Rebuilding Our Natural Capital, Together
Producers intuitively understand their soil’s ability to grow grass, hold water, resist erosion, and support healthy livestock and wildlife. In many cases, getting the soil to produce these results marks the difference for them between profits or losses. Their cattle’s forage (grasses) comprise the primary interface between solar energy and American soil on 121 million acres of pastureland and 401 million acres of rangeland. Across nearly a quarter of the American landscape, ranchers are the specialists we need to efficiently produce natural capital.
Although this value precedes most primary productivity in the most basic sense - commodities are either grown or mined - natural capital has been excluded for too long from markets’ assessment of economic health. It's this same value that manifests in a producers’ landscapes. A critical precursor to raising livestock and good farm & ranch management.
Exploring Carbon Markets: Opportunities for Ranchers in Sustainability and Regenerative Agriculture
Having a natural capital surplus means holding tangible ecological value in place to build, restore, and create manage renewable materials & services. Manifest as healthy soil, clean water, and diverse animal, insect, plant, and microbe life, a surplus from these ecosystem services delivers the benefits that we depend on as a society. Today, as human activity on the planet dominates the trajectory of natural capital availability, we must consider how to measure & manage natural capital for our collective interests.
Grasslands like these hold the potential, with managed grazing, to hydrate the biological sponge that creates natural capital dividends in pasture and rangeland.
Across the United States, unpriced ecological benefits, components of natural capital, gave rise to the strength of a great country. Deep, 15 foot topsoil across the Great Plains helped make America the breadbasket of the world. Timber stands and incredible fisheries made New England a shipping bonanza. California microclimates allowed for entrepreneurial farmers to profitably grow strawberries, lettuce, and almonds and export value. Our modern capital accounts as a country reflect the abundance of the pre-existing condition of American soil.
However, today, these once great surpluses are challenged by the, “externalities” from 100 years + of myopic industrial tendencies. A century of industrial farming has tended to focus on achieving short term yields that draw down farm’s natural capital accounts. That’s part of why farmers today pay too much for fertilizer, machinery, and debt service.
Operating under false assumptions of inexhaustibility, this, “first leg” of the of the US supply chain, where natural systems convert sunlight and mineral compounds into conduits for energy, has been historically neglected. Can a better system for valuing natural capital help agricultural incentives correct themselves?
Producers know that their natural capital account can be drained by aggressive harvests or hydrated via deposits from creating soil. For example, healthy soil can hold 10 times more water & 25% more microbes than degraded soil.
Companies, on the other hand, are beginning to recognize that continuing to do business requires them to consider their natural capital balance sheet, too. Policy makers should know, too, that soil underpins the nation’s productivity. Short term financial goals, both for large, public companies, and for private owners unfortunately have meant that US farmland has tended to be “mined” for short term profits at the expense of soil, water, and ecosystem health. Cattle, corn, and soybeans make up the top three farm products in the US. Consider the loss of biodiversity in a State like Iowa corn and soy now comprise the majority of acreage – but the preconditions that facilitated their cultivation were emergent from centuries of animal, plants, and microbes interactions that built the very loam that supports Iowa’s impressive cash crop yields.
For producers, this has often meant maximizing stocking rates for cattle at the expense of the land. Much of the pre-existing US topsoil is now washed away or sterilized by excessive chemical and fertilizer use or overgrazing. The Great Plains – once so abundant that Bison roamed throughout – are now managed at a loss for many producers – forced to choose between ecological health and short-term profits.
The true cost accounting for a producers ledger – tied to ecosystem conditions - was traditionally tricky to measure – and mostly reserved as a private understanding for skilled land managers, agricultural experts, and a few specialized environmental accountants. But it need no longer be this way.
The Federal Government, has begun to recognize the need for advancing environmental economic accounting to lead sustainable development.
“The nation’s economy and environment are deeply intertwined. A strong economy depends on a stable climate, clean air and water, and all nature has to offer. We have taken it for granted, but we can no longer afford to do so. Climate change and the loss and degradation of ecosystems impact our country’s economic growth and opportunity.”
Outlining federal guidance for natural capital markets in January of 2023, policymakers started articulating how natural capital is a precondition for many supply chains, undergirds business successes, protects property and infrastructure, and promotes, health, recreation, biodiversity based innovation. Indeed, the back and forth between plants and farmers has led to the cultivation of every food crop on the shelf today, long before genetic modifications sped up these changes to support, in particular, short-term profitability on farmland through high yielding corn and roundup – ready soybeans.
The Natural Capital Coalition, also has outlined a few key premises for incorporating these natural assets into a functional marketplace. Stating that businesses should be aware of the externalities in their supply chain produces, strive to contribute to creating natural capital as a function of this production, and work as a community to apply rigorous science to measure, report, and improve delivery of positive externalities. The coalition describes how by working together to measure natural capital with technology and science, a market driven method of investing in creating it at a low cost can be realized. In short, if we are talking about natural capital, agriculture comes to the fore.
