[Senate Hearing 117-]
[From the U.S. Government Publishing Office]


 
 DIVERSIFYING ON-FARM INCOME: OPPORTUNITIES TO STRENGTHEN RURAL AMERICA

                              ----------                              


                        THURSDAY, APRIL 29, 2021

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:05 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Tammy Baldwin (chairman) 
presiding.
    Present: Senators Baldwin, Tester, Hoeven, and Hyde-Smith.

                       DEPARTMENT OF AGRICULTURE

STATEMENT OF DAVON GOODWIN, MANAGER, SANDHILLS 
            AGINNOVATION CENTER

               OPENING STATEMENT OF SENATOR TAMMY BALDWIN

    Senator Baldwin. Good morning. I want to thank you for 
being here today for what is the first hearing of the 
Agriculture Appropriations Subcommittee for the 117th Congress.
    As we await the full fiscal year 2022 budget request, I 
thought it would be a great opportunity for our subcommittee to 
discuss diversifying and increasing on-farm income and how that 
can help to strengthen our rural communities.
    I want to start by welcoming our five witnesses, four of 
whom are with us virtually Mr. Davon Goodwin, board president 
of the National Young Farmers Coalition; Dr. John Lucey, 
director of the Center for Dairy Research; Ms. Rebekah Sweeney, 
Wisconsin Cheese Makers Association; and Mr. Jason Weller, 
president of Truterra and one who is here with us in the room 
today, Mr. Brian Carroll, director of Grand Farm. Thank you all 
for joining us today.
    And I am glad to see my colleague Senator Hoeven, ranking 
member of the committee, is here with us as well, and I look 
forward to working with you, Senator Hoeven, and all the 
committee members this year.
    In Wisconsin and across the country, a strong agricultural 
economy is vital to a strong rural economy. Our hard-working 
farmers and ranchers tie our rural communities together and 
move our economy forward by creating jobs for others and 
spending money in their communities to support the many local 
businesses that serve farms and our farming families.
    For our farms and rural towns to succeed, we need a Federal 
Government that is in their corner. We need to make investments 
and support policies that will help our farms thrive and be 
financially viable to support themselves, their families, and 
their rural communities.
    Today, only 10 percent of American farm families earn most 
of their income from agricultural production. This subcommittee 
has an opportunity to turn that figure around and transform our 
food system. To make this transformation a reality, we need to 
create better markets, fairer markets, and new markets to 
ensure that our farms, no matter what their size, have a 
successful and sustainable future ahead of them.
    There is so much more we can and must do to make farms of 
all sizes more profitable, diversify their on-farm income, and 
manage risk, especially with a changing climate. I believe that 
it starts with helping to create better markets that allow for 
a competitive marketplace.
    All across agriculture from the dairy sector to crops, 
livestock, and poultry evidence shows that where we have 
supported innovation, processing, and regional food systems, we 
allow our farmers to keep more of the consumer's food dollars 
and increase their on-farm income. Our subcommittee is 
responsible for a wide variety of programs that can help make 
these better markets a reality, and I am especially excited to 
hear from our witnesses today about how the new regional Dairy 
Business Innovation Centers are helping dairy farmers diversify 
and increase their income.
    I must add that for farmers to be a part of these better 
markets, we need transformational investments in broadband that 
ensure all Americans finally have access to reliable and 
affordable high-speed Internet service. It is a necessity for 
our jobs, education, healthcare, and helping farms be a part of 
this transformation of our food system.
    Of course, helping all farmers thrive in increasing their 
on-farm income means we must be fighting for fairer markets 
that ensure opportunities for everyone who wants to be involved 
with agriculture, regardless of their income level, race, 
gender, farm size, sector of agriculture, or location.
    Lastly, this subcommittee must look for innovative ways to 
enable new markets and revenue streams as we look to mitigate 
the impacts of climate change. First and foremost, we need to 
have agriculture at the table. Their input will allow us to 
establish effective policies that combat climate change and 
support farm incomes.
    Our farmers, our ranches are a vital part of the fabric of 
rural life and our rural economy. Their value cannot be 
measured in profit margins alone. I know there is no single 
solution, but I look forward to this conversation today and 
hearing more about how this subcommittee can work together to 
help farmers diversify and increase their on-farm income, 
better manage their risk, and strengthen our rural economy.
    With that, I will ask my ranking member, Senator Hoeven, to 
offer his opening remarks.

                OPENING STATEMENT OF SENATOR JOHN HOEVEN

    Senator Hoeven. Thank you, Madam Chairman. Good to be here 
with you.
    And Senator Tester, good to see you this morning, and I 
hope you did your rain dance once again because we sure need 
moisture up our way.
    And of course, I want to thank and welcome Brian Carroll 
for being here in person to testify. He is the director of 
Grand Farm Education and Research Initiative, located in Fargo, 
North Dakota, and Brian and the team at Grand Farm are working 
on cutting-edge precision Ag.
    The goal is actually to have a working farm that is all 
precision Ag, all driven by technology. In essence, autonomous 
farming, just to show what can be done, and it is really 
remarkable what they are doing. So for him to be here and talk 
about precision Ag I think will be very beneficial for the 
committee.
    Our committee has worked very hard to support our farmers 
and ranchers, and really over the last 3 years, when we have 
faced the trifecta of bad prices, problems with the trade 
agreements, and bad weather, have done a lot to keep the 
farmers and our ranchers in the game. And it looks like our 
trade agreements helping to create more opportunities overseas 
and find prices improving, we are hoping to get into a better 
cycle.
    But at the same time, we want to do anything and everything 
we can to help our farmers and our ranchers, and I am always 
fond of saying, and I always will be, every single American 
benefits every single day from good farm policy. Because our 
farmers and ranchers raise the lowest-cost, highest-quality 
food supply in the history of the world, and that benefits 
every American every day. So good farm policy benefits every 
American every day.
    And it is truly an honor and a privilege work on behalf of 
our farmers, and I look forward to working with the chairman 
and the members of this committee to do just exactly that.
    So, once again, thank you, Brian, for being here today, and 
thank you, Madam Chair. And I will turn it back to you.
    Senator Baldwin. Thank you, Senator Hoeven.
    I want to remind all of our witnesses today and committee 
members to please mute your microphone if you are not speaking.
    And with that, again, a warm welcome to both our virtual 
guests, witnesses, as well as Mr. Carroll, who is here in 
person. And I would like to start off the testimony with Mr. 
Davon Goodwin.
    Please, Mr. Goodwin, go ahead with your opening statement.

                   SUMMARY STATEMENT OF DAVON GOODWIN

    Mr. Goodwin. Thank you.
    Good morning, Committee Chair Senator Tammy Baldwin and 
Ranking Member John Hoeven, the rest of the committee and 
staff. Senator Baldwin, thank you specifically for inviting me 
to bring the young farmer voice to this important conversation 
on diversifying farm income.
    My name is Davon Goodwin, and I produce Muscadine grapes, 
blackberries, fruit juice, and mixed vegetables on 42 acres at 
OTL Farms in Laurinburg, North Carolina. I am also the director 
of the Sandhills AGInnovation Center, a food hub in Ellerbe, 
North Carolina, that is working to reinvigorate the local farm 
economy and support the next generation of farmers.
    I serve as the board president of the National Young 
Farmers Coalition because the organization helped me to find my 
voice and provide essential community while starting out as a 
young farmer. I also serve on the USDA Beginning Farmer and 
Rancher Committee.
    I grew up in Pittsburgh, Pennsylvania, but have rooted 
myself in North Carolina for over a decade now. I hold a 
bachelor's degree in biology, with a concentration in botany, 
from the University of North Carolina at Pembroke. While in 
college, I enlisted in the Army Reserve, where I served 6 years 
and deployed to Afghanistan.
    August 31, 2010, my truck hit an IED. From the blast, I 
broke my L1 and L2 in my lower back and suffered a traumatic 
brain injury. I received a Purple Heart for my service. Farming 
saved my life. Once you put your hands in the dirt, you will 
never be the same again. Soil has a healing component that is 
almost indescribable.
    I started farming on leased land, but they wouldn't offer 
me a long-term lease. I planted grapes on a property that I 
will never get to harvest. Leasing land is precarious, 
especially for perennial agriculture such as grapes, where you 
don't see fruit until year number four.
    I knew that I needed to purchase my own land. I couldn't 
invest in fruit trees and grapevines without the security that 
I would be able to harvest when ready.
    When I started out farming, no one told me my student loan 
debt would have such a hurdle to getting land. But the reality 
is that my student loans were standing in the way of my land 
purchase. Bankers told me that I did not have enough farm 
income to purchase farmland. The only way I could get a loan 
would be to have an off-the-farm job.
    So I took the job at the Sandhills AGInnovation Center to 
save money and focus on reducing my debt. I even delayed 
marrying my wife until after purchasing my farmland because of 
her $70,000 student loan debt that would have further 
exacerbated my high debt-to-income ratio. The barriers to 
farming became not just financial, but personal.
    In 2019, I was able to purchase 42 acres of land in 
Laurinburg, North Carolina. Land is fundamental, but land is 
just the beginning. Farming is a capital-intensive undertaking. 
You need land, as well as tractors, equipment, plants, and 
inputs. Having an off-the-farm job has been essential to me 
capitalizing the farm, but it also keeps me away from the farm 
for 40 to 60 hours a week.
    I am in one of the poorest counties in the State of North 
Carolina, but that is the only place where I was able to find 
affordable farmland. Because of this, I am several hours from 
more lucrative markets like Charlotte or Raleigh.
    But I got into farming to serve my community. Local food 
builds local resiliency. The COVID-19 pandemic proved to us 
when our national food distribution network failed us, the 
local farmer guaranteed access to their community. That is why 
I am interested in growing our markets here in the southeast 
area of North Carolina and using value-added products like 
juice, jellies, and preserves, to reach our communities abroad 
and in our State.
    But this local infrastructure needs Government investment. 
Programs like the Local Agriculture Market Program support 
local and regional markets that are critical infrastructure to 
young farmers like me. Providing grants to producers and State 
and local organizations via the Farmers Market and Local Food 
Promotion Program is building stronger local and regional 
markets. I hope this program improves to ensure more 
accessibility and participation for small farmers and beginning 
producers, as well as small processors and distribution centers 
like the Sandhills AGInnovation Center. I ask you to increase 
the funding for FMLFPP and VAPG.
    Grape season lasts 6 weeks, but juice lasts for almost 2 
years. A production facility on-farm would increase the 
productivity and diversify my farm income. Unfortunately, there 
are barriers for a young farmer to access the Value-Added 
Producer Grant because there is a match requirement that is out 
of reach for me at this point.
    Farming is a risky undertaking. We must decrease the risk 
for new entrants into agriculture. You shouldn't have to bet 
your life on the farm.
    The most important risk management tool on my farm is crop 
diversification. The reality is with climate change 
intensifying, diversification of crops will save the family 
farm.
    Investing in young farmers and farmers of color. Young 
people and people of color want to farm. We must invest in 
their operations and ensure they have access to programs 
designed to help them. When you are allocating money, please 
invest in the Beginning Farmer and Rancher Development Program, 
which provides competitive grants to nonprofits and 
universities for beginning farmer training opportunities.
    Current funding only allows 25 percent of applicants to be 
funded, and I know from my work with the National Young Farmers 
Coalition that many projects are not submitted because of the 
match requirement.
    The Outreach and Assistance for Socially Disadvantaged and 
Veteran Farmers, also known as the ``2501 program,'' that 
provides Federal grants to organizations that work with farmers 
of color and veterans like me must also be funded to the 
maximum permissible levels. This program is particularly 
important as we consider the history of discrimination at USDA 
and the current reality that 95 percent of our farmers are 
white. Adding veterans to the 2501 program spreads the funding 
too thin.
    When I first visited FSA, I wanted to farm. The loan 
officer told me that perennials will not be something they will 
fund because of the risk. We need to improve the cultural 
competency of USDA and be prepared to talk to black farmers, 
young farmers, and those who are starting diversified 
businesses.
    The USDA Microloan, offering up to $50,000 at 1 to 2 
percent interest rate, is perfect for me as a beginning farmer. 
The application is very intimidating. In a 2017 National Young 
Farmers Coalition survey, 40 percent of farm owners reported 
that USDA applications are too burdensome. I would like to see 
the USDA modernize their services and put the application 
process online for quicker turnaround as well.
    In conclusion, the work that I do is not just farming, but 
advocating for other small farmers and beginning farmers like 
me.
    Thank you for listening and hosting this important hearing. 
I appreciate the opportunity to highlight my farming 
experiences and the challenges that affect farmers of color 
just like me.
    [The statement follows:]

