A Farmer's Truth About Sustainable Agriculture

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Transcript:

Adam Henkel [00:00:00]:

I think the biggest problem is education. There's a lack of education in the world, from the corporate world down to the smallest little farmer in the world. Understanding how those two can fit together and how they can work together. The easiest way to solve this puzzle is don't go to the big farmers that have all the shiny new equipment, the best there is, go to the middle sized guy, the small guy, the ones who are working hard, trying to get by. Go talk to them and see what they need, how they do it, what they can do, what's possible.

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Saif Hameed [00:00:42]:

Today I'm super excited to sit down with Adam Henkel. Adam is a seventh generation farmer and a third generation conservationist from Illinois and we're going to discuss what sustainable agriculture really means on the ground. Adam was our guest at the State of Sustainability Food and Bev Summit in Chicago just a few weeks ago. Alongside being a full time farmer, Adam is one of the County Farm Bureau presidents and a member of Illinois Farm Bureau's Environmental Advisory team. So he's the perfect guest to help us cut through the buzzwords and understand the real challenges and opportunities in sustainable agriculture. Adam, welcome to the show.

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Adam Henkel [00:01:20]:

Thank you very much. Good to see you again.

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Saif Hameed [00:01:22]:

Fantastic. And Adam, I guess just to start off, would love to get just your sustainability journey and I realised that journey begins several decades ago in your family and so would really love to bring the whole journey to our listeners. And what brought you to this conversation?

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Adam Henkel [00:01:42]:

The 1970s. My grandfather saw what was going on with some of the farmland he had and he wanted to try to do a better job. So he set out to get in more conservation. He did the experiment with no Till. The 1970s was a struggle. Herbicides weren't there, technology on the seed side wasn't available, you know, so it just didn't go the way he wanted it to go. He did sell the ploughs, bought chisel, plough. A lot of neighbours thought he was crazy, but he started down that road, put in some terraces, windbreaks, started doing other conservation measures that were easy to manage and to start improving on the farm.

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Adam Henkel [00:02:23]:

And then Fast forward to 1990. My father and his brothers decided they were going to a full no till. There was good incentives. The government had programmes to give you some good funds for doing the programme. They had a feed by 2000. It's time, you know, we're going to reduce erosion by so many tonnes by the year 2000. And so they took advantage of that converted equipment, converted the planter over for pull, no till stopped working the ground and worked really well the first few years. So we started building off of that and I came back to the farm in 2001 from graduating college.

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Adam Henkel [00:03:01]:

We took it further, started strip filling, variable rate fertility, started adding more technology into the conservation practises and really started building a programme. And today it's easier to list the things we don't do than the items that we do participate in.

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Saif Hameed [00:03:19]:

And Adam, what does sustainability mean to you from a business perspective? Like, is this generally good business? Why is it good business? Are there parts of it that are good business and parts that aren't?

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Adam Henkel [00:03:30]:

Sustainability is having the farm for the future generations. That's kind of the way my grandfather looked at it, that he wasn't so much maintaining it for his sons, for the sons after, you know, for the kids later on. And I, I have two daughters and they both talk about farming and I hope they do that. It's very possible and we'd work them in. But it's the sustainability goes beyond just the conservation and the environment. It's keeping that sustainable for the future generations to be able to come back.

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Saif Hameed [00:03:59]:

Also, Adam, when you think about the operational challenges involved in this sustainability transition, and obviously this is something that, you know, your father faced as well over in the 90s, what makes it difficult to manage the sustainability transition? Like, what are the challenges that you're facing day in and day out on this topic?

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Adam Henkel [00:04:20]:

Mother Nature is the biggest challenge. No year is the same. It's. We do things the same a lot of times and so we've got a different outcome. Last year I did get caught. We were planting soybeans into some very tall cereal rye cover crop that followed seed corn. We grow seed corn for Cortevo and we no till strip till that. The benefit is it comes out early.

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Adam Henkel [00:04:46]:

We can get a cover crop established early and get great growth. What usually happens and is in the spring that's more mature further along. Done it a number of times, but last year it just was cold and wet the whole time and it never really dried out and got fed and the soybean struggled all year long. So it's okay. Management decision time. Do we need to consider terminating that earlier than the rest of it? Normally we terminate the COVID crop after planting, three to four days to multiple weeks after planting. Perhaps, you know, we've learned a lesson now and that needs to be terminated earlier to help us sustain this level of conservation.

