Monday, July 25, 2022

Who Owns America’s Farmland? And What Is Their Role In The Response To Climate Change?

 (This article was originally published on Forbes on 7/18/22)

No-till Soybeans Following Corn (NRCS image)

1870 was the first US Census in which farmers were in the minority (47.7%).Today, only 1.3% of Americans are still farming and increasingly do so on operations of over 2,000 acres. Even so, family farms still make up 98% of our agricultural sector. Farm ownership still reflects the legacy of the Homestead Act of 1862 as a great deal of current farmland still belongs to descendents of the 19th century homesteaders. According to the most recent USDA Census of Agriculture in 2017, the largest share of the US agricultural land is owned by families and individuals (201.5 million acres of cropland and 223.8 million acres of pastureland). Partnerships and family corporations own most of the remaining private land with non-family corporations holding only 3.1 million acres of cropland and 6.4 million acres of pastureland (see graph below)

US agricultural land is mostly in the hands of families and individuals, many with ties to to historic farming families 


The remaining farmers have typically expanded their operations by renting additional acres rather than by purchasing land. That approach makes perfect sense in the high risk, moderate reward business of farming the likelihood of a year with bad weather or low commodity prices makes it too risky to take on a big mortgage. In the USDA’s TOTAL Survey from 2014, rented land accounted for around 28% of US pastureland (~144 MM Acres) and 54% of US cropland (~214 MM Acres).  That survey also found that 31% of farmland (pasture and crop) was rented from “non-operator landlords” and 8% from farmers (see graph below)

The land that farmers rent is mainly from non-farmers (31%) and the landlords are either individuals, partnerships, family corporations or trusts


Farm operations that rent some or all of their acreage dominate in all but the smallest farm size categories (See chart below with partial rental operations in light blue and full rental operations in orange).

The majority of farming operations include at least some rented land. (USDA ERS and NASS)

The landlords who lease this property are a mix of still-active farmers, retired farmers, farm widows, city-dwelling descendants of farm families, and some unrelated investors. Many of these landlords have a hands-off relationship with their farmer tenant and simply collect their annual rent payment directly or through a farm management company. In an age of climate change there are good reasons to consider a more active role for these owners.

Agricultural Land Value In An Age Of Climate Change

Agricultural land is an asset with both short and long-term value. It generates annual income for the farmer and a significant portion of that is applied to rent if the property is owned by someone else. Ag land rental rates are closely tied to historic and regional production history – better land commands higher rent.  Around 1/2 of the cropland in the highly productive Midwest is rented and the percent of land rented from non-farmer owners is highest in the states with the highest rental rates driven by their productive potential (see graph below).

In the major farm states, the percent of land leased from non-farming owners is highly correlated with rental rates which are linked to yield potential for key crops


The property value of agricultural land has been increasing at a brisk pace in recent years making it interesting for a range of investors. A projection from the 2014 USDA survey of land ownership and tenure was that around 9.3 million acres of land would change ownership between 2015 and 2019 and that 60% of that would be through gifts, trusts, or wills, but that some of that may then be sold by the new owners, increasing the supply of land available for purchase. Land values and land rents are highly correlated (see graph below)

Land rental rates are highly correlated with property values within these seven USDA regions. In the Northeast and Western Pacific states other factors tend to drive property values. 


Risk and Opportunity

Climate change is creating both new risks and new opportunities related to the annual and long-term value of agricultural land. On the risk side, agricultural productivity in any given growing season is intimately linked to weather. The shifting climate exposes crops to more frequent extreme weather events (drought, flooding, wind…), yield-robbing warmer nights, and increases in the range and severity of pest challenges. Farmers can get some relief through government subsidized crop insurance, but there could eventually be the need for some risk sharing by landlords.

