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  • Writer's picturePrecision Ag Reviews

Precision Profile: Capturing the Educational and Economic Value of Carbon Credit Programs

Name: Kyle Mehmen

Farm: MBS Family Farms

Location: Plainfield, Iowa

Crops Grown: Corn, Soybeans, Peas, Sweet Corn and Seed Beans

Valuable Tech Tools: Climate FieldView, Prescription Creator by Agrian, John Deere Operations Center, Conservis, Carbon Credit Programs; Cibo, Indigo Ag, Agoro, Nori, Bayer

Precision Pain Point: Capitalizing on long-term data collection to create new and sustainable revenue opportunities

Capturing the Educational and Economic Value of Carbon Credit Programs

Farms are constantly adapting their practices to maintain profitability. For MBS Family Farms, a continued commitment to business diversity - on and off the farm - is key to gaining a competitive advantage.

Throughout the years, the Plainfield, Iowa, family operation has grown a variety of crops beyond the corn and soybean staples to include seed beans, oats, peas, and sweet corn, while also raising hogs, cattle, chickens, and cows.

But their definition of diversity has evolved and today includes complementary interests in commercial trucking, seed and chemical retail, crop insurance, and ownership of a grain elevator.

“The way my grandfather’s operation was run is a lot different than how we do things today,” says fifth-generation farmer Kyle Mehmen. “Our 21st Century diversity is more focused on our business segments.”

While Mehmen acknowledges the temptation to invest more time and effort in grain production when corn is $7 per bushel, he appreciates the bottom-line balance the other businesses provide to offset softer grain markets.

Mehmen and the team at MBS Family Farms apply the same pragmatic approach to precision farming tools and practices.

“Anytime we make a precision investment, we want it to stand on its own for a specific reason,” he says. “But as time has gone on, it’s not one technology or one data system that is the Holy Grail for us. It’s a suite of them that combine for a holistic approach and allow us to evolve.”

Data-Driven Diversity

As the farm began to fill operational needs with different ag technology, Mehmen had the foresight to record and store the information gathered each year. Climate FieldView, John Deere Operations Center, Conservis, and Prescription Creator by Agrian are tools that Mehmen cites as valuable investments in developing a historical record of their on-farm operations.

He also credits hiring a “reconciliation specialist” to be their farm data guru as critical to understanding and capitalizing on future economic opportunities.

“When we started intensively collecting data from our farm ten years ago, we knew it was going to be important to have the information, even if we didn’t know why,” Mehmen says. “But it’s starting to become more and more relevant as we invest in more data-driven opportunities on our farm, and the carbon market is a good example.”

A long-term commitment to sustainable practices, including no-till and cover crops, combined with more than a decade of detailed data, positioned the farm to be early adopters of carbon crediting programs.

Mehmen started researching the carbon market in 2019 as an additional revenue stream to supplement low corn prices, always looking for innovative ways to diversify their business further. They are always looking for innovative ways to diversify their business further.

“Our motivation at the time was the fact that corn was $3, and it was difficult to put together a break-even budget,” he says. “So, our team was trying to figure out what we could do with the resources we had available and the practices we were already doing on the farm.”

Creating Credit Momentum

After some early conversations with stakeholders in carbon sequestration initiatives, Mehmen quickly realized how undeveloped the market was. So consistent with the family’s commitment to diversity, they chose to enroll in various carbon credit programs.

Today, the farm participates in five different programs with Nori, Cibo, Bayer, Indigo Ag, and Agoro. How the companies validate submitted data - like tillage practices and nitrogen management - and then compensate for credits varies.

Some calculate credits internally, while others utilize third-party certification. Some provide practice-based, per-acre payments, while others sell credits on the open market and then pay out a percentage after they are sold.

Mehmen admits that managing the medley of methods can be challenging, but participation in each program provides both economic and educational value.

“We’ve received carbon payments from each company, and our experience has been different with each one - not necessarily good or bad - but whatever direction we take in the future, I want to be able to say we gained a broader understanding of the market,” Mehmen says.

In less than three years, the farm has seen carbon credit revenue begin to rival that of some of their complementary businesses, in part because they already had the infrastructure in place to realize an economic return quickly.

“The time we’re investing to report out the information we’ve been collecting and practices we’ve been doing for years, is time well-spent,” Mehmen says. “What we’re learning is there is an endpoint to this system because it’s monetized.

“Maybe this carbon model evolves into an organic or regenerative tag that goes on a product that commands a premium and adds $0.50 a bushel to my corn. Who knows, but I believe the more we understand and diversify within this system, we’ll be able to gain a competitive advantage in the future.”

Using Artificial Intelligence to Create Agronomic Plans

Get more insight into prioritizing and capitalizing on your farm data - including considerations for entering the carbon market - during the most recent episode of the Precision Points podcast. Host Morgan Seger chats with Matt Rohlik, director of sales and strategic partnerships with Arva Intelligence, about the strategic partnerships to best serve their customers and highlights what they are doing to help growers capture real value from their carbon offsets.

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