Beth Ford What farmers need to be modern climatefriendly and profitable TED
Transcriber:
Corey Hajim: Here with me today
is Beth Ford, the CEO of Land O’Lakes,
a farming cooperative that works
across the United States
and in dozens of countries
around the world.
And she’s going to share with us
her vision about how to create
a better future for farmers
that’s both environmentally
and economically sustainable.
Hi, Beth, thank you so much
for being here.
Beth Ford: Thanks for the invitation,
I’m looking forward to the conversation.
CH: Let’s first talk
about the broadband issue.
How big of a problem is this
and how does it affect
the farming community,
both as you said,
as families and as businesses?
BF: So the estimates have been
that 18 million Americans
lack broadband access,
14 million are in rural America.
Now, having said that, the broadband –
I’m trying to remember
what the name of the organization is,
did a study and they actually say
the number is more like 42 million.
And the reason is
the mapping is inaccurate.
So what could happen is,
let’s say you have a 7-Eleven in a town
and that has Wi-Fi or broadband access
because they laid a line.
It would show up on the map
as though that community
largely has broadband
and it does not.
And so it’s a significant issue.
Think about the education
of your children.
I know you have three, I have three.
And many of them
were doing remote schooling.
Well, what’s happening on the farm,
this is legitimately what’s occurring,
is that the teacher from the town
is driving paper homework out to the farms
to give them the homework
so that they can continue to go to school.
And that’s just one example of many.
And so this is a major challenge,
because if we don’t have basic wiring,
I can say we need like a 1930s'
rural electric initiative
where we go across the country
and we make this, this should be a right,
this should be something that is a basic,
like mail delivery and electricity.
This should not be just
for those who have.
And the scale of it is,
the estimate is to be 80
to 100 billion dollars
to close this gap.
But the challenge of that
is that you get the funding
and then how is it implemented?
We all know you can’t just say –
I say, well, I don’t go in
as CEO, go to the board,
say I need 100 million dollars
for this tech platform
and then, “Approved. Here’s the return.”
And then I go in and I throw it
to the business unit heads and I’m like,
“You guys decide
who’s in charge of that,” right?
And there’s a little bit about it,
it becomes a jump ball
between the FCC and the USDA
and then the governors,
and suddenly we don’t have enough
and we’re on the couches
looking for quarters and nickels
to pay the pizza guy
so that we can finish this off,
as though it’s not a priority,
as though it’s not a priority.
As though it’s somebody else’s problem.
And it is all of our problem.
This is a national security issue.
I cannot say it more directly.
So it’s a major issue
because I’m concerned about speed here
in addition to the funding.
And the good news is
this has been bipartisan support.
Whenever I speak, I speak
for the National Governors Association,
the State Department of AG,
I mean, name it.
Name the administration
official, I’ve done it.
This isn’t a bipartisan issue.
It has to be a prioritization issue.
It has to be something that we decide
as a country is a priority.
And it means in every state.
CH: I’ve heard stories about,
“Well, you’ve put Wi-Fi”
or in some of these communities,
they’ve put Wi-Fi on the buses
and then, you know,
kids are sitting outside
the local library or the local McDonald’s
to do their homework.
And it’s just so unfair.
BF: It’s unacceptable.
CH: Unacceptable.
Unacceptable is the right word.
It also affects the businesses, right?
Farming as a business
because there’s so much
technology being used.
BF: Well, there is.
So oftentimes I’m at an event
and they’re talking
about all this cool new tech.
And listen, I just say
we use satellite technology,
we have big data, data and analytics,
John Deere’s tractors are auto-steer.
And I’m like, “Are you using that?”
“No.” “Why?”
“Well, because I lose connection.
And so I can’t I can’t utilize it.”
You know, there’s so many
exciting investments and innovation
occurring in the sector
that will make farmers more efficient,
will be better for climate
and the environment,
I’ll talk a little bit
about that in a minute,
but none of that can be used
if we don’t have the appropriate
technology access,
if we don’t have broadband.
These are data-intensive models
and they require bandwidth to do so
and to utilize them effectively.
So it’s a major issue
so that from a business perspective,
it’s an efficiency,
it’s a sustainable production issue.
And then back to the community,
again, stable operating environment.
You know, I constantly have
my mother in my ear,
like, “You’re only as happy
as your least happy child,” right?
And why is that?
Because, you know,
if you can’t feel confident
your child has the best education,
has access to a doctor,
pretty hard to be focused
on your business.
And farming is a business.
And so we have to recognize
if there’s a number of hospitals,
local hospitals have shut down,
there’s no banking,
no housing.
It doesn’t work to have a stable
operating environment
in these farming communities.
And yes, directly, you cannot use
the new innovation and technology
that hide the data utilization
if you do not have broadband.
CH: So the technology is a challenge,
and as you said, it’s so important
for the business,
and you mentioned climate.
So I’d love to dive into that
because in addition to, sort of,
challenging market dynamics,
you also have climate volatility
and an increasing weather volatility
and technology’s helping to address that.
Can you talk a little bit
about the technology
that’s being used by farmers
to manage that volatility?
BH: Well, first of all,
what you’re helping them do
is make improved decisions
that make their farms more resilient
and that they can make
more sustainable business practices.
So what we’ve started,
we have a business called Truterra,
it’s run by Jason Weller,
who used to run in our CS
under the Obama administration.
And what this business does,
it works in multiple ways.
We work through our local
retailer, the agronomists.
They get insights from
our Truterra insights engine.
It literally is at the farm level,
acre by acre,
where they can understand
what the soil type is,
what the water situation is,
all of those things,
what kind of tractor do you use,
how many passes at the field do you make.