                Prepared Statement of Mr. Davon Goodwin
    Good Morning Committee Chair Senator Tammy Baldwin and Ranking 
Member Senator John Hoeven, the rest of the Committee and Staff. Thank 
you for this opportunity to share my experiences as a young farmer, 
director of the Sandhills AgInnovation Center in Ellerbe, North 
Carolina, and Board President of the National Young Farmers Coalition. 
Senator Baldwin, thank you specifically for inviting me to bring the 
young farmer voice to this important conversation on diversifying farm 
income.
    My name is Davon Goodwin and I produce muscadine grapes, 
blackberries, fruit juice, and mixed vegetables on 42 acres at OTL 
Farms (Off the Land Farms) in Laurinburg, North Carolina. I am also the 
director of the Sandhills Ag Innovation Center, a food hub in Ellerbe, 
North Carolina, that is working to reinvigorate the local sustainable 
farm economy and support the next generation of farmers. I serve as 
Board President of the National Young Farmers Coalition because the 
organization helped me find my voice, share my story, and provided 
essential community while I was starting out as a young farmer. I also 
serve on the USDA Beginning Farmer and Rancher Committee.
    I grew up in Pittsburgh, Pennsylvania, but have rooted myself in 
North Carolina for over a decade now. I hold a B.S. degree from 
University of North Carolina at Pembroke where I studied Biology with a 
concentration in botany. While in college, I enlisted in the Army 
Reserve where I served for 6 years and was deployed to Afghanistan. My 
truck was hit by an IED (Improvised Explosive Device). From the blast, 
I broke the L1 and L2 in my back and suffered a traumatic brain injury. 
I received a Purple Heart for my service. But after the bomb went off, 
I thought I wouldn't be able to finish college. I had no reason to 
live. I was on many drugs to treat my injuries, and developed 
narcolepsy, a chronic sleep disorder characterized by overwhelming 
daytime drowsiness and sudden attacks of sleep. Thankfully, I found the 
stamina to finish my degree. And because I saw agriculture in my 
community, I thought that this could turn out to be a viable option for 
me in the future.
    Since I couldn't get a job due to my narcolepsy, I volunteered on 
farms. The owner of Fussy Gourmet Farms in Raeford, North Carolina took 
a chance on me and offered me a farm manager position even though I 
didn't have experience in production agriculture.
    Farming saved my life. Once you put your hands in the dirt, you'll 
never be the same again. Soil has a healing component that is almost 
indescribable.
    I served as farm manager for 4 years before starting my own grapes 
at Fussy Gourmet Farms. But unfortunately, they wouldn't offer me a 
long-term lease. I planted grapes on that property that I will never 
get to harvest. Leasing land is precarious, especially for perennial 
agriculture such as grape production where you don't see fruit until 
year four. I looked for leases on different properties, but they would 
only offer a 1 year lease. Because long-term leases like 10-20 years 
were not available in my area, I knew that I needed to purchase my own 
land. I couldn't invest in fruit trees and grapevines without the 
security that I would be on the land when it was time for harvest.
    When I got started in farming, no one told me my student loans 
would be such a hurdle. No one talks about student loans at a farm 
meeting. But the reality is that my student loans were standing in the 
way of my land purchase. Bankers told me that I didn't have enough farm 
income to purchase a farm. That the only way I could get a land loan 
would be to have an off-farm job. So, I left Fussy Gourmet Farm and 
took a job at the Sandhills AgInnovation Center to save money and focus 
on reducing my student debt. I even delayed marrying my wife until 
after purchasing my farmland because her $70,000 in student loan debt 
would have further exacerbated my high debt to income ratio. The 
barriers to farming became not just financial but personal.
    In 2019, I was able to purchase 42 acres of land in Laurinburg, 
North Carolina. Land is fundamental, but land is just the beginning. 
Farming is a capital-intensive undertaking--you need land as well as 
tractors and equipment, plants and inputs. Having an off-farm job has 
been essential to capitalizing the farm, but it also keeps me away from 
the farm for 40-60 hours a week. Farming only in the evenings and 
weekends holds my farm business back from its full potential and takes 
a toll on my mental and physical health.
                           access to markets
    I'm in one of the poorest counties in North Carolina, but that's 
the only place I was able to purchase land. Because of this, I'm 
several hours from the more lucrative markets of Charlotte and Raleigh. 
But I got into farming to serve my local community: to build community 
resilience, provide economic development and employ local people, and 
give our community access to healthy foods they've never had access to 
before. Local food builds local resiliency. The COVID-19 pandemic 
proved that to us. When our national food distribution networks failed 
us, the local farmer could guarantee access to food for their 
community.
    That's why I'm interested in growing our market opportunity here in 
Southeastern North Carolina and using value-added products to help our 
juice reach schools and community centers. But this local food 
infrastructure needs government investment.
    Programs like the Local Agriculture Market Program (LAMP) support 
local and regional markets that are critical infrastructure to young 
farmers like me. Providing grants to producers and state and local 
organizations via the Farmers Market and Local Food Promotion Program 
(FMLFPP) is building stronger local and regional markets. I hope this 
program improves to ensure more accessible participation for small and 
beginning producers, as well as small processors and distribution 
centers like Sandhill AgInnovation Center. I ask you to increase 
funding for FMLFPP and VAPG.
    Value-Added Production has been critical to the success of my farm. 
Grapes last for six weeks after harvest but the juice lasts for 2 
years. We wait 9 months to get a profit from this crop, so by making a 
value-added product of juice, we are able to make the income last 
longer. The value-add has allowed us to engage with more buyers. A 
production facility on-farm would increase productivity and revenue 
diversification, and the Value-Added Producer Grant (VAPG) could make 
that dream a reality. But unfortunately, there are barriers for a young 
farmer to access the program. There is a match requirement that is out 
of reach for me, and often the application is open during the growing 
season when I don't have the time to complete the significant 
application. The paperwork is just too big of a barrier for a small 
operation like mine. I ask that you consider additional funding for 
this program, paired with requirements for USDA to review how they're 
ensuring this program is accessible to new and beginning farmers.
                   diversification as risk management
    Farming is a risky undertaking. When I tell the banks about my farm 
and desire to provide for my local community, they ask me if I'm 
willing to take a gamble on that. We must decrease risk for new 
entrants to agriculture. You shouldn't have to bet your life for the 
farm.
    The most important risk management tool on my farm is crop 
diversification. We have to diversify so we can spread our risk out 
over the entire farm. I should point out that one of the reasons for 
that is that in North Carolina, Muscadine grapes are not insurable with 
the Risk Management Agency in my county and the Noninsured Crop 
Disaster Assistance Program (NAP) does offer lower premiums for me 
because I'm a beginning farmer, a qualifying veteran, and a Black 
farmer, but it's another bill that I can't afford. Whole Farm Revenue 
Insurance is better designed for more established farmers.
    The reality is that with climate change intensifying, 
diversification of crops/products will save the family farm. My farm is 
about an hour and a half from the ocean. When hurricanes come, they 
wreak havoc on the farm. Our grapes ripen during hurricane season. If 
we have nothing but grapes out there and a hurricane comes through, 
we're in serious trouble. Crop diversification is a way to make farming 
less risky. More diversification lets me sleep better at night.
            investing in young farmers and farmers of color
    If we can't make agriculture more viable for young people, then we 
cannot guarantee the future of agriculture in this country. If we need 
100,000 farmers over the next 10 years to replace our aging farmer 
population, we'll need to address the barriers that young farmers face. 
Young people and people of color want to farm, we must invest in their 
operations and ensure they can access programs designed to help them.
    When you're allocating money, please invest in the Farming 
Opportunities Training and Outreach (FOTO). The Beginning Farmer and 
Rancher Development Program (BFRDP), provides competitive grants to 
nonprofits and universities for beginning farmer training 
opportunities. Current funding allows only 25 percent of applicant 
projects to be funded, and I know from my work at the National Young 
Farmers Coalition that many more projects are not submitted because of 
the matching requirements and onerous application.
    The Outreach and Assistance for Socially Disadvantaged and Veteran 
Farmers and Ranchers Grant Program (also known as the ``2501 Program'') 
that provides Federal grants to organizations that work with farmers of 
color and veterans like me must also be funded to the maximum 
permissible levels. This program is particularly important as we 
consider the history of discrimination at USDA and the current reality 
that 95 percent of farmers are white.
    Other USDA programs, like Rural Development grants and funding for 
the USDA Rural Development, need further investment. Our rural 
communities are slipping away, and we need further investment to 
prevent school closings and consolidation because of population 
decrease. Invest in young farmers like myself so that we are able to 
return to these rural communities, especially in the South that has 
been left behind since the Civil War and where hundreds of Black 
farmers have lost their land and livelihoods. If we don't invest in 
thriving rural communities and make farming viable business, Black 
farmers will continue to decline. That is why we also need funding and 
administration action on enacting the 2018 Farm Bill Relending Program 
to Resolve Ownership and Succession in Farmland. This fund would help 
cover legal costs and succession plans to secure land ownership by 
farmers of color. To stem the tide of land falling out of the ownership 
of farmers of color, and to resolve heirs property challenges, I ask 
you to fund this program generously and to hold USDA accountable to 
implement it.
                       access to credit and usda
    When I started farming, I asked other farmers how they could afford 
to do this work. I was told not to use USDA programs at all, that I 
could get myself into trouble working with USDA. But USDA loans are 
low-interest and are meant for farmers who can't get credit with 
traditional banks. When I first went to FSA and said I wanted to farm, 
the loan officer said, ``We will never fund perennials, that's not 
going to happen.'' There was a lack of understanding about non- 
traditional operations. They were used to financing hog and chicken 
farmers. We need to improve the cultural competency of USDA staff so 
that they are prepared to talk with Black farmers, young farmers, and 
those starting diversified and non-traditional businesses.
    For years, I tried to use alternatives to USDA loans. I've used 
Kiva loans and GoFundMe, but there is a limit to crowdfunding. The 
company Steward approached me to offer me financing but at a 7 or 8 
percent interest rate. The USDA Microloan, offering up to $50,000 at 
between 1-2 percent interest rate is perfect for me as a young farmer, 
but the application is too intimidating. The National Young Farmers 
Coalition found in a 2017 survey that 40 percent of farm owners found 
USDA applications too burdensome.\1\ I would like to see USDA modernize 
its services and put the application process online. Quicker 
turnarounds are also needed.
---------------------------------------------------------------------------
    \1\ Ackoff, S., Bahrenburg, A., Shute, L., 2017. Building a Future 
With Farmers: Results and Recommendations From the National Young 
Farmer Survey: https://www.youngfarmers.org/wp-content/uploads/2019/03/
NYFC-Report- 2017_LoRes_Revised.pdf
---------------------------------------------------------------------------
    As I mentioned earlier, student loan debt is a huge barrier for 
young farmers accessing credit to build their farm businesses. Our 
monthly student loan payment is $1,000. That could be an equipment 
payment or another land payment. My wife is a nurse, and we're 
committed to the health of our community. We're not looking for a 
handout, but an acknowledgement of this commitment to our community and 
to our public service. Another aspiring farmer in my community said he 
could never farm because of his student loan debt. If young people are 
saddled with student loans, how will we replace our aging farm 
population?
             cooperative extension and technical assistance
    Another primary support to my farm business is having technical 
assistance from my local Cooperative Extension. I talk to Extension on 
a daily basis. Funding for Cooperative Extension has stayed relatively 
flat over the last 10 years, and should match the investment made to 
the Agriculture and Food Research Initiative (AFRI) that provides 
competitive research, education, and extension grants. This on-the-
ground assistance is a lifeline for my farm and countless others.
                               conclusion
    As I look back at my journey in agriculture, it has been one of 
struggle and perseverance. When I drive through my rural community all 
I see is farms disappearing left and right, and I often ask myself 
where this country will be if we lose our small farmers. There is no 
shortage of young farmers committed to guiding agriculture into the 
future, but we must invest in their success. The work that I do is not 
just farming but advocating for other small and beginning farmers like 
me. I thank you for listening and hosting this important hearing. I 
appreciate the opportunity to highlight my farming experiences and the 
challenges affecting young farmers of color like me.

