00:00 We're asking the question, what's the difference between an inset program and an offset program when it comes to sustainability programs? 00:05 We're asking the guy with the most experience of this in arguably your fifth year of these types of programs. 00:11 Uh, you and I met 2020, you were written up in the Wall Street Journal about getting into a carbon program. 00:16 You're one of the first people that actually made money on a carbon program. You've pursued sustainability money. 00:21 We've got a lot of movement going in this direction. Looks like this is where USDA policy is going to take us. We've got oodles of companies out there like TER, 00:29 for instance, that are helping farmers with their sustainability journey, but there's still a lot of confusion. 00:34 What is an inset program and what is an offset program and which is better? Which one's better for me? 00:42 An inset program is where A CPG will incentivize you For the person that's never watched one of our videos. A CPG is a consumer packaged goods company. 00:51 Proctor and Gamble? Yes. Proctor and Gamble. General Mills? Yes. Uh, okay. New Nestle Purina. Perfect. You know. Okay. 00:59 A CPG will incentivize you with a payment per acre to continue those practices. That is an inset. Okay. 01:06 So they might want you to use a nitrogen use efficiency product. They might want you to try cover 01:12 crops, something along those lines. This is, or this, this is originally how you got into it. You 01:16 Nope. I originally got into it from an offset program. Okay. So the inset program is, um, where, uh, where we are now. 01:23 Yeah. Offset programs were more the original one. They were, and offset programs still are around. They are a little harder to qualify for. 01:31 Inset programs are easier to qualify for. So you, I think, I kind of feel like you see a bigger abundance of those, 01:37 but offset programs are still there. Mm-Hmm. Okay. Offset program to go ahead. And, uh, the person that's watching this, that's like, 01:43 I'm not sure what these gonna talk about. Offset program was you quantified and we went back years before the program, they gave you money 01:50 and said, for the last three years I have reduced my nitrogen or, or utilized my nitrogen more efficiently with a, uh, with a nitrogen stabilization product 01:58 That, that would be really involved in an inset. Yes. Um, you, okay, you are on your offset program. What did you show 02:05 To? So on an offset program, uh, you know, we sold that first carbon from the years 15 through 19, you know, and then the second pro, that was on half of my acres. 02:13 Then the second program was 16 through 20. We went back and we had to show yields and rotation and fertilizer use. 02:20 And we, and we had to show that we are no-till and things like that. We had to talk, we had to show 02:25 and talk about when we first started with cover crops. When into those a hundred percent. And then there's a model. Okay. Okay. Both inset programs 02:33 and offset programs revolve around a model. And a model is a, is it's an algorithm, and the algorithm says in an offset program, 02:41 the algorithm says how much carbon did you photosynthesize and sequester into the soil? 02:47 Okay. That's what the algorithm is all about. Okay. That's an offset Program. That's an offset program. 02:51 And That's what you originally Did. But an incept program, the, the way that they are similar is that algorithm both needs to talk about what that capture, 03:00 what that sequestration is. Okay. So, So if I reduced, if I reduced my inputs, then I got this Yes. 03:05 If I reduced my inputs that meant this and they can Yes. And they, they meaning the company giving us money can, uh, 03:11 Can verify that with the algorithm. Yeah. Um, why are they doing it? Why does Nestle, why does Nestle Purina care? 03:17 Why does General Mills care? Why does, why do, why do these companies want to give farmers money for these programs? 03:24 In my opinion, they're, they're trying to make the world a better place. They're trying to improve the climate. 03:28 They're trying to improve the environment, and they're trying to do their part to be sustainable, to improve the world, to improve the atmosphere. When 03:34 We look at these programs, the, there's been, the reason there's been less adoption by the farmer level is a confusion. 03:41 Confusion, skepticism Or skepticism. Yep. Okay. You've answered some of the confusion, skepticism. 