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DECEMBER 4, 2020
Magnetic Ag News
Happy Friday. The countdown is on. Three weeks ‘til Christmas.

Why not start the gift exchange early and forward Magnetic to all your ag friends and colleagues? It's the [free] gift that keeps on giving. 🎁

On the docket today:
  • The New Norm for Nutrien: Carbon Credits
  • Coffee Crop Sees Eye of the Storm
  • The Next Farm Bill's Tough Task


P.S. We’re launching a new section today: Ag Leader Takeover.

Scroll to see our first featured rockstar & Magnetic subscriber, Julie Borlaug. Yep, that last name might ring a bell... 🌾

Were you forwarded Magnetic? Want your own?
SUSTAINABILITY

Carbon: The Next Cash Crop
Cash Crop Carbon
Feliks Tomasz Konczakowski | GIPHY
Nutrien, the world’s largest provider of crop inputs and services, isn’t joking around when it comes to the $215 billion carbon market.

The ag retail king is rolling out a pilot program targeting 100,000 acres in 2021 to drive growers to sell environmental credits they rack up through using ‘climate-friendly’ products and services.

It’s a two pronged approach:

1️⃣  First, Nutrien will ramp up their offerings of sustainable products - think time-controlled nitrogen fertilizer - while pushing agronomic services and a platform to track and measure the success of those sustainability efforts.

2️⃣  
Then, Nutrien will facilitate a marketplace where growers can monetize their sustainability gains by selling carbon credits to other players in the value chain.

“We want to change carbon from becoming what it is today, an expense, to a revenue,”
noted Nutrien President and CEO, Chuck Magro.

So let’s do the math: Nutrien expects the program could boost a farmer’s income by $50 per acre. That pencils out to $20 coming from carbon credits while $30 stems from productivity and yield gains.

With an estimated 100 million metric tons of carbon annually holed up in U.S. cropland, there is money to be made assuming buyers show up to the market.

With a market opportunity this big, Nutrien is already playing catch up:
Indigo Ag launched its Terraton Initiative using open-source experiments and grower competitions to promote adoption
Seattle-startup Nori and Granular teamed up to scale a blockchain-backed marketplace
Bayer is using its Climate data platform for carbon crediting and promoting climate-smart practices

And there are sure to be more entrants elbowing their way to this crowded carbon dinner table.

The outlook: In 2030, we all may be reading the ‘carbon case study’ on who won the race to help producers reduce greenhouse gases, sequester carbon, and profit from it. Until then, grower adoption and monetization will be the keys to which ag juggernaut will lead the pack.


Commodity Prices
  • Grower grain sales are creeping, waiting to see if Chinese interest doesn't flake. Not so great news: Chinese soybean buying from earlier this fall is dropping off week-over-week...

  • Hogs slumped midweek after lackluster export sales. Thanks, Mexico. Livestock markets question how intense holiday meat demand was for grocers across the country.
AG LEADER TAKEOVER

Julie Borlaug - VP of External Relations, Inari
I have always loved this quote from Aya Chebbi, a youth activist in Africa:

"Your power is your radical self. Find it."

We need the next generation's radical, out-of-the-box ideas to find solutions to end hunger, poverty and address climate change. But we must also give them a seat at the table to listen and learn from them.

It also reminds me of a quote by the Nobel Committee about my grandfather [Norman Borlaug] when he was given the Nobel Peace Prize:


Behind the outstanding results in the sphere of wheat research of which the dry statistics speak, we sense the presence of a dynamic, indomitable, and refreshingly unconventional research scientist."

That is exactly what we need today from the next generation!

SPECIALTY CROPS

Hurricanes in Honduras Hammer Coffee Crop
Coffee Crop
NTCo | Getty Images Pro
Honduras, Central America’s coffee king, just got walloped.

Back-to-back Category 4 hurricanes nailed the country’s coffee hub within two weeks of each other in November. The storms, named Eta and Iota, dumped a collective 49 inches of rain that led to intense flooding and landslides.

The destruction pounded 14 of Honduras’ 15 coffee-producing provinces, damaging roads and bridges that blocked workers' access to fields. 60% of the country’s production was in the storm’s path with a wide swath being the premium arabica beans.

When it rains, it pours: The storms layered on another debacle to an already tumultuous growing season. While the ‘grid’ of access roads were affected, the rain actually spurred coffee bean maturation in a time when labor to harvest will be tight. COVID-19 has shrunk worker pools creating a squeeze on production and export abilities.  

Markets have noticed: Between the Central America storms and Brazil’s wicked dry growing season, supply concerns are real. Arabica-coffee futures spiked 18% in November.

And it’s no wonder.

Iota’s destructive path across Honduras, Nicaragua, and Guatemala
touched 12% of global arabica production. Brazil’s output is 4x that.

Starbucks supply chain leaders might be holding their breath.

Where it stands: Work to repair access to coffee regions is already underway, but losses are already estimated to be in the 10% range with limited visibility to the actual crop. The next thirty days will be make or break for producers and a good indicator of where coffee prices are headed in 2021.  
JUST FOR FUN

Looking for a rural vacation home? Aren’t we all?

Why not snatch up this pretty 3K+ acre Colorado ranch 25 miles from Telluride where you can go big game hunting & big mountain skiing all in the same day.

Colorado Ranch
Canyon Creek Ranch is calling your name. Take a stab at the asking price...


Scroll to bottom for answer
AG POLICY

Next Farm Bill Hurdles Comin' in Hot
USDA
Stein Photo | Getty Images Signature
Only two years into the existing Farm Bill and ag policy circles are getting antsy as they look towards 2023.

As the only industry with a bill passed on its behalf every 4-5 years, the work will begin on the early draft of the next version in 2021.

The big shift? Three of the four leaders of the previous Farm Bill will no longer be in Washington D.C.  

Sen. Pat Roberts and Rep. Mike Conway took the retirement route while Rep. Colin Peterson lost his reelection bid. With 85 years of experience between those three evaporating in January, Sen. Debbie Stabenow will be left with new co-leaders to usher the process.

  • It’s worth noting: The U.S. also lost its farm policy guru, Dr. Barry Flinchbaugh, this year. The Kansas State professor passed away last month and had been involved in some capacity with every Farm Bill since 1968.  

Stabenow’s first new counterpart, Rep. David Scott of Georgia, was nominated this week to fill the House Ag Committee slot.

But the bigger question may be around what programs or policies will get the ax.

Former USDA Chief of Staff Karla Thieman put it bluntly:


“The other dynamic that will make this next farm bill really difficult, I think, is that we are heading into a period of austerity. People are talking about the deficit and how high it is, and that we need to cut government spending.”
QUICK HITS

✅  Syngenta is launching a new tomato variety to tackle the growing Tomato brown rugose fruit virus which pummels yields with up to 70% crop loss.
  
✅  President-elect Joe Biden has no plans to immediately revoke Phase 1 of President Trump’s trade agreement with China.

✅  The University of Florida will release ‘pineberries’, white strawberries with a pineapple aroma, into the U.S. grocery market by 2022.

✅  Corn Board Manufacturing will build a $15 million plant in northwest Iowa to crank out environmentally-friendly shipping pallets from corn stover, scaling up its existing product line of ski, snow, and skateboard equipment.

✅  The US Supreme Court heard oral arguments from former child slaves seeking damages from Cargill and Nestle USA from time spent working on cocoa farms off the Ivory Coast.
ANSWER

Canyon Creek Ranch will run you a cool $9.9 million.

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Written by Travis Martin & MiK Fox


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