cows in field

Climate-Smart Commodities: Organic Milk Processors’ Grants

By Tamara Scully, NODPA News contributing writer

The USDA’s recent grant funding program - Partnership for Climate-Smart Commodities - has announced recipients from its December funding pool, which was inclusive of projects seeking funds ranging from $250,000 to under $5 million. These recent recipients join previous recipients - announced in September 2022.

The goal of the Climate-Smart Commodities funding is “to expand markets for America’s climate-smart commodities, leverage the greenhouse gas benefits of climate-smart commodity production, and provide direct, meaningful benefits to production agriculture, including for small and underserved producers.” For the purpose of the Climate-Smart Commodities (CSC) grants, the USDA has defined a “climate-smart commodity” as an “agricultural commodity that is produced using farming, ranching or forestry practices that reduce greenhouse gas emissions or sequester carbon.”

CSC funded projects are required to fulfill several objectives, as per USDA’s guidelines:

  • “Provide technical and financial assistance to producers to implement climate-smart production practices on a voluntary basis on working lands;
  • Pilot innovative and cost-effective methods for quantification, monitoring, reporting and verification of greenhouse gas benefits;
  • and Develop markets and promote the resulting climate-smart commodities.”

Over 25 million acres of working land is expected to be enrolled across the scope of all funded projects, which are anticipated to sequester over 60 million metric tons of carbon dioxide equivalent throughout the life span of the projects. Some of the practices covered under the grant include: Cover crops; low-till or no-till; nutrient management; enhanced efficiency fertilizers; manure management; feed management to reduce enteric emissions; buffers, wetland and grassland management, and tree planting on working lands; agroforestry and afforestation on working lands; pasture practices, such as prescribed grazing or legume inter-seeding; and use of soil amendments, like biochar.

All projects need to meet USDA NRCS standards, and will need to be third-party certified. Producers already enrolled in NRCS programs are eligible to participate in a CSC grant-funded project, but the same land can’t receive duplicate funding for the same practices. Farmers already utilizing strategies to reduce carbon and other GHG emissions, and who are enrolled in NRCS programs, can enroll more land, or adapt additional practices on the same land via participation in a CSC-funded project.

The USDA requires verification of carbon sequestration or GHG emissions reduction, and show that changes have been made from baseline data via third-party monitoring.

How will these funded projects impact Northeast organic dairy farmers? Where is the money going to be allocated, and how? What on-farm effects might dairy farmers expect? A complete list of all grants awarded, and details on what is funded and who is involved, is available here:

In the Northeast, there are numerous grants that include dairy interests. Organic milk processors - including Maple Hill Creamery and Organic Valley - were among the grant recipients. Stonyfield Organics will be contributing staff time and resources to two projects but did not receive any of direct funding from the USDA, but signed on as a participator in two projects.

Stonyfield Organics

Stonyfield has provided letters of support for two CSC-funded projects - Organic Valley’s Carbon Insetting Program, and the other led by OpenTEAM.

“Stonyfield will be contributing our own staff time and resources to advance the work of these projects,’ Britt Lundgren, Senior Director of Sustainability and Government Affairs for Stonyfield Organic, said. “Our goal is that the funds distributed to producers via CSC projects will contribute to both improved environmental outcomes at the local and landscape scale, and farm viability for small, organic dairy farmers.”

As a participant in the OpenTEAM’s The Alliance to Catalyze Transition Incentives through Open Networks for Climate Smart Agriculture (ACTION for CSA) program, Stonyfield will serve as potential purchasers of credits generated by any Stonyfield farmers participating in one of the regional pilot programs, including one focused in the Northeast. Stonyfield farmers who adapt specific carbon-friendly practices will earn credits, which they can then sell into a market of their choice, with Stonyfield Organics being one buyer of those credits.

In the carbon insetting project led by Organic Valley, which runs from May 2023 - spring 2028, money from Stonyfield will also be used to pay participating Organic Valley producers - at a market value - per ton of CO2 emissions sequestered or removed, as agreed upon by their cooperative members.

Through participation in either program, “organic dairy farmers will have the opportunity to be compensated for the work they do every day to steward natural resources and be eligible for funds to further improve soil health, biodiversity, and air and water quality. Some of these actions, like on-farm energy efficiency and renewable energy adoption, should lower production costs while others like improving soil health may increase forage quality or quantity, thereby supporting animal health and milk production” Lundgren said.

