Eric Jackson, CEO of Pipeline Foods, about large scale conversion of land to organic farming and what holds farmers back while the demand is growing so rapidly. Covering over 1.5m acres in less than 18months, Eric is building an organic powerhouse.
LISTEN TO THE CONVERSATION ON:
After a career in conventional chemical agriculture and software, Eric could retire but decided to build the missing piece in organic broad acre row crops (grain and soy).
He was triggered by a fascinating statistic: the US is a grain, corn and soy powerhouse but imports 75% of its organic demand.
There isn’t enough organic farmland in the US, so Eric started on a journey which led 18 months ago to the founding of Pipeline Foods, to build the infrastructure needed to get organic grain, corn and soy from the farmer to the food processor. Thus giving the farmers certainty and getting more farmers through the difficult transition process.
Why are they focussing on broad acre crops and not livestock, or produce? Because of the scale that they can bring. Broad acre crops cover many many millions of acres and when you can bring them under organic and hopefully soon organic plus/beyond organic management can really have a huge impact on local/regional climate systems, biodiversity and water quality (which we briefly touched upon in the interview)
Listen to the interview to hear why Regenerative Agriculture isn’t a big topic yet for many broad row crop farmers as the market signals aren’t strong enough (yet). Hopefully this changes soon.
We also discussed the role of Impact Investors in the transition and the role investment vehicles and funds might play to help more farmers through the organic transition. An evergreen vehicle or a green bond, helping farmers who want to transition to organic, do so. If you are interested in developing this or now someone who is doing this, please reach out to Eric:)
Pipeline Foods currently works with 1.5M acres in North America, 150k acres in Argentina and is projected to do 150m-175m in sales in 2019.
Some links we discussed:
The paper describing the summer fallow and the impact on the local climate:
How farmers on the Great Plains are changing the local climate
Indian state using Climate Bonds to switch fully to Natural Zero Budget Farming
Andhra Pradesh to become India’s first Zero Budget Natural Farming state
TEXT SUMMARY OF THE INTERVIEW:
Eric Jackson: Well, like many of folks of my age who’ve been in agriculture for a career, when we started in the business like a 35 years ago, we were never given any information. How agriculture and sustainability could work together wasn’t a topic of conversation. But agriculture, particularly production agriculture as a carbon sink was something that was relatively new even across the sustainability community.
Eric Jackson: The idea of using minimum tillage in concert with nature, as opposed to fighting nature every step of the way during the growing season, was producing every bit as much yield for these guys as conventional and their cost structure was much lower because they weren’t having to buy all these all these inputs.
Eric Jackson: Multigenerational farms you know that. That would do something for a long period of time the same year after year. And then they recognize that some of the things that their grandfather used to do was actually better. It started bumping in more and more folks that were at least diversified into organic row crop production.
Eric Jackson: I was looking at the marketplace and watching the growth in the industry, you know, double digit growth year over year for many years. And again with my commercial hat on I was wondering what was being done in terms of the infrastructure. And the supply or the supply right. So the midstream between the farmer and the consumer, there’s a lot of steps that happen. And I was fascinated to try to figure out. And see if that infrastructure had been keeping up with the weather, the whole marketplace and I found out that it hadn’t.
Eric Jackson: Both sides of the pipe can benefit if the pipe is built in such a way that it honors the desires on the demand side and the desires on the supply side.
Eric Jackson: So today after not quite 18 months in business we have headquarters here in Minneapolis. We have a team in Canada that manages our Canadian program, we have a team in Buenos Aries that manages our South American program and we’ve created a partnership with a like minded group out of Europe that gives us a global program in terms of being able to work directly with growers today in about 20 countries.
Eric Jackson: So we said let’s be completely transparent and create a sort of a two way telescope consistent with the thesis of a pipe, I guess, and given both visibility to each other and strengthen the food system in a way that hasn’t really been done at least at a commercial scale before.
