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Office of the Chief Economist Rob Johansson Chief Economist, USDA Chicago, November 2019 Enhancing environmental and financial performance on Midwestern farms 1

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Page 1: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief EconomistOffice of the Chief Economist

Rob JohanssonChief Economist USDA

Chicago November 2019

Enhancing environmental and financial performance on Midwestern farms

1

Presenter
Presentation Notes
August 29 2018 in Manheim PA

Office of the Chief Economist

Real net farm income is projected to fall

0

20

40

60

80

100

120

140

0

20

40

60

80

100

120

140

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Billion dollarsBillion dollars

Nominal Net Farm Income

Real Net Farm Income (2009$)

Data USDA-ERS

2

Presenter
Presentation Notes
August 20191313For 2019 net farm income is forecast at $880 billion Net farm income is expected to increase by 48 percent relative to 2018 or by about $4 billion Net farm income is a longer-term measure of profitability that takes into account balance sheet measures such capital replacement depreciation and changes in inventory131313The dotted lines are the 10-year projections released February 2019 The 10-year projections were calibrated to the August 2018 farm income release with the 2018 MFP added to calendar years 2018 and 2019 1313The 2018 net farm income estimate of $840 billion was revised upward by $209 billion (331) from the March forecast of $631 billion This change is primarily driven by the $252 billion downward adjustment of production expenses caused by new data from ARMS indicating that production expenses were lower than previously estimated 1313While net farm income at the national level remained similar for the years 2013 through 2016 after the revision from the 2017 Census net farm income for 2017 did notably increase to $777 billion a 33 percent change (+$25 billion) compared to the March estimate 13 13

Office of the Chief Economist

Agricultural export values projected to rise slightly in 2020 China share to remain down significantly

Data USDA

02468101214161820

- 20 40 60 80

100 120 140 160

Canada Mexico China Other of China Share

Billion dollars

3

Presenter
Presentation Notes
Updated w latest Trade outlook Sep 3

Office of the Chief EconomistOffice of the Chief Economist

Least US Corn Harvested

by November 101995-2019

1 2009 422 2019 663 2008 72

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

12-A

ug

19-A

ug

26-A

ug

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

16-D

ec

23-D

ec

30-D

ec

Perc

ent

Date

US CORN Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 2: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Real net farm income is projected to fall

0

20

40

60

80

100

120

140

0

20

40

60

80

100

120

140

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Billion dollarsBillion dollars

Nominal Net Farm Income

Real Net Farm Income (2009$)

Data USDA-ERS

2

Presenter
Presentation Notes
August 20191313For 2019 net farm income is forecast at $880 billion Net farm income is expected to increase by 48 percent relative to 2018 or by about $4 billion Net farm income is a longer-term measure of profitability that takes into account balance sheet measures such capital replacement depreciation and changes in inventory131313The dotted lines are the 10-year projections released February 2019 The 10-year projections were calibrated to the August 2018 farm income release with the 2018 MFP added to calendar years 2018 and 2019 1313The 2018 net farm income estimate of $840 billion was revised upward by $209 billion (331) from the March forecast of $631 billion This change is primarily driven by the $252 billion downward adjustment of production expenses caused by new data from ARMS indicating that production expenses were lower than previously estimated 1313While net farm income at the national level remained similar for the years 2013 through 2016 after the revision from the 2017 Census net farm income for 2017 did notably increase to $777 billion a 33 percent change (+$25 billion) compared to the March estimate 13 13

Office of the Chief Economist

Agricultural export values projected to rise slightly in 2020 China share to remain down significantly

Data USDA

02468101214161820

- 20 40 60 80

100 120 140 160

Canada Mexico China Other of China Share

Billion dollars

3

Presenter
Presentation Notes
Updated w latest Trade outlook Sep 3

Office of the Chief EconomistOffice of the Chief Economist

Least US Corn Harvested

by November 101995-2019

1 2009 422 2019 663 2008 72

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

12-A

ug

19-A

ug

26-A

ug

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

16-D

ec

23-D

ec

30-D

ec

Perc

ent

Date

US CORN Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 3: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Agricultural export values projected to rise slightly in 2020 China share to remain down significantly

Data USDA

02468101214161820

- 20 40 60 80

100 120 140 160

Canada Mexico China Other of China Share

Billion dollars

3

Presenter
Presentation Notes
Updated w latest Trade outlook Sep 3

Office of the Chief EconomistOffice of the Chief Economist

Least US Corn Harvested

by November 101995-2019

1 2009 422 2019 663 2008 72

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

12-A

ug

19-A

ug

26-A

ug

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

16-D

ec

23-D

ec

30-D

ec

Perc

ent

Date

US CORN Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 4: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief EconomistOffice of the Chief Economist

Least US Corn Harvested

by November 101995-2019

1 2009 422 2019 663 2008 72

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

12-A

ug

19-A

ug

26-A

ug

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

16-D

ec

23-D

ec

30-D

ec

Perc

ent

Date

US CORN Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 5: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

12-A

ug

19-A

ug

26-A

ug

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

16-D

ec

23-D

ec

30-D

ec

Perc

ent

Date

US CORN Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 6: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Fewest US Soybeans Harvested

by November 101995-2019

1 2009 792 2019 853 2018 87

Source USDA NASS Crop Progress Data

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 7: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

0

10

20

30

40

50

60

70

80

90

100

2-S

ep

9-S

ep

16-S

ep

23-S

ep

30-S

ep

7-O

ct

14-O

ct

21-O

ct

28-O

ct

4-N

ov

11-N

ov

18-N

ov

25-N

ov

2-D

ec

9-D

ec

Perc

ent

Date

US SOYBEANS Percent Harvested

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Based on NASS crop progress data

