Carrot or stick; water quality looming large

Shay

Foulk: Before we jump in, a quick reminder that we publish our premium podcast, 19 Minutes, 3 times a month on the 9th, 19th, and 29th. It's a short, focused update designed to help you think ahead and make faster, clearer decisions. You can subscribe using the link in the description.

Zack

Smith: Thanks.

Shay

Foulk: Welcome back everyone to another episode of the Ag View Pitch. Today you have Shay Foulk with special guest Zach Smith, and we are We're gonna be talking water quality. We're gonna be asking some hard questions today, Zach. And the whole purpose of this is just to bring some perspective to the situation on where we're at in farming. And I think the audience here is across such a broad geographic area that it's gonna be quite an impactful discussion. So Zach, first of all, thank you for coming on. And if you would please, could you give the listeners background on where you're located and a little bit about what you do? And then I might prod you a bit.

Zack

Smith: Sure. So Zach Smith, 46-year-old farmer from— live just outside of Lake Mills, Iowa. So right on the Iowa-Minnesota border, kind of smack dab between Des Moines and Minneapolis, about 15 miles west of I-35. And I farm about 1,200 acres of corn and beans. And then I'll have oats for the first time this year. And utilize strip-till, cover crops, you know, all the things kind of in that vein. And I've spent most of my career working in ag retail in various roles. But I was lastly a Pioneer Seed rep and had my own retail business with chemical and fertility and all the things. And then I retired from that in 2021 to farm full-time.

I had some acres that came up available to me and Did that, and then in conjunction with that, some folks will know me from my startup company StockCropper that I've been working on for the last almost 6 years coming up this week, actually the anniversary of the genesis of that. And yeah, so I'm passionate about a lot of things in kind of what I would call alternative or progressive agronomy. And I'm really passionate about this, the water quality and conservation piece and moving things forward in Iowa here.

Shay

Foulk: Yeah, so we're, we're not going to talk much about Stock Cropper today. I'm going to have you back on if you're willing, um, in a couple months to discuss that. But can you just give the listeners like a 30,000-foot view of what that looks like and where they can go check that out, just, just for the interest of the audience?

Zack

Smith: Yeah, so Stock Cropper, it's best just to go to YouTube and search for that, or my website, thestockcropper.com. It's essentially, uh, it's, it was created as an alternative of kind of regenerative production system that intersects livestock and crops together, and we invented the world's first mobile, uh, multi-species mobile grazing barn unit that we've been working on various iterations of that over the last 6 years. And, uh, um, it's done well. We've had it at Precision Planting the last couple years, and it's been winning, um, all of their production records and setting them, at least from a corn standpoint. And so we continue to get attention around that. I continue to work on trying to, uh, to develop and bring that forward.

Shay

Foulk: So, and for those of you that are watching Zach's beautiful face in the background there, you can see the alleys where stock cropper, you know, could potentially go down. So very exciting project. I think people should definitely go check that out. You mentioned north central Iowa, and as an Iowa native, I know that to be the quote unquote Des Moines Lobe area. Can you give a little bit of background on what the Des Moines Lobe is, soil types, and why it's important to some of the management discussions that we're going to have here today?

Zack

Smith: Yeah, so the Des Moines Lobe is a geological soil formation that was formed when the last glaciation event about 18,000 years ago, the Wisconsin glaciation pushed across Iowa. And it ranges from about Interstate 35 over to Spirit Lake, Iowa, and then kind of forms like a big U-trough down to basically Des Moines, actually where the governor's house is, Terrace Hills, where the glacier stopped and then treated. So it's kind of a big U-shape. And, you know, it's— they call it the Prairie Pothole Region. It's typically, you know, fairly flat and poorly drained soils. And, and so, you know, in order to farm all that stuff, we had to make drainage ditches and put in a lot of tile in the early 1900s. But when, you know, when it's drained, it's some of the most productive soil in the world.

Shay

Foulk: And it is drained, and there's a lot of tile. And that's leading to maybe the main part of the discussion that we're going to have today is around water quality issues that exist and, you know, what's our role as farmers, how do we manage that? But more importantly, maybe some pretty stark truths and realities that we may need to face here.

Zack

Smith: So yeah, I'll just add this other context to finish that because I didn't give it. But the reason that it's, it's, it's an important thing in this discussion is that there's two watersheds that feed the city of Des Moines with drinking water, and one is the Des Moines River. Which the farm I was raised on literally sits on the top of that watershed in Winnebago County, and then the Raccoon River. And so that's— there's been a lot of concern about water quality with the high nitrate levels those rivers have had the last couple of seasons. And, and it's going to be a big issue here in the 2026 election when it comes to the gubernatorial and the Secretary of Ag race as well.

