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The Business of Sustainability

September 6, 2012
By: Jeanne Bernick, Top Producer Editor
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Almond processor Dave Long hunts for sustainable ideas because they save money long-term.  

Agriculture embraces sustainability for its business sense

When Dave Long started growing almonds in the 1980s, sustainability was just another crazy California concept. A native of the San Fran-cisco Bay area, Long came to the almond industry seeking a tax shelter. He fell in love with farming’s way of life and the blossoming opportunities for the almond market. Today, his Hilltop Ranch, based in Merced County, is one of the top five almond processors in the nation.

As an outsider with extensive construction experience, it was easy for Long to find ways to improve energy efficiencies in ag production and processing. He started small, switching the lighting in his processing sheds to fluorescent bulbs. Next, he switched to hydrostatic fork lifts with computer-controlled engines and bought seven new semi trucks with Tier 3 engines that burn 10 gal. less fuel per day. His biggest project was installing a field of 58 solar panels, which generate 78% of the processing plant’s power and reduced his electrical cost from 14¢ per kW to 6¢ per kW. In addition, he received a $1.1 million rebate from the federal government and

a 15¢ per kW rebate for five years from his electric company. To further reduce power demand, Hilltop installed a 150-hp variable-speed electric motor air compressor that can drop to 15 hp or shut off completely when full capacity isn’t needed.

Long spent years systematically improving efficiencies because it made good business sense, not realizing that all along he was becoming more sustainable. He recently partnered with BASF’s new AgBalance program (see sidebar) to conduct a sustainability audit. After 300 man-hours devoted to documentation, it was determined that Hilltop Ranch had reduced its environmental impact by 30%. This is a number that Long’s almond buyers, Kraft and Whole Foods, like to hear.

"Sustainability is about the bottom line," Long says. "Whether it’s packaging, water, energy, land use, chemical use, or emissions, we have dared to challenge ourselves by examining our impact on the environment and the life cycle costs of our product."

Buyers Spur Sustainability. While rising costs for inputs, especially seed and expensive fertilizers, have been the initial drivers of sustainability practices, more top producers are embracing sustainability as a business decision.

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The 58 dual-axis solar panels on Hilltop Ranch produce 78% of its electric needs while processing a million pounds of almonds a week.

Companies that are able to communicate about sustainability and commitment with their stakeholders are more highly regarded, notes Nick Hamon, head of sustainability for Bayer CropScience North America. Sustainability is proliferating worldwide and food companies are cutting energy usage, water, waste and want in their supply chain.

Wal-Mart has developed a "sustainability index" for suppliers; Unilever now requires that 100% of its agri-cultural inputs be "sustainable;" and Kellogg is committing to a 15% reduction in carbon. There are also regulatory drivers, such as the European Union’s new renewable energy directive, Japan’s voluntary carbon laws and recently approved green marketing laws in the U.S.

"Everyone wants to be prepared for what the retailers need; the retailers get cues from consumers," notes Fred Luckey, chairman of Field to Market: The Keystone Alliance for Sustainable Agriculture. "The retailers I work with have very aggressive programs."

Tres Bailey of Wal-Mart says the sustainability movement is not intended to force suppliers to use environmental practices. "This is not meant to be the stick. This is meant to be the carrot approach," Bailey says. Wal-Mart recognizes that food producers have to make a profit. "Without economic viability for farmers, there is no food," he notes.

Unfortunately, most companies, both inside and out of agriculture, are not handling sustainability well, Hamon says. Why? "Because sustainability is complex and multidisciplinary, it needs new tools, it depends on partnerships and it’s hard to apply metrics to the concept," he explains.

This past spring, Bayer held an executive course on sustainability in agriculture to address these issues and identify ways to help grow ag businesses in a more sustainable way.

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FEATURED IN: Top Producer - September 2012

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