2019

Source USDA NASS Crop Progress Data

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 8: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Wheat corn and soybean prices

8

Dollars per bushel

Data USDA

3

5

7

9

11

13

15

200910 201112 201314 201516 201718 201920 202122 202324 202526 202728 202930

Corn

Soybeans

Wheat

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 9: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Farmersbull Recreationbull Uses clean air water clean

waterbull Profitabilitybull Liability

Publicbull Recreationbull Uses clean air water clean water

So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment

9

ldquohellipEvery year American consumers spend more on outdoor recreation [$887 billion] than they do on pharmaceuticals and fuel combined In fact the impact of outdoor recreation on Americas economy is almost as big as that of hospital carehelliprdquo

gt Roughly $170 billion in the Midwest

httpsoutdoorindustryorgwp-contentuploads201704OIA_RecEconomy_FINAL_Singlepdf

Americans spent about $16 trillion on food at home and away from home in 2017httpswwwersusdagovdata-productsfood-expenditure-series

Americans farms created value added of roughly $400 billion in 2017

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 10: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts

1 Technology and innovation2 USDA programs

3 Remaining challenges

10

httpsoceanservicenoaagovnewshistorical-hurricaneshttpsoceanservicenoaagovfactsdeadzonehtml

httpswwwcanrmsueduresourcesmanagement_of_nitrogen_fertilizer_to_reduce_nitrous_oxide_emissions_from_fi

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 11: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

050075100125150175200225250275300325350375400425

TFP Output InputUS Index Year 1929 = 100

Anhydrous ammonia injection becomes predominant

No-till starts to become popular

Robotic milking introduced

Satellites used for precision ag

Big data applications

Weed and pest resistant biotech

First automated irrigation system field tested

Widespread adoption of hybrid seed begins

Rubber tires on tractors introduced

Herbicide 24-D introducedWidespread adoption of inorganic nitrogen fertilizer begins

Consumer-focused biotech traits

Drought tolerant biotech

Source USDA-OCE using data from USDA-ERS and historic USDA data (pre-1948)

11

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 12: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Technological innovations have helped push up agricultural productivity

0

30

60

90

120

150

180

210

240

1960 1970 1980 1990 2000 2010 2020

World Crop Production

Corn

Soybeans

Rice

Wheat

Data USDA BLS

2005=100

Corn output has risen 435 since 1960 soybeans by 1190 rice by 225 and wheat by 215

12

0

30

60

90

120

150

1960 1970 1980 1990 2000 2010 2020

US Meat and Milk Production

Beef

Chicken

Pork

Milk

Beef output has risen 87 since 1960 pork by 143 milk by 77 and chicken by 1050

2005=100

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 13: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Example Rising corn yields through technological innovation

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Productivity can be measured by a single factor like corn production per acre (yield or land productivity)13or per unit of labor (labor productivity) But such measures can be misleading For example yields could13increase through technology adoption or simply because farmers are adding more of other inputs such as13chemicals or machinery Average national corn yield rose from around 30 bushels per acre in the 1930s13to nearly 180 bushels per acre in the present decade While this sustained growth in corn yield was driven13mostly by the development and rapid adoption of successive biological chemical and mechanical innovations (fig 151 also see chapter 27 ldquoBiotechnology and Seed Use for Major US Cropsrdquo) it was also13due in part to heavier use of non-land inputs

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 14: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Recent trends and policies have generally led to falling food prices and growth in trade

020000400006000080000100000120000140000160000180000200000

020000400006000080000

100000120000140000160000180000200000

1960 1970 1980 1990 2000 2010 2020

Corn Oilseed Soybean

Global corn and soybean exports (1000 mt)

Data USDAhttpwwwamis-outlookorgindicatorspricesen

14

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 15: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

15

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 16: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Example Nitrogen Application Quantity Corn

16

Source USDA Economic Research Service based on Agricultural Resource Management Survey (ARMS) data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

Productivity also can drive environmental performance

gtgtgt increasing lbsper acre application

The quantity of nitrogen applied on corn acres are increasing

Presenter
Presentation Notes
Total nitrogen application per acre has increased slightly between 2005-2016 on corn acres in the Corn Belt Large farms apply the most nitrogenacre13131313US map showing planted acres of corn by US state Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres Grey color indicates no data13Graph of average applied pounds of nitrogen per treated acre by USDA region (upper graph) and total number of acres where nitrogen is applied by region (lower) Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average of applied pounds of nitrogen per treated acre by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13The amount of nitrogen added per treated acre and the amount of nitrogenbushel differ by farm size with smaller farms applying less nitrogen per treated acre or per bushel than larger farms (see Figure 9c and Figure 10b) Specifically small farms (lt250 acres) applied the least nitrogen per treated acre at 104 poundsacre in 2005 which increased to 107 poundsacre in 2010 and 114 poundsacre in 2016 131313

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 17: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Nitrogen Application per Bushel Corn

17

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 18: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Nitrogen Application per Bushel Corn

18

Source USDA ERS based on ARMS data for 2005 2010 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

But declining excess nitrogen applications

gtgtgt decreasing lbsper bushel

But nitrogen applications per bushel are decreasing This demonstrates increasing efficiency of production