Shay

Foulk: So, so let's go back 15 years and maybe even further if, if needed. But there were some concerns maybe in the, in the early 2010s, maybe sooner than that, about the water quality that was feeding these watersheds and then coming down to essentially necessitating advanced water treatment facilities in the region. What's, what's your, what's your first memory of this kind of coming to light as a major water quality issue throughout your lifetime? And then when do you really remember steam picking up for this particular region and maybe building to where it is today?

Zack

Smith: Yeah, I mean, the first thing of consequence was probably— oh, it was probably 12 or 13 years ago, I think, when the Des Moines Water Works, which is the organization that runs the treatment facility in Des Moines, to take— so in Des Moines, there's the largest nitrate removal facility in the world. And in 2012, I think it was, their CEO, a guy by the name of Bill Stowe, was fed up with having to run it in order to facilitate the removal of so much nitrate for the people of Des Moines. And he decided to sue several, several counties in the watershed that fed that river and was creating the issue or the need. And that was a huge blowup about 12 or 13 years ago, a big war. Got instigated over that. And, but those lawsuits were defeated. And so nothing really moved forward. There wasn't anything that really changed, except that agriculture kept progressing.

And so the water quality issue has definitely not gone away. And in fact, the last couple years, I would say it's probably gotten worse, due to the combination of probably, you know, expanded, you know, hog production on the Des Moines Lobe, coupled with really a lack of meaningful progress on farming practices that contribute to the issues. And, you know, it really— last year, it really culminated in early June. They actually had to ban the watering of lawns because they didn't have enough water to ensure potable, you know, drinking water needs for the city. And so they told people not to water the lawns to save water. Because the nitrate facility could not keep up in early June last year from that. And so, you know, and now we have that in Iowa.

Shay

Foulk: Zach, I thought the lawns were the problem. I thought the lawns and the golf courses is what caused all this. Yeah.

Zack

Smith: Yeah. That's a fun myth that a lot of people in this business like to say. But if you do the math and carry the 9, you figure out in about 5 seconds it's one of the dumbest arguments you can ever make. If you don't believe me, go to my YouTube channel. I've got a video about Essentially, for it, I'll just be brief with that, but essentially lawn owners for the acres of lawns that we have in the state would need to be applying about 15,000 pounds of Scotts Turf Builder for them to be the problem. So it's an easy scapegoat, but it's pretty intellectually embarrassing when people talk about that. It definitely is a contributing factor. Municipalities are, but the lion's share of this stuff is definitely from what we do.

Shay

Foulk: So, okay, they recognized it as an issue. We had these lawsuits and you said there was basically just a complete lack of meaningful change. What change did they try to implement? I mean, and I can give a high level from my, at this point I had kind of moved out of the state and moved on with different things. Cover crop integration, maybe emphasis around reduced tillage practices. And then of course the 4 Rs from nutrient placement and timing. Is that a good synopsis of it? I mean, there wasn't really like legislation or fines associated with this, right?

Zack

Smith: No, no. The thing they put in place, though, was something called the Iowa Nutrient Reduction Strategy. And Illinois did one too. There were several states, but it wasn't in response to this lawsuit. It was basically a response to the Gulf of Mexico and the zone of hypoxia that was occurring down there. And You know, they set out with a goal, and it was a kind of a partnership of multiple universities and researchers came up with a goal of trying to reduce the load, I think, to the tune— like, they were hoping to reduce the load of nitrogen and phosphate loading into the Mississippi Basin by 45%. And they came up with a suite of practices to do that and encourage farmers to adopt those changes in a voluntary method. So, it's basically, here's the framework to improve now go forth and be fruitful and improve. And, you know, there has been some change.

It's not like zero, but it's nowhere close, you know, so like maybe we, in some areas, maybe we have 10 to 15% of acres being managed with things that would actually lead to meaningful change in the drop of phosphate or nitrate movement off of the landscape. But that doesn't— that's not a meaningful amount. You have to, you know, even the Nutrient Reduction Strategy would indicate you need to probably be somewhere 60 to 80% landscape adoption in order to expect things to actually improve. And, and so what we have happening now is nobody is talking about that number. They're just celebrating, you know, the several hundred percent increase in cover crops. So when you go to zero to a few million acres, I mean, you know, it's just the semantics of the math, but we have such a long ways to go..

And that's what the part that nobody talks about that, you know, involuntary change is, in my opinion, will never get us there, given just the makeup of the realities of the demographics of farming. It will never get there with volunteer change at this point, or at least in my lifetime and maybe the next lifetime, probably.

