Farm Economics by Type

Financial returns from investing in regenerative agriculture range from one farm to the next, depending on the economics facing different types of operations.

The range in features and benefits of practices that go by the term ‘regenerative agriculture,’ (soil armor, living roots, plant diversity, animal integration and community resiliency) are driven by specific economic pressures that different types of farms are facing. The principles are expressed in varying degrees on different types of farms as a result.

• Farmland investment funds benefit primarily from land price appreciation, but may advise renter-operators on new practice adoption;

• No-till commercial grain operations focus on soil conservation and nutrient use efficiency;

• Farmers rotationally grazing multiple species of livestock may promote habitat biodiversity and soil water holding capacity directly to consumers;

• Indigenous-led farms can encapsulate unique societal and social values along with food quality and ecological attributes.

First Nations Farms

Farming on First Nations land faces institutional barriers, yet development is accelerating partly because it can offer consumers unique cultural learning opportunities and an emphasis on respecting and honoring the land. However, tapping into retail markets for community-branded, indigenous-led food products isn't an easy or straightforward process.

It takes a lot of learning and investment to build a farm brand and set up the production, processing, and supply chain components to turn physical products into a thriving business. Join us to see all the steps in selling food from farms to the public using Manitoba bison as an example, in this upcoming webinar hosted by the Bridge to Land Water Sky project, where we’ll walk through everything from inspection requirements at slaughter to the information needed on price stickers.

The economics facing First Nations farming communities often revolve around goals to improve food and nutrition on reserves. Opportunities for employment, food production and processing infrastructure investments, and habitat restoration are also key motivators of indigenous-led farming projects.

Adaptive Multi-Paddock (AMP) Grazing

AMP grazing is fast-becoming known to offer superior ecology and profitability in livestock rearing, compared to conventional grazing and confined animal feeding operations (CAFO’s). The key success factor is ‘adaptive’, meaning the farmer can make best use of available resources without straining its future production capacity, leading to long-term financial resiliency.

In many cases, another key to the success of multi-species grazing operations is their ability to set prices, hire processing, and sell products directly to consumers. This dictates a careful balance between supply and demand, since the capacity for local meat processing is limited and regulations prevent most from being sold outside their own state or province.

Farmland Investment Funds

Typically, farmland funds are in the business for a set horizon like ten years, at which time they owe their investors an exit. By contrast, other farm owners typically hold a multi-generational business view.

The latter dictates much greater stewardship, in particular with respect to soil health, to ensure future generations have the resources they’ll need to keep farming. It is not uncommon on land managed by absentee investment funds for valuable crops and equipment to be abandoned in fields over winter, and natural capital like shelterbelts and wetlands removed, while investments in tile drainage are considered ‘improvements’ despite their leading role in nutrient runoff into natural waterways.

Commercial Grain Operations

Typically, yield and price are the only determinants that commercial grain farm managers bear in mind. Spending money on elevated crop input applications is considered necessary to achieve the maximum yield, with no mind paid to financial market penalties related to the associated emissions.