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Carbon market changing quickly
Illinois Correspondent

BLOOMINGTON, Ill. — A new podcast produced by the Illinois Soybean Association (ISA) and ILSoyAdvisor examined current carbon markets opportunities, critical questions farmers should ask, the evolving carbon landscape and payment structures for agricultural carbon sequestration outcomes. With many carbon programs in pilot stages, adjustments are being made after each field season. Keeping farmers current on carbon market opportunities is the responsibility of Abigail Peterson, ISA director of agronomy, who encourages growers to carefully examine a carbon capture agreement’s fine print with the help of an expert advisor before plunging into an agreement.
“While carbon programs are intriguing, it’s important to understand that many of the current markets are still in early stages and growers shouldn’t jump headfirst into a program without first reading the fine print,” according to Peterson.
Sarah Sellars, a third-year Ph.D. student studying agriculture and applied economics at the University of Illinois (U of I), advised farmers to utilize a data manager, or someone their operation can rely on to stay on top of carbon market trends and opportunities. 
“A data manager acts as a middleman between the buyer of agricultural carbon credits and the farmer,” said Sellars, who joined Peterson on the podcast. “They take all the small pieces and put them together for farmers.”
Along with her advisor, U of I farm economist Dr. Gary W. Schnitkey, Sellars published an essay in the spring of 2021 on what farmers should know about the emerging carbon capture industry. According to Sellers, the article already seems antiquated. “It’s amazing how much has changed since that time. We’re expecting the market to evolve even more this year,” she said. 
With various payment delivery options available to farmers, Corteva is currently guaranteeing a minimum $15 per carbon credit for farmers and is projecting an increase up to $30 per credit in the near future. Indigo Ag, which was paying $10 per credit in 2020, is also currently offering $15 per credit while projecting future payments of $30. 
Bayer, which pays on a per-practice basis, is offering $3 per acre for adopting reduced tillage, along with $6 per acre for cover crop adaptation. Truterra, which originally offered contracts only on a per-credit basis, is now allowing farmers to choose between per-practice and per-credit payment programs. After paying $10 per credit in 2021, the company is now offering $20 per credit or $2 per acre, the podcast revealed. 
“Find out if and how much the companies will pay you up front. Are they going to take measurements and base the payments on those measurements? That really varies, so it’s important to get that clear before making a decision,” Sellars advised. 
How carbon credit rates are determined is currently a matter of competition between carbon buyers battling for agricultural customers, according to Sellars. This has created a seller’s market that farmers can currently take advantage of at least until the government begins regulating and standardizing carbon capture payment rates. There are currently around 11 voluntary carbon sequestration programs available for Midwest farmers to choose from, according to a document published recently by Iowa State University.
To enter into a carbon sequestration contract with a buyer, farmers must submit key data relevant to their operation’s acreage, soil and prior conservation production activities. To help producers assimilate the data, the ISA is drafting a data guidebook that will soon be available online. 
“Data is growing in importance, and it is necessary for farmers to prepare for any program, whether or not a farmer is interested in a carbon program,” Peterson noted, in an article she published coinciding with the ISA’s four-part carbon market podcast series.
Peterson relayed five important tips the ILSoyAdvisor team recommends farmers keep in mind when considering participation in a carbon program. They included:
Start slowly by implementing a new practice on a small number of fields.
Establish access to a trusted agronomist, such as a specialist with the Precision Conservation Management or STAR program, local USDA-NRCS or Extension specialist, or ILSoyAdvisor Soy Envoy. 
Prepare up-to-date farm operational data and records to ensure the top dollar rates from carbon purchasers.
Appoint a carbon expert within your operation tasked with staying current on carbon markets.
Understand your conservation goals before committing to a carbon market.
“Farmers can look to ISA, our friends at Illinois Corn, or the Illinois Sustainable Ag Partnership for resources,” Peterson added.
The ISA-ILSoyAdvisor podcast, “Discussing the Crucial Answers Farmers Should Find Before Deciding on a Carbon Program,” was part four in the ISA’s four-part carbon market series. The series of podcasts can be accessed through Apple Podcasts, Spotify and Stitcher.