An additional push is coming at the federal level, as the Biden Administration has announced federal carbon market plans.
Particularly of interest is sequestering nitrous oxide, which is fueled partially by the manufacture of agricultural fertilizer. Sequestering carbon dioxide is 288 times more impactful than sequestering carbon dioxide, says Hedges.
Fit Your Farm
However, it’s important that farmers consider how all this fits their farms, says Aaron Sindelar, conservation agronomist for Central Valley Ag Cooperative.
He says some of Central Valley Ag Cooperative’s customers in Iowa, Nebraska, and Kansas have been tracking these markets for a couple of years, but most are at the beginning stages where they are examining how these plans can fit into their farms’ business plans.
Some farmers may already be able to access carbon payments with little change, such as those who no-till and seed cover crops. However, switching to these practices requires some transition time and also some risk.
“It’s a pretty big commitment for conventional tillage growers who are asked to switch to no-till,” says Sindelar.
However, carbon markets don’t necessarily shut these farmers out, for payments can be made based on changes in nitrogen (N) management. Like no-till and cover crops, though, this also entails risk, as no farmer wants to risk their corn crop by running out of N during the growing season, Hedges says.
Sindelar says tools like use of N stabilizers or other enhanced nutrient management practices are ways to help a farmer’s bottom line and also help obtain a payment while slicing greenhouse gas emissions.
Hedges adds that extensive data now exists in how hybrids mesh with response to N, such as from WinField United’s Answer Plot system that generates 6 million data points annually. This enables recommendations to be made that let farmers simultaneously optimize N applications and yields, he says.
“The carbon market arena has been an unbelievably rapidly developing space,” says Sindelar. “It’s amazing how much has been learned about it even in the last few months.
“My recommendation is that if this is something you’re interested in, make sure you do your homework and be a little patient as well, too,” he says. Sindelar expects programs to grow from ones that now pay an amount such as $15 per ton for sequestering carbon into ones that pay for more efficient nitrogen practices that not only improve yields, but provide credits for payment.
“It’s an exciting time,” he says.