Across the 38% or so of global land devoted to agriculture, ecosystem services are starting to become recognized as a low cost, comprehensive way to improve the fundamental systems that create value in our economy. Resultantly, a new era of environmental economic accounting, enabled by technology, regulation, and the requirements of responding to the climate crisis is at hand. Implicit in this new accounting is the possibility to evaluate the benefits of natural capital and help businesses with expertise in manipulating landscapes– like farmers and ranchers – produce low cost & high impact, “origination” vis a vi natural capital to sell to other market participants who lack these capabilities - namely some of the largest companies in the world.
If capital deployed to the detriment of natural systems has been the paradigm, moving forward we should recognize that private capital can have similarly transformative results if rules are in palce that recognize the natural landscape’s capacity for reciprocity. Private land and the farm operators on it could be viewed as the emissaries of natural capital – the experts in landscape restoration. What they lack is a market to reward them for their unique capabilities to build soil – the cultivate more life - not just extract short term yields from it.
Some environmental advocates present farming – especially cattle - and other human activity as a non-negotiable evil in the landscape. Indeed, the wonderful tradition of the National Parks, State, and other exceptional wildlife areas in the country follow this logic – keep people out and nature will prosper. Though laudable in intention, this thinking limits the potential for farming and other land use activities to create natural capital. In the climate debate, grazing animals, namely cattle, are pointed to as a substantial source of emissions – but the fact remains that in numerous ecologies, and especially in grasslands, grazing animals are a keystone ecological species without whom soil can’t be rebuilt.
Degraded Vs. Regenerated Ranch Lands , Photo Credit Matt Ricketts a Kateri Advisor
The economy is already the most influential determinant of our rural and, “natural” landscape. How we grow our food and manage livestock and crops won’t be divorced easily from the natural function of the land that supports us. Preservation alone is not enough. And it’s not necessarily a functional way to unwind the century plus of ecological degradation that has transformed much of rural America into less hospitable resources for fostering more life, clean water, and productive, nutrient dense food products.
Traditionally, there are good reasons for leveraging animals to, “harvest” landscapes that are too limited in productivity to glean food from in any other way. On this earth, we’ve cultivated a landscape dedicated to animal agriculture - which undoubtedly takes up a disproportionate percentage of the total arable lands. We have a choice to make, going forward, as to whether to use these lands to continue to produce food, shut them down for conservation, or find a new way forward the works for both goals’ benefit.
Kateri is a new kind of partner for the American Producers that uses technology, science, and market-making to deliver a new way to evaluate and securitize natural capital originiation. Beginning as an program associated with virtual fencing technology, Kateri’s leadership recognized the transformative potential of new technology for biomimicry in raising grazing livestock.
Tracking Cattle Across the Landscape is now possible with Vence and Moovement Tags among others.
In natural systems, grazing animals are constantly moved (under duress) by predators. This kept bison, deer, and even cattle from overdoing it in terms of, “harvesting” one area to excess. Today, technology can virtually track and move livestock in ways that mirror this natural system of checks and balances: namely with invisible fencing. This low cost management tool allows for wider adoption of holistic grazing, which, prior to synthetic fertilizer & feedlots, helped manage farms in a closed, self-regulating ecological loop that built up rather than extracted from the soil: rotating livestock through clearly delineated ecological zones across a given set of pastures – keeping the grass – and cattle – at near carrying capacity to each other mutual benefit. Labor constraints make this solution even more appealing in today’s economy.
Ranches overseeing vast grasslands receive investment from Kateri & work with us to develop site specific grazing plans that keep nature and cattle in reciprocity – taking only what can be taken, returning nutrients to the ecosystem, and leveraging a new data awareness thanks to lost virtual fencing, remote sensing, and advanced understandings of regenerative farming emergent from the land grant and research infrastructure that the US government has funded as part of its plans to advance our economy into a new era that recognizes natural capital.
Currently, Kateri’s focus is on building and selling soil carbon on American Soil. While carbon serves as an efficient proxy for increased soil health and a slew of examples of ecosystem services – but its’ imperfect – and we view it as an effectual starting point for making Natural Capital markets more efficient due to the with substantial guidance, scientific modeling, and a growing market consensus that it should be priced as a cost of doing business.
Kateri works as a facilitator for valuing natural capital to Producers benefit
Using physical sampling and biogeochemical modeling helps us track, monitor, and improve the uptake of soil carbon that ensues from managing cattle symbiotically in the landscape. By using the best science available and reporting beyond the current requirements of carbon registries (Climate Action Reserve, Verra, American Carbon Registry, and the Gold Standard) we’re documenting the other value these ecological ranching can create.
We’re committed to helping incorporate these value streams into land operators’ business decisions at the farm level, and lobbying with evidence to support the inclusion of appropriate, effectual, and life-altering (literally) value. Simultaneously, we take a broader lens to help support the deepening of natural capital markets by remaining committed to investing in and monitoring outcomes from other aspects of the landscape across our partner’s ranches & farms: hydrology, biodiversity, and resilience. We hope someday to sell these, “yields” too. Kateri offers producers tools and access to financing for the greatest project of a generation: rebuilding natural capital on American soil. Join us!