Regenerative Agriculture: Future Trends and Expert Insights

Current Adoption Rates and Growth Trends

Adoption rates of regenerative agriculture are influenced by financial incentives and faster payback periods, particularly in markets with multiple crop rotations. Despite grower uncertainty in Europe, structural improvements in planting methods and significant growth in highly engaged acres globally indicate positive growth trends.

"In Europe, the industry is now forecasted to be down 15%, reflecting increasing grower uncertainty in the region." --- (DE, earning call, 2024/Q2)

"In 2023, ADM refined two of its Strive 35 commitments to more meaningfully drive progress: ADM aims to reduce its absolute water withdrawal by 10%, from a 2019 baseline, by 2035, and ADM aims to increase its use of low-carbon energy sources to 25% of total energy used by 2035." --- (ADM, sec filing, 2024/Q1)

"They adopt when it makes financial sense, and given the double or sometimes even triple crop rotations they're able to achieve, the payback for much of our technology and equipment is significantly faster than in the North American market." --- (DE, earning call, 2024/Q2)

"If you fast forward today, to 2024, we're about 13,000 units above 220, and 70% of that is above 300, and that's being driven off of the structural improvement that our customers are making for how they plant predominantly." --- (DE, earning call, 2024/Q2)

"In fact, at the end of the quarter, we now cover over 415 million engaged acres globally, and importantly, highly engaged acres which, as a reminder, means three production steps and value-creating activities in the John Deere operations center are performed, make up over 25% of the engaged acres amount, having grown by double digits this past quarter alone." --- (DE, earning call, 2024/Q2)

Economic Impacts of Regenerative Agriculture

Regenerative agriculture programs, such as those by ADM and Bunge, demonstrate significant economic impacts through cost savings from carbon sequestration, meeting commercial demand, and supporting farming business development. Investments and expansions in these programs highlight their potential to enhance productivity and sustainability, ultimately strengthening the global food system.

"From our expanding leadership role in the decarbonization of the industries in which we operate, to the potential for the bioeconomy to transform how we think about food, feed, fuel and industrial and consumer products, ADM is helping pave the pathway toward a better future for us all. Among the achievements in the report, ADM successfully expanded its global regenerative agriculture program, with more than 2.8 million acres in 2023 that sequestered 263,700 metric tons of CO2 and emitted 310,000 fewer metric tons of Co2e." --- (ADM, press release, 2024/05/17)

""It's the same for ADM: Regenerative agriculture is a great example of how we are partnering with growers to support agriculture, strengthen our global food system and meet growing and evolving commercial demand while living up to our purpose and building a brighter tomorrow."" --- (ADM, press release, 2024/07/22)

"For example, we recently announced a $20 million investment in Brazil to more than double our regenerative ag program to 600,000 hectares." --- (BG, earning call, 2024/Q1)

"Launch of regenerative agriculture initiatives in Europe, Latin America accelerate global progress as company works toward 3.5 million acres in 2024 ADM (NYSE:ADM) announced today that its global regenerative agriculture program expanded to more than 2.8 million acres in 2023, exceeding its 2 million acre goal." --- (ADM, press release, 2024/04/30)

"Its global regenerative agriculture program supports growers in adopting regenerative farming practices that protect and improve soil health, biodiversity, climate and water resources while supporting farming business development." --- (ADM, press release, 2024/05/21)

Environmental Benefits of Regenerative Agriculture

Regenerative agriculture offers significant environmental benefits by creating plant-based alternatives to fossil fuels, as highlighted by POET's commitment to sustainable bioproducts. Additionally, CF Industries emphasizes that reducing emissions in fertilizer production supports decarbonization goals, further enhancing the environmental impact of regenerative agricultural practices.

"About POET POET's vision is to create a world in sync with nature. As the world's largest producer of biofuel and a global leader in sustainable bioproducts, POET creates plant-based alternatives to fossil fuels that unleash the regenerative power of agriculture and cultivate opportunities for America's farm families." --- (CF, press release, 2024/07/15)

"Reducing the emissions intensity of fertilizer production positively impacts the entire agriculture value chain by supporting the decarbonization goals of the agriculture and consumer packaged goods industries. https://t.co/UtgZEyJ9DN" --- (CF, twitter, 2024/05/21)

Policy and Regulatory Influences

Regulatory uncertainty and delays in biofuel mandates have hindered market growth, highlighting the need for regulatory clarity to support investments. ADM emphasizes the importance of regulatory certainty for timely and expected investment outcomes, while also committing to human rights and compliance protocols, reflecting broader policy influences on regenerative agriculture.

"Regulatory uncertainty and the postponement of biofuel blending mandates and renewable fuel standard targets in some regions further dampened market growth prospects." --- (ADM, press release, 2024/04/05)

"So I think that's an important clarification that needs to happen. These are industries that are investing in the U.S., and I think that providing regulatory certainty are very important for those investments to come to fruition on time and as expected." --- (ADM, earning call, 2024/Q1)

"Additionally, the policy confirms ADM’s commitment to protect human rights defenders, whistleblowers, complainants, and community spokespersons; ADM’s aspiration to cooperate with all parties necessary to enable access to fair and just remediation; and the Company’s non-compliance protocol for suppliers." --- (ADM, sec filing, 2024/Q1)

Expert Opinions and Future Trends

Experts highlight the growing importance of sustainability and digital management in agriculture. ADM emphasizes its role in decarbonization and the bioeconomy, while John Deere notes the increasing adoption of digital operations. These trends indicate a future where regenerative agriculture is driven by technological advancements and sustainability initiatives.

"We’re excited to unveil our 2023 Corporate Sustainability Report, which details how our work to feed the world, protect nature and enrich lives is advancing ADM’s growth strategy while paving the pathway to a better future for us all. https://t.co/fuO6wVtwYz #sustainability #csr https://t.co/xs52Gw1fM9" --- (ADM, twitter, 2024/05/14)

"We expect this trend to persist for the foreseeable future. Our progress is demonstrated, in part, by the growing use of the John Deere Operations Center (our digital operations management system) engaging more agricultural acres globally." --- (DE, sec filing, 2024/Q2)

"What is even more exciting is the opportunity ahead of us. From our expanding leadership role in the decarbonization of the industries in which we operate, to the potential for the bioeconomy to transform how we think about food, feed, fuel and industrial and consumer products, ADM is helping pave the pathway toward a better future for us all. The report details activities spanning three core focus areas: Feeding the World, Protecting Nature and Enriching Lives." --- (ADM, press release, 2024/05/14)