Presenter
Presentation Notes
Although overall applications have increased the application per bushel has remained the same and slightly decreased between 2005 and 2016 This demonstrates the increasing efficiency of corn production 1313Graph of average applied pounds of nitrogen per bushel (based on farmer estimated yield) by USDA region Box designates the three largest producing regions Regions sorted from left to right from most to least planted corn acres Color intensity is correlated to number of planted acres darker colors indicate more planted acres lighter colors indicate fewer planted acres13Graph of national average applied pounds of nitrogen per bushel (based on estimated yield) by farm size Lightest color indicates earliest timepoint (2005) medium color indicates mid-timepoint (2010) and darkest color indicates latest time point (2016)13For nitrogen per bushel mean application rates decreased between 2005 and 2016 in the three major producing regions (See Figure 10a below) Specifically mean nitrogen application rates per bushel decreased overall from 087 to 087 to 083 poundsbushel in the Corn Belt decreased from 086 to 085 to 081 poundsbushel in the Northern Plains and from 072 to 068 poundsbushel in 2010 and 2016 in the Lake States 1313Yield is based on predicted yieldndash therefore does not reflect weather variability13

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 19: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

New focus on intensification can improve productivity and environmental outcomes

19

06070809

1111213141516

1985 1990 1995 2000 2005 2010 2015 2020 2025

Lbs N

Bus

hel C

orn

Prod

uced

Year

Pounds Nitrogen Applied per Bushel Corn Produced in Illinois 1990-2020

Source USDA-NASS Quick Stats

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 20: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily

20

0

5000

10000

15000

20000

25000

0

5000

10000

15000

20000

25000

30000

Thou

sand

cow

s

Number of cows (left axis)

Milk per cow (right axis)

Poun

ds

Data USDA-NASS

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 21: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Focus enhancing productivity and the environment

Enteric methane emissions in dairy has dropped 55 from 31 g methanekg milk in 1924 to 14 g methanekg milk in 2014

Source Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 22: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Voluntary Programs

Generally there will be positive private benefits to conservation practices but there could be underinvestment

USDA and other similar programs can provide incentives to boost investments to achieve private and public benefits

Farming will generate externalities How can we achieve MC = MB

22

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 23: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

On-Farm Economic Benefitsbull Certain practices can have

financial and environmental benefits

bull Reduced tillagebull Reduced N applicationsbull Precision agriculturebull Cover crops

Incentive Programsbull USDA offers a variety of programs

to incentivize adoption of conservation practices

bull CRPbull EQIPbull CSP

How can we promote conservation adoption

23

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 24: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100 Source ICF and USDA 2016

httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 25: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Reduced Tillage

Reduced Nutrients

Precision Ag Tech

Break-even prices for conservation adoption

Range in incentive prices from $0-$100

Reduced tillage using precision ag and reducing N applications can pencil out for farmers

Source ICF and USDA 2016 httpswwwusdagovoceclimate_changeWhite_Paper_WEB_Final_v3pdf

Presenter
Presentation Notes
This demonstrates the range of ldquobreak even pricesrdquo needed to incentivize farmers to adopt conservation practices that have GHG benefits This was analysis done by USDA and ICF in 2016 The prices range from $0 on the left to $100 on the right

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 26: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Conservation Tillage Benefits

bull Reduces soil erosionbull Reduces runoffbull Improves water

managementbull Improves soil healthbull Reduced timefuel

use

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSnrcs144p2_066824pdf

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 27: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Mulch till and no-till adoption vary by region

27

More farmers are using mulch till than no-till in the Heartland

Source USDA Agricultural Resource Management data for wheat (2017) corn (2016) and soy (2012) httpswwwersusdagovwebdocspublications90201eib-197pdfv=17838

Fewer farmers are using conservation tillage in the NortheastLake States

Presenter
Presentation Notes
No-till is more efficient than mulch-till in terms of soil health soil moisture conservation and soil erosion control because it causes less soil disturbance and maintains greater soil residue cover When compared to mulch-till no-till can also mitigate sediment and nutrient loading in bodies of water and preserve soil depth and productivity The benefits of no-till are maximized when the practice is maintained year after year 1313No-till or strip-till was used exclusively on only about 15 percent of acres in the Heartland Around 44 of those acres are not using no-till or strip-till and 18 of those acres are partial adopters meaning they alternate no-tillstrip-till with other tillage practices 13

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 28: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

No-Till Adoption Corn

28Source USDA ERS based on ARMS data for 2005 2010 and 2015httpswwwusdagovoceoeepUSDA Conservation Trendspdf

No-till adoption on corn acres in the Corn Belt is slightly decreasing and is around 20(2005-2016)

Presenter
Presentation Notes
Between 2005 and 2016 the percentage of corn acres with no-till in the corn belt actually decreased slightly (about 20 of corn producers in the Corn Belt are using no-till) No-till adoption increased over that time period in the Northern Plains 1313The rate of no-till adoption does not vary meaningfully by farm size

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 29: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

No-Till Adoption Soybeans

29Source USDA ERS based on ARMS data for 2006 and 2012 httpswwwusdagovoceoeepUSDA_Conservation_Trendspdf

No-till adoption on soy acres in the Corn Belt is slightly decreasing but relatively highndash around 50 (2005-2016)

Presenter
Presentation Notes
No-till adoption decreased on soybean acres in the Cornbelt between 2006 and 2012 However the overall rate of no-till adoption in soy is relatively high (around 50 of soy acres in the Cornbelt and 70 of soy acres overall)

