麥肯錫-通過(guò)再生農(nóng)業(yè)振興田地和資產(chǎn)負(fù)債表 Revitalizing fields and balance sheets through regenerative farming

Mcsey

&company

AgriculturePractice

Revitalizingfieldsandbalancesheetsthroughregenerativefarming

MillionsofacresofUScornandsoycrops—aswellastheplanetmoregenerally—couldbenefitfromregenerativeagriculturepractices.Butfarmersneedabetterwayforward.

byOwenStockdale,PradeepPrabhala,andTomBrennanwithRuiChen

December2024

Agricultureisacornerstoneofsociety.Oneinfourpeopleintheworkforcegloballyarefarmersdependentonlandfortheirlivelihoods.And

theworld’sgrowingpopulationdependsonthe

agricultureindustrytomeettheever-risingdemandforfood:itisprojectedthatdemandforcropswill

increasebyasmuchas61percentby2050.1

Despitetheindustry’simportance—andperhapsbecauseofit—agricultureisalsooneofthelargestcontributorstotheissuesaffectingtheEarth’s

naturalsystems(whichincludetheatmosphere,

oceans,ecosystems,andbiodiversity).2Infact,

agriculture’sgreenhousegasemissions,nutrientpollution,andlandandwaterusecurrentlyexceed

thelimitationsnecessarytosustainhuman

development.3Withoutintervention,theindustrycouldfacilitateirreversibleenvironmentaleffects.

Regenerativeagriculture(whichincludespracticessuchascovercropping,theeliminationoftillage,

strategicgrazing,andnutrientmanagement)is

onewaytohelpmitigateandreversetheindustry’snegativenatureimpacts.McKinseyresearchshowsthatapplyingregenerativeagriculturepracticestoUScornandsoyfarms—amongthelargestcropsin

thecountry—couldnotonlyhelplimittheindustry’s

effectontheenvironmentbutalsoprovide

promisingreturnsformostofthefarmersacrossthecountry,bringinganaverageof$20to$60peracreannuallyforthefirsttenyears.4Withoutsupport,

however,farmerswouldhavetoinvestupto$200

peracreupfrontinregenerativepracticesand

assumetherisksfromsporadicweatherpatterns

andmarketconditions,highlightingtheneedfora

morerobustnetworkofsupportmechanismsand

short-termfinancialincentivestoincreaseadoption.

Thisarticlediscussesthepotentialofregenerative

agriculturepracticesintheUnitedStates—

specificallycovercroppingandno-tillfarming—aswellasthebarrierstofull-scaleadoptionandthe

mechanismsstakeholdersacrosstheagriculture

valuechaincanemploytoadvanceadoptionfurther(seesidebar“Approachtoassessingeconomicandnatureimpactsforfarmers”).

Regenerativeagricultureincontext

Regenerativeagriculturecanhelpimprovesoil

healthandreducetheuseofchemicalinputs,suchaschemicalfertilizersandpesticides.Regenerative

1“Populationandincomedriveworldfoodproductionprojections,”USDAEconomicResearchService,updatedonDecember11,2023.

2Natureinthebalance:Whatcompaniescandotorestorenaturalcapital,McKinsey,December5,2022.

3Ibid.

4Savingsaredependentonfarmsizeandlocation.

Approachtoassessingeconomicandnatureimpactsforfarmers

Multiplelensescanbeusedtoassesstheperformanceofregenerativeagriculture,

withvariouswaystodefineandscope

theimpactofthesepractices.Thisarticleseekstoinformthediscussionbyusing

adata-backedandgrower-orientedap-proachintheUnitedStates,withbroaderimplicationsthatmaybeappliedbeyondthescopeoftheanalyses.

Todevelopacomprehensivesetoffarmdata,weusedDSSAT—acropgrowthsimulation

1Forthepurposesofthisarticle,theUSCornBeltreferstothecountieswithintwelvestates:Illinois,Indiana,Iowa,Kansas,Michigan,Minnesota,Missouri,Nebraska,NorthDakota,Ohio,SouthDakota,andWisconsin.

model—toestimatethepotentialoutcomesofregenerativepracticesacrossvarious

regions,soiltypes,andclimateconditions.