    Senator Baldwin. Thank you so much, Mr. Goodwin, and thank 
you for your service.
    Next I am going to call upon Dr. John Lucey, who is the 
director of the Center for Dairy Research.
    Welcome, Dr. Lucey.
STATEMENT OF JOHN A. LUCEY, PH.D., DIRECTOR, CENTER FOR 
            DAIRY RESEARCH
    Dr. Lucey. Thank you, Chair Baldwin, Ranking Member Hoeven, 
Senators/subcommittee members.
    Hello, my name is John Lucey, and I am a professor at the 
University of Wisconsin-Madison and director for the Center for 
Dairy Research, the CDR.
    The CDR was founded in 1986 and supports the U.S. dairy 
industry with training, technical support, and applied product 
research. The CDR is the largest dairy food center in the U.S. 
and annually works with over 300 dairy companies. The center 
was set up as a partnership between dairy farmers, the cheese 
industry, and the university and is proud to be largely dairy 
farmer funded.
    The CDR has played an integral role in growing the 
Wisconsin cheese sector, which, in 2019, produced more than 818 
million pounds of specialty or value-added cheese. Last year, 
CDR trained more than 60 percent of all winners at the World 
Championship Cheese Contest, and the new $72 million CDR 
facility, which is under construction, was made possible by a 
partnership between the university, State of Wisconsin, and the 
dairy industry.
    In 2019, the Dairy Business Innovation Initiatives was 
launched as part of the 2018 farm bill by Senator Baldwin and 
others. The objectives of this initiative are to establish 
regional centers that would support dairy businesses and 
farmers with the development, production, marketing, and 
distribution of dairy products. The program includes direct 
grants to dairy businesses and dairy farmers to support 
creating specialty products.
    The CDR, in partnership with the Wisconsin Cheese Makers 
Association, was named by the USDA as one of those three 
centers after a competitive selection process. The other 
centers are in Tennessee and Vermont. We work closely with 
these two other centers in this initiative.
    We call our center the Dairy Business Innovation Alliance, 
or the DBIA, and we support the Upper Midwest States of 
Illinois, Iowa, Minnesota, South Dakota, and Wisconsin. And we 
have collaborators in each of the States' Department of 
Agriculture that assist the DBIA. We had over 40 letters of 
support from various dairy organizations and dairy companies 
across our region.
    Our overall goal is to improve the profitability of dairy 
farmers and small dairy businesses. The initial grant to 
establish the DBIA in 2019 was for $460,000, and the current 
award is for $6.13 million over a 3-year period.
    There are three overall objectives of the DBIA. One, to 
increase on-farm diversification. Two, to create more value-
added dairy products, such as specialty cheese. And three, to 
encourage more exports of dairy products. And we deliver on 
these objectives by two parts. One, technical assistance. And 
secondly, direct grants to businesses.
    Rebekah Sweeney of the Cheese Makers Association will be 
talking about the DBIA business grant programs coming up. These 
grants are at least 50 percent of the total value of each award 
we get.
    This past year, the DBIA has provided free entrepreneurial 
webinars to a total of 563 attendees that were dairy farmers, 
farms-to-producers, and other small dairy businesses. The focus 
of these webinars is to identify and share the local, State, 
and Federal resources, expertise, connections, and technical 
assistance; and to help individuals develop and implement their 
own ideas.
    Our dairy farmers are experts in areas like cow management, 
sustainability, animal health, nutrition, et cetera, but need 
our help and support to learn how to successfully make and 
market dairy products. This past year, we provided a series of 
these eight webinars under the title of ``Let's Get Started,'' 
and those webinar topics are listed in your materials.
    These topics cover the broad range of issues or challenges 
facing farmers that want to start their own on-farm dairy 
product manufacturing business or expanding their own small 
business. These webinars are available on demand for everyone 
on the DBIA website.
    This website also holds recorded interviews with farmers 
and processors that share their own experiences, lessons 
learned, and real-life success stories. The DBIA is expanding 
its webinar program this year to provide more in-depth training 
that will help dairy businesses expand their knowledge base as 
they look to commercialize their ideas and grow their 
businesses.
    The DBIA also supports several technical staff at CDR that 
work directly with dairy businesses to help them diversify and 
to develop value-added products such as specialty cheese and 
new dairy beverages. Those dairy businesses will have access to 
expertise in product development as well as licensed facilities 
at CDR to make small batches or prototypes for consumer 
testing. These are critical factors in the successful 
development of new value-added dairy products.
    The DBIA is also looking at additional cheese opportunities 
in international markets. To help our industry develop cheeses 
that will meet the taste and texture required by overseas 
consumers, we will first generate market intelligence and 
consumer analysis for these key export markets. Currently, the 
U.S. dairy industry exports only about 6 percent of total 
cheese production. We believe there is significant room to grow 
cheese exports.
    The goat and sheep cheese industry is a small, but growing 
sector in the U.S. It is dominated by small artisan-sized 
businesses. To help grow this sector, the DBIA will identify 
import substitution opportunities by analyzing the 
characteristics of imported sheep and goat cheeses and then 
assisting artisans in the development of equivalent or superior 
domestic versions.
    I truly believe this initiative provides dairy farmers that 
wish to diversify with the relevant technical and business 
advice, as well as financial grants to support our new or 
expanded dairy businesses. This initiative is very timely with 
the serious challenges that U.S. dairy farms have faced in 
recent years.
    As someone who grew up on a dairy farm, strengthening dairy 
farms is something that I am passionate about, and I thank you 
for supporting this initiative and welcome any questions you 
might have.
    Thank you.
    [The statement follows:]