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 30: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Cover Crop Benefits

bull Reduce soil erosionbull Reduce runoffbull Improve water

managementbull Improve soil healthbull Provide additional

nutrients bull Suppress weeds

Source USDA NRCS httpswwwnrcsusdagovInternetFSE_DOCUMENTSstelprdb1082778pdf

Presenter
Presentation Notes
Studies demonstrate that cover crops reduce the amount of nitrogen leaving a field by 1 to 89 with a median value of 48 (across 10 studies and 16 observed reductions)1313Some studies report finding no significant effect of cover crops on total phosphorus losses sometimes because the cover crops may have reduced total phosphorus losses but increased soluble phosphorus losses (often in below-ground leachate water) However reductions have been observed showing that cover crops reduced total phosphorus loads in water samples by 15 to 92 Because cover crops reduce erosion the main mechanism by which cover crops may inhibit phosphorus losses is through preventing soil loss by covering the ground and rooting to secure the soil in place

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 31: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Cover crop adoption is increasing but still low overall (about 5)

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 32: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Cover Crop AdoptionmdashAll Crops

Cover crop adoption is increasing but still low overall (about 5)

The Corn Belt and Lake States are at about 5 adoption but the Northeast is much higher (around 20)

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Despite these benefits therersquos room for improvement 1313Both the percentage of acres grown with cover crops and the number of acres of cover crops grown increased from 2010 to 2015 although the national rate of adoption remains around 5 1313The Corn Belt had the largest increase in cover crops planted (approximately 33 million acres) from approximately 518000 acres in 2010 to 38 million acres in 2015 1313However the percentage of acres in the Corn Belt using cover crops lags far behind other regions especially in the Northeast This may be due to state policies prioritizing cover crops as a practice to reduce water quality emissions For example Maryland will pay up to $80acre in some cases to incentivize farmers to adopt cover crops This policy has been very successful as evidenced by the high rates of adoption in the State

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 33: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2012

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 34: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Percent of acres using cover crops in 2017

Increased adoption in the Eastern and Midwestern States

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 35: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Source USDA ERS analysis of 2017 Census of Agriculture Summary Data USDA NASS

Change in cover crop acreage 2012-2017

Bright green represents a 5-39 increase

Dark blue represents a 5-35 decrease

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 36: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Cover crops can provide yield returns

Source SARE Cover Crop Economics 2019 httpswwwsareorgLearning-CenterBulletinsCover-Crop-Economics

Presenter
Presentation Notes
Cover crops can also provide economic returns The Sustainable Agriculture Research and Education institute (SARE) did a study of 500 farmers who used cover crops and found a 3 boost in yield after 3 years on corn acres and an almost 5 yield boost after three years for soybean acres 1313This equates to a payoff for the cost of implementing cover crops as opposed to more traditional crop management strategies For example when dealing with herbicide-resistant weeds the study found that cover crops pay off in one year for soy and two years for corn (with a savings of about $27acre)

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 37: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

USDA encouraged cover crop planting on prevented plant acres this year

Source USDA httpswwwfarmersgovmanageprevented-planting

Presenter
Presentation Notes
Many fields that are saturated for a long time face a loss of soil organisms Cover crop roots re-establish soil health and create pathways for air and water to move through the soil USDAs Natural Resources Conservation Service provides technical and financial assistance to help farmers plant cover crops and cover crops were encouraged on prevented-plant acres in 2019

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 38: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Precision Agriculture

Benefits bull Apply fertilizer and

other inputs in the right place and right rate

bull Maximize nutrient benefits while minimizing overapplication

bull Financial benefits by reducing inputs

Source USDA ERS httpswwwersusdagovamber-waves2016decemberprecision-agriculture-technologies-and-factors-affecting-their-adoption

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 39: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Variable Application Rate Technology Adoption (1998-2016)

VRT adoption especially on corn (blue line) rapidly increased from 2005-2016

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Precision agriculture allows farmers to save on seed fertilizer and pesticide costs increase yields in certain situations and be better stewards of farm resources By 2016 15-40 percent of US farms used variable-rate application equipment which adjusts input application rates depending on field conditions

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 40: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Variable Application Rate Technology for Fertilizers Corn

40

In 2005 around 5of corn farmers used VRT in the Corn Belt

By 2016 almost 40of corn farmers used VRT in the Corn Belt

Source USDA ERS based on ARMS data for 2010 2011 2012 and 2015 httpswwwusdagovoceoeepUSDA_Conservation_Trendspd

Presenter
Presentation Notes
Looking specifically at corn in the corn belt adoption of variable rate technology jumped from around 5 in 2005 to almost 40 in 2016 1313Note that most of this adoption is happening on large farms (1000+ acres) as compared to medium and small farms 1313Outfitting equipment with VRT is expensive but research demonstrates that VRT improves average profits In 2010 corn acres using VRT saw a 1-percent increase in profits About a fifth of planted acres for several crops (figure 2111) such as soybeans and rice used VRT in 2012-13 Perhaps more surprising is that VRTrsquos supporting technologiesmdashsuch as GPS mapping soil mapping and auto-steer guidance systemsmdashare also profitable on their own Mapping and auto-steering for example added between 2 and 3 percent to corn farm profits in 2010 This technology can help farmers save money by becoming more efficient

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 41: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

USDArsquos broadband programs support precision ag adoption

bull USDArsquos ldquoA Case for Rural Broadbandrdquo report found that meeting rural broadband needs could provide $18 billion in additional economic benefits

bull The USDA ReConnect Program offers grants and loans for broadband infrastructure

bull USDA has invested over $51m to date

41

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 42: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Targeting resources applies to both a farm level and a programmatic level