Shay

Foulk: So yeah, that 41%, 45%, whichever kind of different articles that you look at from the Iowa Nutrient Reduction Strategy, where, where are we at in that 41% reduction? Because my, my outlook is next to zero from meaningful change.

Zack

Smith: Yeah, no, it would be so like I went to a water quality meeting in Ames this week and I drove through the Des Moines Lobe. Like there's definitely pockets in Iowa like Washington County or over, you know, Mitchell County in Iowa. There's a hotbed over there as well. There's pockets where there's leaders in this space that are getting, you know, maybe 20, 25% landscape adoption of some of these practices. But on the Des Moines Lobe, I mean, it is next to nothing if you drive it. And that's when, you know, so I took a survey to this meeting and I would guess there was probably less than 1.5%. I drove by probably about close to 100,000 acres, and I bet it was no more than 1,000 acres on either side of the road on traveling down Highway 69.

That had, you know, any semblance of sign of conservation practices that would be meaningful or lead to, you know, the nutrient reduction strategy, you know, standards that were set forth 13 years ago. And so, and, you know, the thing is, is that we just kind of live, you know, so that what happens often is the industry groups and the politicians will find the 1 or 2 guys in a county that are really actually doing this stuff, and then they'll prop them up and project that this represents all of agriculture. But you don't have to be a rocket scientist to drive around the Iowa Des Moines lobe. It's blacker than the ace of spades. There's hardly any cover. There are some cover crops, but it's hardly anything.

And, you know, we have a ton of activities that increase the chances of having a problem with water quality with the amount of fallen hydrous and the amount of fall hog manure and how early those timings and applications have shifted over the last 10 years. I think, you know, because of the scale and everything of everyone gearing up, like it just keeps shifting earlier and earlier because we rely on all these custom crews, they've got lots to do. There's just a lot of dynamics that are not pointing in the, the direction of hope that things are actually going to improve here.

Shay

Foulk: So let's talk about, uh, meaningful practices. And, you know, when you say that, I have a list that comes to mind, but talk to me when you think of meaningful practices or how the Nutrient Reduction Strategy and the supporting materials have said, you know, number one is this, number two is this, It's an iterative list, but how do you envision that?

Zack

Smith: Yeah, so the number one thing for reducing it is the use and integration of COVID crops. I think, you know, that has shown, I think, you know, specifically with things like nitrate that, I mean, you can reduce the off-field loss, I think, up to 45% with a well-established fall cover crop. And then, you know, beyond that, reducing tillage helps substantially. You know, a lot of people don't understand that tillage actually speeds up the the process of mineralization and loss by injecting oxygen into the soil. And so that can, you know, that contributes to it as well. And then, and then the shifting of the timing of nitrogen applications, whether that's, you know, fall-applied commercial or manure, you know, the longer that stuff sits out there, the longer the chance it has to interact negatively with the environment, end up in spots that we don't want it to.

And so, Yeah, but those are probably the top 3, you know, really trying to push timing closer to when the crop actually needs it, minimize tillage, and then have a sponge out there. And that's what a cover crop is, is a nitrate sponge to soak it up in the 9, you know, 8 or 9 months out of the year where we don't have an active root to do anything, you know, to intercept that before it goes into the tile. So, and that, you know, and it can't be just one of the things. That's the other part with meaningful change. It literally says in the Iowa Nutrient Reduction Strategy, you have to have a whole suite of things, you know, in-field to have the chance to get to those reduction numbers. You can't just cherry-pick what's easy for you.

So if you're a strip tiller, and you're not using cover crops, you still have a blind spot there, you know, especially on soybean stubble, you can lose a lot of nitrogen just naturally, in that case. So a lot of people like to hang their hat on, well, I'm doing this one thing. And, and so that should be good enough. And that really, the math doesn't math on that.

Shay

Foulk: So, so I thought that, you know, some of the people I follow in the, in the European Union or overseas, I think we're missing an opportunity in the United States because I think they appropriately named it a catch crop instead of a cover crop. And cover crop kind of has this connotation of, you know, whatever it's been for people over the last 20 years, all that doesn't work. When you think of it as a catch crop, it's maintaining those nutrients, keeping the soil in place, uh, you know, maintaining a living root kind of throughout the year. So I wanted to mention that. And then the second thing I wanted to mention is, well, why don't we just, uh, you know, dig these big trenches and holes and run all the tile that's coming off of our fields into a bunch of wood chips and, and put in these bioreactors that maintain all the nitrogen from coming out?

Because some people seem to think that's the answer.

