Is regenerative agriculture a viable option for agricultural producers on a global scale? Despite the ambiguity of what “regenerative” means in agriculture, I think the optimal pathway to induce change in this field is to speak to the financial benefits. It’s time to acknowledge that superior methods exist for cultivating food to meet the needs of a burgeoning population while simultaneously regenerating producers’ incomes. However, before widespread adoption of these practices, it’s imperative to dispel several myths surrounding regenerative agriculture.
Lower yields myth
One of the biggest misconceptions about regenerative agriculture is the assumption that regenerative agriculture leads to lower yields and therefore is not profitable. The Rodale Institute has been conducting side-by-side field studies for the last 30 years comparing organic and conventional agriculture.
Their extensive study has shown that after the one-to-two-year transition period, where yields do tend to decline, there is no difference between conventional and regenerative farming in terms of yields. Their research highlights that regenerative crops are more tolerant of stressful conditions, particularly during drought conditions. Rodale’s organic fields perform better because they are more resilient, which is directly related to the higher soil organic matter and subsequent increased water holding capacity.
Increasing input costs
Farmers operate on thin margins and face low commodity prices, combined with rising input costs, leading to a stagnation or decline in overall farm profitability.
Rising input prices are expected to continue impacting farmers’ profitability, with production expenses estimated to increase 4% in 2024.
According to the American Farm Bureau Federation economists, farmers are predicted to endure the largest recorded year-to-year drop in net farm income in 2024, estimated to be nearly $40 billion lower this year compared to 2023.
A 2021 report on fertilizer costs highlighted that many types of fertilizers are now at record price levels, with several phosphate and potash fertilizer products increasing by 15-20% since 2023.
A 2018 study by Lundgren and LaCanne compared the revenue and costs of conventional and regenerative production systems.
The study analyzed the average gross profits across 40 fields on 20 farms and found that regenerative systems had 70% higher profit than conventional cornfields, primarily due to significant decreases in input costs, seed costs, irrigation costs and fertilizers.
The study concluded that the two keys to success for this approach to farming were fewer inputs and access to new and diversified markets.
The promotion of soil biology and increased organic matter help the regenerative system function more efficiently, allowing plants to grow to their maximum productivity without dependence on off-farm supplements.
A study in almond production systems by Fenster et al. in 2021 found that profits were twice as high in regenerative orchards relative to their conventional counterparts.
The success of regenerative almond orchards was attributed to a combination of regenerative practices that optimized their production.
The current conventional system relies heavily on the perpetual use of expensive inputs (pesticides and fertilizers) and is therefore not a sustainable business model.
Unlocking new markets
Consumers are increasingly seeking to understand where their food comes from and how it was produced. They want their food to reflect their values, which today means being good for both people and the planet.
According to Planet Forward, 55% of all growth in Consumer Packaged Goods (CPGs) from 2015-2019 came from sustainably marketed products, and consumers are willing to pay a 39% premium for sustainably marketed products compared to conventionally marketed counterparts.
There is potential for higher premiums in these new high-demand markets.
Regenerative transition
While initial yields may dip during the transition to regenerative farming, resulting in less marketable produce and reduced profits, a study by Bain and Nature United suggests that earnings could match and exceed previous levels within four years of transitioning. Other studies have shown that a breakeven point could be achieved in two to three years. The key here is that after reaching that pivotal financial point, the farmer is better positioned to achieve higher profits than if the farm had not made the transition.
I’m convinced that improving soil health and promoting biodiversity while simultaneously producing nutritious food profitably is the only way forward to sustain the planet’s growing population. Placing value on and offering incentives to growers to implement systems that provide resilience and profitability needs to be prioritized. Farming is ultimately a business that needs to be profitable, and this regenerative conversation should be a catalyst for change. The farming methods that promote regeneration can assist in combating global-scale problems while making farms more resilient and profitable. Regeneration must encompass the continuous improvement of the entire agricultural sphere, including agricultural practices, policies, technologies, economics, environmental impacts, rural communities, supply and distribution chains, societal influences and the well-being of farmers and consumers alike.
Adam Brown is a Michigan Agriculture Environmental Assurance Program technician with the Leelanau Conservation District. He has a background in ecology and a B.S. from Western Michigan University in earth science with minors in environmental studies and biology. Prior to becoming a MAEAP technician he owned and managed a certified organic fruit and vegetable farm with his wife Haley Breniser, called Undertoe Farm in Kewadin. He has a passion for sustainable agriculture with a focus on soil health.
