Economic Tidbits

Do What Makes Sense on Your Farm

Agriculture ecosystem credit markets, like carbon credit markets, have been described as the “Wild West.” Right now, anything goes. Farmers and ranchers have been inundated with information about participating in carbon credit markets. Nebraska Farm Bureau’s Inside Profitability webinar last week focused on ecosystem credit markets and sought to make sense of these markets from a producer perspective.

Speakers included Shelby Meyers, an economist with American Farm Bureau Federation; Nathan Thompson, an agricultural economist at Purdue University; and Lukas Fricke, a producer from Butler County. The speakers discussed the basics of ecosystem credit markets, what’s driving them, and how they work; shared information on fellow producers’ thoughts regarding credit markets; identified issues producers should consider when thinking about entering credit programs; and shared first-hand experiences with ecosystem credit markets.

According to Thompson, of roughly 1,200 producers surveyed by Purdue University earlier this year, 7 percent said they had discussed carbon credit contracts with companies and only 1 percent had signed contracts. Low prices were identified as the biggest reason for not participating. Fricke, who has entered into a carbon credit contract on his farm, said farmers need to make sure credit markets make money for them. Farmers’ data is worth a lot he said, and producers need to be careful of which companies they work with and make sure the company is reputable and an agricultural data certified company.

Producers should invest in conservation practices when they make sense for their operations and help meet their conservation and operation goals the speakers summarized. Revenue from credit markets can be the “gravy” to these goals. To view a recording of the webinar and obtain additional information on ecosystem credit markets, go to Nebraska Farm Bureau’s Inside Profitability web page at Inside Profitability Series.

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