Beyond a Movement - Regenerative Ag Goes Mainstream

The stakes are well-known. Climate change could eliminate up to one-tenth of U.S. gross domestic product by 2100, with agricultural yields potentially down to 1980s levels by as soon as 2050, according to the National Climate Assessment.

Row crop agriculture contributes 5 percent of greenhouse gas emissions from the U.S., and is the largest emitter of nitrous oxide – a gas with 300 times more warming potential than carbon dioxide. However, scientists estimate that a 21 percent reduction in row crop emissions is a viable goal over the next 15 years through the optimization of current technologies – and a reduction of up to 71 percent is possible with new innovations.

Despite being a contributor, agriculture is also one of the most vulnerable sectors to climate change. But regenerative growing practices, which work with nature to optimize the health of the entire ecosystem, offer growers the ability to build healthy soils that can protect crops from uncertain rainfall, reduce the need for inputs, reduce farm costs and risks, restore biodiversity, and strengthen the long-term value of the land.

Despite the facts and warnings, regenerative agriculture has existed in the cognizant wings as it were, being seen more as a fringe movement or a catchphrase. However, more recently, the production methodology seems to be going mainstream and rapidly gaining ground (pun intended) with some of the world’s largest CPGs as they take a more active role in determining the integrity of their supply chains.

Within only a matter of weeks there have been numerous announcements by the world’s largest and leading food companies and retailers, detailing how regenerative agriculture is being integrated and adopted as a critical factor of their business strategies.

PepsiCo and Walmart

In March of this year, PepsiCo announced it is investing $216 million in long-term, strategic partnership agreements with three farmer-facing organizations: Practical Farmers of Iowa (PFI); Soil and Water Outcomes Fund (SWOF); and the Illinois Corn Growers Association (ICGA) to drive the adoption of regenerative ag practices across the U.S.

Four months later, another announcement reaches us that PepsiCo is partnering with Walmart on a seven-year collaboration to pursue $120 million work of investments focused on supporting U.S. and Canadian farmers in scaling regenerative agricultural practices on more than 2 million acres of farmland to deliver approximately 4 million metric tons of greenhouse gas (GHG) emission reductions and removals by 2030 - reflecting the equivalent to the electricity needed to power 778,300 homes for one year.

As well as lowering GHG emissions, the companies state that they also have a shared commitment to improving soil and water health, adding that a resilient food system is critical to both their businesses and in meeting Pepsi’s goal of seeing regenerative practices being adopted across 7 million acres by 2030 while striving toward net-zero emissions by 2040; and Walmart’s goal, along with the Walmart Foundation, to protect, restore, and more sustainably manage 50 million acres of land and 1 million square miles of ocean by 2030.

"This effort is a new model for PepsiCo, marking our first, large-scale strategic collaboration focused on sustainable agriculture with a retail partner," said Steven Williams, CEO, PepsiCo Foods North America.

"Farmers are critical to our business, and many of the brands our consumers know and love rely on ingredients that we source straight from the farm. By joining forces with Walmart, we'll be empowering farmers through education, upfront investment in outcomes, peer coaching, and cost-sharing – and hopefully inspiring others to join us."

ADM

Also this month, global sustainable agricultural supply chain leader Archer Daniels Midland (ADM) announced it is launching a significant expansion of its re:generations™ regenerative agriculture program, giving North American producers the ability to generate new income channels while making a positive impact on the environment.

After enrolling more than 1 million acres in 2022, with continued investment, the program now seeks to cover 2 million acres this year, and 4 million acres globally by 2025.

This expansion will include farmers in 18 U.S. states and three Canadian provinces, offering financial incentives and technical support for implementing cover cropping, improved nutrient management, and conservation tillage, with ADM incentivizing multiple practices and performance outcomes spanning crops including corn, soybeans, peanuts, and wheat.

“ADM’s purpose is to unlock the power of nature to enrich the quality of life, and we cannot achieve that purpose without a strong and unrelenting focus on protecting our planet, our communities and our people,” said Greg Morris, president, Ag Services & Oilseeds business, ADM. “Beyond that, sustainability is driving our strategic efforts to get closer to our producer customers and create value across our broad range of customers. Our work to rapidly scale up our regenerative agriculture efforts to 4 million acres by 2025 is one of the key ways in which we’re enabling our entire value chain to meet the demand for sustainably sourced products and helping to pave the way toward a more sustainable future.”

This July and August ADM program managers will begin conducting in-person informational meetings to educate producers on the program and its offerings, and to begin enrollment just as farmers are beginning to consider their cover crop plans for the fall and planting decisions for 2024. More information on how to enroll, along with additional details, can be found here.

Nestlé U.S.

Rounding out July’s announcements is Nestlé U.S., which stated it is investing to bring regenerative practices to wheat farms that supply ingredients for its DiGiorno pizza brand supply chain.

Nestlé explained that nearly two-thirds of its global GHG emissions comes from sourcing ingredients, and as part of its strategy to achieve net zero emissions by 2050, the company aims to source 20 percent of its key ingredients through regenerative agriculture by 2025, and 50 percent by 2030. Through a combination of financial support and technical resources and assistance, the company will help wheat farmers engage in cover cropping, eliminate or reduce tillage, and to reduce the use of pesticides for improved soil health and fertility, and to protect biodiversity and natural resources.

Through partnerships with ADM and Ardent Mills, two key supplier of wheat for DiGiorno, the initiative will bring regenerative agriculture to more than 40,000 hectares of land across Kansas, North Dakota, Indiana, and Missouri - an area equal to the size of 53,000 football fields, and almost double the area of land needed to grow the wheat used in its DiGiorno pizzas.

Nestlé explained that nearly two-thirds of its global GHG emissions comes from sourcing ingredients, and as part of its strategy to achieve net zero emissions by 2050, the company aims to source 20 percent of its key ingredients through regenerative agriculture by 2025, and 50 percent by 2030.

“...as the world's largest food and beverage company, we have a tremendous opportunity to help create a regenerative, healthy food system while also working with the local farming communities that employ it," said Steve Presley, CEO, Nestlé Zone North America.

"To do this we need to find solutions that create shared value throughout the ecosystem - value for us, value for farmers, value for consumers, and value for the planet. This investment in wheat producers is just one example of how we are bringing this commitment to life across our supply chain."

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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