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Saif Hameed [00:05:26]:

And Adam, when it comes to like volatility or variability of this nature, do you feel like that's getting worse anecdotally and Actually scientifically, one just sees evidence that in many farming communities around the world the volatility is just not baked into the margin. I, I used to have a flower farming business and in, in my case, I know that I had like maybe one good year, two bad years basically and a lot of that was, was, was heavy rains, heat waves. We had a plague of locusts at one point as well, which is a real thing.

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Adam Henkel [00:05:59]:

What are you seeing play ups and down? I don't know how much nature does play into that. You know, we've we pretty lucky here in the Midwest we have a decent transition from spring to summer to fall. It might get extremely hot in the summertime, but it's not stuck. A long period that we can't maintain. You know, the crop can't get through it. 50 years ago the hybrids we had, they would not survive. Today they wouldn't survive the practises we're doing. But technology has improved the hybrids, they've helped to adapt to mother nature that the advantage of growing the seed corn in this area is parents were growing here, they've kind of, you know, already adapted to this environment.

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Adam Henkel [00:06:44]:

Then we grow the hybrid here, it's made for the environment but it's, you know, it's definitely a struggle. You're in, you're out, you try to plan right. One example I would give is I've been in a pilot programme for sustainable aviation fuel and so even track the carbon intensity and my score and everything. Well, June 25th, we had a hailstorm come through this summer and completely devastated the corn crop. Large area of our corn was basically mowed down. Three days later you drove down the road, it smelled like silage. It just had done that much devastation. It was 65% damage according to the insurance company.

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Adam Henkel [00:07:27]:

You go back then, my CI score I was based on a 250 bushel average figuring, you know, I can grow 250 bushel corn, so that's going to give me a low CI score. Well now all of a sudden I'm looking at 120, 130 bushel corn crop. I fertilised, I did everything right, grow that corn crop. Mother Nature came in one fell swoop and cut that in half. Now my CI score gets brutally cut. Okay, now I need to do something there to protect against. I did everything right. Mother Nature said, no, hold on, change this.

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Adam Henkel [00:08:06]:

So you know, having top insurance, having the government programmes we do gives us that protection against mother nature that we can move on. It may not be the best year. We can still get through that plague of locusts and get the next year.

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Saif Hameed [00:08:21]:

I hope you don't get the plague of locusts out of. But I hear the pain. When it comes to your conversations with corporate buyers, how much do they understand all of this? Because most agricultural contracts are still going to be spot contracts, right? And you're getting, I assume, more and more pressure to do more and more long term things that require more and more upfront investment, whether it's capital or time or risk. To what extent do the corporations that you engage with get that? There is so much unpredictability in this and so much risk, frankly.

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Adam Henkel [00:08:56]:

Where the big disconnect comes in is they don't understand the risk in their world. They set the price, they set the market, they get control of everything. The farmer has no control except for our own farm. Von F. Kelvin, he said it best when he said that the farmer, the American farmer pays. He buys it retail, sells it wholesale and plays pays the shipping each way. That's very true. Corporate America does not understand that because they get to charge for everything, like I said, and it doesn't work out.

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Adam Henkel [00:09:29]:

So when we're sitting down talking to them, they see conservation, they see sustainability as a just a easy transition. Well, you just got to plant a cover crop. Well, that's not so easy for some guys because there's management involved, there's changing the way they do things. And my God, I just said a bad word there. Change, that's the biggest problem is people stuck in their ways and they live by the model. That's why we've always done it. That's just nailed on a chalkboard for me. There's gotta be another way to do things.

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Adam Henkel [00:10:00]:

People can make changes, they can slowly transition, they can start adapting these practises so they can start to meet some of these corporate agendas that are going on that, okay, you know, we need to lower our carbon footprints. Now you start switching some ground. You know, they don't have to go 100% right away. There's no mandates to say if you're going to do this, you got to be 100% in. You can switch a farm, switch a field at a time, start small, work your way up. Once they get into it, I think it's pretty evident that it works and guys will transition more. But it's the corporate world has to understand that this is not an overnight transition. Guys can't just make the switch instantly.

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Adam Henkel [00:10:40]:

You like to think it's that easy. But there's a lot that has to change and the Biggest change comes mentally. Bar has to understand they have to try, they have to change.

