Feedstuffs in Focus
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Feedstuffs in Focus
Supply chain collaboration to drive regenerative agriculture
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Four organizations can sit in the same supply chain and still act like they live on different planets. We wanted to see what changes when they stop acting alone. Sarah Muirhead talks with Paul Scheetz, Director of Regenerative Agriculture at ADM, about a new collaboration with General Mills and Walmart designed to accelerate regenerative agriculture on 40,000 wheat acres across Illinois, Indiana, and Missouri.
We dig into why this cross-industry partnership matters for scaling regenerative farming, and why “local” is not a buzzword when you are dealing with soil types, weather swings, and field-by-field management. Paul explains how ADM works as the on-the-ground facilitator, what it means to move beyond simply buying grain, and how technical assistance partners like Practical Farmers of Iowa, American Farmland Trust, and Ducks Unlimited help farmers pressure-test practices in the real world.
We also get practical about incentives, risk, and measurement. You will hear why financial payments are often necessary for long-term adoption, how data collection and verification are handled, and which practices this wheat program prioritizes: no-till, cover crops, and fertilizer efficiency, including nutrient stewardship and outcome-based nitrogen use efficiency. Along the way, we talk about what success looks like for farmers’ bottom lines, for resilient sourcing, and for a regenerative agriculture business case that can actually scale.
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Collaboration News And Show Welcome
SPEAKER_01General Mills, ADM, and Walmart have announced a strategic collaboration to accelerate regenerative agriculture. Why is this type of cross-industry collaboration so important for scaling regenerative agriculture? Welcome to Feedstuffs in Focus, our podcast, taking a look at the big issues affecting the livestock, poultry, grain, and animal feed industries. I'm your host, Sarah Muirhead. This episode of Feedstuffs in Focus is sponsored by United Animal Health, a leader in animal health and nutrition. You can learn more about United Animal Health and how they're working to advance animal science worldwide by visiting their website at unitedanh.com. Here with us today to talk about this new industry collaboration in the area of regenerative agriculture is Paul Sheets, Director of Regenerative Agriculture with ADM. So, Paul, this partnership brings together ADM, General Mills, and Walmart kind of across the food
Why Cross Chain Partnerships Matter
SPEAKER_01value chain. Why is this type of cross-industry collaboration, why is it so important for scaling of regenerative agriculture? And what makes this initiative different?
SPEAKER_02Yeah, I'd say just that. First off, is uh we've been in the uh ADM's been in the region act space here for the better part of the last 10 to 15 years. And I think this is our first partnership that has, I call it four different pieces of the supply chain, add the farmer onto it as well. But when you have farmer and you have ADM and General Mills and Walmart as well, I think if you look across maybe any other industry, whether it's technology, you know, SEAL, uh banking, very rarely do you see four different spots in the supply chain working together to ultimately uh incentivize and adopt regenerative agriculture practices that'll benefit all four of us. So why it's so beneficial, the big part is um nobody can do it alone. Uh, we've tried it a couple different times. Um, there's different lines of sight, there's different asks, there's different requests. Uh, farmers got to explain what works, what doesn't work. We've got to understand from a supply chain um uh what we can uh how we can ultimately add um to the uh either the conversation, the education, or the incentives, and then share that across our supply chain as well. So uh sometimes it takes uh more than just one entity, and I think this is a really good example of how four different companies. Then if you want to add, we're all consumers. We all buy we all buy from Walmart as well, actually, five different parts of the supply chain in one partnership is pretty special.
SPEAKER_01As they always say, takes a village, right?
SPEAKER_00Yeah, yeah.
Why Midwest Wheat And Where
SPEAKER_01So this initiative focuses on 40,000 wheat acres across Illinois, Indiana, and Missouri. Why why these regions and why this crop and and how do they fit into kind of the broader supply chain from farmer to consumer? Connect those dots for us, if you would.
SPEAKER_02Yeah, I'd like to think that the agriculture supply chain is one of the most transparent supply chains out there. That being said, it's not perfect. So, where we always like to start is we're uniquely positioned on the ADM side, that we have visibility upstream to farmers and downstream uh to at least one of those customers that is um General Mills. So we start by understanding where our sourcing region ultimately is because that's what we depend on. Uh, we've depended on it for you know the greater part of the last 100 years. We'd like to depend on it for another 100 years. Um, so engaging farmers specifically in those regions around our mills and our and uh our sourcing regions uh is where we like to start. That's also where we have really good relationships with farmers. Uh, more than likely, you know, we've been working with them on buying their grain for decades so we can have an open and transparent conversation. Um, and then understanding the complications because that's that's the one thing about region ag that's maybe different than um you know other sustainability requirements is that it's it's very local. There's local opportunities and there's there's local issues that are associated with it as well. When you talk about crop and soil type and weather and the different practices that could work and couldn't work. So that's where we start is understanding our sourcing region and trying to create programs that give incentives to farmers to adopt practices that have positive environmental impacts.