Organic Valley

Organic Valley’s $24,999,735 CSC-funded CROPP Carbon Insetting Program (CCIP) is focused on carbon insetting - not offsetting. The objective is for Organic Valley dairy and egg farmers to implement climate-smart farming practices, thus reducing or removing carbon directly within the company’s supply chain. This differs from carbon offsets, which allow other supply chains to benefit from carbon sequestration by purchasing carbon credits generated outside of their supply chains.

“Unlike offsetting, insetting creates a pathway for companies to invest in the ecosystems their suppliers/farmers depend on to increase resiliency and provide significant, measurable benefits to the communities surrounding the value chain. Carbon insetting results in carbon benefits directly tied to the production and sourcing of the climate-smart commodity, which consumers and buyers can reward at the point of purchase,” Organic Valley said.

Projects eligible for funding under Organic Valley’s CCIP include: “renewable energy-solar, improved manure management, enteric feed supplements, agroforestry, cropland and grazing enhancements,” the company stated. “Additionally, climate-smart farming practices have many co-benefits beyond GHG emissions reductions and carbon removal. For example, on-farm solar electricity generation can reduce and stabilize farm energy costs, reduce labor and maintenance costs associated with fossil fuel-powered equipment and improve air quality in barns and buildings through reduced diesel emissions. Manure management improvements can result in labor savings by eliminating, in some cases, the need to daily haul manure. Water quality benefits can result when a dairy transitions from liquid management to dry storage, treatment and land application. When dry manure is composted and applied to pasture and croplands, yield and productivity improvements can be observed. Agroforestry-silvopasture can result in improved livestock health due to increased shade in summer months and more drought resilient pastures. Riparian buffers result in water quality improvements and increased biodiversity along streams and waterways.”

Organic Valley will pay farmers for verified practices at the time of installation, and then annually. Payments can be utilized by the farmer for practice implementation, or for capital needs. Historically underserved farmers and small family farmers will receive USDA carbon outcome payments as well.

Organic Valley’s own Powering the Good Loan Fund for on-farm renewable energy projects will be available to any participating farm pursuing renewable energy-solar projects through the CSC-funded CCIP. The company will also provide assistance for farmers in the form of helping to budget for projects, and assistance with securing grants or other cost-share funding available to farmers interested in implementing approved CCIP projects. All Organic Valley dairy or egg farmers are eligible to participate, and funding will be distributed on a first-come, first-serve basis.

Maple Hill Creamery

“We’ve always been keen on trying to differentiate grass-fed from commodity, conventional, and organic milk as much as possible,” Phyllis Van Amburgh, co-owner with her husband, Paul, of Dharma Lea, one of the first farms to join Maple Hill Creamery founders Tim and Laura Joseph as they grew their brand. Phyllis partnered with Maple Hill Creamery on their Climate Smart Commodities grant, providing input and helping to develop a proposal that would work for the brand’s farmers.

Van Amburgh, at first, wasn’t sold on the premise behind the CSC program. She didn’t want to pay producers to convert crop land to pasture; Maple Hill’s dairy farmers have already done that, and she viewed that approach as a step backward from the regenerative philosophy of grass-fed dairy.

A lot of brainstorming on how to “use their (USDA) framework to pay our farmers for doing what they already have been doing” and “to retrofit the grant to Maple Hill’s existing standards rather than try to do something new to get grant money” was involved, and eventually a plan was hatched “to reward the farmers for what they are already doing.”

Carbon sequestration is really the focus of grass-fed dairying, not something to do to be more sustainable. Maple Hill Creamery’s 100 percent grass-fed dairy farmers have been regenerative well before the term entered into the mainstream lexicon, Phyllis said.

“We use perennial agriculture to sequester carbon. Carbon represents the life cycle,” she said. “For Maple Hill Creamery, carbon sequestration is taking control of your own ecological domain. The ability to wield our own personal ecology is really important to us. To us, climate-smart is ecologically smart.”

This philosophical differences and their practical on-the-ground impacts led to hesitation around the concept of carbon markets. One feature of existing carbon markets is the concept of additionality - that their carbon wouldn’t have been sequestered if there were no payments being made to do so. This is not at all aligned to the philosophy behind the Maple Hill Creamery dairy farming model, Phyllis said.

Maple Hill Creamery’s self-reliant grass-fed dairy farmers don’t require the fuel, the equipment, the field crops and the infrastructure - all of the inputs which generate carbon and other greenhouse gases - that most non-grass-fed dairy farms rely upon, so their carbon footprint is already lessened. By managing perennial pasture, grass-fed dairy farmers are farming regeneratively, and growing the ecological resiliency of the farm and insuring its longevity.

