By Angie Peltier, UMN Extension crops educator, Anna Cates, UMN Extension soil health specialist and Ryan Miller and Dave Nicolai UMN Extension crops educators
January 22, 2025, was a first for the University of Minnesota Extension’s Strategic Farming: Let’s Talk Crops program in that it was broadcast live, not from Extension offices throughout Minnesota, but from one of the largest agricultural conferences in Minnesota each year, the Minnesota Ag Expo in Mankato. Hosted by UMN Extension crops educators Ryan Miller and Dave Nicolai, the program featured Anna Cates, UMN Extension soil health specialist, Warren Formo, executive director of the Minnesota Agricultural Water Resource Center, Joe Smentek, executive director of the Minnesota Soybean Growers Association and Dan Coffman, Minnesota soil health specialist for the Conservation Technology Information Center discussing sustainable aviation fuel and other conservation topics. This was the third weekly episode of the 2025 Strategic Farming: Let’s talk crops! webinars. The series runs through March.
To watch this and all episodes, visit z.umn.edu/StrategicFarmingRecordings.
As these are federal tax incentives, the details regarding regulations and recordkeeping rules come directly from either the US Department of Treasury or the US Internal Revenue Service.
The first step is to implement a practice in the field, for example you may decide to switch from conventional tillage to strip tillage corn or plant a cover crop the fall before your corn crop is planted. Step two is documenting that you have adopted the conservation practice; what passes for documentation will differ among different incentive or premium programs, with some requiring georeferenced pictures or ‘as-applied’ maps or receipts for expenses associated with adoption, while still other may require in-person, field-specific inspections to document practice adoption. The last step is to determine how much a specific suite of practices is worth from a carbon standpoint. This is what is referred to as a ‘carbon intensity’, ‘carbon index’ or ‘life-cycle analysis’. If one is also interested in participating in carbon markets, this last step is to determine how much the carbon reduction is worth to those companies or individuals looking to offset their own carbon emissions.
For processing plants that use commodity crops to produce SAF to receive tax incentives, every bushel of grain coming in for processing needs to have a carbon intensity score assigned and the weighted average carbon intensity score for the feedstock used by that plant needs to be below 55 . Once a plant receives the tax credit, it will be up to the plant to determine how to transfer a portion of that credit to the farmers that produced the corn.
Some ethanol plants, particularly those in the Upper Midwest, have determined that the corn that they are able to purchase locally will not reach the carbon intensity sustainability goals to qualify for the tax incentives. Plants are also trying to figure out just how much of a tax incentive they would have to pass along to the producing farmers to incentivize farmers to adopt and continue to produce crops using specific low-carbon-intensive production methods.
Unlike the carbon credit market, one can already be using all of the production practices that reduce carbon intensity to sell to an ethanol plant, the practice adoption does not need to be new to the field or farm to potentially qualify for premiums. These payments can also be stacked on top of EQIP payments or SWCD payments and carbon markets. More information regarding these sorts of payments will be best addressed by the ethanol plant that is accepting your grain.
Many of the production practices used to feed this model relate to nitrogen use including how much nitrogen is applied in various forms to the crop, when it is applied and whether any sort of nitrification inhibitor is used to reduce loss. Also considered is whether the nitrogen is broadcast applied or injected.
USDA recently came out with a different carbon intensity calculator that is more ‘user friendly’ and easier to use. Using this model folks can estimate carbon intensity for corn, soybean and sorghum on up to four different fields at a time. This calculator has fewer practices as options to adjust. Cates ran through several scenarios using this calculator to demonstrate that spring application of inhibitor-stabilized nitrogen can reduce one’s carbon emission per bushel by 7% when one switches from fall-applied nitrogen applied without a stabilizer. Emissions per bushel of corn produced were reduced by 29% when in addition to reducing tillage, one also split applies their N in-season and uses a cover crop.
Reducing tillage can also improve soil health through maintaining soil structure. Soil aggregates are particles of clay, silt, sand and organic matter held together with roots, fungal hyphae and glues secreted by the bacteria and fungi that colonize the soil. A well aggregated soil will allow for better water and air infiltration of the soil and will be less subject to both wind and water erosion, holding soil aggregates together. Soil health will be compromised with tillage as it disturbs the delicate fungal strands holding aggregates together and exposes more soil to the microbes that facilitate the conversion of nitrogen into forms more easily lost to the environment.