Weusedgranulardatagleanedfromsur-

veysconductedbyKynetecRegenTrakoffarmersatlargefarmstoestablishbaselineconventionalpracticesacrossaselectionofcountieswithintheUSCornBelt.1Whencombined,thecropmodelcansimulatetheeffectsofadoptingregenerativepractices,includingyields,nitrogenavailabilities,soilwatercontent,andsoilcarbonamount.

Oncetheindividualestimationpointswere

established,weperformedaclusteranalysistoidentifythemajorfactorsinfluencingthevariationsinoutcomes.Finally,wecon-

structedaprofit-and-lossmodeltoevaluatethefinancialimplicationsoftransitioningtoregenerativepractices.

Revitalizingfieldsandbalancesheetsthroughregenerativefarming2

agriculturereferstoseveraldifferentpracticesthat

helprevitalizesoilfertilityandfoodsystemswhile

conservingwater,minimizingdisruptionstonatural

ecosystems,andmimickingtheEarth’snatural

growingpatterns.Becausethesepracticesreplenishimportantnutrientsandpreventdamagetothe

environment,theycanhelpgeneratehigherand

more-stablelong-termyieldsforfarmers,foodsthataredenserinnutrientsforconsumers,andmore-

sustainableecosystemswithbetterbiodiversity.

Ofcourse,regenerativeagricultureisnotanew

concept—Indigenouspeoplehavebeenfarmingthiswayforcenturies.Whilethisarticlefocusesmostlyonaddressingcarbonandimprovingpopularized

farmingpracticesthroughregenerativeagriculture,theseareonlytwopiecesofalargerpuzzletocreatesustainableequityacrossAmerica.

Thefollowingsectionsfocusprimarilyonno-till

andcover-croppingpracticesbecausethesetend

toyieldmorecropsforfarmersgrowingcornand

soyonlandintheCornBelt.5No-tillfarminggrowscropswithoutdigging,disrupting,oroverturning

thesoil,whichhelpsreducesoilerosion.Cover

cropsareplantedtoprotectandrevitalizesoilratherthanbeingharvestedorconsumed.Thisimproves

microbialactivity,enhancesnitrogenavailability,andreducespollutionrisks.

CornandsoyaretwoofthelargestcropsintheUnitedStates,coveringnearly180millionacresacrossthe

country.6Byachieving80percentadoptionofno-till

andcovercroppingregenerativepractices,Americancornandsoyfarmerscouldreapanincremental

economicvalueofupto$250billion7overadecade

becauseofthepotentialfornetincomeincrease,landvalueappreciationresultingfromhigherproductivity,andecosystempayments(suchascarboncreditsandbiodiversitycreditpayments).AccordingtoMcKinseyanalysis,farmerswhoimplementbothno-tillandcover

croppingcananticipateyieldsthatare10to30percenthigher,onaverage,thanthoseoftheirconventional

peers,whichmeansthatthesameamountoffoodcanbeproducedusing10to25percentlessland.

Whiletheresultsofregenerativeagriculturepractices

havebeenpromisingthusfar,theirscalabilityremainsatopicofdebate.Fieldtrialsshowimprovementsinyieldsandsustainability,butcriticsquestionwhetherthese

practicescanbeappliedextensivelyacrossallfarm

acresorwhethertheymeetthedemandsofagrowing

globalpopulation.Challengessuchasup-frontcosts,

laborintensity,andvaryingyieldimpactsacrossregionswillbediscussedinlatersectionsofthisarticle.Ongoingresearchandpilotprogramsaimtoadaptregenerativepracticesforbroaderuse,emphasizingtheneedfor

tailoredapproachesbasedoneachfarm’sspecific

crops,soil,andconditionsratherthanpushingaone-size-fits-allmodel.

