Upload
brandi-schroeder
View
221
Download
0
Tags:
Embed Size (px)
Citation preview
Opportunities and Challenges
of Marketing FGD - Gypsum to Agriculture
David FlackMarketing Director
Ag Spectrum Company
2
Overview
• Market size in acres by major row crop
• Value of FGD-Gypsum in Agriculture
• Barriers to Adoption
• Benefits to Agriculture
• Benefits to Industry
• Key Elements of Marketing to Farmers
3
Market SizeCorn – 68,000,000 Harvested Acres
4
Market SizeSoybeans – 72,400,000 Harvested Acres
5
Market SizeWheat – 45,500,000 Harvested Acres
6
Market SizeCotton – 12,200,000 Harvested Acres
7
Market SizeTotal Harvested Acres – 302,700,000 Acres
8
Market Size Summary
• Row Crop Agriculture is HUGE!– 200,000,000 + acres of major row crops alone!
• Row Crop Agriculture is CONSTANT!– Total production acres of major row crops does not change
drastically year to year
• Row Crop Agriculture is PREDICTABLE! – Planting intentions are accurately forecasted short and long term
• Row Crop Agriculture is RELIABLE!– Once a production practice is proven and adopted there is high
resistance to change
9
• Most farmers utilize tillage to prepare soils for planting
– Tillage releases carbon from the soil into the atmosphere
– Expensive in the face of high fuel, labor and equipment costs
The Real Value of FGD – Gypsum in Row Crop Agriculture
10
The Real Value of FGD – Gypsum in Agriculture
• FGD – Gypsum allows farmers to reduce or eliminate tillage– Carbon is accumulated in soils when tillage is
reduced – ½ ton per acre per year in a corn/soybean rotation
• Carbon credits generated by reducing tillage are worth $4.00 - $4.10/ton on the Chicago Carbon Exchange (CCE)
• Future value of Carbon Credits $12, $17, $20 per Ton ??
11
12
Barriers To Adoption• Cost
• Most growers are located $20/ton transportation from sources• There is a cap to cost for the farmer
• Dependable supply• Developing a cropping system involving FGD-Gypsum
• Misinformed Agriculture Industry leadership• Current failure to understand the value
• Material characteristics• 8-12% moisture• No adverse crop production effect• Heavy metals meet regulated standards
• Regulations• EPA – Each state has to approve land applications• Agriculture – farm use subject to oversight of Department of Agriculture
13
Benefits to Agriculture• Lowered capital requirement for equipment
– Opportunity to invest equipment capital in technology and land for growth
• Lowered fuel costs– Environmental Stewardship Bonus
• Lowered labor costs– At the very least, opportunity to re-allocate labor
• Improved soil quality– Better air and water management equals better yields– Better soils erode less and require less applied fertilizer– Environmental Stewardship Bonus
• Government regulation/compliance payments
14
Benefits to Industry• Long term low cost disposal
– Dependable market year to year
• Potential carbon credit accumulation– December 2005 – Two dairyman receive first carbon credit
payments in excess of $26,000– Trade Carbon Credit Value for FGD-Gypsum Value??
• Environmental Stewardship– At the plant– On the farm
• Public Relations– EVERYBODY WINS!
15
Key Elements of Marketing FGD- Gypsum to Farmers
• Limitations to marketing in Agriculture• No T.V. or effective radio • Limited publications and newspapers• Farmers require “Proof” of concept before purchasing• Market “Noise” obscures the truths of nature• Every farmer has an “Expert” that already influences their buying decisions
• Successful marketing of FGD-Gypsum will occur through the “Right” local experts
• Technically competent to integrate FGD – Gypsum into a complete production plan
• Established farmer relationships and historical reputation of improving production results
16
Key Elements of Marketing FGD- Gypsum to Farmers
• Establish supply and logistics to meet current demand• Direct sales transaction between the utility and the farmer
• Establish value equation for new farmers• FGD-Gypsum as a component to a production plan that lowers cost, improves soil
quality and increases yield potential• Low cost, dependable supply of FGD-Gypsum available via carbon credit accumulation
as a result of tillage reduction
• Expand demand• Trial Use – Early Adopters• Service – Educate the farmer in-season• Monitor and Measure Results – Link role of FGD-Gypsum in the farmers mind to
specific results i.e. crop emergence, crop health, air and water management, fertility management, cost reduction etc.
• Establish adoption via proof of local results