Zack

Smith: Yeah, I mean, so the edge of those are called edge-of-field practices. And that's what a lot of the, you know, the politicians and, you know, Farm Bureau and corn growers like to do because they don't require anything. It looks good. It looks good. Well, it looks good. And it sounds really technological and like, you know, new age, but they're just diapers. They're second principle solutions for first principle problems. You put a diaper on the edge of your field. Okay, so to what, to allow you to put nitrate, you know, Hogmanure on the 10th of September. So you create the problem, and then you have to put the diaper on the edge of the field, like they're, you know, when you lead with that as the solution, because that requires the farmer to do zero, the cost share will come in, the state will pay for all of it. And it'll be on the edge of the field.

So you don't have to change anything. And so we still have this huge nitrate load that we're— that with this pile of wood chips buried underneath the ground is supposed to filter out. And it's just, you know, and the other thing is, is that from a scale point, I mean, we were at this meeting the other day and I asked the question, how many of these things have actually been installed? And IDOLLS was in the room and they couldn't even give me a real number. They thought it was maybe 100 that we've actually put in. So they talk about this in all these campaigns. There's 5 million acres in those two watersheds that feed Des Moines. And I think it's somewhere between 80,000 to 100,000 of these things would have to be installed to give the opportunity to actually, you know, put those diapers on the system to do that. And, you know, we're— there's nowhere near enough cost share money.

The state can't afford to do all these things.

Shay

Foulk: My, uh, you know, my 3 AM Grok research this morning— I know you and I were both up— my 3 AM Grok research said it would take about 1,000 years, uh, to get all those bioreactors implemented if that was the sole solution to the practice. And whether Grok is right or not on that isn't the point. The point is the cost share isn't there, the timing isn't there, and more importantly, the desire isn't there. And I, I question the long-term efficacy of those projects personally.

Zack

Smith: Yeah, I mean, this is— everybody in Iowa is looking for the Ozempic solution, right? Just give me the shot so I can fix this issue. And it's, it's, you know, it's like an— it's like a bad episode of— I make it analogous to like, you know, that show on TLC, you know, My 600-lb Life, where you've got this super obese person that, you know, that just needs to obviously make some life changes, and the doctors, you know, tells them what to do and the thing, the change they make is they switch from drinking a case of Pepsi a day to Diet Pepsi, and then they're pissed because, well, how come that isn't good enough, you know? And they still weigh, you know, 583 pounds. Like, it— you have to think about this from a holistic solution standpoint. And will it, will it be uncomfortable? Yeah.

But, you know, we have real consequences, and we have the, the highest cancer growth rate, you know, in the, in the state. That should make everyone involved— this is not rural versus urban, you know, issue. Uh, this is, this is everyone that lives here, you know. And, uh, yeah, being able to go fishing, being able— I mean, every, every summer, State Beach and Clear Lake, where we like to go swimming with, with my girls as they were growing up, it's always closed because, you know, the bacterial counts are too high. And so this is a quality of life issue. And trying to keep people living in this state and wanting to live in this state, we have to in my opinion, you know, thinking about, you know, being a grandpa probably in the next 10 years, like, I— that's a lot of what's driving me in, in pushing for dealing with this from a realistic and grown-up perspective.

Shay

Foulk: So the cancer rates that you mentioned there, I was looking at that and I went into the, um, the Iowa well testing, and it's estimated that 300,000 Iowans get their water from wells. And of those wells, you know, something like 10 to 12% had nitrate levels that were above EPA recommendations and then well above, like, cancerous concern recommendations. That should give a lot of people pause on, you know, what are we doing? And more importantly, the sad part is which of those wells are not getting tested and people don't know about it.

Zack

Smith: Exactly. Yeah, 100%. And I, I had a buddy over yesterday. We were grinding meat and his wife just got diagnosed with breast cancer. And he was talking, he's like, I got to get my well tested. He's like, I have no idea. And, you know, we're asking ourselves these questions. How did this happen? Now, does it— am I sitting here saying that the water quality is the reason for all the cancer? No, we've got plenty of things in Iowa that can be contributing to this, but You know, we do know that we've got too much, you know, this, this nitrate issue in the water is not a good thing. And the safe drinking water level is like 10 milligrams per liter. And like, that's the standard the EPA uses. But I've read some, some stuff that suggests that that may be too high. Some folks have said it maybe it should be closer to 5 milligrams to eliminate really that carcinogenic impact.

And so, you know, if that's the case, then we've got some real issues because we're, you know, we're consistently, you know, at those levels or above, like the Des Moines River right now today and the Raccoon, I looked yesterday, they were at about 11, 12 milligrams. So we're treating water in the middle of, you know, February. That's, you know, that is— and that's, that's a first thing that hasn't happened in like 10 or 15 years since that's happened. But the reason it happened is we put a lot of nitrogen on this fall and then we got a couple inches of rain with unthawed ground and it started moving. The tiles were running in December.. And, you know, so that's, that's why it happens. Well, we've got to be honest enough to admit that we have something to do with that.