                  Prepared Statement of Dr. John Lucey
    Thank you, Chair Baldwin, ranking member Hoeven, and Senators/
subcommittee members.
    Hello, my name is John Lucey and I am a professor at the University 
of Wisconsin-Madison and Director of the Center for Dairy Research 
(CDR). The CDR was founded in 1986 and supports the US dairy industry 
with training, technical support and applied product research. The CDR 
is the largest dairy foods center in the US and annually works with 
over 300 dairy companies. The Center was set up as a partnership 
between the dairy farmers, cheese industry and the University, and is 
proud to be largely dairy farmer funded. The CDR has played an integral 
role in growing the Wisconsin cheese sector, which in 2019 produced 
more than 818 million pounds of specialty, or value-added, cheese. Last 
year CDR trained nearly 60 percent of all winners of the World 
Championship cheese contest. The new $72 million CDR facility was made 
possible by a partnership between the University/State of Wisconsin and 
the dairy industry.
    In 2018, the Dairy Business Innovation Initiative was launched as 
part of the 2018 Farm Bill, by Senator Baldwin and others. The 
objectives of this initiative are to establish regional centers that 
would support dairy businesses and farmers with the development, 
production, marketing and distribution of dairy products. The program 
includes direct grants to dairy businesses and dairy farms support for 
creating specialty products. The CDR, in partnership with the Wisconsin 
Cheese Makers Association (WCMA), was named by the USDA as one of these 
centers after a competitive selection process. The other centers are in 
Tennessee and Vermont. We work closely with the other two centers in 
this initiative. We call our center the Dairy Business Innovation 
Alliance (DBIA) and we support the upper Midwest states of Illinois, 
Iowa, Minnesota, South Dakota and Wisconsin (we have collaborators in 
each State's Department of Agriculture that assist the DBIA). We had 
over 40 letters of support from various dairy companies and dairy 
organizations across our region. Our overall goal is to improve the 
profitability of dairy farmers and dairy businesses. The initial grant 
to establish the DBIA in 2019 was for $460,000 and the current award is 
for $6.13M over a three-year period.

    The three overall objectives of the DBIA are:

a) To increase on-farm diversification

b) To create more value-added dairy products, such as, specialty 
        cheeses

c) To encourage more exports of dairy products

    We deliver on these objectives by: (a) technical assistance and (b) 
direct grants to businesses.
    Rebekah Sweeney of the WCMA will be talking next about the DBIA 
business grant program (these grants are at least 50 percent of the 
total value of each award).
    This past year the DBIA has provided free entrepreneurial webinars 
to a total of 563 attendees that were dairy farmers, farmstead 
producers and other small dairy businesses. The focus of these training 
webinars is to identify and share the local, State and Federal 
resources, expertise, connections and technical assistance to help 
individuals develop and implement their own ideas. Our dairy farmers 
are experts in areas like cow management, sustainability and animal 
health/nutrition but need our support to learn how to successfully make 
and market dairy products. This past year we provided a series of eight 
webinars (called Let's Get Started). These webinar topics included:

  --Introduction to the DBIA (``who we are and how we can help'')

  --Business Planning (``how to setup a business'')

  --Marketing and Branding (``what to sell to consumers'')

  --Product Development (``making a new food product'')

  --Regulatory Issues (``getting your plant inspected and licensed'')

  --Food Quality and Safety (``making safe, high quality products'')

  --Economic Development Financing (``getting financial assistance'')

  --Exporting Dairy Products (``how to export my products'')

    These topics cover the broad range of issues or challenges facing 
farmers that want to start their own on-farm dairy product 
manufacturing or expanding a small business. These webinars are 
available on-demand for everyone on the DBIA website, https://
www.cdr.wisc.edu/dbia This website also hosts recorded interviews with 
farmers and processors that share their own experiences, lessons 
learned and real-life success stories. The DBIA is expanding its 
webinar program to provide more in- depth training that will help dairy 
businesses expand their knowledge base as they look to commercialize 
their ideas and grow their businesses.
    The DBIA also supports several technical staff at CDR that work 
directly with dairy businesses to help them diversify and to develop 
value-added products, such as, specialty cheese and new dairy 
beverages. Thus, dairy businesses will have access to expertise in 
product development, and licensed facilities to make small batches or 
prototypes for consumer testing. These are critical factors in the 
successful development of new value-added dairy products.
    The DBIA is also looking at additional cheese opportunities in 
international markets. To help our industry develop cheeses that will 
meet the taste and texture required by overseas consumers, we will 
first generate marketing intelligence and consumer analysis for key 
export markets. Currently, the US dairy industry exports only about 6 
percent of total cheese production. We believe there is significant 
room to grow cheese exports. The goat and sheep cheese industry is a 
small but growing sector in the US, dominated by small artisan-sized 
businesses. To help grow this sector, the DBIA will identify import 
substitution opportunities by analyzing the characteristics of imported 
sheep/goat cheeses and assisting artisans in development of equivalent, 
or superior, domestic versions.
    I truly believe this initiative provides dairy farmers that wish to 
diversify with the relevant technical and business advice, as well as 
financial grants to support a new/expanded dairy business. This 
initiative is very timely with the serious challenges that US dairy 
farms have faced in recent years. As someone who grew up on a dairy 
farm, strengthening dairy farms is something that I am passionate 
about. I thank you for supporting this initiative and welcome any 
questions that you might have.

    Senator Baldwin. Thank you, Dr. Lucey.
    Next I would like to turn to Ms. Rebekah Sweeney, 
communications, education, and policy director at the Wisconsin 
Cheese Makers Association.
STATEMENT OF REBEKAH SWEENEY, COMMUNICATIONS, 
            EDUCATION, AND POLICY DIRECTOR, WISCONSIN 
            CHEESE MAKERS ASSOCIATION
    Ms. Sweeney. Thank you so much, Chair Baldwin, Ranking 
Member Hoeven, and all of the members here today.
    I am Rebekah Sweeney, and I serve as communications, 
education, and policy director for the Wisconsin Cheese Makers 
Association.
    Since 1891, WCMA has served as an advocate, networking hub, 
and trusted provider of information and education for dairy 
product manufacturers. Today, our organization has grown to 
represent nearly 700 companies and cooperatives nationwide, 
including more than 300 sites across 33 States where dairy 
products are made from fresh milk or are processed and 
marketed. In addition, hundreds of member companies supply 
goods and services to our global industry.
    Our members range from artisans with just a few employees 
supporting their work to multinational corporations employing 
tens of thousands of people. Our members fulfill an essential 
mission, providing consumers with delicious, nutritious dairy 
foods--cheese, butter, yogurt, and their ingredients. Our 
members take great pride in being dependable partners to their 
farmer patrons and also premier employers in their communities.
    We are here today to talk about strategies to strengthen 
rural America, and the dairy businesses WCMA serves are a key 
component to that discussion. America's dairy industry anchors 
rural counties and small towns with more than 3 million jobs, 
delivering $159 billion in wages and $620 billion in overall 
economic impact nationwide.
    Despite those impressive numbers, you know the struggles of 
the dairy industry even prior to the pandemic. There are just 
32,000 dairy farms in the United States today, less than half 
of what we had two decades ago. Volatile prices for milk and 
dairy commodities have challenged farms and dairy processors to 
remain profitable.
    Chair Baldwin knows this all too well. The dairy farm 
losses in Wisconsin, America's dairyland, they have been 
significant. We have seen declines in the number of dairy farms 
of 15 percent in just the last 2 years. That decline, that 
issue is a major motivation for her work to create the Dairy 
Business Innovation Initiatives.
    WCMA partners with the Center for Dairy Research at the 
University of Wisconsin-Madison to run the Dairy Business 
Innovation Alliance, one of three Dairy Business Innovative 
Initiatives, which the U.S. Department of Agriculture funds at 
the direction of Congress. Our program serves dairy farmers and 
processors in a five-State region, including Iowa, Illinois, 
Minnesota, South Dakota, and Wisconsin.
    Chair Baldwin first secured support for the creation of 
these initiatives in the 2018 farm bill, and we thank her for 
shepherding this concept through the legislative process and 
for fighting for every dollar every year since to maximize its 
impact for farmers and cheese makers.
    You have already heard Dr. John Lucey of the CDR describe 
his team's work. WCMA's role is to deliver direct-to-business 
grants, a deliberate division of labor. As a trade association, 
we are not bound by grant policies like many colleges and 
universities requiring a significant percentage of funds be 
swept away to cover overhead costs.
    As a result, we believe we can be particularly good 
stewards, cost-effective stewards of the monies that we are 
given, holding administrative cost to the grant side of the 
program to just 2.5 percent of the overall allocation for our 
first 4 years in operation.
    The Dairy Business Innovation Alliance's targeted 
investments of small dollar grants are helping farmers and 
processors diversify their business models to become more 
profitable and resilient through periods of increasing 
volatility. In our first round of USDA funding, the Dairy 
Business Innovation Alliance received $450,000 and designated 
$230,000 in grants. We received 77 applications for awards, 
with total requests for funding topping $1.5 million.
    Through a competitive review process, we selected 13 
projects for awards of up to $20,000. Each project is 
highlighted in my submitted testimony, but I do want to 
highlight just a few now.
    First is Farm Life Creamery, born of Valley Side Farm. This 
eighth-generation family dairy farming operation has a new 
farmstead creamery in South Dakota, handcrafting small-batch 
artisan cheese using Grade A milk from their herd. With DBIA 
grant monies, Farm Life Creamery is launching production of 
paneer, which is a value-added dairy product that enables them 
to process more milk and reach a brand-new consumer audience.
    Triggered by the loss of markets amid the early days of the 
pandemic, Redhead Creamery began working with its competitors 
and colleagues to comingle Minnesota-made cheeses, forming full 
pallets to ship at reduced cost to buyers outside the Midwest. 
Grant monies are helping them offset the expense of some 
necessary updates at Redhead Creamery, updates that are going 
to expand their product consolidation endeavor and open new 
markets to small Minnesota cheese makers.
    Marcoot Jersey Creamery of Illinois is using grant monies 
to create a new high-protein and value-added frozen sports 
recovery product, made with whey from the milk of their 65 
Jersey cows. This family's goal is to enable the next 
generation of Marcoots to continue in the dairy industry.
    Similarly, Gurn-Z Meadow Farm of Wisconsin, a seventh-
generation family dairy farm, is using grant monies to launch a 
processing venture, Royal Guernsey Creamery, making value-added 
artisan butter with milk from their farm.
    We look forward to supporting many more projects like 
these. In the second round of USDA funding, the Dairy Business 
Innovation Alliance has scaled up, and we are receiving $6.1 
million for use over a 3-year period. We are going to be 
distributing $3.4 million in direct-to-business grants.
    With your support, we can deliver meaningful aid to dairy 
farmers and processors directly, diversifying their businesses, 
and fortifying an essential industry, which has been in 
distress for years. In turn, we can preserve, protect, and 
enhance the quality of life in rural America.
    We thank you for entrusting us with a part in that mission 
and for allowing us to provide an overview of our work today. I 
will also welcome your questions.
    [The statement follows:]