On the opportunity side, plants can capture carbon dioxide from the atmosphere and store it underground in relatively stable forms of organic matter – this is one means of climate change mitigation through carbon sequestration. There are certain farming systems that focus on the improvement of soil-health, and they do a particularly good job of carbon sequestration. If this kind of “climate-action farming” could be implemented at large scale (e.g. 100+ million acres), it would be of great benefit for society as a whole. There is a further upside associated soils that have captured and stored a lot of carbon – they become more resilient in the face of climate change because they are better able to capture and store rainfall in ways that buffer crop yields in both excessively wet and dry years. The land becomes more “climate-resilient.” While there is no one system suited to all situations, the basic elements are keeping plants growing in a field to feed the soil ecosystem for as much of the year as possible (double cropping, cover crops), having different species there over time including some which are particularly deep rooted (diverse rotations), and most importantly doing all of this with little to no mechanical soil disturbance in the form of plowing or tillage since that sort of operation leads to the release of sequestered carbon. There are also benefits from certain livestock integration practices.

The Transition Challenge

While dual climate-resilient/climate-action farming systems are very attractive as concepts, it is not at all trivial for a farmer to implement them in the real world. They must also be customized to fit different soils types, regional climates and primary cropping options. These changes require upfront investment in things like seeds or equipment. There may be reduced income from some of the rotational crops chosen for their soil enhancement characteristics rather than profitability. It also typically takes 3-5 years years for the yield and yield stability benefits to kick in and so the key hurdle is financing the transition. These changes are difficult enough to justify for land the farmer owns, but far more difficult to justify for rented land. It will be increasingly important to educate landowners that there will be a growing perverse incentive for a future tenant to “mine” the soil of nutrients for a few years by tilling --- essentially what the original sodbusters did.  That future conventional tiller will actually pay more to lease the ground, knowing that his non-land operating costs will be lower than on his/her other fields.  An unwitting landowner might think this is a good deal and switch tenants for a slightly better rent offer --- not appreciating the asset degradation the land is about the suffer in the background.  It is a poor trade, but not very visible.  This has been a major source of friction in some communities.

Carbon Offset Markets

There are initiatives underway to pay farmers to sequester carbon, but there is considerable skepticism as to whether such programs offer enough money to justify the costs and complications involved. There are also questions about whether these programs can be administered in a way that is fair and verifiable. Hopefully carbon markets will contribute towards more climate-ready farming, but other mechanisms are needed to enable the extensive and timely adoption of climate-resilient farming needed to protect the food supply.

Regenerative Farming

The farming methods described here are related to what is variously defined as “Regenerative Farming.” Unfortunately there is an effort to link the regenerative designation to organic through a certification process that would continue the ideologically-driven technology limitations of organic. The organic business model is to compensate the farmer for lower crop yields through consumer-paid price premiums, and that is not a workable approach to drive the system change on a large sale in row crops. The shift to climate-resilient farming methods needs to be enabled by all the best available technologies including biotechnology and well regulated crop protection chemicals.

Is This Kind of Change Even Possible?

Yes, there is reason to believe that this is possible based on a historical precedent for a farming huge system paradigm shift that happened in mainstream agriculture:  “no-till farming”. That change was also a response to a climate crisis of human origin – the Dust Bowl phenomenon of the 1930s, and it demonstrates the fact that farmers can make changes when they need to. This year marks the 60th anniversary of the first “no-till” field grown in Kentucky in 1962. Growing crops without plowing or tillage was such a radical idea that early adopters had to avoid social gathering spots like coffee shops to avoid getting harassed about their “trashy fields.” Fast forward to 2017 and 104.5 million US acres were farmed using a no-till approach.  No-till or the related Strip-till farming methods are the ideal foundation for the full suite of climate ready systems, and so it is important to consider what enabled that kind of large-scale change. The key elements were applied public research, the development of specialized machinery, and the availability of key technologies such as herbicides and biotech crops.  But perhaps most importantly, the change was pioneered by a distinct and innovative subset of the farming population. Today there are still self-identified “no-tillers” and “strip-tillers,” and they are at the adoption forefront of other farming methods that enhance climate-resilience. Grower oriented publications like No-till Farmer or Progressive Farmer are filled with narratives about farmers that are working out the practical details of adding things like cover crops or unusual rotations or livestock integration. The key is not to tell growers how to farm, but rather to ask these leaders what works and what would help them and others to move in the right direction in terms of a climate change response.