TheuntappedpotentialofAmerica’scrops

Regenerativefarmingpracticesarewidelyrecognizedfortheirnaturalbenefits,butthereisavariedconsensusregardingtheireconomicreturns.AccordingtoarecentMcKinseysurvey,onlyone-thirdofUSfarmershavea

positiveviewontheROIforcovercropping,andlessthan60percentholdasimilarlypositiveperspectivetowardreduced-tillorno-tillfarmingpractices.8

Stakeholdersacrosstheagriculturevaluechainare

usingsubsidiesandcarbonpaymentstoencourage

adoptionofregenerativepractices,butintheUnited

States,adoptionisstillnotyetatscale,with40percentofcroplandremainingtilledand80percentofcroplandnotyetplantedwithcovercrops(Exhibit1).

Whilemajorreturnsarepossible,theamountis

entirelydependentontheregionafarmisin,the

techniquesfarmerschoosetoincorporate,andthestateofthemarket.

5Forthepurposesofthisarticle,theUSCornBeltreferstothecountieswithintwelvestates:Illinois,Indiana,Iowa,Kansas,Michigan,Minnesota,Missouri,Nebraska,NorthDakota,Ohio,SouthDakota,andWisconsin.

6“Feedgrainssectorataglance,”USDAEconomicResearchService,updatedonDecember21,2023;“Sinceearly2000s,growthinU.S.soybeanplantedacreagehasoutpacedcornandwheat,”USDAEconomicResearchService,updatedonJune15,2023.

7Theestimatedvalueissubjecttofactorssuchasuncertainweatherconditions,fluctuatingmarketprices,variationsinfarmsizes,anddifferencesinoperationalchoices.

8“VoiceoftheUSfarmer2023–24:Farmersseekpathtoscalesustainably,”McKinsey,April9,2024.

Revitalizingfieldsandbalancesheetsthroughregenerativefarming3

●

Exhibit1

AdoptionofregenerativeagriculturepracticesintheUnitedStateshasyettoreachscaledespiteperceivedbene?ts.

LevelofadoptionofsustainablepracticesvsUScropfarmers’ROIperception,1%

TraditionalpracticesAdvancednutrientmanagementNext-frontierpractices

Focusofthisarticle

100

50

0

Shareofadoption,%ofUScroplandacrescovered

Farmeradoptiopracticesandfarmarecor

~4

nofsustainable

erROIperceptionrelated

0%

Fertilizerapplicatisoilsamplingoutc

onbasedonomes

ofUScroplandconventio

~8

isyettobeplante

isstilltillednally,and

0%

dwithcovercrops

Reducedorno-t

ill

Storm

Nitrogenstabilizers

inhibitors

.Slow-release

water

Variable-ratefertilizerapplication

fertilizers

mana

Biologicals

gement

Planting

covercrops

Controlledirrigationpractices

Equipment

Treesincropland

poweredby

renewablefuel

0

BiocharOn-farm50100

asa

fertilizer

renewable-energygeneration

%offarmerswithpositiveROIperception

1Theadoptioncouldalsovarysigni?cantacrossdiferentcountries,BrazilandWesternCanada,forexample,haveveryhighadoptionofno-tillfarming.Source:McKinseyUSFarmerPulseSurvey2023–24(n=485)

McKinsey&Company

Howdifferentregionscanbenefitfromregenerativeagriculturepractices

Themainparametersthatdeterminethe

effectivenessofregenerativeagriculturalpractices

arenaturalfactors,includingprecipitation(wetversusdry),temperature(coolversuswarm),andsoiltexture

(coarseversusfine).CountiesintheUSCornBelt

typicallyfallunderfivecategories:wetter-cooler-fine,wetter-warmer-fine,wetter-cooler-coarse,drier-

cooler-fine,anddrier-cooler-coarse(seesidebar“LandcompositionacrosstheUSCornBelt”).

Revitalizingfieldsandbalancesheetsthroughregenerativefarming4

LandcompositionacrosstheUSCornBelt

Accordingtotheclusteranalysisforthis

article,precipitation,temperature,andsoiltexturearethetopthreefactorsinfluencing

theeffectivenessofregenerativeagriculturepracticesoncornandsoyyields.These

factorsvaryacrossallcountiesintheCorn

Belt,makingregenerativeagriculturemoresuccessfulinsomeareasmorethanothers(exhibit).

