Carbon Forces A Y In the Road For Ag Retail
According to Brett Bruggeman, president of WinField United, the opportunities around carbon markets are bringing a stratification in the ag retail business.
“We used to say it starts with seed—but it starts with soil. That’s the greater purpose. That’s the livelihood for the grower. If it doesn’t start with the soil, you’re missing a step,” Bruggeman says.
In 2021, Land O’Lakes, Inc., WinField United’s parent company, launched its first tranche of payments through the Truterra carbon program, its offering in this space, which paid farmers more than $4 million in carbon contracts.
He says the company learned four key lessons in its first year of helping its retailers and farmers participate with carbon contracts:
- The importance of a green strategy. “Having a green strategy might be as important as a hiring strategy. You’re going to see us continue to focus on a green strategy at Land O’Lakes,” Bruggeman says.
- Top to bottom–you have to have an understanding of the power of topsoil. “The most progressive growers are using the Truterra Sustainability Tool to keep the rates they have or get new land based on topsoil being the no.1 asset. Momentum wise, I think it’s a fuel to the engine. It’s a confidence builder,” Bruggeman says.
- We’re at a tipping point for farmers engaging. “The most progressive growers have figured out if they aren’t selling, they’ll be buying credits. There are more farmers who want to know about carbon than those who don’t,” he says.
- This isn’t an experiment. “We are making sure we are clear that we are shaping a market and building a market. The last time we got to do this was the fungicide market,” Bruggeman says. “We have people in this space who are treating it like an experiment or treating it selfishly to offset their credits. You build credibility a thimble at a time and lose it a wheelbarrow at a time. And farmers are giving up data without thinking who they are giving it to.”
Bruggeman says those lessons are steering his team as they launch their program for its second year and second tranche of payments.
When asked what he may have done differently if he could go back to the first year of the program, his answer boils down to “more.”
“We would have put the foot on the accelerator,” he says on reflection. “Knowing the amount of enthusiasm we had about Truterra’s carbon program with 1.0 and now 2.0, I would have moved more resources quicker. That’s how bullish we are about shaping this market.”
He sees the industry in having a finite window of time to act.
“We have 24 months–not much longer than that– as a window for the masses to jump on,” Bruggeman says. “It’s important because it establishes the size of the market and the investments needed to play in this market.”
To keep the market science based and not the “wild west” WinField United is staying rooted in its data—both field history and in-season/real-time data.
“Our position of being an aggregator of data has only gotten stronger,” he says. “You have to have the tools to be able to track and trace. Most growers won’t do the administrative work. And if you don’t have the data in a usable format, it’s not a good day. That’s where we can lead with our retailers.”
He nods to the investments in the Answer Plot program, Field Forecasting Tool, Data Silo, Truterra’s sustainability tool, and others as building blocks for the WinField United approach to its carbon offering.
“Agriculture is a 70% predictability game. If you can get your decision success at 70% or better, you’ve done a heck of a job with all of these variables. You won’t get 100%--but you’re trying to increase your probability each time,” he says.
He sees the ag retailer’s ability to participate in carbon markets as a new score card.
“Farmers can sort through how much a retailer understands about their farm. And when they talk about the soil health components, you’ll realize how much they want to help in this market opportunity,” Bruggeman says.