Shay

Foulk: So, and it was record amounts of anhydrous application in the fall. I mean, it was wide open. Harvest was nonstop. And then, you know, you and I had kind of commented on X back and forth there on when we would see the first tanks being pulled across the field. October was really hot. So I think it was maybe a little bit later than what we would see in a quote unquote normal year. But still rolling well before you had soil temperatures below 50 degrees from a stability standpoint of the anhydrous outlook. And I would guess record— I'm of the opinion, and this audience has heard me say it too, I'm of the opinion that we're going to have another record number of acres headed to corn next year. So got to get that nitrogen on, got to get it down. We don't got time for that in the spring, right?

Zack

Smith: Yeah, no, 100%. Like, I've got sources in retail in Iowa that told me that their tons were 30 to 40% higher what hit the ground in the fall of '25 versus '24, you know, and yeah, there can be some seasonal shift between the window, but in north central Iowa, I mean, I think it was about the same, you know, the same window the year before for people that wanted to get it on. But the price was so much cheaper and that's what really drove people and with the crappy economics right now to, to go out and do it. And yeah, I mean, it was October 20th, rigs started, custom rigs started rolling here. And by the 15th of November, it was pretty much all done. I drove to a meeting in Des Moines on the 15th, and it was 70 degrees, and there wasn't a single sign of— I mean, the anhydrous was all done and on by then, you know.

So, uh, yeah, including the hog manure too, that was all done, pretty, pretty well wrapped up by then as well.

Shay

Foulk: So, so let's talk about, let's talk about the hog manure, um, or livestock in general, because that's another part of this argument that The row crop farmers, they want to point and say, oh, it's the people applying manure September 10th to October 20th or whatever, and look at the rates and look at the runoff. And then you have these, you know, CAFO operations. You know, what are your thoughts on that? How does this tie in? I'm not here to defend one group or the other, but let's look at what reality is.

Zack

Smith: We're all complicit in this and we've We've— what's happened is that, you know, we didn't used to have the confinement system 25, 30 years ago, the infrastructure that we have that's really ramped up, you know, in the late '90s, in the early 2010s, a lot of these barns got built and it changed. It changed the way that we apply nutrients, you know, on the Des Moines Lobe. And as farms have scaled up and gotten bigger, you know, fall custom anhydrous has become a lot bigger deal than what it used to be 25 or 30 years ago. It used to be that people would, get, you know, finish harvest. And then when they were done, then they would go hook onto a bar and put an hydros on. That usually would push them into, you know, closer to freeze-up. But now, you know, I would guess that probably in my area, you know, it's probably 60-80% is just done by a custom rig that the co-op sends out.

And they got a lot to do. So they, they go out and they start as, you know, as early as they can feel decent about hanging the 4R certified sign in their office and, and doing it. And if And if they don't, if they don't do it, and the farmer wants it done, because they're nervous, and they, you know, the neighbor's going, well, they'll just go get somebody else that will say screw the, you know, the, the good practice, you know, mantra that we like to prop up all the time, and they'll just do it, you know. So I think, you know, the system has evolved into people feeling the necessity to go earlier and earlier. And that has consequences. And it's not just, It's the row crop guys. It's, you know, it's, it's the big pork model. You know, that we— that's very, very prevalent in Northwest Iowa. I mean, they're, you know, we all have something to do with it.

And they're the— but the challenge is, is that it's very difficult, you know, with the amount of work that has to get done, the idea of shifting that forward, because it will be expensive to do that. People would lose their minds if they had to— the idea of putting on all their hog manure in the spring where it would actually be closer to when the crop, you know, would be there to take it up. And, and we don't have as many, you know, we don't have as many good solutions for like in-crop or side-dressing applications, you know, of that at scale too. So that's why there's resistance to the change is because from a logistical standpoint within the industry, we're not set up very well to do it the right way, in my opinion.

Shay

Foulk: So incentives drive actions, and we can look at that from incentives on, you know, adoption rate of COVID crop practices, I think would be a good one to start with. And some of the numbers would point to, oh, look back to 2023, look at the massive increase of adoption that we had. Well, we were coming off of 2 years of high profitability, first of all. So people had extra money. And then you had all these carbon foo-foo programs, right, that were paying $15 to $50 an acre. So of course you're going to have higher adoption because what people are going to do, and I'm in this space on the seed side, and if you feel like I'm picking on you, well, guess, you know, you should probably take this seriously. They're saying we're going to fly on cover crops on October 10th and hopefully they don't grow very well, but I'm going to get my check for the COVID crop program.