ADM As Program Facilitator
SPEAKER_01And ADM is serving as the on the ground facilitator of this program. What does that exactly mean? What does that role entail and how is ADM going to be working directly with with farmers to help implement these regenerative practices? I'm sure there's some education and some other things that really need to go into this.
SPEAKER_02Yeah, great question, Sarah. So in my opinion, to to uh participate in a successful Regen Act program, you have to know what you do well and you have to understand maybe some of what your weaknesses are and what isn't um uh something that you that you do well, also. So we have those uh four companies that are listed between Farmers, ADM, General Mills, and Walmart, but we also have other partners that help us with the technical assistance piece. So our role on the ADM side is to engage farmers and be able to have an open, transparent conversation about this region ag agreement that is quite a bit different than just buying grain from farmers, of understanding what we're incentivizing, which practices, which requirements are needed around those practices. Um and then we and then what we do is we lean in what we call our technical assistance partners, which in that region in uh Missouri, Illinois, and Indiana includes Practical Farmers of Iowa, American Farmland Trust, and Ducks Unlimited. And what they'll do is a one-on-one consultation if the farmer prefers to either meet them on the farm or have a phone call about best practices if they have any questions around them. Sometimes they'll lean on their own. Everybody's got their own person, their own expert. So sometimes they'll lean on that, or else we have that resource that's available for them as well. Uh, and then what we'll facilitate is the payments. Uh, we also have one other partner that is gradable that will do the data collection from the farmer that we try to make as painless as possible because we'd rather the farmer spending more time executing practices than giving, you know, having to uh give a bunch of information. Um, but that is part of the process that ultimately we have to collect the data, we have to verify it, then we have to measure the outcomes of the practices that were ultimately executed. So we're kind of a pro a program manager, kind of a facilitator. Um, uh, but those initial conversations with farmers, especially when it's new, we get a lot of questions like, why are you doing this? Um, is my data secure? Things like that.
SPEAKER_01Of course. And and and farmers are the center of the regenerative agriculture um initiatives, I'm sure. What's it along that line? What kind of those support, including technical assistance, maybe financial incentives? Are there are there things that participating growers are going to going to receive? And and you know, why are those resources really critical to long-term adoption?
Incentives And Adoption Risk
SPEAKER_02First off, it all depends on the farmer because that's where it all starts. That's what we're focusing on is um any concerns around soil erosion or water quality or climate impact. Um, that being said, it's a really big burden for the barn for the farmer to um to hold on their own. Uh so financial incentives are needed because there's a reason why some of these practices aren't adopted at a large scale. It's because there's real productivity or cost concerns that's associated with them. And more than likely, in a lot of them, there's short-term benefits of not doing some of these practices. A lot of the benefits tend to be long-term and positive impacts, whether it's reducing soil erosion, whether it's uh increasing soil organic matter that also comes with increasing soil organic carbon, um, whether it's water quality in your local area. There is the way that I always like to compare it, Sarah, is like whenever you're trying to, you know, in your personal life, say that you're, you know, you have a 10-mile commute to your to your office, it's like asking someone to ride a bike instead of um driving a car. Some people will do it. Being said, it's more work, it's more time, it's more management. And on their side, there's significantly more risk. So it's like riding a bike on an interstate uh versus uh maybe just some.
SPEAKER_01Or it's gonna rain in the afternoon and you didn't plan for that.
SPEAKER_02Yeah, yeah, yeah. You ride a bike when it's 70 degrees and nice, but what about when it's 95 degrees or it's 30 degrees? Uh, that's the that's the thing about a lot of these region act practices is there's a learning curve that's associated with them. The best teachers of region act practices are other farmers as well, some of the first adopters that have had success with it, but there's always a learning curve. And that learning curve, again, comes with like direct either productivity or cost concerns, which means that comes with direct potential negative financial impact of the farmer. And if it's something that we're, you know, we're trying to benefit from, whether it's more resilient crop for the next 40 to 100 years, then we we find it very important that we've got to pay farmers incentives to adopt these practices. Now, hopefully, like long-term, um, that payment is just incremental revenue and they're seeing benefits through yield, through cost savings, whatever it may be. Um, but that's going to take time. Uh, and that's one thing I'm pretty proud about our programs, too, is we've uh we've been pretty consistent over the last four or five years.
SPEAKER_01It's easy to jump in and jump out of a program, but to be dedicated and committed to a program, that's a whole nother
Value For Farmers And Brands
SPEAKER_01level. Now, now, behind beyond environmental benefits like improving soil health, water quality, carbon sequestration, what value does regen um ag create for farmers, for food manufacturers, and even down to that consumer level?
