Matt Ollendieck, a no-till farmer, planted cover crops

New year, new enrollment opportunity

December 15, 2020 | Heather Lilienthal

While the Soil & Water Outcomes Fund will be enrolling new farmers into the program starting next month, Matt Ollendieck already has a year’s worth of experience under his farm’s belt. After participating in the fund’s pilot program in 2020, he’s looking forward to the future. 

The Soil & Water Outcomes Fund provides financial incentives to farmers who transition to on-farm conservation practices that yield positive environmental outcomes. These outcomes include carbon sequestration in soil, water quality improvements and more. The program provides new market opportunities and revenue streams for farmers by aggregating and selling the outcomes to private and public beneficiaries. 

The Soil & Water Outcomes Fund is a partnership of AgOutcomes, Inc., a subsidiary of the Iowa Soybean Association, and ReHarvest Partners, a subsidiary of Quantified Ventures. AgOutcomes leads the agronomic and farmer relations elements of the operation and ReHarvest Partners manages the financial and contractual aspects of the Fund. 

Farmers can learn more and enroll at www.theoutcomesfund.com. 

Ollendieck farms with his grandfather, father and brother near LaPorte City. About 25% of the no-till operation has been seeded to cover crops. The opportunity presented by the fund closed the gap on the remainder of the farm. 

“We decided to make the big step and enroll the rest of the acres in the program, taking us to 100% cover crops on our fields,” says Ollendieck. “For the family, the conservation benefit is key. 

“We took the first big step 20 years ago when my dad pushed my grandpa to transition the farm to no-till,” he says. “And being a part of the Soil & Water Outcomes Fund is rewarding, knowing that entities and municipalities, like Cargill and the City of Cedar Rapids, are supporting our efforts. It’s a unique team approach.” 

Adam Kiel, AgOutcomes executive vice president, is looking forward to the program’s expansion. In 2020, just under 10,000 acres were enrolled. 

“Participating farmers received payments ranging from $25 to $45 per acre, with an average of $37 per acre,” explains Kiel. “This is possible by stacking together payments for carbon sequestration water quality outcomes from the same acre. Farmers are also given the opportunity to decide what works best for each field, and they often combine or stack practices, such as reducing tillage and fertilizer rates and adding cover crops. The annual payment to farmers is based on the environmental outcomes produced, so the more outcomes produced the higher the revenue opportunity.”

When a farmer enrolls acres into the program, the Soil & Water Outcomes Fund runs models, quantifies the estimated carbon sequestration and water quality benefits, and structures customized payment to that field. The amount depends on how many environmental outcomes are produced. 

“We offer the opportunity for farmers to maximize outcomes per acre and enroll as many acres as they want,” says Kiel. “The payment is structured according to what they produce.”

Kiel said there are several outcomes customers, including Cargill, the cities of Ames and Cedar Rapids, Iowa Department of Agriculture and Land Stewardship and USDA-NRCS. 

Cargill was the first carbon outcome customer to participate. 

“Working with Cargill has been a natural partnership and aligns with  Cargill’s goals of increasing sustainable farming practices,” says Kiel. 

Lance Lillibridge farms near Vinton and was already strip- and no-tilling all his acres. He is active in the Middle Cedar Partnership Project, so the pitch from Kiel and Jason Gomes, independent crop advisor, to add new conservation practices through the Fund instead of depending on cost-share was attractive to him. 

“I found that the fund lined up with my own ideas and goals for protecting soil health. The structure of using private-sector funds sounded even better,” says Lillibridge. “I understand that assisting with conservation costs makes a difference, but I really like the different nature of this endeavor.” 

He laughs and adds, “My first honest reaction was, ‘Finally! Somebody really gets this!’” 

Lillibridge added cover crops to 100% of the operation’s acres. He’s also grazing cattle on some of those cover crop acres, which takes the value even further for him. 

The return on the investment of  any conservation practice requires commitment, he adds. “Even when I started with tillage changes, I promised myself to stick with it for five years. I needed to remind myself of that commitment after year one …and two. But the benefits I now see have been worth it.” 

He says the payments are important to the longevity of the conservation efforts on his farm. 

“It would be hard not to have this program to continue the work,” he says as he looks to re-enrollment. 

“Providing these outcomes is good for my business and allows me to keep investing in my ground. That’s where our investments and returns truly come from. Keeping the soil in good condition is simply good business.” 

Ollendieck, like Lillibridge recognizes the importance of continuity and remaining focused on the long-term vision of and commitment to the new practices. 

“This can become a competitive market, especially looking at how the carbon market could take off,” he says. “There is more potential for us to capture value with the fund.” 

This story was originally published in the December 2020 issue of the Iowa Soybean Review. 

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