STIR (soil tillage intensity ratings) ratings are calculated by characterizing the soil disturbance that occurs and the amount of crop residue left on the soil surface after every single tillage pass in each field. Tillage depth, speed and the surface area covered by tillage are all included in the STIR rating. Operations with higher STIR ratings till more surface area at higher speeds and at greater depths. STIR ratings need to be below a specific level in order to have production practices considered ‘reduced tillage’ for carbon intensity calculations.
The aviation industry produces significant greenhouse gas emissions. As industrialized countries work to reduce their greenhouse gas emissions, sustainable aviation fuel will help to improve the sustainability of air travel. There is much more demand for SAF than the soybean industry alone can supply, making the interest in SAF widespread among other commodity groups including the canola industry and those groups supporting alternative oilseed crops such as pennycress and winter camelina. While breeding efforts are still underway and basic agronomic practices are being researched for these newer oilseed crops, a stable market may still be 5-10 years out. For farmers interested in diversifying their crop rotation, there are numerous other more well-established crops that could be considered.
In supporting Minnesota soybean producers, MSGA is also interested in the SAF market as a vehicle for Minnesota soybean growers to get recognition and premiums for some of the conservation practices they have already adopted.
Financial assistance for the program is being provided by the largest Climate Smart Commodity Grant awarded by the USDA totaling $95 million. The program offers participating producers $50 per acre. Funding for participating farmers is split over a 3-year period, with $25, $15, and $10 per acre supplied in years one, two and three of participation, respectively. By year four, the team surmises that the earlier financial and technical assistance means that participating operations should be capable of planting cover crops on their own.
The CTIC has hired ‘cover crop coaches’ that work throughout Minnesota that specialize in grazing systems, strip tillage or planting green into a living coving crop. Participating farmers have access to coaches through text, phone and email; on-farm visits also take place. The overarching goal of this sort of technical assistance is to share -farmer to farmer- information about ‘lessons learned’ so that the farmer newly incorporating cover crops into a larger cropping system doesn’t have to ‘relearn’ mistakes already made by others. One can think of this Farmers for Soil Health program as providing a bit of a ‘safety net’ for those new to the soil health learning curve. Once folks learn how best to grow cover crops in their farming operation, they are better able to take advantage of other premium-based conservation incentive programs.
MAWRC also teams up with University of Minnesota Extension to put on two annual conferences held in February each year, one devoted only to nitrogen and the other to nutrient management generally. The Nitrogen: Minnesota’s Grand Challenge & Compelling Opportunity Conference will be held on February 4, 2025 at the Mayo Clinic Health System Event Center in Mankato, MN. The Nutrient Management Conference will be held on February 18, 2025 at the Holiday Inn & Suites in St. Cloud, MN. Both conferences require registration, a $20 registration fee and can be attended either in person or remotely via the Zoom platform.
Thanks to the Minnesota Soybean Research & Promotion Council and the Minnesota Corn Research & Promotion Council for their generous support of this program!
Climate smart ag practices
It might not have been clear to most why Anna Cates, soil health specialist with UMN Extension, was recruited to participate in a discussion of sustainable aviation fuel (SAF). In order for a renewable fuel to be classified as “sustainable”, many of the practices associated with improving soil health, referred to as ‘climate smart ag practices’ must be in place in the fields on which SAF commodities are produced. Climate smart ag practices include reducing tillage and on-farm fuel use, adopting cover crops and using nitrification inhibitors. Fuels meeting specific carbon index scores help qualify processors of SAF for federal tax credits.As these are federal tax incentives, the details regarding regulations and recordkeeping rules come directly from either the US Department of Treasury or the US Internal Revenue Service.
Calculating crops’ carbon intensity
Carbon intensity is an accounting of the additions (tillage, nitrogen application) and subtractions (cover crops, using nitrification inhibitors) of greenhouse gas emissions related to farming practices. There are several calculators with many different practice-related parameters that can be adjusted for those that are interested in estimating how much carbon dioxide is produced or sequestered with a specific production practice.The first step is to implement a practice in the field, for example you may decide to switch from conventional tillage to strip tillage corn or plant a cover crop the fall before your corn crop is planted. Step two is documenting that you have adopted the conservation practice; what passes for documentation will differ among different incentive or premium programs, with some requiring georeferenced pictures or ‘as-applied’ maps or receipts for expenses associated with adoption, while still other may require in-person, field-specific inspections to document practice adoption. The last step is to determine how much a specific suite of practices is worth from a carbon standpoint. This is what is referred to as a ‘carbon intensity’, ‘carbon index’ or ‘life-cycle analysis’. If one is also interested in participating in carbon markets, this last step is to determine how much the carbon reduction is worth to those companies or individuals looking to offset their own carbon emissions.