               Prepared Statement of Ms. Rebekah Sweeney
    Thank you, Chair Baldwin, Ranking Member Hoeven, and Members. I am 
Rebekah Sweeney, and I serve as Communications, Education and Policy 
Director for the Wisconsin Cheese Makers Association.
    Since 1891, WCMA has served as an advocate, networking hub and 
trusted provider of information and education for dairy product 
manufacturers. Today, our organization has grown to represent nearly 
700 companies and cooperatives nationwide, including more than 300 
sites across 33 states where dairy products are made from fresh milk, 
or are processed or marketed. In addition, hundreds of member companies 
supply goods and services to our global industry. Our members range 
from artisans with just a few employees to multinational corporations 
employing tens of thousands of people.
    Our members fulfill an essential mission: providing consumers with 
delicious, nutritious dairy foods--cheese, butter, yogurt, and dairy 
ingredients. Our members take great pride in being dependable partners 
to their farmer patrons, and premier employers in their communities.
    We're here today to talk about strategies to strengthen Rural 
America, and the dairy businesses WCMA serves are a key component of 
that discussion. America's dairy industry anchors rural counties and 
small towns with more than three million jobs, delivering $159 billion 
in wages and $620 billion in overall economic impact nationwide.
    Despite those impressive numbers, you know the struggles of the 
dairy industry, even prior to the pandemic. There are just 32,000 dairy 
farms in the United States today--less than half of what we had two 
decades ago, according to the U.S. Department of Agriculture (USDA). 
Volatile prices for milk and dairy commodities have challenged farms 
and dairy processors to remain profitable.
    Chair Baldwin knows all too well the dairy farm losses in 
Wisconsin, America's Dairyland, with the number of dairy farms 
declining 15 percent in just the past 2 years. That decline is a major 
motivation for her work, championing the Dairy Business Innovation 
Initiatives, which I am here to detail.
              about the dairy business innovation alliance
    WCMA partners with the Center for Dairy Research at the University 
of Wisconsin-Madison to run the Dairy Business Innovation Alliance, one 
of three Dairy Business Innovation Initiatives which USDA funds at the 
direction of Congress. Our program is designed to serve dairy farmers 
and processors in a five- state region, including Illinois, Iowa, 
Minnesota, South Dakota and Wisconsin.
    Chair Baldwin first secured support for the creation of these 
initiatives in the 2018 Farm Bill, and we thank her for shepherding 
this concept through the legislative process and for fighting for every 
dollar, every year since, to maximize its impact.
    You have already heard Dr. John Lucey of the Center for Dairy 
Research describe the incredible work of his team.
    WCMA's role is to deliver DBII direct-to-business grants to dairy 
farms and processors. This role for WCMA is by design: As a nonprofit 
trade association, we are not bound by the grant policies in place at 
most colleges and universities, requiring a significant percentage of 
funds to be swept away to cover overhead costs. As a result, we believe 
we are a particularly cost-effective steward, holding the 
administrative cost of the grant side of the program to just 2.5 
percent of the overall USDA allocation for our first 4 years in 
operation.
              small-dollars grants making a big difference
    The Dairy Business Innovation Alliance's targeted investments of 
small-dollar grants are helping farmers and processors diversify their 
business models to become more profitable and resilient through periods 
of increased market volatility. In our first round of USDA funding, the 
Dairy Business Innovation Alliance received $450,000 and designated 
$230,000 for grants. We received 77 applications for awards, with total 
requests for funding topping $1.5 million. Through a competitive review 
process, collaborating with representatives from each state department 
of agriculture in our region, we selected 13 projects, detailed below, 
for awards of up to $20,000 for reimbursement of approved expenses.

  --Bennett Valley Cheese, Gilmanton, Wisconsin -- Awarded $16,489
        Project Summary: Bennett Valley Cheese is building an artisan 
        cheese plant and on-site storefront that sources their milk 
        from a small Jersey dairy farm. They are making cheese curds 
        for sale in their store, as well as in local restaurants and 
        stores.

  --Carr Valley Cheese Company, La Valle, Wisconsin -- Awarded $16,489
        Project Summary: Carr Valley Cheese Company is creating a new 
        product line of flavored, pasteurized cheese using local 
        sheep's milk, an endeavor that will benefit their farmer 
        patrons and create new jobs in their processing facility.

  --Country View Dairy LLC, Hawkeye, Iowa -- Awarded $20,000
        Project Summary: In response to COVID, Country View Dairy LLC, 
        a small farmstead, family operated dairy plant, has developed 
        individual-serving frozen yogurt treats that are sold at retail 
        stores and from food trucks. They plan to expand the 
        production, sales and distribution of their frozen yogurt 
        treats through new cooperative agreements with partners and are 
        using grant monies to purchase a delivery cooler and design and 
        purchase branded packaging.

  --Crave Brothers Farmstead Cheese, Waterloo, Wisconsin -- Awarded 
        $12,500
        Project Summary: Crave Brothers Farmstead Cheese of Wisconsin 
        grew from Crave Brothers Farm, launched in 1978 as a 57-cow 
        operation run by two brothers. Successfully diversifying their 
        business over the past four decades, the three generations of 
        family members now running Crave Brothers Farmstead Cheese 
        continue to innovate for growth. The company is making use of 
        grant monies to develop and install an innovative water use and 
        circulation system to conserve a precious natural resource and 
        save money. This, in turns, provides a new case study for 
        others in industry of how more sustainable operations can also 
        be more profitable.

  --Ellsworth Cooperative Creamery, Ellsworth, Wisconsin -- Awarded 
        $16,489
        Project Summary: Ellsworth Cooperative Creamery is researching 
        and developing a new shelf- stable dairy product to diversify 
        its offerings for export markets in Asia. Ellsworth endeavors 
        to increase milk production, providing greater support for its 
        more than 300 farmer patrons.

  --Farm Life Creamery LLC, Ethan, South Dakota -- Awarded: $16,514
        Project Summary: Born from Valley Side Farm, an eighth-
        generation family dairying operation, Farm Life Creamery 
        handcrafts small batch artisan cheese using Grade A milk from 
        their Holstein herd. With DBIA grant monies, Farm Life Creamery 
        is launching production of paneer, a value- added dairy product 
        that will enable them to process more milk and cater to a new 
        consumer audience.

  --Marcoot Jersey Creamery, Greenville, Illinois -- Awarded $20,000
        Project Summary: Marcoot Jersey Creamery of Illinois is using 
        grant monies to create a new, high protein and value-added 
        frozen sports recovery product, made with whey from the milk of 
        their 65 milking Jersey cows. The family's goal is to enable 
        the next generation of Marcoots to continue in the dairy 
        industry.

  --McCluskey Brothers, Hillpoint, Wisconsin -- Awarded $15,031
        Project Summary: McCluskey Brothers is purchasing new equipment 
        designed to produce and package a new value-added dairy 
        product--shredded organic cheese--from their grass-fed herd in 
        its farmstead cheese plant and custom cheese conversion 
        facility.

  --Metz's Hart-Land Creamery LLC, Rushford, Minnesota -- Awarded 
        $20,000
        Project Summary: Metz's Hart-Land Creamery, a farmstead 
        processing operation solely using the milk from the Metz 
        family's 220 cows, is using grant monies to purchase a cheese 
        vat to boost cheese curd production and grow sales.

  --Redhead Creamery LLC, Brooten, Minnesota -- Awarded $20,000
        Project Summary: Triggered by the loss of markets amid the 
        early days of the pandemic, Redhead Creamery began working with 
        its competitors and colleagues to comingle Minnesota- made 
        cheeses, forming full pallets to ship at a reduced cost for 
        buyers outside the Midwest.
        Grant monies are helping to offset the expense of some of the 
        necessary facility updates for this continuing endeavor, which 
        promises the Minnesota cheesemakers involved a larger, more 
        diverse and more stable consumer base for their value-added 
        dairy products.

  --Royal Guernsey Creamery LLC, Columbus, Wisconsin -- Awarded $20,000
        Project Summary: Gurn-Z Meadow Farm of Wisconsin, a seventh-
        generation family dairy farm, is using grant monies to launch a 
        processing venture, Royal Guernsey Creamery, making value- 
        added artisan butter with milk from their farm at nearby Sassy 
        Cow Creamery. The owners' goal is to create new revenue streams 
        to ensure their farm can continue its operations for 
        generations to come.

  --Taste and See Creamery, Boyceville, Wisconsin -- Awarded $20,000
        Project Summary: Taste and See Creamery is using grant monies 
        to purchase a vat pasteurizer for the new on-farm creamery it 
        is building on its grass-fed grazing dairy farm. Taste and See 
        Creamery also plans to host dairy farm tour groups.

  --Yodelay Yogurt, LLC, Madison, Wisconsin -- Awarded $16,489
        Project Summary: Yodelay Yogurt is designing and building a 
        custom case packer, to accommodate business growth and support 
        increased milk processing, as demand for their value-added, 
        artisan yogurt continues to increase.
                     scaling up for maximum impact
    We look forward to supporting many more projects in the years to 
come. In the second round of USDA funding, the Dairy Business 
Innovation Alliance has scaled up, receiving $6.13 million for use over 
a three-year period, and we will distribute more than $3.4 million in 
grants to dairy farmers and processors.
    An abundance of great ideas awaits the necessary boost those grants 
will provide. With your support, we can directly deliver meaningful 
assistance to dairy farmers and processors, diversifying their 
businesses and fortifying an essential industry which has been in 
distress for years. In turn, we have the opportunity to preserve, 
protect and enhance the quality of life in rural America.
    We thank you for entrusting us with a part in that mission, and for 
allowing us to provide an overview of our work today. Now, I welcome 
your questions.

