What’s the real value of your farm’s carbon?

There is a lot of talk going around rural America about paying farmers and ranchers to sequester carbon. Given the current low commodity prices, more money flowing to rural America would be welcome. But, what is that carbon really worth? We decided to do the math.

Oil is approximately 85% carbon and it’s a commonly traded commodity, so let’s use that as a baseline to help establish value.

• The average price of crude oil on 1/23/20 was $53.25.
• A barrel of oil weighs approximately 300 pounds.
• Oil is 82-87% carbon and 12-15% hydrogen.
• 300 pounds, multiplied by 85% = 255 pounds of C in each barrel of oil.
• To get the cost per-pound of carbon in oil, we take $53.25 and divide that by 255 pounds, which comes to = $.209.

So, using this oil-based, carbon-value metric, one pound of carbon is worth 20.9 cents.

The question for every farmer and rancher should be, “How can I sequester carbon to capture that value?”

Plants: Your carbon-capturing partners
The atmosphere consists of approximately 0.04 percent carbon, and living plants have the ability to take that atmospheric carbon and through photosynthesis convert it to carbon-based compounds which they exude into the soil. This allows a farmer the opportunity to literally capture that carbon and bank it on their farm.

How much carbon a farmer can retain each year is based upon his/her management practices. The more plants capturing solar energy the more atmospheric carbon will be converted into soil-based carbon.

If producers are simply growing a monoculture cash crop, harvesting that crop, and then letting their land lay idle until the next crop, they are sequestering a small amount of carbon, perhaps just 300-500 pounds per acre per year.

However, producers growing a cash crop, inter-seeded with companion cover crops that grow throughout the growing season, producers will sequester much more, perhaps 1,000 or more pounds per acre per year. Add livestock grazing into a very diverse plant community, managed in a manner which allows for optimal recovery, and the amount of carbon sequestered increases significantly—to perhaps 2,000 or more pounds per acre. The more plants, the more diversity, the more carbon.

Using these conservative numbers here is what we find when we compare management practices:

Monoculture cash crop only: 500 pounds x .209 =$104.50/acre/yr.
Cash crop with diverse covers: 1,000 pounds x .209 = $209/acre/yr.
Diverse forages grazed by livestock: 2,000 pounds x .209 = $418/acre/yr.

The carbon sequestering impact these practices is not just theoretical. In our work, we are seeing producers who are using regenerative practices sequestering large amounts of carbon. Researchers on Gabe Brown’s ranch have documented 96 tons of carbon in the top four feet of topsoil on his ranch, which equates to $40,128 per acre. Talk about adding wealth to rural America.

Carbon value and beyond

Carbon is just one metric by which we can increase value through regenerative agricultural practices. For example, many farmers/ranchers pay for rural water. What if we were paid for the water we infiltrate and store in our soils?

Soil has the capability to store approximately 20,000 gallons of water per acres, per 1% organic matter. Gabe has regenerated his ranch’s soils to an average of over 6% organic matter. That soil has the capability of storing over 120,000 gallons of water per acre, which is the equivalent of four railroad tank cars of water per acre.

In Kansas, rural water is costing some users $9.00 per 1,000 gallons. At that cost, the water stored in Gabe’s soil is worth $1,080 per acre.

Add that value to his soil’s carbon value of $40,128 and we now have ecological services worth $41,208, per acre.

Changing the conversation

It is time we change the conversation in rural America so that farmers and ranchers are paid for ALL of the services they are providing to society. But even if we aren’t paid directly, these ecological services pay YOU through lower synthetic fertilizer costs, lower pesticide costs, improved plant and animal health, improved water cycling and resiliency.

The question you need to ask yourself is “How can I position my farm/ranch to capitalize on these ecological services?” The answer: REGENERATE!

Look for further conversation on this topic at www.Understandingag.com