Exhibit

CornBeltcountiescanbeclassi?edinto?vearchetypesbasedonyieldresponsestoregenerativeagriculturepractices.

Distributionofclimate–soilarchetypes

acrosscornandsoybeancountiesintheUS

Signi?cantfactorsafectingcornandsoybeanyieldresponsetoregenerativepractices

Precipitation

Meanannualprecipitation,inches

Wetter>28Drier<28

Meanannual

rainfallpercountywithsigni?cant

diferenceindirectionand

magnitudeofyieldresponseat28

inches

Temperature

Mean

minimum

temperature

Cooler<55oF

Warmer>55oF

Meanminimum

temperaturesforoptimalcrop

growthwithsigni?cant

diferenceindirectionand

magnitudeofyieldresponseat55oF

ArchetypesCornandsoy

Precipitation–temperature–soiltextureacres,2022,1

%ofUStotal

Soiltexture

Soiltextureclasseswithsigni?cant

diferencein

directionand

magnitudeofyieldresponsebasedon%sandfraction

Soiltextureclasses

Fine(Lowsand%)

Coarse

(Highsand%)

Wetter–cooler–?ne36

Wetter–warmer–?ne

13

Wetter–cooler–coarse

4

Drier–cooler–?ne26

Drier–cooler–coarse

3

Total82

Note:Forthepurposesofthisarticle,theUSCornBeltreferstothecountieswithin12states:Illinois,Indiana,Iowa,Kansas,Michigan,Minnesota,Missouri,Nebraska,NorthDakota,Ohio,SouthDakota,andWisconsin.

1IncludesonlyacresplantedwithintheUSCornBelt;excludesacresnotassignedtoacountywithinUSDepartmentofAgricultureNationalAgriculturalStatisticsService(USDANASS)database.

Source:MichelChampagneetal.,“DevelopingscoringfunctionsbasedonsoiltexturetoassessagriculturalsoilhealthinQuebec,Canada,”CanadianJournalofSoilScience,December2023,Volume104,Number4;NationalCentersforEnvironmentalInformation;PramodAcharya,RajanGhimire,andAtinderpalSingh,“Soilpro?lecarbonsequestrationandnutrientresponsesvariedwithcovercropsinirrigatedforagerotations,”SoilandTillageResearch,May2024,Volume

238;SoilGrids;USDANASS;McKinseyACREanalysis

McKinsey&Company

Revitalizingfieldsandbalancesheetsthroughregenerativefarming5

Dependingonthelocation,applyingcertain

regenerativefarmingpracticescanincreasethe

farmers’incomeovertime.Inthisanalysis,the

netpresentvalue(NPV)isusedtorepresentthe

expectedincomeoveraten-yearperiod,providingaclearmeasureoffinancialbenefits.Forexample,implementingno-tillandcover-croppingtechniquestendstoyieldahigherNPVinregionsthataredrier,cooler,andpossessfinersoils,suchasNebraska

andNorthDakota.Theseareastypicallyhavehigherlevelsofwaterstress—aconditionthatmayaffect

moreareasinthefuturebutthatcanbealleviatedbyimplementingno-tillandcovercropping.

Nonetheless,implementingregenerativefarmingpracticesinmostoftheacreswithintheCornBelt,eveninareaswithlesswaterstress,isanticipated

toyieldapositiveNPV,whichindicatesthatthe

transitiontoregenerativepracticescouldproduceadequatereturnsindependently,positioning

ecosystemservicemonetization(carboncredits,forexample)asabeneficialoptionratherthanarequisiteforfinancialsustainability(Exhibit2).

Regenerativetechniques’potentialforproducinghigheryields

Minimizingyieldlossduringextremeweather

conditionsiscrucialforthelong-termproductivityoffarmland,especiallyinthefaceofclimatechange.Thesuccessofregenerativefarmingtechniquesindry,

warmplaceshighlightstheimportanceofsoilwatercontentanditsrelationshiptogreateryieldstability.