    Senator Baldwin. Thank you, Ms. Sweeney.
    Next I want to turn to Mr. Jason Weller, the president of 
Truterra Land O'Lakes, Inc.
STATEMENT OF JASON WELLER, PRESIDENT, TRUTERRA LAND 
            O'LAKES, INC.
    Mr. Weller. Good morning, Chairwoman Baldwin, Ranking 
Member Hoeven, Senator Tester, and members of the committee. 
Thanks very much for the opportunity to participate in today's 
hearing.
    My name is Jason Weller, and I serve as a member here of 
the Land O'Lakes cooperative system and the lead for our 
sustainability business here at Land O'Lakes named Truterra. I 
hope I am able to convey in the next few minutes a little bit 
of the passion I know I have, but also my colleagues and my 
coworkers at Land O'Lakes, our passion on this topic in 
particular, and why we are passionate, in the end, is because 
we are a farmer cooperative.
    So let me first just outline a little bit for the committee 
and for other attendees and for the audience about Land 
O'Lakes. Of course, we are a dairy food company, but we are 
more than a dairy food company. We are actually foundationally 
a dairy cooperative. We are about to celebrate our 100th 
anniversary. We were constituted as a creamery 100 years ago in 
St. Paul, Minnesota.
    But beyond being a dairy cooperative, we are also an 
agricultural retail cooperative, a cooperative of cooperatives. 
We have over 800 Ag retailer cooperatives and independent 
retailers who are owners and members of the Land O'Lakes 
family.
    We are also Purina. So we are the large animal nutrition 
business with facilities across the Midwest and across the 
United States providing for nutrition in products that 
livestock producers need to feed their growing herds and their 
animals.
    We are also WinField United, a crop inputs and crop 
insights company that provides the technologies in crop inputs 
that the ag retailers in turn help use to ensure a productive 
and profitable crop production system for tens of thousands, 
hundreds of thousands of farmers across the United States.
    And we are Truterra. Truterra is a sustainability business 
where we work with our member-owners across the United States 
to advance both farm sustainability and the sustainability of 
the supply chain.
    Why we are passionate about this particular topic is 
because in the end, at the end of the day, we don't just work 
in rural America, Land O'Lakes is rural America. We work out of 
10,000 rural communities across the United States. We have 
10,000 employees that are working in rural communities, in many 
cases are farmers themselves.
    We have coworkers and colleagues that work in processing 
facilities and mills that during the midst of the pandemic 
still showed up to work, worked extra hours, notwithstanding 
the stress of their own concerns and impacts on their families, 
did the way we know how to do, which is to roll up the sleeves 
and get to work and to feed a growing world.
    So we are approaching this concept on vitality really 
holistically, but also strategically. At a high level, we have 
three main strategies that Land O'Lakes is pursuing. So, first, 
it is about connecting rural America. Second, it is about 
innovating sustainability solutions. And third, it is about 
building public-private partnerships that co-invest in these 
solutions we need on the ground.
    So in my testimony, I had more specific examples of the 
types of projects we are leading. I am going to just very 
briefly highlight a few of those.
    So, first, connecting rural America. As, Senator Baldwin, 
you had in your opening remarks, it is ensuring and really 
finishing the job of connecting all Americans to the 21st 
century superhighway, like the rural electrification 
initiatives and its interstate highway system, seeing access to 
the Internet, whether you are in rural or urban America, is 
foundational not just to be able to access the global market, 
but also to ensure all Americans have access to quality of 
life, access to educational opportunities, access to business 
opportunities, access, of course, to educational opportunities.
    And that is why Land O'Lakes has partnered with over 150 
organizations to launch the American Connection Project, first 
to advocate for sound Federal policy and investments, Federal 
investments. Over $80 billion are needed to finish the job to 
connect all Americans to the superhighway of the 21st century. 
But beyond advocacy, this coalition has also got to work.
    So just in the last year, we collectively have turned on 
over 3,000 Wi-Fi hotspots in rural America to allow for 
families to get access to telemedicine appointments, to allow 
for school children to get access to schooling and online 
learning opportunities, and really just to be able to access 
the Internet.
    And beyond access to the Internet, we see the need now to 
get past advocacy also to do what we do best and just get to 
work and help advance the ball here on connectivity. That is 
why we launched this week the American Connection Corps, which 
is a really innovative approach I hope to be able to get to 
more in my remarks.
    Beyond connectivity, we are also innovating on 
sustainability solutions. So, Truterra, with our Ag retailer 
network, is partnering with our retailers and other private 
sector companies and public agencies to bring conservation and 
stewardship solutions to thousands of farmers across the United 
States. And we see sustainability, conservation, in addition as 
a new revenue source. So connecting farmers, for example, to 
now carbon offsets, to water quality improvement incentives, 
where now farmers can be compensated for good environmental 
sustainability and now create new sources of income and revenue 
on their farms.
    And third and final, we are taking what has now 
traditionally been a waste stream and a regulatory pain point 
for dairy producers, their manure management, and innovating 
and finding new, creative ways with public partners and private 
partners to create new sources of income, turning what is a 
waste stream into an income stream. Through our barn-to-bio gas 
project in California, we are now hoping to convert methane 
into compressed renewable natural gas, powering California, but 
also offsetting the greenhouse gas emissions from our dairy 
farms.
    In the end, I hope to be able to convey during today's 
hearing that Land O'Lakes is not just a 100-year-old company. 
We see ourselves as 100 years young. We are thinking for the 
next 100 years. We are trying to come up with the innovative 
solutions we think will drive vitality, the economic, social, 
and environmental vitality that is needed in our rural 
communities, of course for the economic well-being of our 
member-owners, but also for the well-being of these communities 
that we believe are foundational not just to secure the future 
of America, but also to feed a growing world.
    Thanks very much.
    [The statement follows:]

                 Prepared Statement of Mr. Jason Weller
    Chairwoman Baldwin, Ranking Member Hoeven and Distinguished Members 
of the Subcommittee, I am Jason Weller, President of Truterra, LLC, the 
sustainability business at Land O'Lakes, Inc., one of the nation's 
largest farmer-owned cooperatives, and former Chief of the Natural 
Resources Conservation Service (NRCS) at USDA. With a cooperative 
footprint in more than 10,000 rural communities, I appreciate the 
invitation to speak about rural vitality and the opportunities for 
farmers to diversify on-farm income by capitalizing on and profiting 
from emerging markets.
    As a farmer- and ag retailer-owned cooperative with deep roots 
across the countryside, rural vitality is an important topic to Land 
O'Lakes. We see the opportunity: when we invest in rural America, every 
American benefits. Rural communities are key to our food security--the 
communities where our members work and where they call home. If we want 
to begin to address the socio-political, economic, and environmental 
challenges our country is facing, we need to carefully consider how we 
collectively--public and private institutions--create opportunities to 
improve the quality of life and economic opportunities in both urban 
and rural America. As a farmer-owned cooperative, Land O'Lakes is 
keenly interested in partnering with Federal and State officials to 
create innovative solutions for farmers and rural communities. Land 
O'Lakes is focusing on these economic, quality of life, and 
environmental challenges by focusing on:

  --Connecting Rural America with the 21st Century's superhighway, the 
        Internet, to improve the quality of life of our farmer members 
        and the communities where they live. But its more than just 
        connectivity. Increased bandwidth unlocks value-added 
        agriculture and allows farmers to access new tools and 
        capabilities increase food production while minimizing 
        environmental impact.

  --Innovating sustainability solutions to improve both farmer 
        profitability and environmental quality, such as reducing GHG 
        emissions, drawing down carbon from the atmosphere, and 
        protecting water quality.