So, we can make improved,
sustainable production decisions.
More recently, probably just last week,
we announced our Trucarbon platform,
which is a systemic way
that we can work with farmers, databased.
This is partnered with
the Soil Health Institute,
with many environmental groups,
to create a carbon credit.
So where the farmer is making a decision
that is improving carbon capture
and at the same time is improving
their own profitability,
and then is able to monetize that.
Our first customer was Microsoft,
and they’re using this for carbon credit.
So why is this so important?
In addition to the fact
that we have validation
and this is an evolving marketplace,
carbon and carbon credits,
carbon offsets,
it’s an unstructured pricing environment.
And I think all the studies would show
that agriculture is a great way
for us to address this issue
using basic photosynthesis.
So if we if we agree that,
then we have to say,
what is that pricing environment?
One of the fundamental things
we started with is the farmer.
In fact, Secretary Vilsack more recently
said in his confirmation hearing,
we’ve got to start with the farmer
and that farmer has to be profitable
when making that decision.
It’s a virtuous circle.
So we want the farmer to take action.
But you can’t just say,
“Everybody put on cover crops.
That’s the best.”
Because then that farmer isn’t profitable,
and then how do we make sure
that we can sustain our food production
and the farm?
So we’re working with this inside engine,
with our agronomic advice,
with soil health and soil testing,
with any number of pieces of data
and process and expertise.
And that’s what differentiates,
I think, our approach,
that it goes right back to the farm level
but leverages technology.
We have a partnership with Microsoft,
their FarmBeats program, their airband.
They’re working with us
on closing this digital divide
in different communities
so we can take advantage
of these opportunities.
And at the same time, as I said,
they were our first customer
for our carbon credits.
And one of the reasons
I’m so focused on this,
not just because this is
an evolving marketplace,
and because climate change
is something we have to address
and we want to address,
and I believe farmers
are part of the solution.
They are a major part
and a major opportunity for solution.
It also is another
revenue source for farmers.
And go back to that statistic I gave you
about the “hobby” farmer,
about the fact that they’re working
off the farm to retain their farms.
And the reality is, there’s going to be
even more disruption
in the coming years in this sector.
It will be in some ways driven
by the electrification
of the transportation sector.
That means biofuel utilization
and a significant portion of the corn crop
goes into biofuels, ethanol.
And if that is no longer needed,
because we’ve gone to electric vehicles
over the next 10 years,
what happens to corn price,
to land values?
And at the same time soybeans,
some of that is used for biodiesel.
So that will be a major disruptor
to row crop farming.
So we’ve got to point farmers,
they’re pretty smart,
to the right levels
of investment they can make
for other sources of potential
revenue for their farms.
And I think that this is a great way
to think about it.
CH: Right, so you feel like
the things that farmers can do
to be more environmentally sustainable
can also help them economically?
BF: Exactly. And it must.
It must.
And that’s why this model that we have,
Truterra Insights Engine,
is iterative almost.
Hey, if I do these three things,
what happens to my profitability?
And it might be tied to a program
that’s available at the state level,
it might be tied to improve variable
rate application of your fertilizer
where you don’t put everything
on at the same time
and then have it seep into the soil.
Instead, you look and you use
your satellite technology and everything
and you say, “Oh, I’m going to
put partial on now,
and maybe I don’t need as much later.”
Every piece, every acre
on a farm is not the same
and doesn’t have the opportunity
to yield as much,
one acre to the next.
And with that then,
where do you make the right investments?
And a model like this helps you understand
where to make those investments.
We also have applied research plots,
answer plots, where we help
with our agronomists
to help improve the planting
decisions a farmer may make.
So there’s any number of variables,
and I say it makes a farm more resilient.
And let’s agree,
we’re going to get into a situation
where the financial markets
and the bankers are going to say,
you need to be making investments
that make your farm more resilient,
given the amount of disruption
we’re seeing already, right?
Climate.
Think of the fires in the west,
the freeze in the south, in Texas,
and we’re going to see these events
over the next number of years.
We have to make the farm more resilient.
That makes it more profitable
for the farmer.
It helps their ability
to make an investment
that we all know is necessary.
CH: But you mentioned
that it can also be a revenue source.
Can you give an example of how, you know,
a climate mitigation technique
also provides revenue for a farmer?
BF: Well, there’s two things.
One, I was just mentioning
more directly, this true carbon,
where you’re generating a carbon credit
because you’re able to prove
the new practices you’re putting in place
is going to reduce that.
You use that proof
for the soil test in advance,
and then a number of years later.
You may use a stabilizer, for instance,
and that would mean that you don’t have
some of your nitrogen you’re putting on
or using, kind of, seep into the soil.
That, in and of itself,
means you have less of investment
you have to make in those products
as you’re putting on fertilizer
or planting different crops.
But then more directly,
that credit that you develop,
because this market is evolving,
can be sold.
So what we’re doing with the Microsoft
partnership here and their purchases,
if you are able to prove
this tonnage reduction,
it’s like 20 dollars a met ton
for carbon credit,
so it’s a more direct line payment
for that in and of itself.
And that’s an evolving marketplace
we’re going to see.
We’re also partnered with Nori,
it’s a platform like eBay,
and they want to be the eBay
of carbon credit trading.
This is very early stage,
but it’s an exciting opportunity
because we know it’s going to take
this kind of innovation, this creation,
this technology to address climate change.
And the farmers can be in a position
where they can be part of the solution.
CH: Thanks for being here, Beth.
BF: You bet.