I'm going to get out there as early as possible in the spring and I'm going to terminate it and I'm going to do it the cheapest way possible. You know, I'm going to, I'm going to put out the lowest rates of the cheapest product and I'm going to spray it as early as possible. So let's carry on business as usual. The adoption rates into year 2 and year 3 are like 20% year over year consecutive, you know. So if you go from 100,000 acres next year, you're going to have 20,000. And then the year after that, you're going to have 4,000. I mean, it's, it's a really abysmal adoption rate because we don't have the incentive. So I think the question here, and I have some other areas that I want to ask you on, but the drive home is, are we at the point where the carrot isn't enough and the stick needs to be implemented? Yes.

Zack

Smith: And what is the answer?

Shay

Foulk: What does that look like? I mean, because people are going to hate that.

Zack

Smith: Yeah, you can hate it all you want, but then tell me, tell me the alternative solution that's believable. That's the thing. We are selling We are selling foo-foo dust, you know, to quote you, with the idea that we're ever going to voluntarily move in a direction in our lifetimes or the next lifetime. And so regulation is the only way that this will be solved, in my opinion. There would be two simple taxes that would be employed, and people hate that. They hate the idea of taxes, but there is a cost that we are ignoring in agriculture to this stuff. And it's carried by other folks. Well, it's carried by all of us, actually, you know, when you think about it. And it's— we ignore that external cost, and it's time that we internalize it. And I think if you want to fix it, there's two simple things.

You put a tax on any amount of nitrogen, whether it's manure or commercial forms applied or invoiced. Before the 31st of March in a calendar growing year. And it could be something where you would stair-step it up. It'd be a progressive tax. It would— so it'd be low on year 1 and then build to year 5 to give people an off-ramp and a time to adjust, or for the industry to adjust, because there would be some big logistical changes to that. And it would give people optionality. If you're convinced you can't grow corn without putting an hydrosaw on the 20th of October, or, or hog manure on the 10th of September, that's fine. But there's going to be a price and you're going to pay more for that. And the second thing is you have to have landowners on the hook for this.

I think there should be a landowner use tax with that would, you know, your property taxes would be higher if you're not ensuring that, you know, you're reducing tillage and covering the ground with something to, to address this. And, you know, you do those two things that addresses it from the landowner standpoint, if the landowner is going to pay a higher property tax, that's going to motivate them to find a tenant that's going to be able to put these practices into place. And then the nitrogen side on the farmer's side. So, and that's, and know that not everybody is going to opt in. There will be people that say, ah, screw it. I don't want to participate in that. That's fine. But you know, if you ask AI how to solve this problem, this is how AI tells you to do it. If you actually want to get to the level of 60, 70% landscape adoption, it would take policies like that to drive it.

Because money talks and bullshit walks in this business.

Shay

Foulk: So— And you had said, I was listening to a podcast from this event that you've referenced a couple of times here or as follow-up to it, and you made a comment about crop insurance subsidization potentially being tied to practices. And I think your exact words were, it's asinine that it's not currently.

Zack

Smith: Yeah, well, it is. And so what I'm talking— what I just talked about now is from the state level. I think the federal I mean, in my opinion, crop insurance should be totally overhauled. And it should be the subsidy that the taxpayer pays should be based off of practices. If you kill two birds with one stone, I think spending money on the carrots is a total waste of time. I think things like EQIP, CSP, all the Inflation Reduction Act money, I, you know, it is, it goes as far as what, you know, whatever the money is given, the farmer will go up to that amount and not a dollar more. I know this because I have a cover crop business. And all of that business is contingent on that funding. And I have maybe 1 or 2 customers that go above and beyond.

So just get rid of those things, because they're not really driving stuff from a fiscal standpoint, and then just make the subsidy that we get to the tune of 62% of our crop insurance bill based off of these practices. That would be an idea at the federal level, you know, beyond the state of Iowa. You know, in my opinion, what I'm really, you know, driving for in this next election is just to have state policies that influence this stuff, because I think the I think it'd be simpler to do that than to try, you know, the hope that we're going to overhaul crop insurance, you know, where we can't get a farm bill at all. You know, how can we deal with this more locally and get on top of this?

Shay

Foulk: This is not a Des Moines Loeb issue. This is not an Iowa issue. You drive back and forth to, you know, an hour southeast of me or, you know, you're traveling all the time. You could do the exact same thing that you did headed down to your meeting in Des Moines. And you're going to see less than 1% adoption between your place and mine and probably significantly less. And it's no different. It's just different watersheds. It's different farm operations in different states and different counties. This is, this is a widespread issue.