Exhibit2

Regenerativeagriculturecouldprovideupto$80billionincashlowsforUSCornBeltfarmersovertenyears.

ofCO2esequesteredperacreannuallyinthetoplayerof

regenerativesoils

~0.4–0.8tons

ofwatersavedperacre

annuallyinirrigatedcornandsoyfarms

~45–115

thousand

gallons

higherpotentialfarmlandvaluefromincreased

productivityandbettersoilhealth

~5–20%

Potentialeconomicvalue1over10years

forUSCornBeltfarmerswithfull-scaleadoptionof

no-tillandcovercrops,translatingto~$20–$60per

acreofincrementalvalueperyear

~$20B–$80B

Thepotentialeconomicvalueisbroughtby

10–15%higheraverageexpectedyields

and2–15%costsavings

1Presentvalueof10-yearuntappedeconomicvalueforfarmertransitiontoNo-TillandCover-CropsacrosstheUSCornBelt,de?nedasthe12statesintheUSMidwestregion.Excludespotentialvaluerealizedfromexistingadoption;exactvaluedependentonthefarmandfutureweatherconditions.

Source:USDAERS,McKinseyUSFarmerPulseSurvey,SARE,FINBIN,McKinseyGlobalCarbonCreditsMarketOutlookQ12024,Expertinterviews

McKinsey&Company

Revitalizingfieldsandbalancesheetsthroughregenerativefarming6

Regenerativepracticesplayasignificantrolein

enhancingsoil’swaterretentioncapabilitiesand

canhelpensurethestabilityofcropsbymaintaining

highersoilmoisturelevels,particularlyduringperiodsofdrought,underscoringtheirvalueinimprovingagriculturalresilienceandefficiency.

Techniquessuchasno-tillfarming,forexample,canenhancethesoil’sabilitytoretainwaterbyimprovingitsstructureandporosity,reducingcompaction,andmaintainingaprotectivelayerofcropresiduetohelpregulatesoiltemperature.Thisbenefitisespeciallysignificantforrainfedfarms,whichaccountfor

approximately85percentofthecornandsoyacreageintheCornBelt,accordingtothe2018IrrigationandWaterManagementSurveyfromtheUSDepartment

ofAgriculture(USDA).9AccordingtoMcKinsey

analysis,duringyearsofdrought,whenaconventionalfarmmightachieveonlyone-thirdofitstypicalyield,

farmsthatpracticeno-tillfarmingandplantcover

cropscouldmaintainmorethan95percentoftheir

usualyield.TheenhancedyieldstabilityresultingfromtheimprovedcapacityofsoiltoholdwaterislikelytoextendtoothercropsoutsidetheCornBelt,though

theexactrangeofimpactmaydiffer.

Becausesoilwatercontentplayssuchanimportantroleinensuringgoodyields,irrigatedfarms—whichincludeabout15percentofthecornandsoyacresintheUnitedStates,accordingtotheUSDAsurvey10—seeasmallerupsidefromtheregenerativetransitionbecausetheycancompensateforthewaterneeds

duringdroughtperiodsbyusingirrigatedwater.

Howbreak-eventimesmayfluctuatebetweenregions

Despiteafavorablelong-termeconomicupside,farmersmaytakebetweentwoandfiveyearstobreakevenoncumulativefreecashflow;benefitsfromlargecropyieldsbuildupgraduallyandcantakeafewyearstomaterialize.Farmersmayalsohavetoinvestinnewequipment,suchasno-till

planters,inthefirstyear,whichmayelongatethetimeittakestobreakevenbutwhichalsobringsahigherlong-termNPV(Exhibit3).Leasing

equipmentorhiringplantingserviceswould

requirelessofanup-frontinvestmentthanbuying

equipment,butthisoptionmaybemorecostlyinthelongrun.