How Could Farm Leases Be Modified To Help Drive Change?

As mentioned earlier, it can take several years for the crop yield benefits of modified farming practices to kick in and typical leases are on an annual cash basis.  Longer leases would be a step in the right direction, but probably not all that is needed.

As the growing climate becomes more challenging, land with enhanced climate resilience will become more valuable, both in terms of potential rent and as a premium property. It would make sense to structure a lease to include some cost sharing between the farmer and the owner during the transition process, and then have some mechanism for the farmer to share in the for the increased rent potential and land value. There would also need to be a cooperative lease model for land that is going to be enrolled in a carbon market program. Getting carbon credits requires a commitment to the “permanence” of the carbon sequestration which is not something that a renter can promise since a subsequent renter could return the land to full tillage and release the stored carbon back into the atmosphere. A land owner who wants to have their land in a carbon program will need to find a capable and willing farmer and it would be appropriate to do that with some sort of cost and value sharing arrangement.

Another possibility would be to identify farmers with the most experience with transitioning to climate-ready farming methods, and engage them to upgrade land that hasn’t been optimally farmed in the past. Once again a cost sharing arrangement would be appropriate up front followed by some mechanism for the grower to share in the upside value. It would also make sense to set up an apprentice-like arrangement for young farmers to learn from those same experts.

Connecting the Key Players

In order for there to be widespread adoption of new lease models that support climate-ready/climate-active farming, to be there needs to be a way to connect progressive farmers with enlightened landowners and other entities. The goal is not to tell farmers how to farm, but rather to enable them to optimize the climate resilience of land in ways that make sense for specific settings. There could be a role for environmental or climate-action NGOs to generate interest among non-farming land owners and provide them with background information and lease models. Federal and state agencies involved with agriculture as well as farm industry organizations could help in the development of the new lease models. The operators of carbon offset programs should clearly “be at the table” as should individuals or organizations who want to invest in farmland. There could be a role for entities pursuing corporate sustainability or climate goals. There could be a role for climate-oriented charitable foundations. On the surface these diverse groups might seem like “strange bread-fellows,” but with a commitment to mutual listening and respect, they could join forces to make a meaningful difference for the future of the food supply and the trajectory of climate change.



Sunday, July 24, 2022

Can Florida's Iconic Citrus Industry Survive Its Own Pandemic?

(This article was originally published on Forbes on January 26, 2022

For more than two years, human society has been dealing with ramifications of the Covid-19 pandemic and that already feels like a long journey. It has killed millions, caused significant human stress, and precipitated economic disruption. Unfortunately the timeline for its resolution is unclear. For the past seventeen years, the Florida citrus industry has been grappling with a pandemic of its own – in this case an exotic bacterial disease that plagues the trees grown to produce the popular and health promoting fruit and juices we enjoy (oranges, grapefruits, lemons, limes, tangerines…). This severe plant disease now occurs in all 45 citrus producing counties in Florida. The disease was first described in China in the early 1900s where it called Huanglongbing or “yellow dragon disease.” In the U.S. it is usually called “HLB” or “Citrus greening.” 

Asian Citrus Psyllid Adult (image USDA-APHIS)

In 1998 an insect called the Asian Citrus Psyllid (ACP) showed up in Florida and caused concern because it was known to vector this disease while feeding on the tree’s sap. However the bacteria didn’t get introduced into the state for a while, and it was not until 2005 that the first diseased trees were found. In the ensuing years the insect and disease spread to essentially all of the citrus groves in Florida where they threaten the very survival of this important industry ($6.7 billion total economic impact, 33,000 jobs, $1.816 billion at the farm level). However, both pests are also now present in other US citrus growing states and represent a looming threat to those industries. 