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Saif Hameed [00:10:50]:

And Adam, when it comes to change and practise adaptation, I assume that there are some practises and inputs that are really easy to transition, not just because it is easy to do, but also it makes very clear economic sense. And cover cropping, for example, might be one of those examples. I imagine there are also some that are really at the other end of the spectrum where you're getting pushed to do this or getting asked to do this, but it makes no business sense or is just really difficult. Could you give us a couple of examples of what types of shifts sit at either ends of that spectrum? What is really easy?

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Adam Henkel [00:11:29]:

What is really hard wrapping is really easy. Like myself. We have a fertiliser spreader that is dedicated to just spreading cereal rye. And so that's one of the jobs my mom takes on, is she. We have it sitting ready to go in the morning. She's done with her latte. You gotta give her time to have her latte or else she's a little feisty and then she'll come and spread. Taste the combine, so to speak, is what we say.

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Adam Henkel [00:11:54]:

But rather spread till the buggy is empty or until she catches up to us at harvest and, okay, she's done for the day and she can go on about it and Peter do other things on the farm. She helps. She hauls grain and does help a lot. But one of the things she does enjoy doing is spreading cereal rye. And I mean, it's very simple. It's just spread the seed out there. And I always joke with guys, cereal rye is very easy to. Very easy to establish.

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Adam Henkel [00:12:18]:

If you just sprinkle a little seed on your shop floor and sneeze on it, it'll grow. It does not need much. It is very, very good seed. So that's the simplest way to get into it, is just plant a cover crop. Cereal rye. The amount of technology on farms is not as broad as one would think. Yes, there's yield monitors in about every combine. But having the technology on a tractor, on their sprayer, on whatever it is they're going to use for application, that is where it's lacking in the world.

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Adam Henkel [00:12:52]:

We're lucky. My grandfather was ahead of the time. My dad always kind of see ahead also. So we built the programme as we went and we've been doing, like I said, variable rate for over 20 years, strip filling for that long. That is the biggest payback, I think, that we've seen is doing the strip till where we're banding our nutrients, place them on right underneath of the seed. So when that corn starts growing, it's got, as I like to call it, a little steroid packet right there that when that tap root goes down, it's got everything it needs. It doesn't have to go searching for it, it's spoiled, it can produce. That is the farthest end of the spectrum that the strip till, variable rate, banding the fertiliser right there.

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Adam Henkel [00:13:33]:

But it is doable. Technology is there, the equipment is available, it makes it very easy.

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Saif Hameed [00:13:40]:

Adam, when it comes to making things easy or just easier, a lot of our listeners come from the food and beverage industry. What is it that they could do to make life easier for the farming community, which is such an important stakeholder for them? Like in terms of having this conversation and understanding stuff that is easier for you to do, stuff that is harder for you to do, but also maybe the right kind of incentives, the right kind of support, like what do you think is a practical way that they could make that interface or relationship when it comes to sustainability easier?

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Adam Henkel [00:14:11]:

With farmers, I think the biggest problem is education. There's a lack of education in the world, from the corporate world down to the smallest little farmer in the world. Understanding how those two can fit together and how they can work together, or the easiest way to solve this puzzle is they just need to get out two farms and actually sit down and talk to people. Don't go to the big farmers that have all the shiny new equipment, the best there is. Go to the middle sized guy, the small guy, ones who are working hard, trying to get by. Go talk to them and see what they need, how they do it, what they can do, what's possible.

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Saif Hameed [00:14:49]:

My impression is that I kind of think of two teams within the company and there's a corporate sustainability team and there's a procurement team. And the procurement team are the ones that would traditionally be going out and managing the purchases. And often they're either buying from an intermediary or if it is the intermediary, they're buying directly from the farm. There's the sustainability team that has the kind of macro picture, here's what needs to happen, here's what it means to be a regenerative agriculture source, et cetera. And I find there's often this disconnect between those two teams. And that's kind of where one bit starts, where the procurement team is going out there and managing the sort of spot contract or buying and really putting pressure on margin and rate and the Sustainability team is probably asking for more, basically asking to, for more to be done. The two things I would think would be easier. One is longer term contracts, particularly where you are looking to push the farmer to do more longer term contracts, even if it's just three years, I imagine would be a big win because then as a farmer you could potentially borrow against that contract.

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Saif Hameed [00:15:51]:

You could have certainty and you could do stuff that will have a longer yield period. The other thing I think about, and I'd love your views on this is insurance because what I remember and now my flower farm was in Pakistan, which is like, if you think about like cereal crops in the Midwest and flower farms in Pakistan, I can tell you which one you want to be in from a business perspective. But you know, like it was impossible to get any kind of insurance from my farm. Like you couldn't even design a new insurance product even if you managed to get through to the insurance company. And I imagine that there's a lot that corporate buyers could do, particularly with mid sized farms or smaller farms, to, to, to support insurance against some of the volatility that's, that's going to come. You know, just as whether it's weather patterns changing or any of the new initiatives delivering variable yield, I would think that sort of thing could be helpful.

