Climate of Change

It’s often been said that everyone talks about the weather but no one does anything about it.  Well the federal government says it is going to try.  President Biden is committing the US to a goal of cutting our greenhouse gas emissions in half over the next decade although his plan is short on details of how we will achieve that goal.  Those details will be very important to our country in general and to agriculture in particular.  Already we are seeing USDA raising CRP rates and incentives to idle more acres.  USDA hopes to get 4 million more acres in the program at a cost of about $300 million a year. It will be interesting to see how successful this offer will be.  Historically CRP participation has been quite high when commodity prices are low but interest and acres in the program are much lower when commodity prices are high like they are right now.  USDA officials are usually quick to point out farmers’ desire to produce for the market place and not government programs.  This offer will put test that theory on both sides.  Meanwhile there are many remaining questions about the government’s push on climate policy such as will other countries make and honor similar commitments, will the approach to achieve these goals be mandatory or voluntary and will promised revenue streams for ag producers like carbon markets actually live up to the advance billing?  Some steps are being taken in Congress to help establish carbon markets for producers but like so much of these efforts, details are lacking.  For agriculture there is a lot at stake.  While it remains to be seen how the government sees ethanol’s role in these efforts already we are seeing increased demand for renewable diesel which has created a great demand for soy oil.  Some analysts feel we could see a biodiesel industry boon much like we saw for ethanol a few years back.  However many farmers and ranchers are taking a wait and see attitude on some of these programs and their promises and rightfully so.  They have heard this before. In the past many of the promises proved to be empty and often had a higher level of regulation attached.  Despite its impressive record of reducing its carbon footprint and lowering greenhouse gas emissions, agriculture is often viewed as more a part of the problem than part of the solution.  For some reason those who emit the least seem to get regulated the most.  Hopefully that won’t be the case this time.  If so that may be the biggest change of climate we’ve seen in a long time.