Cultivating sustainable agriculture industry practices requires a strategic process

Water conservation and waste reduction

Water scarcity is a pressing issue for farmers in the western United States. Limited water resources and prolonged droughts pose significant challenges to agricultural production. To mitigate the impacts of water scarcity, farmers are implementing various strategies.

Allied Potato recently invested in technology to increase efficiency in water and nutrient use at its California and Washington farms. The company is working toward reducing or eliminating water waste from inefficient irrigation systems on its California farm, thanks to the Certa-Set PVC piping system designed for agricultural irrigation, which was an ideal option. Allied has already achieved tremendous improvements in water use efficiency with the new system.

Additionally, the company improved the harvesting and planting system at its Washington farm by planting at a higher density to grow more potatoes per acre, thanks to a sophisticated new bed planter. The new planter allows for higher-density planting and withstands the region’s high heat with canopy coverage to protect the potatoes in the ground. The end results are more potatoes and less waste due to crop rot. The new bed-planting system helped Allied achieve a 15% increase in yield, and the company estimates seeing a 30% increase in quality, leading to higher efficiencies in the processing shed.

“The entire Allied Potato team is extremely proud of seeing our equipment and knowing that we put this type of investment into the farm,” said Jason Davenport, founder and president of Allied Potato. “We’re building employee morale, while also demonstrating that we care about our environment and place great value in our customers. We all win.”
 

Energy efficiencies

Energy efficiency plays a crucial role in agriculture, as it helps reduce costs and minimize environmental impact. One of the key reasons energy efficiency is important in agriculture is the high energy demand in farming operations. Farms require electricity for various activities such as irrigation, lighting, ventilation, and machinery operation. By improving energy efficiency, farmers can reduce their energy consumption and lower their utility bills.

Driscoll’s, a family-owned and-operated company for more than a century, focuses on saving energy while farming berries. In 2021, the company installed 3,384 solar panels on its 155,000-square-foot cooling facility in Santa Maria, California, which is estimated to generate 1.4 million kilowatt hours of power annually. The company also installed a battery storage system capable of holding up to 700 kilowatt-hours. Driscoll’s announced in a press release that, “Together, both systems will allow the company to offset about 92% of the facility’s energy usage, generating a reduction in greenhouse gas emissions (GHG) equivalent to removing more than 7,750 cars from the road over the course of 25 years.”

In addition to cost savings and environmental benefits, energy efficiency also enhances the overall productivity and competitiveness of agricultural operations. Efficient use of energy resources allows farmers to allocate their financial resources to other important aspects of their business, such as investing in advanced technologies or expanding their production capabilities.

Energy efficiency is often at the core of sustainability initiatives for many types of organizations. Operational initiatives usually offer the most opportunity to positively impact our environment and preserve it for future generations. While some industries inherently spend more (and thus can save more), all industry types have energy expenses, and the approach is unique to each industry type and company.
 

Develop a roadmap to achieving sustainability goals

The examples above are just a few of the myriad of ways ag companies are leading the way in adopting sustainable practices — beginning with a strategic plan. Many factors should be considered when developing a sustainability strategy: brand/value, energy efficiency and cost drivers, stakeholder management, risk management, purpose, consumer demands, and funding new business opportunities, just to name a few.
 

Energy savings ideas for agricultural businesses

When drafting a sustainability strategy, practicality is of the utmost importance. A realistic plan is as important as the strategy itself.

“Begin with defining your sustainability objective,” notes Mike McKay, KeyBank agribusiness national sales manager. “Then identify any potential issues and determine the human and equipment resources needed for success. Look at your entire operation and examine your energy use, costs, and times of maximum energy demand to begin to develop an approach.”

Here are a few examples:

• Optimize lighting systems. Lighting is an essential component of agricultural operations, especially in indoor farming or greenhouse environments. Optimizing lighting systems can significantly improve energy efficiency and reduce electricity consumption.
• Implement smart irrigation practices to conserve water and energy. Strategies such as precision irrigation and use of soil monitoring technology can minimize water waste and reduce the energy needed for pumping water long distances.
• Use renewable energy sources for operations. Options such as solar, wind, and bioenergy, derived from organic waste or dedicated energy crops, can reduce reliance on the electrical grid.
• Acquire energy-efficient equipment and technologies. Farmers can invest in energy-efficient tractors, harvesters, and other agricultural machinery designed to consume less fuel or electricity. Upgrading to more efficient equipment can significantly reduce energy consumption and operating costs. Farmers can also consider using advanced technologies such as precision agriculture systems. These systems use sensors, GPS technology, and data analytics to optimize production practices. By accurately monitoring and managing inputs such as water, fertilizers, and pesticides, farmers can minimize waste and maximize energy efficiency. Furthermore, energy-efficient building designs can also contribute to overall energy efficiency in agricultural operations. Insulating farm buildings, installing energy-efficient windows, and using natural ventilation systems can reduce the need for heating, cooling, and artificial lighting.
• Research efficiency programs to earn rebates for new machinery. The Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants program provides guaranteed loan financing and grant funding to agricultural producers for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and food processing. Funds can be used for a variety of needs. Grants vary from $2,500 to $1 million.

Resiliency is the key to staying the course. Like many business strategies, sustainability initiatives require dedication, if not tenacity, to execute and achieve success. No action means lost opportunity for collecting data and potentially saving money by using more efficient equipment.

A sustainability strategy should also detail a path for acquiring the equipment needed to implement that plan, and a thorough analysis of purchasing options, including financing, to circumvent a large initial cash investment.

“A good lender should evaluate details of all financing options and evaluate the return on investment,” said Justin Woodward, agribusiness equipment finance sales manager for KeyBank. “Fixed rates and rate locks are also important considerations, especially in our current rising-rate environment.”

Whether an organization starts with energy efficiency or other priorities, beware of the “paralysis by analysis” trap.

“Take action now to benefit from data and gain experience,” advised Woodward. “By creating a strategy that addresses the various facets of sustainability, agricultural companies create an opportunity to save money, engage stakeholders, and please consumers — all while reducing their carbon footprint.”
 

For more information contact:

Mike McKay, KeyBank Agribusiness National Sales Manager at Mike_W_McKay@KeyBank.com
Justin Woodward, Key Equipment Finance officer at justin.woodward@key.com