  --Building public-private partnerships at the Federal and State 
        levels to leverage the expertise and ingenuity of our farmer 
        network and science, and the resources of public agencies.
                  broadband as economic infrastructure
    Increasingly, the key to rural vitality is the ability to tap into 
technology and innovation. Bringing broadband access to rural 
communities is absolutely critical to the success of these communities. 
Rural America cannot compete on a global scale without this access. The 
COVID- 19 pandemic brought the digital divide to the forefront, as we 
all now heavily rely on high-speed Internet for critical facets of 
everyday life from healthcare to education, to working to 
entertainment. We can't leave these communities behind, and broadband 
must be seen as essential infrastructure, similar to roads and bridges.
    Broadband is also critical to the expansion and success of 
improving on-farm sustainability and profitability of farmers. The 
accessibility and utilization of next-generation technology, supported 
by strong broadband connectivity is key to this success. This 
connectivity is essential, and currently lagging far behind. According 
to Federal Communications Commission estimates, more than 14 million 
Americans lack Internet connectivity. By some estimates, the number of 
Americans without access to high-speed Internet is even higher than FCC 
projections--experts believe the number could be twice as high. To 
address the connectivity gap in the near-term, Land O'Lakes, our 
agriculture retail-owner network and other organizations, have come 
together to provide free Wi-Fi access points at over 3,000 locations in 
49 states to help our neighbors connect to telehealth, remote learning 
and other critical services during this pandemic. However, this is a 
short-term solution for a long-term problem.
    Through our American Connection Project, Land O'Lakes along with 
more than 150 other partners, is advocating for Internet access for all 
Americans. The success of America's rural communities is inextricably 
linked to the security and prosperity of our country as a whole, and a 
robust Federal investment is imperative to help close the divide. As a 
coalition, we have been advocating for at least $80 billion to connect 
everyone across the country, and only the Federal government can make 
this consequential investment. We must also fix the Federal broadband 
maps, which are relied upon to dole out these scarce government 
resources. And finally, we need to ensure coordination between 
government agencies as they deploy public dollars to build these 
essential high-speed networks.
    In addition to our advocacy work with state and Federal 
legislators, we recognize as a Coalition that direct support to 
communities is needed to unlock opportunities around Internet 
connectively and to close the digital divide. That's why we're excited 
about the launch of the American Connection Corps (ACC). ACC, launched 
on April 27th, 2021, is an effort to connect 50 young fellows in 12 
states to their hometowns for a two-year pilot project through Lead for 
America's proven Homecomers model. During their 2 years as ACC Fellows, 
this new generation of community leaders will work to increase digital 
access and inclusion in their communities by coordinating local 
partners to access Federal and state resources for broadband access or 
delivering digital literacy to marginalized members of the community. 
Over the next several years, we hope this program will both grow 
significantly and provide important insights that could inform 
policymakers at both the state and Federal levels. The goal is to 
create a scalable, successful model for economic development--
demonstrating one more way to make an impact in communities critical to 
our success as a nation.
    At Land O'Lakes, we are building and executing a strategy based in 
precision agriculture and conservation. We know that the only way to 
protect water quality, sequester carbon, reduce GHG emissions and 
maximize farmer profitability will be through precision conservation 
solutions, fueled by technology. None of these advancements are 
possible without broadband.
    Connectivity at the farm gate allows farmers to connect equipment 
to GPS, ensuring that their machinery is using the most efficient 
routes to optimize seeding and crop input applications. Connectivity 
enables usage of drones to scout crops and more effectively identify 
pest and disease outbreaks, variable rate application to reduce input 
use, and helps farmers connect with Farm Management Information Systems 
to improve the in-season management of their irrigation water and 
fertilizer applications. A 2019 USDA report found that 40 percent less 
fuel is used due to variable rate technologies, 20 to 50 percent less 
water is used due to precision agriculture and an 80 percent reduction 
in chemical application. When it comes to environmental improvements in 
agriculture and connectivity, they must go hand-in-hand.
land o'lakes, truterra and trucarbon: a farmer-focused, private sector 
                                approach
    Land O'Lakes and Truterra are focused on helping farmers identify 
and adopt farm stewardship practices that improve their economic and 
environmental sustainability. This in turn helps our farmers both 
become more profitable individually while also competing in a 
marketplace that places a greater premium on sustainably grown 
products.
    Truterra is built on the idea that farmer return on investment can 
generate environmental return on investment. With access to 
conservation expertise and the latest tools and technology, farmers can 
make decisions about managing their land, acre-by-acre, such as 
adopting minimum or no- till practices, optimizing fertilizer 
management, or planting cover crops, that can both maximize yields and 
profitability and expand stewardship.
    There is a growing mainstream enthusiasm for, and embrace of, the 
major role that farmers and ranchers can play in mitigating and 
offsetting the impacts of climate change, as evidenced by the number of 
carbon credit-focused offerings that have launched in the past 12 to 18 
months. And, we are seeing more and more disruption, volatility and 
demand change in traditional commodities markets, which is putting more 
pressure on farmers and making it tougher for them to stay in business 
and plan from year to year. Meanwhile, public companies are 
increasingly being evaluated not only on strong financial performance 
but on environmental, social and governance (ESG) factors.
    Taken together, these factors are driving interest across the board 
in a new class of environmental commodities, rooted on the farm. 
Farmers have always responded to market demands. They will produce what 
the market seeks, if they can do so while remaining economically 
viable. As a member-owned cooperative, our challenge is to help enable 
farmers' role as carbon removers in the same manner we help enable them 
to feed, clothe and fuel our society. That is why we have been quietly 
building and executing a strategy based in precision agriculture and 
conservation since the launch of the Truterra business in 2018.
    One example of how we are partnering with agriculture retailers and 
leveraging technology to improve profitability and stewardship is 
through one of our new projects in Iowa. In Dubuque County, Iowa, 
Truterra is working with the Dubuque Soil & Water Conservation District 
and one of our ag retailer partners, Innovative Ag Services, on a 
first-of-its-kind, pay-for-performance program. This partnership 
supports farmers with adopting more sustainable farming practices that 
can improve soil health and water quality by strategically installing 
new conservation in fields where farmers can make the biggest positive 
water quality impact. The program then financially rewards producers 
for measurable improvements. This is the future of agricultural 
conservation--one that shows agronomic and profitability benefits for 
producers with precision adoption of new practices, delivered through 
public and private partners.
                               trucarbon
    Earlier this year, Land O'Lakes announced what was a natural 
offshoot of our sustainability business with the launch of TruCarbon. 
TruCarbon represents the first and only farmer-owned carbon program in 
the U.S. TruCarbon offers buyers carbon credits that are created using 
leading soil and conservation science, and precision data and 
verification methods. TruCarbon also maximizes the value and return for 
farmers with premium carbon credit value.
    TruCarbon provides farmers new opportunities to be recognized and 
financially rewarded for their stewardship, creating new revenue 
opportunities for farm families as they adopt soil health practices and 
increasing the focus on carbon storage in crop fields. It's through 
innovative approaches such as this that our farmer cooperative system 
can help ensure that farmers' businesses are profitable, our rural 
communities are resilient, and the land, air and water are healthy for 
future generations.
    TruCarbon launched with Microsoft as its first secured buyer to 
purchase carbon in 2021. For this initial launch, participating farmers 
receive $20 per ton of carbon with payments this summer for this first 
tranche of credits. Qualifying farmers may be compensated for carbon 
sequestration retroactively up to 5 years based on the soil health 
practices they adopted in prior growing seasons. For maximum farmer 
convenience, Truterra will handle soil testing and other activities 
designed to ensure maximum credit quality and value.
    For Land O'Lakes, TruCarbon and our Truterra business unit are part 
of a long-term strategy to mitigate against several risk factors that 
have the potential to severely disrupt the strength and viability of 
agriculture and agriculture businesses. This builds on efforts underway 
across Land O'Lakes to support and position our member-owners, farmers 
and ag retailers for success in this operating environment, future-
proofing their businesses--and ours--while respecting their 
independence, privacy and their ability to make a living.
                 land o'lakes and calbio collaboration
    In 2018, Land O'Lakes, Inc. and California Bioenergy LLC (CalBio) 
launched a first-of-its-kind collaboration to support the financing, 
installation and management of on-farm methane digesters to generate 
renewable compressed natural gas (``R-CNG'') fuel in California--
creatingan innovative farmer-led model for ``barn to biogas'' that can 
shape nationwide solutions to agricultural methane emissions reduction 
and unlock new revenue streams for dairy farmers.
    Manure storage on dairy farms result in the release of methane, a 
highly potent greenhouse gas. This collaboration brings technology, 
operational experience and capital to help dairy farmers build 
digesters and methane capture projects to convert this methane to a 
beneficial use as renewable natural gas (RNG). As one of the nation's 
largest agricultural cooperatives, Land O'Lakes is uniquely positioned 
to tap into the potential power of California dairy farmers to generate 
renewable energy from farm waste. CalBio provides the expertise needed 
to develop, execute and manage on-farm methane digesters, as well as 
market R-CNG credits in California, in a manner that is cost effective 
for farmers. This partnership with CalBio also allows Land O'Lakes 
dairy member-owners in California to meet new state standards that call 
for a 40 percent reduction in dairy and livestock manure-related 
methane emissions from 2013 levels by 2030.
    In December 2018, the State of California provided a grant totaling 
more than $90 million to help expand interconnection pipeline needed 
for the project. The dairy biomethane projects are designed to send 
dairy biogas to a centralized processing facility where it will be 
upgraded to RNG and injected into the local gas utility's pipeline. The 
RNG is then marketed as an alternative fuel for heavy-duty trucks, 
buses, and eventually off-road and farm equipment.
    Combined the 10 digesters in the Land O'Lakes-CalBio partnership 
will eliminate over 1.8 million metric tons of CO2 equivalents over 10 
years. That's equivalent to the GHG emission of approximately 39K 
passenger vehicles per year. This partnership also provides on-farm 
income diversification for our members. Based on partnership type, our 
dairy members could see anywhere from $50-150/cow/year based on credit 
sales and investments in the projects once they are fully online.
    This is just one example of how innovative public/private 
partnerships can bring producers additional revenue, help them meet new 
regulatory standards, and reduce greenhouse gases.
                               conclusion
    Most U.S. farm households are unable to rely on farm income alone, 
turning what was once a proud way of life into a rushed part-time job. 
In 2018, 82 percent of U.S. farm household income came from off-farm 
work up from 53 percent in 1960, according to the U.S. Department of 
Agriculture. We must find ways to diversify farm income in new and 
innovative ways. We owe the men and women who are putting food on our 
tables at least this much for their efforts.