SPEAKER_02Yeah, we did a survey this year. So total, not just the uh the Indiana, Illinois, and Missouri wheat program, but we did a survey to farmers where we had over 700 responses this year, where we asked them did enrolling in our regenerations program have a positive impact on your bottom line? 91% said that it did have a positive impact on their bottom line. So from a revenue stream standpoint, especially from you know how how tough the agriculture farming community is right now from a profitability standpoint. That was one way to support it. The one thing that we found is more anecdotal in our business, our core business, we rely on our farm relationships for sourcing the uh the commodities that we ultimately turn into agriculture ingredients that goes to our downstream customers. Where we really see a benefit is we've gotten closer upstream to farmers and we've gotten closer downstream to our customers as well. The from a farmer perspective, you know, when I started in this business 16 years ago, if you would have asked me, if you're asking farmers like all their field level practices, do you think that's gonna be positive or negative? I would have said, I think that's gonna be negative. I think they would want us out of their cookies, not asking them a bunch of information. But a lot of the feedback we get now is hey, I've been taking a chance on doing this strip tail practice. I'm glad you care about it. I'm glad you're incentivizing it, glad you have a little bit of knowledge. Now we're never gonna have as much knowledge as they have for farming 20 to 30 years on it, but we're learning. Uh, and then on the downstream side, um, some of our customers don't have that direct visibility in those farmer relationships. So we find ourselves being somewhat of an interpreter of these are the hurdles, these are the risks. And the one thing I'm pretty proud of of the general mills, the Walmarts, and others is they've really gotten to know their our farmers, which are their farmers as well, and understand the complications that happen at the field level and how they're always paying attention to weather. And every year is different. There's not a SOP of farming like there is one of our mills. Um, every year is different. Of their 15 fields, they could have 15 different soil types, so it takes a little bit more of a nuanced approach.
SPEAKER_01Yeah, it's good for them to have an understanding and develop that understanding, these, you know, the whole food sector when it comes to regen and anything that agriculture does. Now, ADM, as we've been talking about, has extensive experience working with farmers through the regen agriculture programs that uh that you folks put together.
Lessons Learned And Future Scaling
SPEAKER_01What lessons from those efforts are are being applied to this specific collaboration and and how do they help to position this program for success?
SPEAKER_02Yeah, there's been a lot. Um, first, it's hard at every level of the supply chain, from farmer, the hardest, uh, on the practices and under understanding the positives and negatives that go with it, but even throughout the supply chain of understanding what's best practices, what methodology do we use, what models do we use, how do you pass that on across the supply chain? So, first that it's hard. Second, it's going to take time. This isn't there isn't a silver bullet. Um when when we started, you know, 12 to 13 years ago, you know, sometimes you can have a use case that's presented to you on like cover crops. It's like, oh, this is a no-brainer. Why isn't everybody planting cover crops? And that's usually what you just hear, you know, when you're just engaging like a specific type of um of farmer, but then you find a lot of complications that can ultimately happen as well, and how it ultimately takes time, and you need more adoption, you need more success stories, and you need more funding. Um that time, there's a time horizon that's associated with it as well. Um and then the last thing that we've probably learned is you never regret getting started. So there's a there's a million things that could slow you down from like, you know, analysis by paralysis of like this isn't like you know, the perfect practice or the perfect model or the perfect data collection scheme or the perfect technical assistance partner or the perfect region. But anytime that we've ever started a program, we've always learned a lot from it. And it's way easier to build off of those, you know, those learning opportunities and those regions than you know, essentially not doing anything at all. So those are probably the biggest three, Sarah.
SPEAKER_01Okay. Well, let's look ahead then. How do you how do you hope this collaboration um, you know, what it signals maybe to the broader food and agriculture industry, and and how can it serve as a as a model of how uh companies across the food chain can can really work together towards you know regenerative agriculture at more of a scale?
SPEAKER_02Even though I'm I'm I'm super impressed with how many different prongs of the supply chain are participating in this, it's still only scratching the surface of who benefits from regenerative agriculture practices at the farm level when you're talking about you know reducing soil degradation that's gonna happen in the next 25, 25 to 50 years, improving resiliency in crops that's gonna have you know different weather conditions over the next 30 to 40 years. So, like the one thing that I hope it creates an opportunity for is more participation uh across the industry um uh in future years. Because I do think we're just scratching the surface. I think there's a lot of different uh participants that can ultimately contribute. And then long term, once we you know we get to a scaled up effort, I think I'm hoping that um it's even recognized from the consumer world of how these practices ultimately have a positive impact on everyday life across your country, across your region, whatever it ultimately might be. Um, because the term regenerative ag, Sarah, is still somewhat in its infancy. Um still trying to figure it out standards and requirements and feeling more comfortable about the research and the impacts of these practices. I think every year that we ultimately do it, feel more comfortable. There's an education component to it, not only upstream, but downstream as well, all the way to the consumer. And I really hope we spend the next five, 10 years kind of building that business case. Because, like ultimately, for this to be attractive and it for it to be scaled up, there has to be a business case across the whole supply chain. So from farmer to processor to food manufacturer to retailer, I really hope there's uh a business case that be that that is developed because I do the one thing I do feel super confident is that the impacts deserve a business case. Uh they're big enough. Um, we just have to do the work and the uh and roll our sleeves up and uh uh feel more comfortable about what the impacts are.