Another concern when applying for CSC funding was that carbon offsets in the commercial market are paid well below the true value of sequestering the carbon. Maple Hill didn’t want to perpetuate this inequity, and if they were going to pay farmers to sequester carbon, it would need to be at a much higher rate than the standard $15 -$20 per ton.

Phyllis cites recent research that the real value of carbon sequestration in soils is calculated to be approximately $400.00 per ton. If Maple Hill were to join in on paying carbon credits to farmers, those payments would have to reflect much more accurately the value of the sequestration.

Mitch Clark, senior vice president of supply chain, and their grant writer, Ben Shorofsky, P.E., of Stepwell Strategies, felt that although their farmers were already climate-smart farming, and doing so without many of the externalities associated with conventional dairy farming models, Maple Hill could write a CSC proposal which met the USDA’s guidelines for the program. This would allow them to further reward farmers for improving their regenerative practices.

“Our model is centered around getting more money into our producers’ hands, above our already higher pay price,” Mitch said. “This will insure that Maple Hill Creamery will be a model for family-sized farms for generations.”

Maple Hill Creamery’s CSC-funded project, Growing the Supply and Market for Climate-Smart Grass-fed Organic Dairy, is focused on providing enhanced opportunities for their producers to improve their existing, already carbon-friendly farming practices and not “compete with those who are going to take crop land and turn it into perennial pasture,” Phyllis said. The program received CSC funding of $20 million dollars and will run for five years.

Direct payments to farmers consist of $13.5 million, while administrative costs will require $1.5 million, with the last $5 million set aside for marketing. The CSC program requires a marketing component. For Maple Hill, this marketing is meant to attract consumer attention, so more consumers will then vote with their pocketbooks for the climate-friendly farming their grass-fed model is built upon, ensuring that the model can continue in perpetuity, well after the CSC funds are dispersed.

Maple Hill already uses pasture scoring metrics for their existing “Pay for Progress” internal payment incentive program, and these will also be utilized to measure CSC improvements. Maple Hill will pay its farmers $100 per ton for carbon sequestration via the CSC-funded project, tying pasture monitoring to soil sampling and cow body conditioning scores.

Pasture scoring indicators include: plant litter decomposition and incorporation into the soil; manure breakdown and decomposition; reproductive capacity of grasses, legumes and desirable forbs: population vigor of pasture forages; evidence of any wind or water erosion; evidence of micro fauna; and percentage of bare soil. The program’s approach piggybacks on both their existing Pay for Progress initiative, which emphasizes ongoing training to continually enhance ecological pasture improvements , and their Pasture Scoring metrics to measure that progress, so farmers learn to advance their carbon-friendly farming techniques, and are paid more as they get better at skills which enhance pasture ecology. They will also use USDA’s database of metrics for each practice to measure progress.

The CSC-funded project measures each farm’s individual baseline, and makes payments based on year-over-year improvements in scoring metrics, allowing each farm to work to improve its practices and be rewarded for doing so. These improvements also enhance the farm’s grazing ability, increase plant and cow nutrition and positively impact farm economics.

Another important part of the Maple Hill farming model is farmer-to-farmer education. Their “Pay for Progress” model relies on sharing knowledge, both to increase skills and to reduce farmer stress by creating supportive environments for like-minded producers and helping farmers to grow farms which contribute not only to the planets and the animals’ well-being, but to their own. This will be supported under the CSC-funding and is intrinsic to the Maple Hill Creamery philosophy.

“The project in general, by incentivizing the ability to come together in groups and discuss these regenerative really does make a huge difference in all of the farmers’ lives,” Phyllis said. The time off-farm for regenerative education, if paid, can make it easier for producers to attend. By learning techniques to enhance pasture grazing, which enhances soil carbon and “the ecological resilience of the farm,” which decreases farm economic viability, and farmer stress, too.

CSC funding will be open to all Maple Hill producers, and they will begin signing up willing farmers immediately. They are even able to sign up new farmers to the Maple Hill family, who would then be eligible to participate, if they are family-sized grass-fed farms and are nearby to a hauling route, or perhaps if a neighboring group of such farms were in a new area, it could work, Mitch said.

Agriculture has a role to play in mitigating climate change. Financially compensating farmers for practices which are ecologically beneficial and do not harm the environment holds promise as a part of the solution. If the CSC-funded projects developed by organic dairy processors can effectively model how directly incentivizing farmers can increase participation in such practices, and increase consumer awareness and support of climate-friendly farming products, perhaps the true cost of farming and of various farming practices - both environmentally sound as well as damaging ones - can finally be acknowledged. And our food system can change into one based on ecological viability, or true sustainability, while also feeding the world.