For processing plants that use commodity crops to produce SAF to receive tax incentives, every bushel of grain coming in for processing needs to have a carbon intensity score assigned and the weighted average carbon intensity score for the feedstock used by that plant needs to be below 55 . Once a plant receives the tax credit, it will be up to the plant to determine how to transfer a portion of that credit to the farmers that produced the corn.
Some ethanol plants, particularly those in the Upper Midwest, have determined that the corn that they are able to purchase locally will not reach the carbon intensity sustainability goals to qualify for the tax incentives. Plants are also trying to figure out just how much of a tax incentive they would have to pass along to the producing farmers to incentivize farmers to adopt and continue to produce crops using specific low-carbon-intensive production methods.
Unlike the carbon credit market, one can already be using all of the production practices that reduce carbon intensity to sell to an ethanol plant, the practice adoption does not need to be new to the field or farm to potentially qualify for premiums. These payments can also be stacked on top of EQIP payments or SWCD payments and carbon markets. More information regarding these sorts of payments will be best addressed by the ethanol plant that is accepting your grain.
Carbon intensity calculators
One carbon intensity calculator can be found on the American Coalition for Ethanol’s website. This calculator determines carbon intensity by looking at different pools of carbon including the value that either the California carbon market or US Department of Energy assigns to the Midwest corn crop. There is also a means for users of the calculator to estimate carbon intensity of their own crop given their current or proposed production practices. A person can enter their own corn crop’s yield, fuel usage, tillage and nutrient management practices into the calculator.Many of the production practices used to feed this model relate to nitrogen use including how much nitrogen is applied in various forms to the crop, when it is applied and whether any sort of nitrification inhibitor is used to reduce loss. Also considered is whether the nitrogen is broadcast applied or injected.
USDA recently came out with a different carbon intensity calculator that is more ‘user friendly’ and easier to use. Using this model folks can estimate carbon intensity for corn, soybean and sorghum on up to four different fields at a time. This calculator has fewer practices as options to adjust. Cates ran through several scenarios using this calculator to demonstrate that spring application of inhibitor-stabilized nitrogen can reduce one’s carbon emission per bushel by 7% when one switches from fall-applied nitrogen applied without a stabilizer. Emissions per bushel of corn produced were reduced by 29% when in addition to reducing tillage, one also split applies their N in-season and uses a cover crop.
Practices highlighted by SAF tax credits
Every corn farmer may hope that their fields are located near an ethanol plant that is participating in these federal tax incentives for the potential opportunity to receive a premium for their crop. Regardless of one’s field proximity to participating plants, the practices highlighted through these programs will improve overall health of the soil and may reduce the environmental impacts of crop production. Moving from a 100% fall-applied nitrogen (N) system to a spring-applied strategy or perhaps splitting one’s N application in-season and using nitrogen stabilization products such as ureases inhibitors or nitrification inhibitors can all reduce the chances of nitrogen loss to ground and surface water through leaching or to the atmosphere through denitrification. Cover crops can help to sequester nutrients subject to environmental loss. Cover crops and reduced tillage can also keep soil in place, leading to less erosion-related phosphorus pollution.Reducing tillage can also improve soil health through maintaining soil structure. Soil aggregates are particles of clay, silt, sand and organic matter held together with roots, fungal hyphae and glues secreted by the bacteria and fungi that colonize the soil. A well aggregated soil will allow for better water and air infiltration of the soil and will be less subject to both wind and water erosion, holding soil aggregates together. Soil health will be compromised with tillage as it disturbs the delicate fungal strands holding aggregates together and exposes more soil to the microbes that facilitate the conversion of nitrogen into forms more easily lost to the environment.
STIR (soil tillage intensity ratings) ratings are calculated by characterizing the soil disturbance that occurs and the amount of crop residue left on the soil surface after every single tillage pass in each field. Tillage depth, speed and the surface area covered by tillage are all included in the STIR rating. Operations with higher STIR ratings till more surface area at higher speeds and at greater depths. STIR ratings need to be below a specific level in order to have production practices considered ‘reduced tillage’ for carbon intensity calculations.