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Adam Henkel [00:16:44]:

Procurement and sustainability teams definitely need to work together and they need to be going out to the farms, get that education, understand how it works, where it comes from. This is not an end all, save all. Yes, we can do a lot to help the environment, but we all have to work together on it. You talked about the incentives. It's definitely carrots or sticks. Because I'll be honest, if you put more regulations on me, I'm going to figure out how to bend that stick just far enough that I hear it start to crack, but it's not breaking. I'm still within my bounds, but you know, I'm going to push it to the limits of what's best for me. You dangle carrots out there, rides are going to dill.

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Adam Henkel [00:17:22]:

Well, if you put the money in front, they're going to take it and run. It would be very helpful if the corporate world would go to legislators, you know, Parliament, Congress. Hey, we need this, we need this kind of support for the partners. We need this to happen. Just like the Farm Bureau is lobbying for the American farmer, not her corporate. You know, we're on really different ends of that spectrum so. But I think there is a middle ground there where we could help each other. And in fact procurement team that sustainability team, they're talking to the legislators, hey, you know, can we talk a little bit more about the sustainable aviation fuel? How are these incentives going to help the farmer? Can we talk about conservation, you know, CRP Conservation Reserve Programme here in the us? Do we talk about the conservation stewardship programme? If there's a few of those items that they had a little knowledge on and they're talking to their, the government, get out to the farms, learn more about what we're doing, what we're trying to do, how we can do it, understand it's not an overnight sensation, it can be done, but it just takes time, it takes education, it takes resources and we got to work together on it.

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Saif Hameed [00:18:32]:

Adam, how much do you think about measurement of impact of what you do? And the reason I'm coming at that is because a lot of the sustainability teams that we speak with are trying to do more and, and invest more in sustainability transition, but they also want to be able to demonstrate what happened as a result of that investment. So if they, if they collaborate with the farming community to make a big change happen, how do they prove that the change took place? To what extent has that. Is that a topic that you are actively working on or thinking about or being asked about?

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Adam Henkel [00:19:06]:

At the end of the day, it comes down to where they're financially sound. Decision that I made, did I make money on it? I'm not going to do something just, let's be honest, I'm not going to do something just because it is better. If I'm losing money, it's probably not sustainable, so I'm not going to keep doing it. But I've been lucky. Everything we've adopted, everything we've tried done fruitful and so we keep doing that. The measurements are tough. There's no, really no standards, even down to a soil test, they can be interpreted so many different ways. It's the same lab doing it, same test around the world, but there's different ways to, different ways to look at it, different ways to interpret that data.

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Adam Henkel [00:19:54]:

So at the end of the day, it comes down to everybody's farm. Were they happy with what happened? Did they make money? Was there a positive outcome? We've been to, like, the corporate world, but did we do what we're supposed to do?

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Saif Hameed [00:20:15]:

And Adam, on the subject of. Adam, on the subject of money, any views on offsets insets?

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Adam Henkel [00:20:22]:

There's no true definition. And, you know, it comes down to if they're doing something themselves, that's an inset, you're buying carbon credits for Me, that's an offset. So we can work together. Yeah, they can put up solar panels, they can plant more green on their roof, they can try to do things to create insets, but they don't have the real estate available to make all of those carbon offsets available. And so they come to the farmer. We have the resources, we have the carbon offsets available. So, yeah, I mean, there's a great potential there to work together and create more offsets for them.

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Saif Hameed [00:21:02]:

Is that a space you're benefiting from at all today, Adam? Like, are you able to monetize any of the reductions you're able to make on your farm?

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Adam Henkel [00:21:09]:

We have been a little bit. Biggest challenge is a lot of the programmes that have come out in the last five, six years have been for new adoption of technology and we are what's considered early adopters. So we're old guys in the industry. They don't want us, they want the people who have been ploughing land, turning it black, planning on crop harvesting, doing everything the same. They want them to start cover cropping, start no tilling, start making these conservation changes so they get their biggest bang for the buck. There have been some programmes the last few years come around more equipped for guys like me who have early adopters. The sustainable aviation fuel. The Internal Revenue Service came out with a 45Z code, which entitles producers who are producing sustainable aviation fuel to get a pack credit that they can also pass on to me, they can pass on to the farmer.