Practices No Till And 4R
SPEAKER_01So we do have a question from the audience. Um, can you list some specific practices that will be employed, such as soil treatments, fertilizer, insecticide, seed treatments, fungicide, etc.
SPEAKER_02Yeah. So for this is a wheat program that is across those three states. So we tend to have slightly different programs depending on when the commodity what the commodity is and where the regions are. So on wheat, we have three big focus areas. And the one thing about region ag there's 15 different practices out there, but there tends to be big three categories that have the biggest impacts and are the most multidimensional when we're talking about climate impact, uh, water quality, soil erosion. And I'm gonna throw biodiversity a little bit in there, but those first three are the biggest. So our incentives that we specifically offer is uh a no-till incentive uh for the tillage practices, uh cover crop adoption, and then fertilizer efficiency. And usually our fertilizer efficiency program has two different categories. One is a practice and one is an outcome. One is four Rs that is very prescriptive. Follow these four things of right place, right time, right amount, right product to be efficient with your fertilizer. And you do these four things, and then one is outcomes. So to be really efficient on your fertilizer in certain regions, we use a calculation that is nitrogen compared to your final yield because it's not just it's not just removing fertilizer altogether, you won't be able to grow a crop. It's being really efficient with your fertilizer efficiency as well. So we'll have metrics on the nitrogen use efficiency that will incentivize farmers in that category. I forget, forgot double crops as well. Um uh we don't want to necessarily replace double crops we with uh with planting a cover crops, so we make sure we incentivize double crops as well. Um, and then there'll be future opportunities around other categories as well. Edge of field practices is a big one, ribarian buffers. Uh, but today we kind of wanted to start on those those big three categories, and those should have, like I said, they're multidimensional. So when farmers adopt, and and and we don't expect farmers to adopt, you know, to be looking at all three categories. That's almost like swallowing an alpha. It's like, let's start with this on this portion of fields, and then let's expand and let's continue to expand over years. But those are the the three big categories when it comes to wheat specifically in the US.
SPEAKER_01Very good. Uh, anything else you'd like to to leave our audience with today? Any kind of key takeaways?
On Farm Story And Takeaways
SPEAKER_02Uh no, I think the biggest thing is kind of the coolness of how many different um uh participants in the supply chain participated in this. And then I will share one story. Every year we we we get a chance to do a farmer meeting with uh all the program participants. So we were in southwest Missouri um on farm. Uh it was a little rainy that day, uh, but you had the farmer, you had the you had all four um companies talking about why this is important to them, what the hurdles are, what the resources is that they ultimately need from farmer to ADM to General Mills and to Walmart. And the one thing that I give General Mills and Walmart a ton of credit for is they're very versed, they're very knowledgeable. That being said, when you get a chance to talk to a farmer, you always learn something new. So we had two farmers in that region. One farmer was pretty advanced on a no-till operation, while the other one was advanced on cover crops around corn and soy, and they're talking about sharing about how they were going to get better, the cover crop one on no-till, the no-till one on cover crops. And then you got to hear from Walmart and General Mills why it's important to them. Um essentially, like at a high level, you know, we've been around for a while, we want to be around for um another 50 to 100 years as well. And uh just a really cool conversation. And I wish I could replicate that 365 days a year. Uh, you can't, but uh, when you're in the moment, you sure realize how kind of special it is that everybody gets together and you know, you can hear a farmer's input and their opinion at the same time you can hear from Walmart as well.
SPEAKER_01You can share and learn at the same time.
SPEAKER_02Yeah, it was awesome.
SPEAKER_01Very good. Well, Paul Sheets of uh ADM, thank you so much for being with us today. We greatly appreciate your time. Thanks for having us, Sarah.
Subscribe And Closing
SPEAKER_01I'm Sarah Muirhead, and you've been listening to Feedstuffs in Focus. If you would like to hear more conversations about the big issues affecting the livestock poultry, grain and animal feed industries, subscribe to this podcast on your favorite podcast channel. Until next time, have a great day and thanks for listening.