Acres with high leaching potential in the Western Lake Erie Basin

Source USDA CEAP Data 2015

Presenter
Presentation Notes
Targeting resources also applies to USDA 1313The Conservation Effects Assessment Project (CEAP) helps identify priority areas to target conservation This image identifies watersheds that have a high runoff potential This information can help USDA allocate conservation resources and technical assistance more efficiently

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 43: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Example Enhanced Efficiency Fertilizers (EEFs)

bull Reduce nitrogen losses to water and airbull Nitrous oxide emissions from fertilizers are the largest

source of greenhouse gas emissions from the ag sector (almost 50 of ag emissions)

bull Improve nitrogen use efficiency and yield

New technologies will continue to drive efficiencies in production

43

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 44: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 45: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Coated fertilizersbull Double inhibitors

(nitrification and urease inhibitors)

bull Nitrification inhibitorsbull Urease inhibitors

Impact of Enhanced Efficiency Fertilizers on Nitrous Oxide Reductions

Nitrogen inhibitors can reduce nitrous oxide emissions by over 40

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
Enhanced Efficiency Fertilizers (EEFs) are also a promising technology to reduce nitrous oxide emissions in the ag sector 1313This shows the percent reduction of nitrous oxide based on a variety of enhanced EEFs (coated double inhibitors nitrogen inhibitors and urase inhibitors) 1313Nitrogen inhibitors in particular can reduce N2O emissions almost 50 These data come from combined studies of 5 different meta analyses

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 46: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 47: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Enhanced Efficiency Fertilizers bull Nitrification inhibitorsbull Urease inhibitorsbull Double inhibitors

(nitrification and urease inhibitors)

bull Coated fertilizers

Impact of Enhanced Efficiency Fertilizers on Nitrogen Use Efficiency

Nitrogen inhibitors can also increase nitrogen use efficiency by almost 50

Source ICF and USDA 2019 Draft memo Data from Akiyama et al 2010 Kim et al 2012 Li et al 2018 Shcherbak et al 2014 Zhang et al 2019

Presenter
Presentation Notes
These technologies also have on-farm benefits EEFs can increase nitrogen use efficiencyndash for example these meta analyses indicated that nitrification inhibitors can increase N use efficiency by almost 50

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 48: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

bull USDA makes significant investments through Farm Bill programs (EQIP CSP CRP etc)

bull These investments have led to reductions in soil loss runoff and sequestered carbon

USDA has a role to play in incentivizing conservation adoption

48

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 49: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Billi

on

Working lands Cons Reserve Ag Conservation Easements

Note Data expressed in 2018 dollars Working lands includes Environmental Quality Incentives Programs Conservation Stewardship Program and Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program All programs include these and their predecessors

USDA investments in conservation (2009-2018)

Working lands programs have made up a higher share of USDA conservation spending over time

Presenter
Presentation Notes
Overall USDA conservation spending has been relatively consistent over the past decade with shifts between which programs receive the most funding Through the Farm Bills there has been a shift away from easements and the CRP program towards working lands programs such as EQIP

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 50: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Expenditures on top 5 EQIP practices 1998-2015

Cover crops account for more of EQIP spending over time

Data USDA ERS Agricultural Resources and Environmental Indicators 2019 httpswwwersusdagovwebdocspublications93026eib-208pdfv=23483

Presenter
Presentation Notes
Of the working lands programs USDArsquos Natural Resources Conservation Service (NRCS) administers two programs that provide financial assistance to farmers to retain or use soil health practices and enhancements the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) Farmers receive payments to implement or maintain practices like nutrient management no-till cover cropping and pasturerangeland management and restoration EQIPrsquos budget has increased since 1997 as it grants more contracts to eligible producers EQIP expenditures on nutrient management and terracing have decreased while expenditures on cover crops have increased

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 51: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Total US Spending 20186187 Million

USDA conservation spending by state in 2018

Source NRCS RCA Reports

Note Data expressed in 2018 dollars Includes these programs and predecessors Environmental Quality Incentives Programs Conservation Stewardship Program Conservation Technology Assistance Conservation Reserve Program Agricultural Conservation Easement Program

Presenter
Presentation Notes
This shows the same data as a heat map Here you can see the concentration of spending on conservation

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 52: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Working lands ProgramsConservation Reserve ProgramAgricultural Conservation Easements

Total US Spending 2018

6187 Million

Working lands programs include Environmental Quality Incentives Program Conservation Stewardship Program

Distribution of USDA conservation spending by program 2018

Source NRCS RCA Reports

Presenter
Presentation Notes
This demonstrates the proportion of conservation funding going to various programs The dark blue represents working lands programs and the light bluegreen is the CRP program The yellow are easements 1313Interestingly much of the spending in the ldquoIrdquo states is on CRP

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 53: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Average Sediment Loss Reduction 2017ndash18252 million tons

Average Wind Erosion Loss Reduction 2017ndash18313 million tons

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates what wersquore getting for USDArsquos conservation investments 1313This shows the average sediment (252 million tons) and wind erosion loss reduction (313 million tons) from 2017-2018 in the Corn Belt These data come from CEAP

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 54: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Average nitrogen runoff 2017ndash18down 535 million lbs

Average phosphorus runoff 2017ndash18down 891 million lbs

Outcomes from USDA conservation investments

Source USDA CEAP Data

Presenter
Presentation Notes
This slide demonstrates the nutrient benefits provided by USDA conservation investments in the Corn Belt with nitrogen reductions around 535 million tons and phosphorous reductions around 891 million tons from 2017-18

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 55: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Comparing successful EQIP participation to additionality

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 56: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Comparing successful EQIP participation to additionality

Conservation tillage is not as additional but very likely to be completed as planned