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Adam Henkel [00:22:06]:

So that is something that's coming that it doesn't matter if you're first time, no till cover crop, been doing it for 100 years, it's going to benefit everybody the same. The only thing that depends is how much you actually do. How many practises you implement is going to affect your score. At the end of the day, guys just get into it. Maybe they're just cover cropping for the first time. They're going to make a little bit less than I would, having all the practises established, doing everything on every farm. So there is potential there, but it's been more of a struggle for myself because of the early adoption of all these technologies, all this conservation.

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Saif Hameed [00:22:44]:

Adam, as an early adopter, are there any new technologies coming out or getting traction that you're particularly excited by?

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Adam Henkel [00:22:52]:

Yes, it's not really on the conservation side of things, but see, and spray on sprayers is something that I'm looking into. My sprayer is currently. It's plug and play, I'll say, so it wouldn't take much to add a CN spray system to it if I wanted to. And what that does is it does not just spray the whole boom width at the same time as I'm driving through the field with cameras monitoring. When they see a weed, they'll turn on whatever nozzle it is that's going to come in to that area. So I'm not spraying the whole field at once. I'm just spraying what's needed. Good for the environment, good for my pocketbook at the end of the day.

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Adam Henkel [00:23:33]:

But it's not something that's, I think, viable yet because of the way we farm with corn and soybeans, tiny residual products out there to keep the weeds from growing. Wise man once said the best way to kill a weed is don't let it start. So we need to put residual herbicides out there so that the weeds cannot get established. Because we have nightmares like waterhemp here that once it gets more than a few inches tall, it is very tough to kill. It is a very resilient, very tough weed. If we can find a way to make a crop out of that, heck, we could be out of business in no time because everybody could farm at that point. But it is, you know, technology's coming, but I don't think for myself it's so much on the sustainability side as it's on the technology side. We're already running AI on the combine, monitor our grain loss.

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Adam Henkel [00:24:23]:

And that's always interesting when I get large groups and I had a group from Northwestern University out of Chicago out here last fall and we're talking and I started talking about AI and they all just can't stop. And you're using artificial intelligence. Yeah, we have been for about five years now. We've got cameras on the combine that actually monitoring. They can pick the grain out of the trash as it's flying through the air at 100 miles an hour and tell us what kind of loss we're doing, what kind of job we're doing, and where we need to make changes. And that's incredible. We have to adapt. I mean, we have to make changes and we have to accept new technology.

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Adam Henkel [00:24:58]:

And it also helps that my mother was a software consultant. So I've been around computers my whole life. So computers and the farm just. They've always gone hand in hand. But if there's something that is out there and it's available and I think I can make a dollar, I'll spend money to buy it. I mean, I'm not afraid to invest if I know I'M going to get a return on it. And that's important in the farming world is we got to be wise, not just go buy anything because it looks cool. We got to buy what works for us and what's going to improve our bottom line? What's going to improve our farm? And then hopefully, at the end of the day, I'm improving sustainability and improving the world for everyone else.

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Saif Hameed [00:25:36]:

Adam, that would normally be a great note for us to end on, but I have one more question for you, which is there's probably a subset of our listeners that is going to have a conversation with a member of the farming community over the next few weeks. And so if you were addressing those sustainability professionals, those individuals who are going out to speak with farmers over the next few weeks, what is one piece of advice that you would give to them?

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Adam Henkel [00:26:08]:

Don't be afraid to ask questions. No question is really out of line. That's the hard question. Why aren't you doing this? Why don't you try to be that way? How can we help you? That's another question that nobody ever wants to ask is how can we be of service? What can we do to help you move forward? Can we go talk to politicians? Can we offer a better incentive? Is there something that needs to be done? You know, education, I talk about that all the time. Education comes from questions, getting answers. So, yeah, if they're going out to talk to farmers, ask questions, no questions off the table. Yeah, they might seem a little embarrassed at the time, but I think once they open up and start talking more, they'll find that you asked the right question at that point and you can work through it and keep moving forward.

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Saif Hameed [00:26:57]:

Adam, fantastic. Thank you so much. I've really enjoyed this conversation. It's been packed with insights, as expected. And I'm looking forward to touching base with you when I'm back in Chicago.

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Adam Henkel [00:27:09]:

I like that. Thank you very much.

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