Diversifying crops is good for the planet. But can it be good for farmers' wallets?

There is a swath of the Gulf of Mexico that's virtually devoid of life because algae blooms have choked out marine plants and animals; scientists say it is growing and getting worse.

One of the culprits lies to the north, in the massive amounts of fertilizers used on corn and soy farms throughout the Midwest.

There are some relatively simple steps farmers can take to reduce the amount of fertilizer that washes off their farms and into the Mississippi River, ultimately feeding the algae in the Gulf, but there's little incentive for them to do so.

Some key players, though, are coming together to change the game — with potential benefits for farmers financially, and for ecosystems in general.

It's as simple as supply and demand: Farmers, nonprofits, researchers and food conglomerates are trying to find ways to create markets for crops that, if grown in rotation among the corn and soy, can not only reduce fertilizer runoff but also boost soil health in a number of other ways, which can help in the battle against climate change and potentially improve the efficiency of animal agriculture.

Giving soil a break from corn can reduce fertilizer use because corn is a nitrogen-hungry crop, and repeated application of large amounts of fertilizer is why soil has excess levels of nutrients that end up draining into waterways. Plus, simply having roots in the ground more of the year helps to stabilize soil and keep more nutrients in place.

Alisha Bower, strategic initiatives manager at the nonprofit Practical Farmers of Iowa, which represents more than 1,500 farmers, says her organization has long heard from farmers that they like growing a diversity of crops and would prefer to grow more than corn and soy. Rotating through different crops helps farmers cut down on fertilizer and pesticide use, and diversification is almost universally considered a solid economic strategy. But farmers say they can't justify doing so, financially, without a place to sell the other crops.

"[Farmers] tapped us to go find markets for small grains in the Corn Belt, essentially," says Bower, referring to crops like oats, rye and barley. They explored possibilities for food-grade oats for breakfast foods, for example. "But in the grand scheme of things, humans eat a tiny, tiny portion of the grains grown in the U.S. Most of the grain goes to livestock."

That means that in order to make an impact at any kind of scale, farmers who grow corn and soy for livestock need to be able to sell other crops for livestock as well — that is, they need to convince the people in charge of livestock operations to add small grains to the animal feed. And there's some indication it may be working.

Last October, Target announced it was joining the AgWater Challenge, an initiative from nonprofits Ceres and the World Wildlife Fund that encourages better water management practices among the world's biggest food and beverage companies. Although it declined to discuss how the effort is progressing or disclose how many farmers are participating to date, Target said last year that it plans to support the development of cover crops (which are planted to mitigate soil erosion and hold nutrients), including small grains that can be grown in rotation with corn and soy. The company is collaborating with both Practical Farmers of Iowa and the Vermont-based Sustainable Food Lab, an effort that could potentially lead to the small grains being processed as food for livestock. (The two organizations work closely together, trying to link different segments of the supply chain to boost sustainable agricultural practices. "What we [at PFI] do with farmers, they do with companies," Bowers says of the Sustainable Food Lab. "They work with companies to figure out what can companies do to meet their sustainability goals.") PepsiCo, meanwhile, has started to provide financial support for farmers to grow rotation crops, and is exploring other opportunities for collaboration. "We work closely with groups like the Sustainable Food Lab that are helping to connect a variety of market players [that] farmers can sell to," Margaret Henry, PepsiCo's director for sustainable agriculture, says in an email. The company is currently working with more than 50 farmers and plans to increase that number this fall.

And Oatly, the alternative dairy company that has been taking over New York City's subway system with its quippy ads, is also engaging with farmers to add oats to their rotations. Communications manager Sara Fletcher says the company currently sources most of the oats for its North American market (it's a Swedish company) from Canada. She says Oatly sees the corn-soy farms throughout the Midwest as a win-win opportunity — the company can boost domestic production and farmers can find profit in growing a third crop between the corn and soy, all while improving soil health.

When they talk to farmers or meat processors, perhaps the most common question that PFI and the Sustainable Food Lab get is how livestock will be affected by eating these other crops. They find it an almost ironic concern, given what the animals are supposed to eat; corn and soy are by no means their natural diet. "Farmers will say, 'My grandfather used to grow oats. I think we still have the grain drill in the barn,' " says Elizabeth Reaves, the Sustainable Food Lab's senior program director for agriculture and environment.

Animal health specialists say animals can eat other grains, based on what Bower and colleagues have heard from farmers who are experimenting with small grains. That's bearing out in practice: Farmers say animals are less aggressive at feeding time, doing less tail-biting, and seem happier overall. "Just like it's more healthy for you to eat a bowl of oatmeal in the morning, versus sugary cereal, that same thing happens with animals," Bower says. "Feeding them corn and beans, in least-cost rations, is like feeding them sugary breakfast cereal."

But happier animals don't necessarily mean more profitable animals, so PFI and the Sustainable Food Lab are enlisting researchers to assess the financial costs and benefits this mixed-feed approach generates for the farmers they're working with. Some research has suggested there are benefits for animal health as well.

In Montana, organic dairy Amaltheia embarked last year on an experiment of its own. Nate Brown, who helps run the family operation, says they bought flax, barley and peas from Casey Bailey, a farmer in the region who's passionate about experimenting with greater crop diversity. Brown says he paid a little more for the feed — about 24 cents per pound, when feed normally ranges between 16 and 18 cents per pound. But the results more than made up for that added cost: Not only did the goats produce more milk this year on the enhanced diet, but each gallon of the milk produced more cheese. According to Brown, the goats produced up to 20 percent more milk this year, and when processed, 18 percent of the milk became cheese. Most years, he says, the cheese yield is closer to 14 percent. (The rest of the milk becomes whey.)

Still, it takes investment of both time and money for a farmer to go this route. PFI is exploring different mechanisms to reduce the financial risks for farmers, including setting a floor price or specifying purchasing timelines in a contract.

And the feeding trials continue to provide concrete proof that changing the animals' diet won't have adverse impacts on their health.

Ultimately, the success of PFI and the Sustainable Food Lab's efforts will be a matter of merging these conversations and getting the attention of enough decision-makers at large-scale food and animal processing companies. They, after all, ultimately dictate how most farmers operate their farms.

"If those [corn-soy feed] rations could be reformulated to include a third crop, imagine what the change and impact on the landscape would be," says Reaves, explaining it could easily mitigate the Gulf's dead zone, among other benefits. "We can build a sustainability case around it. We can build a cost-effectiveness case around it. Now it's a matter of — what do we need to do to get these to work together?"

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