Zack

Smith: Yeah. And, you know, and in Illinois, I mean, the thing that I haven't heard water quality issues there as much, but I mean, you had the dust storm, you know, on I-55, you know, a couple of years ago with that huge crowd, 100 pile 100-car pileup. And, you know, it's the same thing. It's how we farm has an impact on what happens. And we— the commonplace in this business is just to deny and deflect. But eventually, you know, the general public is going to start asking some hard questions. And when we become fewer and fewer of the voting populace in the state of Iowa, there's only about 15,000 or 20,000 operations left that probably farm 90% of the ground. That doesn't represent a very big voting bloc anymore versus the other 2 million registered voters.

Shay

Foulk: And so incredibly— either—

Zack

Smith: yeah, either, either we figure this out and we get busy coming up with progressive solutions on our own or prepare for what's next. And I would just as soon have us have a credible seat at the table versus what we're doing right now, which is just— it makes us look like idiots.

Shay

Foulk: And if people listening to this don't follow, you know, if you're not on X or you don't follow farmers in other territories, other countries, look at the regulation that's occurring in the European Union and look at the regulation that's occurring in Australia and New Zealand. And it is, it's total carrot or excuse me, total stick, no carrot. And guess what? The farmers aren't holding the stick on themselves. They are getting the crap beat out of them from the general public that ends up implementing wazoo stuff that doesn't make sense. These are sensible solutions. I think, I think a person from the outside can look at that and just say, of all the solutions that exist, this is most sensible because what's going to happen— and I'll use New Zealand as an example— they're, they're not just going to say, okay, Zach, you have to apply after March 31st.

They're going to say you have to apply after March 31st and you have to do it when the corn is 4.5 feet tall and you have to have a 97-foot buffer strip along every waterway and you got to plant hedgerows and you got to make sure that you have a certain amount of pine trees per acre that you farm. I mean, these are legitimate type of solutions coming up with whether it makes sense or not. And, and at that point, it's not only the stick of what you're penalized for, how you get taxed, but then it's legitimate fines. Your business is being fined long-term, uh, as a result of not implementing these practices.

And I, I'm of the opinion that you can look to our neighbors to the east in the European Union and just say, well, that's going to be here in 30 or 40 years or sooner, uh, because people are so disconnected, they're so disconnected, but they have every right to be pissed off about what's occurring, frankly.

Zack

Smith: Yeah, it is an F around and find out scenario for sure. And that's why, you know, and the thing that's really disappointing to me is the fact that our leadership in our ag groups, and I can just go down the list and name them all, but there is such a lack of courage to stand up and say that this is a message of abundance. This is not, you know, they lead with fear that if we're going to do these things, like we're not going to be able to grow a frickin crop. It's a joke. You look who holds the national corn record. It's David Hula, 623 bushel an acre. And guess what? He's a strip tiller, you know, which they say doesn't work on the Des Moines Loeb, or a lot of folks do. And he applies his nitrogen all in season. You know, is that a weird coincidence?

Shay

Foulk: Like, it's, you know, I'm going to have— he was at a speaking event I was at last week, and I'm going to have him on for a Dad's Wisdom podcast. I'll be sure to ask him about that, too, because I think that's interesting.

Zack

Smith: Yeah. Ask him if he applies his nitrogen 9 months ahead of when his record corn crop is going to, you know, he's hoping to have it pop. You know, it's— there are farmers all over the Midwest that are using these practices and producing tremendous yields doing it. So it's, you know, it's fearmongering at best, in my opinion, with the way that people poo-poo some of these things, you know, I, and I look also to some of the opportunities, you know, with like the 45Z rules that just got, you know, potentially now there's hope again for that stuff. I mean, those are things that we can do, you know, if you, if you want to see the ethanol industry continue, because there isn't an off-ramp for that right now.

And, you know, that's a huge opportunity for, you know, if we're going to be able to capture some premium out of those things, those are— should be things, you know, if we're in, you know, poor economic times, everybody should be looking at what are the alternate or what are the other options that we can do to bring more value here. And it will— but it will require you to farm differently. And, you know, but it kind of seems like that spirit of like, pulling yourself up by your bootstraps or just doing that, it just seems to be kind of a fleeting thing in this industry for some reason. I don't get it. We've probably had just too many bailouts, you know, that don't have contingencies within. The money keeps getting printed and pumped to us and we need to be hungry again. That's my opinion.