This story has been unfolding slowly over these many years. The reason such a long-running problem has returned to the news of late is that the USDA published a depressingly dark production estimate for the 2022 Florida orange crop. They project that it will be down to 44.5 million 90-pound boxes - only 18% of the crop seen in 2004 - prior to the HLB era (see graph below) 

Ever since HLB appeared in 2005, production has been dropping (graph by author based on USDA-NASS data)

How Low Can It Go? 

In Florida, this disease is causing considerable concern about the future. Once the bacteria have been introduced into the tree by the ACP insect, they become systemic. The infection leads to a 50-70% decline in tree root function, reduced tree vigor, fruit drop, and problems with fruit ripening. Infected groves generate lower and lower marketable crop yields over time. That financial strain has induced around 5,000 farmers to quit growing citrus altogether. Unfortunately the potential to shift to different crops (e.g. blueberries, strawberries, peaches, vegetables) is limited because of weather and competition from other US growing areas and from imports. Citrus used to be the most profitable option in South Florida and that is why it was grown on around 900,000 acres prior to HLB. The declining yield and acreage trends for oranges can be seen in the graphs below. 

Orange production has dropped both because of reduce acreage and because of declining yield per acre.  This has also been true for other citrus types (Graphs by author based on USDA-NASS data)

Particularly for the juice industry, critical mass is required for running processing plants. Therefore it has been necessary for the major brands to include imports from Mexico and Brazil. The one grower-cooperative juice brand that continued making a “100% Florida-grown” product for many years (Florida’s Natural) has no longer been able to maintain that distinction. 

So Is There Any Hope? 

As is often the case in agriculture – adversity has inspired a diversified, private/public research effort to identify and/or develop pest management options for this disease and its vector. Funding for this comes from the industry itself (eg. The Florida Citrus Research and Development Foundation), the state ( University of Florida/IFAS), the federal government (USDA) and private technology companies. In 2018 the National Academy of Science published a 287 page review of the research effort with inputs or reviews from 23 scientists. One of the key conclusions was that no single solution would be likely to solve this problem and that a diversified strategy was needed. The following is at least a partial list of the strategies that are being pursued for both immediate and long-term solutions to this challenge. 

Nutrition and water management – because HLB compromises the tree’s root system, it becomes more important than ever to provide nutrients via fertilizers. However, this is a challenge in the extremely sandy Florida soils because these minerals can be washed down below the rooting zone to become a potential groundwater issue. The state’s extension experts recommend “spoon feeding” of small doses of fertilizer at multiple times during the year delivered through the irrigation systems which are now used in virtually all the groves. Major additions of organic matter are also used at replanting and/or in later years, but it is a challenge to retain their effects in these soils. Overall, growers are advised to follow BMPs (best management practices) that do as much as possible to reduce the effects of HLB while also protecting the environment. 

CUPS - One fairly extreme but near-term option for growers who are planting new citrus stands is to use a system called CUPS –“Citrus Under Protective Screening.” The idea is to completely exclude the ACP vector by growing the trees under a protective 40-50 mesh high density polyethylene screen. 
There is an orange grove under this protective cover designed to completely exclude the insect vector of HLB (Arnold W. Schumann, University of Florida/IFAS)

This sort of structure costs around $1/square foot and the screen has to be replaced every 7-10 years. That capital investment can theoretically make sense because in addition to avoiding HLB damage, the trees begin to bear fruit within 2.5 years of planting vs the normal 5-7 year range. Still, economic analysis of this system suggests that it is only feasible for the “highest possible yield of premium-quality fresh fruit with a high market price” and that only with a high degree of market stability. 