Moreover,thetimeittakesforfarmerstobreak

even,increaseincrementalincome,andbenefit

fromlandvalueappreciationuponappraisaldifferssignificantlyacrossfarmsandisaffectedbyvaryingnaturalconditionsacrossthecountry,managementapproaches(suchasusingspecificregenerative

agricultureandirrigationpractices),andmarketprices(Exhibit4).WhencomparingtheNPV

acrossdifferentpractices,forinstance,McKinseyanalysisfoundthatcombiningcovercroppingwithno-tilltechniquesyieldsthebestmedianexpectedNPV,asindicatedinExhibit3.No-tillaloneis

typicallythenextbestoption:ithasaslightlylowerexpectedNPVbutcomeswithanarrowerrangeofuncertainty.Andlow-tillandcovercroppingalonehadasignificantlylessfavorableoutcome.

92018IrrigationandWaterManagementSurvey,USDA,2018.

10Ibid.

Combiningcovercroppingwithno-tilltechniquesyieldsthe

bestmedianexpectedNPV.

Revitalizingfieldsandbalancesheetsthroughregenerativefarming7

Exhibit3

ImplementingregenerativeagriculturepracticesacrosstheCornBeltcan

substantiallyenhancefarmers’yieldandprovidereturnsinthreeyearsorless.

xx

Yearstobreakeven,byscenario

LowHigh

Cornandsoyacres,2022,1%ofUStotal

Interquartilerangefor10-year

netpresentvalue,no-tillfarmingandcovercropping,$peracre

2631,519

Distributionofclimate–soil

archetypesacrosscornandsoybeancountiesintheUS

Drier-cooler-?ne

Drier-cooler-coarse

Wetter-warmer-?ne

Wetter-cooler-?ne

Wetter-cooler-coarse

26<22–3

721,062

32–32–3

112983

13<22–3

81810

36<22–3

17311

42–32–3

1IncludesonlyacresplantedwithintheUSCornBelt;excludesacresnotassignedtoacountywithinUSDepartmentofAgricultureNationalAgriculturalStatisticsServicedatabase.

Source:“DevelopingscoringfunctionsbasedonsoiltexturetoassessagriculturalsoilhealthinQuebec,Canada,”CanadianJournalofSoilScience,September18,2023;NationalCentersforEnvironmentalInformation;PramodAcharya,RajanGhimire,andAtinderpalSingh,“Soilpro?lecarbonsequestrationandnutrientresponsesvariedwithcovercropsinirrigatedforagerotations,”SoilandTillageResearch,May2024,Volume238;Soilgrids;McKinseyACREanalysis

McKinsey&Company

Revitalizingfieldsandbalancesheetsthroughregenerativefarming8

Exhibit4

Mostacrescouldseepositivenetpresentvalue,buttherangeofimpactandtimetoeconomicparitymaydiferamongarchetypes.

Medianexpectedtimetobreakevenon

cumulativefreecashlowperacreoverthetransitionperiod

Medianexpectednetpresentvalue(NPV)over10-yeartransitiontowardadoptingno-tillandcovercropping1

Shareoffarms,

Shareoffarms,

%ofUStotalcorn

%ofUStotalcorn

Yearstobreakeven2

andsoyacresplanted

10-yearNPVperacre1

2to3years77

3to5years

4

andsoyacresplanted

$500to$1,00026

$250to$49951

$0to$249

4

110-yearNPVofchangeinfreecashlowsfromtransitiontoregenerativepracticesfromconventional(basedonmediumpricingandyieldscenarioforeacharchetype).

2Break-evencategoriesarebasedonfreecashlowsinmediumpricingandyieldscenario.

Source:ClimatedatafromNationalCentersforEnvironmentalInformation;DSSATCropSimulationModel;USDepartmentofAgricultureSoilSurveyGeographicDatabase;McKinseyanalysis

McKinsey&Company

Obstaclespreventingtheadoptionofregenerativepractices

Giventhatnaturalfactorsandthepricingenvironmentarebeyondfarmers’controlandvaryannually,

adoptingregenerativepracticesinvolvesinherent

uncertaintiesandrisks,whichcanhinderadoption.

Barrierstoadoptionincludeup-frontinvestments,a

lackoffinancialandsocialsupportmechanisms,andalackofeffectiveoperationalstandards.

