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Uptick in farmers talking with companies offering carbon payments  

More farmers are engaged in discussions with companies offering payments to sequester carbon, according to the latest Ag Economy Barometer.

Jim Mintert is the director of the Purdue University Center for Commercial Agriculture.

“Going back to the beginning of 2021, periodically we’ve been asking people about their exposure to and interest in having discussions with companies about getting payments to sequester carbon in row crop agriculture. The responses have varied somewhat from month to month, but in general the response rate with respect to people engaging in discussions specifically with companies about getting paid to sequester carbon has been pretty low but we saw a jump this month,” he says. “To put that in perspective throughout 2021 and I think one prior month here in 2022, the range of percentage of respondents engaged in discussions has fallen between about roughly two to maybe a little less than six percent of the people in the survey. This month nine percent of the people in the survey said they actually had a discussion with a company about getting paid to sequester carbon so that was a notable increase and one we’ll follow up on to see if that holds moving forward.”

Mintert says when asked about the offered payment rate per metric ton, “roughly three-fourths of the people in the survey said they were offered a rate of less than $20 dollars a metric ton and a very small number were offering some of these higher rates.”

Despite the increased interest, only one percent of farmers surveyed said they have signed a carbon contract.

“So, there are more discussions taking place, but not many of those discussions have resulted in actually signing a contract,” he says.

Producers indicated rates will have to increase before they would enroll their farm in a carbon capture program.

“Two-thirds of the people in the survey said they would need a rate per acre of $30 or more,” he says. “If carbon capture is going to catch on, based on the information, we’ve been able to pick up, the rates are going to have to climb some.”

The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. producers.