Breeding New Citrus Varieties – there are several, long-running University and USDA breeding programs for citrus which have added HLB resistance to their goals in addition to other kinds of pest resistance, yield and quality traits, and consumer traits like easy-to-peel tangerines. There are some promising examples of new varieties coming out of these programs. There is also another ambitious inter-species hybridization effort working with a citrus relative called Poncirus trifoliata or “Japanese Bitter Orange.” That source of genetic diversity may provide “constitutive disease resistance (CDR) genes” in hybrids that can then be back-crossed to restore fruit and juice quality. Modern technologies like genome resequencing and transcriptome sequencing are used to speed-up this process. Poncirus hybrids are also being evaluated for relative resistance to the vector insect, ACP. 

Rootstock Breeding - with tree and vine crops there are usually independent breeding efforts for the part of the plant that grows above ground (scion) and that which grows below (rootstock). Researchers at both the University of Florida and the USDA have long-standing rootstock development programs that were seeking to address other disease and nutrition issues before HLB, but they have found a few of their hybrids to be promising for reduced impact from infections. In some cases they have observed reduced proliferation of the pathogen inside the tree. There is the possibility that this sort of bacterial growth reduction effect will move up to the grafted scions where the fruit is formed. They are also breeding for “dwarfing” rootstocks that enable early bearing, “ultra-high density” plantings suitable for machine harvesting – a potentially more economically viable option for the future. 

Biocontrol - pest management involving live biological control agents is an increasingly important part of the tool box for farmers in general. Researchers at the University of Florida’s research and education center in Apopka have been testing a benign strain of a different bacterial pathogen of grapes called Xylella. By injecting this organism into HLB infected trees it appears to be possible to delay the development of severe symptoms and thus keep the orchard producing longer. This option is not yet available to growers because it will require EPA registration, but research continues to determine how effective the protection could be for new trees and how often new injections may be needed. 

Genome Editing - The recent advances in genome editing technologies such as CRISPR are generating excitement for many applications ranging from human health care to agriculture. An extensive review of how this might be applied to counteract HLB has been published by Chinese researchers in the International Journal of Molecular Sciences. While the USDA and other global regulatory agencies have signaled that they will minimize barriers to this approach, it remains to be seen how the EU will respond to broad scientific support for a smooth regulatory path for this kind of technology. If instead, the EU follows its historic tendency to employ extreme precaution regardless of scientific advice, their influence on export markets will negatively impact this future option for Florida and other citrus growing regions. In any case, this solution will not be available soon because it takes several years to get from a gene edited cell to a tree that is old enough to generate buds for grafting on to rootstocks. Genetic Engineering: like many other brand-sensitive food industry players, the Florida orange and grapefruit juice producers have acquiesced to the pressure to display the insidious “Non-GMO” label even though there are no commercial “GMO” cultivars being grown. There was an excellent article written in 2013 about the early history of this pandemic and the concern that growers would be denied any transgenic tools with which to fight HLB.

There is an active genetic engineering research program being pursued by a multi-party team involving Texas A&M, The University of Florida, Southern Gardens Citrus, Purdue University, the University of California and the USDA. It involves identifying genes for antimicrobial peptides to counteract the HLB organism and then either getting those expressed in the trees or delivering them with the help of a benign version of a common citrus virus. In the later case the trees themselves would not be “GMO” and it would be possible to use the technology across many existing and new varieties. There are regulatory processes involved (USDA, EPA) but those are nearing completion. Even if the “conventional breeding” options are promising and less controversial, it is always logical to have a diversified strategy – especially for a perennial crop which needs solutions that will remain effective over something like the 20-30 year lifespan of a new planting. That National Academy of Sciences review from 2018 specifically recommended “expanded efforts in educational outreach to growers, processors, and consumers” about the topic of biotech options. Back to the Covid-19 pandemic analogy, disinformation abounds when it comes to both vaccines and “GMOs.” 


So yes, the continuing HLB pandemic will result in a record low Florida orange crop in 2022. But there is still reason to hope that a combination of grower dedication and research to develop diverse strategies will ultimately mean that consumers can continue to enjoy these flavorful and health-promoting fruit and juice options. Finding solutions is not just important for the Sunshine State but also for other HLB-threatened states like Texas, Arizona and California.