Structural practices are additional but less likely to be completed as planned

Conservation tillage probably pencils out for farmers

Source ERS Working Lands Conservation Contract Modifications Patterns in Dropped Practices

Presenter
Presentation Notes
Shifting to USDArsquos conservation programsndash we see similar trends in additionality Looking at the practices that are more likely to be completed as planned but maybe less likely to be ldquoadditionalrdquo (to what the farmer might have done anyway without the USDA incentive payment)ndash we see conservation tillage This practice likely pays off for the farmer 1313Field borders and filter strips donrsquot have on-farm benefits so theyrsquore more likely additional but also more likely to not be completed

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 57: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief EconomistOffice of the Chief Economist

Current CRP Enrollment and Expirations

bull Current CRP enrollment is at 22 million acres The 2018 Farm Bill increased the cap to 27 million acres by 2023

bull Expiring CRP Acresbull 536 million acres in FY 2020bull 301 million acres in FY 2021bull 401 million acres in FY 2022

470

256345

066

045

056

536

301

401

000

100

200

300

400

500

2020 2021 2022

Expirations (Million Acres)

Continuous

General

Source USDA

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 58: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

58

-

50

100

150

200

250

300

350

400

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill

ion

Acr

es

Fiscal Year

CRP Enrollment at End of Fiscal Year (Acres))

General

Continuous

Continuous Enrollment Has Expanded Relative to General Enrollment

Source USDA

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 59: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Chart1

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres))
2
0
153
0
2387
0
2888
0
3252
0
33
0
3399
0
3502
0
3502
0
3498
0
345
0
3272
0098
2966
068
289
092
3023
119
3201
16
3183
213
3163
248
3184
287
3173
317
3245
355
3292
385
3054
407
2942
438
2664
463
2605
507
2422
53
214
55
197
574
1798
62
1686
702
1602
733
14
809

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
1986 1986
1987 1987
1988 1988
1989 1989
1990 1990
1991 1991
1992 1992
1993 1993
1994 1994
1995 1995
1996 1996
1997 1997
1998 1998
1999 1999
2000 2000
2001 2001
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
2018 2018
Page 60: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

A

ampLAnnual2004Historywk4

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Cumulative
Acres Financial Assistance Payments Technical
Enrolled Rental CS Incent Total Asst Total Year General Continuous
(Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) ($Mil) (Acres)
Year Acres
1986 20 0 0 0 0 8 8 1986 20 00
1987 154 410 246 0 656 41 697 1987 153 00
1988 240 756 282 0 1038 56 1094 1988 239 00
1989 292 1149 181 0 1330 86 1416 1989 289 00
1990 328 1390 118 0 1508 0 1508 1990 325 00
1991 332 1590 41 0 1631 10 1641 1991 330 00
1992 341 1613 39 0 1652 10 1662 1992 340 00
1993 351 1652 32 0 1684 0 1684 1993 350 00
1994 350 1722 14 0 1736 0 1736 1994 350 00
1995 350 1729 4 0 1733 0 1733 1995 350 00
1996 335 1721 1 0 1722 9 1731 1996 345 00
1997 328 1677 8 0 1685 61 1746 1997 327 01
1998 302 1597 96 0 1693 53 1746 1998 297 07
1999 298 1320 115 0 1435 56 1491 1999 289 09
2000 314 1333 133 10 1476 35 1511 2000 302 12
2001 336 1397 150 78 1625 32 1657 2001 320 16
2002 339 1520 143 114 1777 20 1797 2002 318 21
2003 341 1575 99 100 1774 55 1829 2003 316 25
2004 347 1588 117 84 1789 60 1849 2004 318 29
2005 349 1620 93 75 1788 75 1863 2005 317 32
2006 360 1657 100 84 1841 78 1919 2006 325 36
2007 368 1718 90 58 1866 101 1967 2007 329 39
2008 346 1774 84 69 1927 65 1992 2008 305 41
2009 337 1708 75 72 1855 61 1916 2009 294 44
2010 313 1699 67 70 1836 98 1934 2010 266 46
2011 311 1621 99 72 1792 95 1887 2011 261 51
2012 295 1648 100 57 1805 101 1906 2012 242 53
2013 269 1602 84 37 1723 65 1788 2013 214 55
2014 20 6
2015 18 6
2016 17 7
Total -- 40786 2611 980 44377 1331 45708 2017 16 733
2018 14 8
ACRES
02-11 18245 708 Year General Continuous General Continuous Year Contracts Acres Year Average
(Number)
1986 21 0 1986 193 0 1986 0 0 1986 919
1987 153 0 1987 1535 0 1987 0 0 1987 1003
1988 242 0 1988 2387 0 1988 0 0 1988 986
1989 304 0 1989 2888 0 1989 0 0 1989 950
1990 342 0 1990 3252 0 1990 0 0 1990 951
1991 350 0 1991 3300 0 1991 0 0 1991 943
1992 365 0 1992 3399 0 1992 0 0 1992 931
1993 384 0 1993 3502 0 1993 0 0 1993 912
1994 384 0 1994 3502 0 1994 0 0 1994 912
1995 388 0 1995 3498 0 1995 0 0 1995 902
1996 394 0 1996 3450 0 1996 0 0 1996 876
1997 388 0 1997 3272 10 1997 0 0 1997 843
1998 343 48 1998 2966 68 1998 12 2 1998 865
1999 336 76 1999 2890 92 1999 18 3 1999 860
2000 358 107 2000 3023 119 2000 23 4 2000 844
2001 389 152 2001 3201 160 2001 28 5 2001 823
2002 386 205 2002 3183 213 2002 35 6 2002 825
2003 385 237 2003 3163 248 2003 38 7 2003 822
2004 395 270 2004 3184 287 2004 41 8 2004 806
2005 396 300 2005 3173 317 2005 43 9 2005 801
2006 409 333 2006 3245 355 2006 45 10 2006 793
2007 427 357 2007 3292 385 2007 46 10 2007 771
2008 389 377 2008 3054 407 2008 49 12 2008 785
2009 369 392 2009 2942 438 2009 52 13 2009 797
2010 343 402 2010 2664 463 2010 54 15 2010 777
2011 348 405 2011 2605 507 2011 54 16 2011 749
2012 320 418 2012 2422 530 2012 57 18 2012 757
2013 290 410 2013 2136 548 59 20 737
2014 1970 574 23
2015 1798 620 26
2016 1686 702 29
2017 1602 724
Page 61: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

