Ep 4 - Matt Nicoletti: The Methadone Clinic for Agriculture
Manage episode 445699234 series 3595985
In this episode, Patrick Smith interviews Matt Nicoletti, Director of Business Development at Penny Newman Grainโa California grain trader founded in 1878 that has grown into a global leader in bulk commodity logistics.
We dive into how Penny Newman is both advancing soil health through innovative inputs, and working to transform their legacy business.
Their unconventional approach challenges some of the received wisdom in regenerative agriculture:
๐ ๐๐ป๐๐ฒ๐ด๐ฟ๐ฎ๐๐ถ๐ป๐ด ๐ฆ๐ผ๐ถ๐น ๐๐ฒ๐ฎ๐น๐๐ต ๐ถ๐ป๐๐ผ ๐๐ด๐ฟ๐ถ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐: Penny Newman is leveraging their scale to produce and distribute innovative biological inputs, integrating them directly into large farming operations without asking for fundamental operational changes.
๐ ๐ฃ๐ฟ๐ถ๐ผ๐ฟ๐ถ๐๐ถ๐๐ถ๐ป๐ด ๐ข๐๐๐ฐ๐ผ๐บ๐ฒ๐ ๐ข๐๐ฒ๐ฟ ๐ฃ๐ฟ๐ฎ๐ฐ๐๐ถ๐ฐ๐ฒ๐: Instead of focusing on cover crops or no-till methods, Matt's team optimizes soil biology through biological inputs. The result is rapid and dramatic improvements in crop yield and vigor, which really grabs producers' attention.
๐ฐ ๐๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ ๐ช๐ถ๐ป๐ ๐๐ฒ๐ณ๐ผ๐ฟ๐ฒ ๐ ๐ถ๐ป๐ฑ๐๐ฒ๐ ๐ฆ๐ต๐ถ๐ณ๐๐: Matt's approach focuses on delivering immediate economic results rather than waiting for farmers to adopt new practices or change their mindset. Showcasing the power of soil biology opens the door for producers to explore further.
โก๏ธ๐๐ ๐ผ๐ฝ๐ฝ๐ผ๐๐ฒ๐ฑ ๐๐ผ ๐ฎ "๐บ๐ถ๐๐๐ถ๐ป๐ด ๐บ๐ถ๐ฑ๐ฑ๐น๐ฒ" ๐๐ต๐ฒ๐ ๐ฎ๐ฟ๐ฒ ๐๐ต๐ฒ ๐บ๐ถ๐ฑ๐ฑ๐น๐ฒ: Penny Newman trades and transports commodities into California from all over the world. We discuss some of the challenges they're facing as they navigate their customers' Scope 3 emission reduction programs.
Notable Quotes- (17:16) It's much more difficult to save your way to profitability than it is to grow your way to profitabilityโฆone of the mistakes that I made early was trying to get growers to drastically reduce their nitrogen inputs. So let's use the tomato market, for example. If you were to reduce, let's say that tomato grower was using 200 units of nitrogen in the form of UAN 32. That means that they're using roughly 70 gallons of UAN-32 and a gallon of UAN-32 in the current market costs roughly, you know, $2. Okay, so you're spending $140 per acre. So if you reduce your nitrogen inputs by half, you're going to save $70 roughly. Okay, and that's material on a per acre basis, like any grower who you go to and say, hey, I want to take $70 out of your input budget. They're going to like that in concept, right? However, when you look at, you know, where the profitability comes from, going back to yield increases, right? The tomato market is today, $112.50 per ton. Average tomato yield last year was roughly 50 tons per acre. So a, which would mean that a that a five ton yield increase would be a 10 % increase in yield, which is absolutely attainable, right? And at five tons times $112, you're north of $500 in profitability increase, right? So I would rather make $500 than save $70.
- (09:57) If I can't show up and show results within โ call it the first year of working together โ Then I don't get invited back. You know, my customers are not people that say, I want to go regenerative. Let's work with Penny Newman. These are people who are just wanting to maximize profitability on-farm and looking for innovative ways to do that.
- (08:40) It's kind of like a methadone clinic, right? You're weaning growers slowly and steadily off of those things, but doing it in a way that you don't see this big yield decline. Because I think one thing that you obviously think a lot about, is how growers manage that perceived risk, right? And when we talk about soil health and regenerative, we're generally talking about management practices that are oftentimes difficult to implement that growers don't have experience with. And in the regenerative ag circles, you hear people talk about this sort of yield dip that is inevitable when you go quote unquote regenerative. And as much as I love that word and I love the movement, I don't necessarily align ourselves with it as much anymore because if that's what regenerative ultimately means, then I can't necessarily claim that what we're doing is quote unquote regenerative. I personally believe that it is because we are emphasizing the restoration of, you know, soil, natural soil biology and creating an ecosystem that more closely mimics what exists in nature and the way nutrients cycle through the soil in nature.
- (25:22) It's fun because a lot of times you actually can get that mindset shift after you've shown somebody the power of, call it soil health and emphasizing that. We've seen that in a myriad places with large, call it industrial growers that have started to use carbon -based inputs and have said things like, I've never seen an immediate yield and vigor response from any sort of input like we have when we use this, right? And it was ultimately the power of biology that drove that.
- (46:50) I'm optimistic. You know, it's a total mess out there right now. Like I said, it's a bloody ocean, you know, at the crop input levelโฆ. there's no doubt about it, that our food system is facing challenges that growers are facing so much economic pressure, interest rates, you know, labor and materials, inflation and input, and inflation, those problems are all real. You know, water limitations in California through regulations like SGMA, problems are all very, very real. But I do believe we're going to innovate our way out of this. The sad fact of the matter is there is going to be a lot of people that don't survive this paradigm shift, right? But I also think that the ones that are most at risk are the ones that are in the current environment that are facing these mounting economic pressures, not willing to adopt these new, call it innovations or embrace this paradigm shift towards a more regenerative future.
- Penny Newman farm products division - https://penny-newman.com/farm-products/
- PlanetFWD - https://www.planetfwd.com/
7 episoder