Shay

Foulk: Yeah. And I would say from— because you said something really important there about the economic outlook. The reason so much anhydrous went on is because it was economically driven. And what we need to realize is we have a commodity business, commodity being the key word. Commodities are ruthless, and they're very, very efficient. And they're going to continue to drive down margin and profitability for all of time. I mean, that's their job. That's what they are designed to do. So as we see this consolidation, continued consolidation of size of farm operations, I think the implementation of some of these practices becomes even more important because you have fewer people managing more acres that have an outsized impact compared to your farm operation or my farm operation. You know, we're similar-sized farm operations.

We become, we become a blip in the map for the decision-making that occurs here that affects the rest of the communities that are around us, and it affects our children. And our grandchildren. And this is— if you don't like anything else that we've said in this podcast, go to your tile line that's coming off of your field on April 15th before you start planting, and would you drink that water? Or would you feel— would you feel safe with your kids or your grandkids playing in that water? That should— that should be what gives you pause. And if the answer is no, I think you need to do a little bit of soul searching and ask yourself, what am I doing? And it's not a save the world. It's not a save the United States. It's not a save Iowa. It's thinking about the future of your children and your grandkids that are going to be maybe farming that land, but if not, tied to that land.

I don't know how else to say it any differently than that.

Zack

Smith: No, you're 100% spot on. And we think way too often in short-term timetables in this business. And we need to think— we need to think more long-term, you know, just beyond paying off the banknote at the end of the year. What is the implication of what we're doing, you know, in the next 10, 20, 30, 40, 50 years?

Shay

Foulk: So a couple more questions and then we'll wrap up here, Zach. So, you know, my thought is on this, you can't just target specific areas. So you can't just target your highly erodible landscape, your HILs. Because then you start to have legislation that targets land values of those who may have bought those or just live there versus those who are in, you know, flat black square 160s. So I think implementation of legislation, if that's what occurs here, it needs to be, frankly, every acre and every managerial position. Am I off base on that?

Zack

Smith: No, it has to be broad acre. You know, you can't do it. The math is you need 60 to 80% participation.. And that's what the academics have stated. And that's— you got to have policy to get us there, and that's the only way it's going to happen.

Shay

Foulk: Gotcha. Any other— well, maybe this is what I should ask. So where should people get started? You know, test your water coming out of your tile line, if nothing else. Look at your level of erosion. Maybe adopt practices and don't just give up on them after a year. What's your what's your encouraging message to people that know that they need to do something different but haven't taken that step?

Zack

Smith: Yeah, I, you know, it's starting to do something. And, you know, maybe it means going and talking to the neighbor that's doing this and ask questions. And, you know, the biggest thing that holds a lot of this back and we didn't talk about it, but it's an important point, is the fact that there is so much geriatric control in this business of dads and grandpas, uh, in many cases holding the decision-making and the purse strings. And there are a lot of young guys and gals that want to do some of this stuff, but they're handicapped by that. And so I think, you know, if you can— if you go talk to the neighbor and maybe you have somebody come and do this, like, just to prove it to the older generation that this is possible.

But I mean, I'm— I've got a good friend that I'm working with on this right now, and he's in this exact situation where his dad's going to lose his mind if we go to do away from what's been successful for the last 50 years. And I think it's starting small and maybe demonstrating that the world's not going to come to an end if we do something different and then building it out from there. But unfortunately, like I said, that's kind of that voluntary scope. That's not going to get us there. So that's where I feel like until the old guard is either out of the way or there's regulation that forces them, I just don't see that we're going to do this. But for those that are curious, go talk to your neighbor, go ride with them, ask them questions, you know, figure out what's working and what's not, you know, what's not working.

The machinery and the technology has come a million miles since I started this 15— doing this stuff 15 years ago is so much easier than what it used to be. So yeah, but just, just do something or be curious at least, because I think this stuff is coming one way or the other. It's just a matter if we're going to be part of it or if you said if we're going to take orders like New Zealand.

Shay

Foulk: So yeah, and stick's coming. It's got Zach's name on it and it's not going to— it's not going to smack you in the ass. It's going to hit you in the side of the head, probably. So, Zach, I really appreciate the conversation and I hope listeners get value out of this of, hey, let's take some introspection here. Maybe we need to change again stock cropper stuff. I know you're inundated with that, but I'd like to have you back on in a couple of months and But just thank you so much for taking the time.

Zack

Smith: Yeah, and thanks for having this conversation. There's not, you know, not all the podcast platforms would probably want to talk like this. So thanks to, thanks to Ag View and doing this and putting this type of content out there.

Shay

Foulk: Yeah, our purpose is to provide value and perspective to people. So thank you everyone for listening to another episode of the Ag View Pitch, and we will catch you next time.