So again today, like you said, we have somewhere in the neighborhood of 50, just over 50 people. We have four grain elevators, two and two in Saskatchewan, and two in North Dakota. We have a small oilseed crushing operation in Missouri.
Koen van Seijen: I’m quoting here perhaps: one of the hardest parts of this journey is to walk into a local coffee shop and getting a cold shoulder for doing something different. How do you work on that psychology piece that I’m gonna be to the weird one in the village and in the community because I’m going organic and gonna have a very messy field?
Eric Jackson: One of the things that we’re starting to do is to create a community and connecting all the various farmers to each other giving them the opportunity to understand that, although they may be odd in the local coffee shop, at the global coffee shop they’re not that odd.
Koen van Seijen: What means regenerative agriculture for Pipeline Foods and what are your plans in that?
Eric Jackson: To make change is when you can connect the demand side to the supply side because the primary exchange is money right. And without money the universe of participants shrinks to only those who are mission driven, which is important. But in my mind it is not sufficient. So we’re trying to figure out how the signals are going to get sent if you will. And regenerative is a relatively new signal in the commercial world.
Eric Jackson: Our approach at this point is a little bit of a wait and see, not because individually as people we aren’t sympathetic to many of the ideals expressed in regenerative and regenerative conversation.
Eric Jackson: I tell my team at some level we shouldn’t care about motivation as long as the outcomes are aligned with our business philosophy and our ethos. So if a person, if a grower, for example, is solely motivated by money and that’s the way that we can get that grower to behave in a different way that creates an economic opportunity for the grower and an abundance of additional environmental outcomes, we shouldn’t care, we shouldn’t be so altruistic that we need for the growers to stand up and salute you know some sort of flag or some sort of icon. We should really care about the outcomes of the endeavor.
Eric Jackson: And so with soil health being really the topic that’s driving that conversation, now getting commercialized by major food companies and major participants in the value chain out of that conversation now.
Eric Jackson: In the US one of the things that has become more apparent now in rural communities is that their groundwater is impaired. Take away the surface water discussion and go to groundwater. Many of the rural community wells that there would be supplying a small town are impaired in terms of water quality. There is no secret about what the source of that impairment as is clearly agricultural leaching.
Eric Jackson: You know if I could snap my fingers and turn the entire world organic overnight. I do not believe at this point I would have said this a few years ago. But I do not believe at this point that you would see any decrease in production. In fact I would argue that the long term is the only way that things can work. But you’d see an immediate impact in terms of environmental outcomes and I think people would be astounded and understand that they’ve been fed a bunch of stories that aren’t necessarily true about the need for using synthetic production methods, you know, to be able to feed the world. This whole feed the world concept is a red herring.
Eric Jackson: Another interesting point of tension is because you’ve got the what I call the legacy organic crowd who are typically farming smaller acreage and very intensive. Maybe 40 different crops on an acre. Right. But it’s mostly designed for local use. Fruits vegetables and fruits and vegetables. And that’s bright and not green. But it’s great.
Eric Jackson: I mean that’s the food I want to eat and I’m glad about the work that those programs are up and going. But that is not going to make a systemic change on a local regional or certainly global level. You have to get the broad acre.
Koen van Seijen: What kind of size you are dealing with?
Eric Jackson: In our most recent review of the acreage that we are currently working with North America I believe that’s 1.4 million acres.
Eric Jackson: You know investment in soil health. I mean you can create a whole wheel of fortune if you will with lots of slivers of benefits, all coming from essentially the same thing, you know. And so that you can pool capital and that capital can be put to work to help sponsor the initiation because our biggest problem in the US is that we do not have enough acres that are organic to support our domestic demands so we’re importing. Now granted we’re always going to import things we can’t grow here, but we import 75 percent of our organic corn and soybeans. But the point is we are the king of soybeans and corn and yet we’re importing organic soybeans and organic corn because we don’t grow enough here.
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