Disrupting the Status Quo: When Less May Be More

Agriculture has always been supported by technological innovation. In this op-ed, Sound’s Vice President of Sustainability Kaitlin Fitzgerald follows the thread of innovation in fertilizers to the modern day and how the next innovation might necessitate new kinds of incentives. 

As #Harvest2023 ramps up farmers are wrapping up their current season and will quickly shift gears to making key decisions for the next season. Chief among these includes booking inputs to meet core macronutrient (NPK) needs. Fertilizer represents 20 – 30% or more of operating costs for key crops and is an essential input for plant growth, so this decision can have a significant impact on the productivity — and profitability — of the entire operation.

At some point in time, you may have seen the popular No Farms No Food® bumper stickers from American Farmland Trust on a car in your neighborhood. We ask a lot of our farmers, from looking after our planet to feeding the world, and they need access to the best mix of solutions to drive those outcomes. Innovations in seed technology, advances in equipment, and new inputs have all led to rapid expansion in crop productivity, but perhaps none have been as singularly impactful as the invention of the Haber-Bosch process which allowed humans to convert atmospheric nitrogen to ammonia at scale. In fact, researchers estimate that nearly half of the global population is sustained through the use of synthetic fertilizers.

While fertilizer is essential for plant health and yield, much of the applied fertilizer is lost to the environment or left in a form unusable by the plant. This can lead to significant agronomic, environmental, and economic impacts that are not often priced into the true cost of synthetic fertilizer use. Around half of the world’s habitable land is used for agriculture with over a quarter of global greenhouse gas emissions and two-thirds of global freshwater withdrawals tied to food and agriculture. Fertilizer use is a key driver of that footprint with the fertilizer supply chain accounting for over 2% of all global greenhouse gas emissions. Meanwhile, nutrient runoff has been linked to harmful algal blooms, human health implications, and expensive mitigation efforts, the cost of which dispro­por­tion­ately impacts the rural communities in which our food is produced. 

It’s well understood that to feed a growing population that is estimated to reach nearly 10 billion over the coming decades, we need solutions that deliver continued increases in productivity in a more environmentally and economically sustainable way. That’s a big challenge, but it’s also exciting to imagine what the next wave of financial and technological innovation can bring, especially since the industry is still heavily reliant on a 110+ year old breakthrough that carries considerable externalities. With that context in mind, it begs the question—how do we deliver key nutrients in a more efficient and cost effective manner? Maybe it’s time to look to better sources of crop nutrition and ways to influence systems change. 

The soil is a rich ecosystem that provides for the crop, and soil fertility depends upon the balance between biological, physical, and chemical soil properties. A handful of soil contains millions of different microbial species, and these bacteria and fungi are essential components of the biological composition supporting plant health, nutrient cycling, and productivity. Plants’ root exudates also contain signaling molecules to recruit and guide microbial activity, so when external factors such as overapplication of synthetic fertilizer interrupt that plant-microbe interaction plant soil health can decline. Today an emerging class of nutrient use efficiency products work to address these imbalances serving as alternatives to synthetic fertilizer that deliver nutrients to the rootzone when crops need them the most by leveraging the power of the soil ecosystem. 

Because synthetic fertilizer has historically been viewed as a relatively cheap input, some growers apply beyond optimal amounts as insurance to protect yield regardless of the broader impacts. However, Liebig’s law of the minimum states that growth is dictated by the most deficient resource, or limiting factor. High levels of a particular nutrient in the soil can also interfere with the availability and uptake of other nutrients. Implementing a more yield based goal approach doesn’t necessarily take into consideration the potential environmental externalities of the crop getting more nutrients than it requires or the ROI implications of over application. A recent University of Illinois study underscores the diminishing returns of applying nitrogen beyond an optimal rate with an average recorded loss of around $30/​acre.

Despite the data from these types of studies, widespread familiarity with the concept of a maximum return to nitrogen (MRTN), new products that help optimize nutrient uptake, and price volatility over the past 18 – 24 months, the perceived risk of lost yield remains a key barrier to reducing synthetic applications. 2022 peaks saw growers booking nitrogen at $1/​lb or more, but fertilizer prices have since dropped by 50% or more. Given how the fear of loss may drive a grower’s choices, it can also be risky for stakeholders like crop advisors or extension agents to even offer the recommendation to reduce. Doing less isn’t always the most intuitive approach, and touting the message of not applying in a world of cheap fertilizer can be a tough sell. 

To address this situation players across the supply chain are experimenting with ways to drive behavior change and incentivize key outcomes. Last year, Field to Market released a financial innovation report outlining a dozen blueprints and case studies to help catalyze change. For the 2024 growing season, Sound Agriculture has launched a fertilizer replacement guarantee that shifts any downside risk of reducing away from the grower and onto Sound’s balance sheet. Qualifying growers who reduce 25 lbs of nitrogen and/​or phosphorus are guaranteed to hold yield or will be made whole up to $100/​acre. Even in an environment of lower fertilizer prices, this type of program allows growers to be proactive rather than reactive by getting in front of future price volatility, staying ahead of any regulations that may come down the pipeline, or providing an on-ramp to take advantage of evolving ecosystem incentives in the marketplace.

With forums like Climate Week NYC and COP28 bringing increased attention over the coming months to the future of how we grow food in a more resilient manner, now is an opportune time to explore how we can start thinking differently. Challenging the status quo can help take farming to the next level, and the industry has a responsibility to provide farmers with the appropriate tools to get there.