A

Contracts
Acres
Year
Percent
Continuous Signup as Percentage of All CRP

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Page 62: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

TREES

General
Continuous
Fiscal Year
Million Acres
CRP Enrollment at End of Fiscal Year (Acres)

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Page 63: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

BUFFWET

General
Continuous
Fiscal Year
Number of Contracts (1000)
CRP Enrollment at End of Fiscal Year (Number)

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Page 64: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Charts

Million Acres
CRP Enrollment Over Time (Cumulative at End of Each Fiscal Year)
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Page 65: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused
ampLAnnual2004Historywk4
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
366
212
473
91
1061
36
849
42
9
59
3198
Page 66: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused
ampLAnnual2004Historywk4

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2001 2001 2003 2004 2005 2006 2007 2008 2009
Buffers 979045 1267192 1454201 1646670 1748187 1839236 1901658 1999093 1982223
Wetland 1651863 1774227 1793088 1887746 1850172 2011458 2063851 1975556 2012522
Wetland Initiatives
2004 2005 2006 2007 2008 2009 2010
53504 36037 44892 38116 60035 62809 134893
53504 89541 134433 172549 232584 295393 430286
Page 67: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
General Continuous
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Page 68: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Outcomes from CRP investments

bull 34 million metric tons CO2e stored

bull Habitat for over 42 million ducks since 1992

bull Over 9 billion tons of soil erosion reduced since 1986

bull In 2017 CRP reduced Phosphorus reaching streams by over 100 million pounds Nitrogen by over frac12 billion pounds and sediment by nearly 200 million tons

Source USDA

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
Page 69: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Despite these investments and improvements in efficiency we still have externalities

60

httpswwwnolacomnewsarticle_98aed114-b492-11e9-b48d-2ba5b81fd692html

httpswwwepagovghgemissionsinventory-us-greenhouse-gas-emissions-and-sinks

Lake Erie Harmful Algal Bloom Tracker

MRB Hypoxic Zone

httpswwwglerlnoaagovresHABs_and_HypoxiahabTrackerhtml

Presenter
Presentation Notes
Hypoxia 13The 2019 hypoxia area is 28 times larger than the goal set by Mississippi RiverGulf of Mexico Watershed Nutrient Task Force which calls for reducing the size of the dead zone to a five-year average no larger than 1931 square miles1313This yearrsquos dead zone also is more than 1000 square miles larger than the 5770-square-mile average for the dead zone for the five-year period ending in 2018 And it is larger than the state of Hawaii The heavy rains this year contributed to more nutrient runoff than was anticipated 1313Over 11 million people in the US and Canada rely upon Lake Erie as a source of drinking water Most are familiar with Lake Eriersquos past and ongoing water quality challenges including harmful algal blooms and pollution but many are less aware of the growing concern over hypoxia The central basin of Lake Erie has experienced a lack of oxygen near the bottom of the lake nearly every summer since the late 1990rsquos Hypoxia may sometimes manifest as dramatic lsquofish killrsquo events but a more common impact is its effect on water quality at public utility intakes1313GHG emissions13The Agriculture sector contributes about 8-9 of US greenhouse gas emissions Greenhouse gas emissions from agriculture come from livestock such as cows agricultural soils and rice production13About 49 of agricultural GHG emissions come from cropland soils mainly from nitrous oxide as a result of fertilizer application Roughly 26 of GHG emissions from the sector result from enteric fermentation from livestock and manure 13131313

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
Page 70: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

USDA has a role in continuing to incentivize conservation adoption

Summary US agriculture must continue to be productive while addressing environmental challenges

61

Thinking about this in an ldquointensityrdquo context can help achieve productivity and environmental improvements

USDA Conservation Spending 2018

Global Research Alliance httpsglobalresearchallianceorgwp-contentuploads201511USA-national-dairy-CH4pdf

Source NRCS RCA Reports

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
Page 71: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief Economist

Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment

Total Factor Productivity grew 170 from 1948-2015 This trend must continue to meet global demand

Total inputs only grew 7 during this time period This efficiency is necessary to protect the environment

Presenter
Presentation Notes
Continuing to improve Total Factor Productivity a measure of inputs needed to produce agricultural outputs will help us achieve this goal 1313This can benefit producers consumers and the environment

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum
Page 72: Enhancing environmental and financial performance on .../media/others/events/...Herbicide 2,4 - D introduced; Widespread adoption of inorganic nitrogen fertilizer begins. Consumer-focused