Why the Minnesota Soybean Growers Association (MSGA) is interested in SAF
Joe Smentek of the Minnesota Soybean Growers Association shared that the soybean crushing industry was started to provide livestock producers that feed their hogs, chickens, turkeys or cattle a source of high-quality protein. The need to create a market for the soybean oil that was produced during the crushing process eventually led to the soybean biodiesel industry. In Minnesota, there is a law that dictates that diesel needs to contain 5% biodiesel year-round and 20% biodiesel in the summer months. While 40% of the soybean oil produced during crushing is used for human consumption, before the biodiesel industry took root, much of the remaining 60% of soil was being landfilled, dragging lower the economics of the soybean and soybean meal markets and increasing the carbon footprint of soybean production.The aviation industry produces significant greenhouse gas emissions. As industrialized countries work to reduce their greenhouse gas emissions, sustainable aviation fuel will help to improve the sustainability of air travel. There is much more demand for SAF than the soybean industry alone can supply, making the interest in SAF widespread among other commodity groups including the canola industry and those groups supporting alternative oilseed crops such as pennycress and winter camelina. While breeding efforts are still underway and basic agronomic practices are being researched for these newer oilseed crops, a stable market may still be 5-10 years out. For farmers interested in diversifying their crop rotation, there are numerous other more well-established crops that could be considered.
In supporting Minnesota soybean producers, MSGA is also interested in the SAF market as a vehicle for Minnesota soybean growers to get recognition and premiums for some of the conservation practices they have already adopted.
What does the Conservation Technology Information Center do?
The Conservation Technology Information Center (CTIC), a nonprofit based in West Lafayette, IN, had a booth at the Minnesota Ag Expo’s trade show and was recruited to come and speak to about CTIC’s mission to Dave Nicolai. CTIC is currently administering a program called Farmers for Soil Health, a program active in 20 states that provides both financial and technical assistance for farmers interested in adopting cover crops. Partnering with the US Fish and Wildlife Foundation, the National Corn Growers Association and the national pork and soybean checkoff programs, CTIC was at the MN Ag Expo’s trade show signing farmers up to receive both technical and financial assistance to reduce many of the barriers associated with the learning curve required to successfully integrate cover crops into a cropping system.Financial assistance for the program is being provided by the largest Climate Smart Commodity Grant awarded by the USDA totaling $95 million. The program offers participating producers $50 per acre. Funding for participating farmers is split over a 3-year period, with $25, $15, and $10 per acre supplied in years one, two and three of participation, respectively. By year four, the team surmises that the earlier financial and technical assistance means that participating operations should be capable of planting cover crops on their own.
The CTIC has hired ‘cover crop coaches’ that work throughout Minnesota that specialize in grazing systems, strip tillage or planting green into a living coving crop. Participating farmers have access to coaches through text, phone and email; on-farm visits also take place. The overarching goal of this sort of technical assistance is to share -farmer to farmer- information about ‘lessons learned’ so that the farmer newly incorporating cover crops into a larger cropping system doesn’t have to ‘relearn’ mistakes already made by others. One can think of this Farmers for Soil Health program as providing a bit of a ‘safety net’ for those new to the soil health learning curve. Once folks learn how best to grow cover crops in their farming operation, they are better able to take advantage of other premium-based conservation incentive programs.
Warren Formo, Minnesota Ag Water Resource Center Exec. Dir.
Dave Nicolai also pulled Warren Formo, executive director of the Minnesota Agricultural Water Resources Center (MAWRC) into the conversation. The MAWRC administers the Discovery Farms program in Minnesota, a program that works with farmers in Minnesota to monitor practices that can reduce off-farm nutrient losses on their own working farms. Data is collected from these farms to determine both nutrient and water budgets to help Minnesota crop producers to better understand nutrient management given the practices implemented, soil and landscape characteristics and weather conditions experienced on the farm.MAWRC also teams up with University of Minnesota Extension to put on two annual conferences held in February each year, one devoted only to nitrogen and the other to nutrient management generally. The Nitrogen: Minnesota’s Grand Challenge & Compelling Opportunity Conference will be held on February 4, 2025 at the Mayo Clinic Health System Event Center in Mankato, MN. The Nutrient Management Conference will be held on February 18, 2025 at the Holiday Inn & Suites in St. Cloud, MN. Both conferences require registration, a $20 registration fee and can be attended either in person or remotely via the Zoom platform.
Soil Management Summit
Next week, UMN Extension’s Soil Management Summit will be held at the Mayo Clinic Health System Event Center in Mankato, MN on January 29 & 30.Thanks to the Minnesota Soybean Research & Promotion Council and the Minnesota Corn Research & Promotion Council for their generous support of this program!
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