Howcomplexityanduncertaintyhinderadoption

Duringthetransition,farmersmayencounter

economic,operational,andsocialbarriers.For

example,farmersmaybehinderedbythecostofequipmentoralackofthetechnicalknow-how

toimplementpractices,requiringbothfinancial

supportandthebehavioralchangesnecessarytosuccessfullymakethetransitiontoregenerativeagriculture(Exhibit5).

Revitalizingfieldsandbalancesheetsthroughregenerativefarming9

Exhibit5

Farmersfacenumerouseconomic,operational,andsocialbarrierswhenitcomestotransitioningtoregenerativepractices.

Economicbarriers

Initialcosts

~50%

Yield

decline

~30%

Market

incentives

>40%

Accessto?nancing

~25%

Risk

sharing

~25%

offarmersexpectequipmentcoststoincreaseby3%

offarmersexpectyieldstostaylatordecreaseby2%ormore

offarmershighlightalackof

premiumsandecosystem

creditsasabarriertotransition

offarmersarelimitedbyaccessto?nance(eg,loans)

offarmershighlightcrop

insurancerequirementsasa

barriertoadoptingcovercrops

Operationalandsocialbarriers

>40%

ROI

uncertainty

Changing

behaviorand

buildingtrust

c

Technicalsupport

>40%

Inputs,tools,and

technology

~35%

tenure

Land~40%

~70%

offarmersarelimitedbyknow-howtoimplementpractices

offarmersarelimitedbyaccesstorequiredequipmentand

technology

offarmerswanttobetter

understandimpactontheirpro?ts

ofUSfarmlandisrented,withleasingarrangementsoften

inluencingthedecisiontotransition

offarmerswouldtryanew

practiceortechnologyifmostoftheirpeerstryitsuccessfully

Source:DanielBigelow,AllisonBorchers,andToddHubbs,“U.S.farmlandownership,tenure,andtransfer,”USDepartmentofAgricultureEconomicResearchService,August2016;OttoDoeringetal.,“Cropinsurance:Abarriertoconservationadoption?,”JournalofEnvironmentalManagement,December2020,

Volume276,Number111223;IowaFarmandRuralLifePoll:2018summaryreport,IowaStateUniversity,May2019;McKinseyUSFarmerPulseSurvey

2023–24(n=485);McKinseyanalysis

McKinsey&Company

Moreover,whilethenaturalpotentialofregenerativefarmingpracticesiswidelyacknowledged,thereisariskthatNPVmaynotremainrobust,especially

duringprolongedperiodsofextremeweather

conditions,suchasdroughtorheat,andcoupledwithlowcommodityprices.Monetizingthebenefitsof

regenerativefarmingremainsacomplexchallengeforfarmers,aswell.Despitecarboncredits

beingfurtheralongintermsofdevelopmentand

implementationintheUnitedStates,therearestill

manyuncertaintiesanddebatesoncostsforfarmers,methodsformeasuringandquantifyingemissions,

andverificationpractices.11Forexample,accuratelymeasuringandverifyingcarbonsequestration

inagriculturalsoilsiscomplexandcostly.Some

challengesincludeestablishingbaselines,monitoringchangesovertime,andensuringthatcarbonoffsetsarereal,additional,andpermanent.12

11“USDAreleasesassessmentonagricultureandforestryincarbonmarkets,”USDA,October23,2023.

12Ibid.

Revitalizingfieldsandbalancesheetsthroughregenerativefarming10

Theongoingscientificdebatesregardingthe

optimaldepthforsoilsamplingaddsanotherlayer

ofcomplexity.Manycurrentstandardsrequireonlysamplingthetopzeroto30centimeters(cm),but

someresearchpapersarguethatsomecarbonsinkslowerthan30cm.Whileregenerativetechniques

mayhinderthedownwardmovementofcarbon,theinconsistencyofsamplingcanleadtoinaccurate

reportingacrossfarmsorcanmisscarbonthathassunklowerthan30cm.13Retrievingsoilsamplesat

thisdepthisalsoquiteexpensive.In