Office of the Chief EconomistOffice of the Chief Economist

Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

Registration is now openhttpswwwusdagovoceforum

63

  • Slide Number 1
  • Real net farm income is projected to fall
  • Agricultural export values projected to rise slightly in 2020 China share to remain down significantly
  • Slide Number 4
  • Slide Number 5
  • Slide Number 6
  • Slide Number 7
  • Wheat corn and soybean prices
  • So why focus on environmental performance now First most everyone cares a lot about farm and food production and the environment
  • But secondly because we can focus on improving the financial performance of farms and limiting their environmental impacts
  • Technological innovations have helped push up agricultural productivity
  • Technological innovations have helped push up agricultural productivity
  • Example Rising corn yields through technological innovation
  • Recent trends and policies have generally led to falling food prices and growth in trade
  • Example Nitrogen Application Quantity Corn
  • Example Nitrogen Application Quantity Corn
  • Nitrogen Application per Bushel Corn
  • Nitrogen Application per Bushel Corn
  • New focus on intensification can improve productivity and environmental outcomes
  • Cow numbers have been falling since the mid-20th century while milk per cow has increased steadily
  • Slide Number 21
  • Farming will generate externalities How can we achieve MC = MB
  • How can we promote conservation adoption
  • Slide Number 24
  • Slide Number 25
  • Slide Number 26
  • Mulch till and no-till adoption vary by region
  • No-Till Adoption Corn
  • No-Till Adoption Soybeans
  • Slide Number 30
  • Cover Crop AdoptionmdashAll Crops
  • Cover Crop AdoptionmdashAll Crops
  • Percent of acres using cover crops in 2012
  • Percent of acres using cover crops in 2017
  • Change in cover crop acreage 2012-2017
  • Cover crops can provide yield returns
  • Slide Number 37
  • Slide Number 38
  • Variable Application Rate Technology Adoption (1998-2016)
  • Variable Application Rate Technology for Fertilizers Corn
  • USDArsquos broadband programs support precision ag adoption
  • Slide Number 42
  • New technologies will continue to drive efficiencies in production
  • Slide Number 44
  • Slide Number 45
  • Slide Number 46
  • Slide Number 47
  • USDA has a role to play in incentivizing conservation adoption
  • Slide Number 49
  • Slide Number 50
  • Slide Number 51
  • Slide Number 52
  • Slide Number 53
  • Slide Number 54
  • Slide Number 55
  • Slide Number 56
  • Current CRP Enrollment and Expirations
  • Slide Number 58
  • Slide Number 59
  • Despite these investments and improvements in efficiency we still have externalities
  • Summary US agriculture must continue to be productive while addressing environmental challenges
  • Continuing to innovate improve efficiency and enhance bottom lines will help meet demand and improve the environment
  • Join us on February 20-21 2020 for USDArsquos 96th annual Agricultural Outlook Forum

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BROADLEAF HERBICIDE THE 2,4-D AMINE WEED KILLER

The Herbicide Asulam Handbook - WhatDoTheyKnow · 4.1.3.4 Using the herbicide information summary sheets Ammonium sulphamate Asulam Clopyralid Cycloxydim 2,4-D Dicamba Dichlobenil

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AGRO-ESSENCE 2,4-D 300 HERBICIDE · AGRO-ESSENCE 2,4-D 300 HERBICIDE ACTIVE CONSTITUENT: 300g/L 2,4-D (Present as the ISOPROPYLAMINE SALT) For the control of emerged broadleaved weeds

2011 Beltwide: Managing glyphosate-resistant Palmer amaranth using 2,4-D systems in Dow AgroSciences Herbicide Trait Technology (DHT) Cotton In GA, NC,

Shredder Amine 4 - WinField · PDF fileShredder® Amine 4 GROUP 4 HERBICIDE ACTIVE INGREDIENT: Dimethylamine salt of 2,4-Dichlorophenoxyacetic acid *..... 47.3%

GUNSLINGER P+D Alligare GUNSLINGER P+D Herbicide is a water soluble liquid product containing picloram and 2,4-D . Use Alligare GUNSLINGER P+D Herbicide in permanent grass pastures

2,4-D Ester 700 Liquid Herbicide Label - DuPont4-D Ester 700 Liquid Herbicide CONTAINS 2,4-D EMULSIFIABLE CONCENTRATE ... then give artificial respiration, preferably by mouth-to-mouth,

Roundup Ultra2 Liquid Herbicide · and loading, clean-up and repair. Do not enter treated field within 12 hours of application. ... Roundup Ultra2 Liquid Herbicide plus 2,4-D amine

Oxidative Stress Induced by the 2,4-Dichlorophenoxyacetic … · 2018-09-25 · Oxidative Stress Induced by the 2, 4-Dichlorophenoxyacetic Herbicide 117 that 2,4-D produces oxidative

NUFARM 2,4-D Ester 700 Liquid Herbicide · (sleeve) GROUP 4 HERBICIDE NUFARM 2,4-D Ester 700 Liquid Herbicide CONTAINS 2,4-D EMULSIFIABLE CONCENTRATE For use in wheat, barley, rye,

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New 2,4-D LV 6 · 2018. 4. 29. · 2,4-D LV 6 is a high concentration phenoxy herbicide formulation that controls a variety of broadleaf weeds in crops including cereal grains, corn,

DuPont Zest herbicide - National Sorghum Producers€¦ · DuPont™ Zest™ herbicide Tank Mixing Zest™ • 2,4-D ester, dicamba, atrazine, fluroxypyr and metsulfuron methyl •

Phenoxy herbicide formulations · Web viewMost chemical users are aware that certain phenoxy herbicide groups (e.g. 2,4-D, MCPA, triclopyr and picloram) are available as amine, salt,

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