03:47 You've been doing this for several years now. I have. You haven't gotten a lot of money lately. You did early on. Yes. We're gonna make another big 03:54 carbon sale later this year. You know, it's been a couple years and, uh, we have some acres that will qualify again, 03:59 but the skepticism, you know, I don't do this to, uh, I don't farm the way I farm to get these sustainability dollars. 04:06 I farm the way I farm because I think it's the best thing for me. Agronomically and financially. 04:10 The fact that the sustainable part comes into it is just a blessing that that's, uh, in line with my beliefs. We're 04:17 Standing in a field, you're standing, I'm sitting. 'cause my hip hurts. In a field that you put in a cover crop, 04:22 you put in a cover crop because of a couple reasons. Uh, we've already massively, uh, broadcast different episodes about your, um, 04:29 aversion from soybean acres this year because it looked like they were gonna lose your money. Also because you have cattle. 04:34 This is a cover crop mix of nine species. Did you get incentivized to put this in through an inset or an offset type of program? 04:41 No, not out here where we're pastoring the cows. Okay. I did not, I did this because it's more profitable On your crop land acres where you're planting corn, 04:47 you are now part of an inset program. On my cropland makers, I have an, a inset program in a couple spots, 04:54 but predominantly it's part of an offset. Still the offset still it's an offset because it's more valuable. Yeah. 04:58 Still the offset. So the inset one seems like it's the easiest one to get into. You just find a program that says, reduce your nitrogen util 05:05 increase your nitrogen utilization, reduce your nitrogen application, boom. Yes. You know, different rules for different programs 05:11 Or phosphorus or whatever that thing should be. Yes. Yes. Depending on where you are, Depending on where you are, where you live 05:15 And soil types and, and environmental problem. Okay. How hard does it get into one of these things? Inset or offset? 05:20 An inset program is fairly easy to qualify for. They, they're gonna have some rules that they want you to follow, be it nitrogen, use efficiency, 05:29 be it a cover crop, you know, uh, so on and so forth. An offset program can be harder to qualify for and depending on where you live. 05:37 Luckily for us here, living in Western Iowa, we're in kind of what they would say is the sweet spot for sequestration 05:42 because of the climate. Because of the soil. I will have fields that I believe that the, the algorithm will show potentially up 05:49 to three ton of carbon per acre per year. So that becomes quite valuable. Got It. Anything I didn't ask 05:55 you about inset versus offset programs, uh, companies like the TRU and and the other companies that are in this space? 06:01 Is it pretty easily to discern and, and understand this, if I go to their websites? It is, it is pretty easy to figure out. 06:07 I would tell you that, uh, the carbon space is the wild, wild west and you need to be with someone that's secure. 06:12 You need to make sure that the length of the contract after, you know, I, I'm gonna get paid for the years 22, 23 and 24 in my offset program this year. 06:21 Mm-Hmm. You know, make sure that you're not committed much longer than that. You know, Tru is good about that with our programs. 06:27 Uh, I'm involved with Trutter 'cause I think it's the best spot to be. His name's Kelly Garrett. I'm Dave Mason coming at you. 06:33 We've talked about this a few times before, but you know what, this is where the future looks like it's going. 06:37 It's important that you understand this, whether you participate or not. You know what we're, we're not here to tell to do that, 06:42 but we also think we can help you on your sustainable journey, uh, because this guy's actually done it and it looks to me like this is 06:48 where there's gonna be a lot more, I should say, energy in this space. Uh, and you probably better familiar yourself a little bit 06:54 with, if you plan on farming in the next five years, Carbon is another crop to sell. Why wouldn't you wanna do it? 06:58 Especially in revenue years that are a little be down like this. Absolutely. Got it. Till next 07:02 time, check out all of our great stuff. Extreme Ag Do Farms, you'll find out more on this very topic. 07:06 Just go in the search engine, type in, in, within the extreme Ag Farm website, type in sustainability programs, type in carbon, uh, 07:12 and we can, uh, probably find you a bunch of videos that might help you a little bit more about this. Till next time, thanks for being here, Damian Mason.