    Senator Baldwin. Thank you, Mr. Weller.
    Next I would like to call upon Mr. Brian Carroll. Mr. 
Carroll is the director of Grand Farm Research and Education 
Initiative.
STATEMENT OF BRIAN CARROLL, DIRECTOR, GRAND FARM 
            RESEARCH AND EDUCATION INITIATIVE
    Mr. Carroll. Madam Chairman Baldwin, Ranking Member Hoeven, 
and distinguished Senators, thank you for the opportunity to 
testify today.
    My name is Brian Carroll, and I am the director of the 
Grand Farm Education and Research Initiative, located near----
    Senator Baldwin. I believe that your microphone might not 
be on.
    Mr. Carroll. Test. Maybe just a little bit closer? Okay.
    Okay. Let me start over again.
    Madam Chairman Baldwin, Ranking Member Hoeven, and 
distinguished Senators, thank you for the opportunity to 
testify today.
    My name is Brian Carroll, and I am the director of the 
Grand Farm Education and Research Initiative, located near 
Fargo, North Dakota. It is an honor to be with you here today 
and tell you about the Grand Farm and how we are engaging 
private companies in collaborative work to strengthen the Ag 
tech ecosystem in North Dakota.
    In March of 2017, at 1 Million Cups Fargo, Barry 
Batcheller, a local entrepreneur and founder of Phoenix 
International, issued a challenge to our community. Batcheller 
challenged us to define a ``major,'' a specialty that attracts 
innovation and businesses into our area. In the following days, 
leaders came together and discussed how our region's major 
could center around advanced technology in agriculture.
    Emerging Prairie, a local nonprofit with a mission to 
energize communities, worked with local, State, and national 
leaders to define five strategic pillars: developing an 
advanced agriculture technology ecosystem, creating a coding 
and robotics school, establishing autonomous friendly policy, 
bringing world-class venture capital organization into the 
region, and developing the Grand Farm innovation site.
    Our first substantial investment from Microsoft, with $1.5 
million commitment over 3 years, kicked off the development and 
establishment of the Grand Farm. Microsoft agrees with us that 
the establishment of the Grand Farm takes an entire ecosystem 
to initiate change and includes private companies, Government 
agencies, and a network of startups and entrepreneurs with a 
common goal and desire to find solutions for the world's 
largest problems, including food insecurity.
    Last summer, in the midst of COVID, we launched the Grand 
Farm test site. Working with North Dakota State University, 
CHS, USDA's Agricultural Research Service, we identified 
several core projects. Last year, we completed over 40 projects 
with 9 different partners, and we were able to hold 22 outdoor 
events.
    As the growing season begins this year, Grand Farm will 
deploy over 200 projects this year on over 130 acres. Our 
projects this summer will include precision agriculture 
technologies, robotics, autonomous systems, biologics, big 
data, satellites, Internet of Things, and connectivity 
solutions. The projects on the Grand Farm seek to solve the 
pain points of farmers throughout the region, to increase 
efficiency, which leads to on-farm income and reduced expenses.
    Additionally, with the reopening of our region, we have 66 
outdoors events planned this year, many of which will be 
livestreamed. We invite you and the members of the committee to 
participate in these events any way that you might be able to.
    Since the launch of the Grand Farm initiative and with the 
expansion of virtual capabilities, we are tracking people from 
all around the world. We realize that our position as a neutral 
platform provides a unique place for innovators from all types 
of organizations to dream of the future and work together to 
create it.
    As for this committee's interest with regards to Department 
of Agriculture programs, I will highlight one opportunity. 
Rural Development will announce soon the Rural Innovation 
Stronger Economy Grant Program. The goal for this farm bill 
program is in strong alignment with the five strategic pillars, 
as it seeks to build innovation centers, which improve economic 
resiliency in rural America.
    We intend to apply for this opportunity, and when the 
program is announced in the coming months, in our RISE 
application, we want to leverage private investments of our 
corporate partners and start building a long-term campus--in 
building a long-term campus for the Grand Farm. It is our 
vision to have an innovation center surrounded by demonstration 
fields, research plots, and creative places for start-ups and 
entrepreneurs to identify challenges and work collaboratively 
to find those solutions. In the coming months, the Grand Farm 
will be selecting a long-term site for the future campus.
    At the heart of the Grand Farm is the idea of innovation 
through collaboration. It is important for us to promote 
innovation through our ecosystem and across the region. Grand 
Farm is in preliminary talks with other Midwest innovation 
catalyzers about building a Midwest Ag-tech innovation 
corridor. This corridor would facilitate communications and 
dialogue and allow us to work together to solve problems across 
the region.
    We are talking with BioKansas, Wabash Heartland Innovation 
Network, AgriNovus, the Midwest Row Crop Collaboration, among 
others. We would welcome Midwest innovation catalyzers to reach 
out to us if they would like to participate and learn more.
    In the few years since Barry Batcheller challenged the 
Fargo region, the Grand Farm has several key successes. Because 
of my short time, I will just highlight one that we are really 
proud of.
    Since launching in April of 2020, Emerging Digital Academy 
has graduated 31 students over 3 cohorts and has had a 
graduation rate of 92 percent. Before entering into this 
program, these learners had an average salary of $24,000. Upon 
getting their new jobs out of the program, they are now making 
over $50,000. This is an exciting activity that we are focused 
on.
    Through our collaboration with private companies, start-
ups, and entrepreneurs, we continue to focus on how we can 
provide the most value to agriculture technology, industry, and 
farmers. We are discovering that the highest value is providing 
a neutral platform that facilitates collaboration between 
private industry, higher education, and Government with few to 
no barriers to our entry.
    Thank you for this opportunity to be here today. I would be 
happy to answer any questions at the appropriate time.
    [The statement follows:]

                Prepared Statement of Mr. Brian Carroll
    Madam Chairwoman Baldwin, Ranking Member Hoeven and distinguished 
Senators, thank you for the opportunity to testify before this hearing 
of the Committee on Appropriations Subcommittee on Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies about 
'Diversifying On-Farm Income: Opportunities to Strengthen Rural 
America.'
    My name is Brian Carroll, and I am director of the Grand Farm 
Education and Research Initiative located near Fargo, North Dakota. It 
is an honor to be with you today.
    The Red River valley has a long history of agricultural innovation 
with locally grown companies like Titan Machinery, Bobcat, and Steiger 
Tractor Company. Building on that history of innovation, the Grand Farm 
accelerates the research and innovation to develop technologies of the 
farm of the future by producing solutions for the big challenges facing 
the agriculture industry. Essentially, we provide a neutral platform 
for projects and demonstrations that energizes collaboration among 
businesses, organizations, and researchers.
                       history of the grand farm
    In March of 2017 at 1 Million Cups Fargo, Barry Batcheller, a local 
entrepreneur and founder of Phoenix International, issued a challenge 
to our community. Batcheller challenged us to define a ``major''--a 
specialty that attracts new businesses and innovation to their area. In 
the days following farm, business and civic leaders came together and 
discussed how our region's major could center around advanced 
technology in agriculture.
    Emerging Prairie, a local nonprofit with a mission to energize 
communities, took the lead in bringing the major for the region to 
life. Emerging Prairie worked with local, state, and national leaders 
to define five strategic pillars:

  --developing an advanced agriculture technology ecosystem creating a 
        coding and robotics school

  --establishing autonomous friendly policy

  --bringing a world-class venture capital organization to the region, 
        and developing the Grand Farm Innovation Site.

    Immediately following the definition of these priorities, a local 
farmer donated 40- acres of farmland 6-miles south of Fargo, to help 
launch the Grand Farm test site. A steering committee formed to guide 
the initiative:

  --Lauris Molbert, Venture Partner, Arthur Ventures--Steering 
        Committee Chair

  --Christi Offutt, Chair of RD Offutt Co.

  --Barry Batcheller, Chair of Appareo

  --Tammy Miller, CEO of Border States Electric

  --Jake Joraanstad, Cofounder of Bushel

  --Eric Hardmeyer, CEO Bank of North Dakota

  --Kevin Siffert, Founder of Fargo Automation

  --Mike Derheim, Cofounder of The Nerdery & Prime Digital Academy

  --Michelle Kommer, Commissioner of ND Department of Commerce

  --Greg Tehven, Cofounder of Emerging Prairie

    The momentum around the initiative built through the following 
year. In July 2018, at TEDxFargo Barry Batchellor presented a vision 
for creating ``Robosention Valley'' throughout the Red River Valley to 
focus on the mechanization and automation of production agriculture 
through the intersection of technology, innovation and research. At the 
same event, Brad Smith, president of Microsoft, discussed the rural 
digital divide, highlighting the disparity of opportunity based on 
geographic location and accessibility to stable, reliable, and fast 
Internet connectivity.
    By the spring of 2019, we were positioned with land, partners and 
projects and Emerging Prairie welcomed Secretary of Agriculture, Sonny 
Perdue to Fargo, ND, to break ground on the Grand Farm Test Site. This 
brought national attention to the Grand Farm with several key 
stakeholders coming forth and the subsequent launch of several of the 
five strategic pillars within the next year.
    Building off the growing national attention, in late 2019 Microsoft 
came in with a big bet by investing $1.5 million over 3 years into the 
development and establishment of the Grand Farm. During the 
announcement Mr. Smith commented,
    ``Our ambition is to partner Microsoft technology, technologists, 
and data scientists with North Dakota farmers and entrepreneurs to 
build a world-class leading ag innovation center that showcases the 
``farm of the future.''
    The partnership between Microsoft and the Grand Farm is founded on 
a joint focus on increasing collaboration in agriculture technology. We 
agree that it takes an entire ecosystem to initiate change, and that 
includes private companies, government agencies, and a network of 
startups and entrepreneurs, all with a common goal and desire to find 
solutions for the world's largest problems, including food insecurity.
    With this funding secured, Emerging Priairie established a separate 
501(c)(3) non profit in 2020 and named it the Grand Farm Research and 
Education Initiative, Inc. Grand Farm's Board of Directors are:


Mike Derheim, Board Chair, Co-Founder of Prime Digital AcademyTaya 

Spelhaug, Board Member, TechSpark Manager at Microsoft  --Jay Schuler, 
        Board Member, Regional Ag Entrepreneur

  --Cynthia Schreiber-Beck, Board Member, North Dakota State 
        Representative

  --Mark Watne, Board Member, President of the North Dakota Farmers 
        Union

    Following 9 months of active recruitment, in March 2020, Plug-and-
Play announced the launch of Plug-and-Play North Dakota. Plug-and-Play, 
in partnership with Bremer Bank, Microsoft Corporation, OCP Group, and 
CHS, expands the innovation platform and entrepreneurial ecosystem in 
Fargo. Plug-and-Play North Dakota engages start ups through six-month 
cohorts. Since its launch, 42 start-ups are engaged in the ag tech 
ecosystem from around the world.
    April 2020, we launched the Emerging Digital Academy to address the 
challenge in the region of the lack of a technology workforce. The 20-
week coding and software development bootcamp was launched with the 
support of 11 industry partners and 13 students in the first cohort. 
Since this launch, 31 learners have graduated the program (92 percent 
graduation rate), and seven learners are currently in the program's 
fourth cohort.
    Last summer the Grand Farm Innovation Test Site continued to build 
momentum. Working with North Dakota State University, CHS, and USDA's 
Agricultural Research Service we identified several core projects for 
the test site and planted it to soybeans, corn, sugarbeets, sunflowers 
and wheat. This led to over 40 innovative, agriculture technology 
projects through last summer with nine different organizations and 
companies. Additionally, we held 22 outdoor events through the summer. 
The energy around the Test Site culminated in an autonomous truck 
demonstration in October with North Dakota Department of Transportation 
which brought more than 30 state legislators together to discuss 
autonomous technologies and future policies that may be needed.
                        the grand farm of today
    As the growing season begins this year, Grand Farm will deploy over 
200 projects on the Test Site with over 130 acres planted to soybeans, 
corn, rye, sugarbeets, wheat, and sunflowers. We are currently working 
with over 30 participating partners, which are listed in the attached 
slide, many of which are private companies collaborating with public 
and private entities to innovate together and demonstrate new ag 
technologies. Our projects this summer include technologies in 
precision agriculture, robotics, autonomous systems, biologics, big 
data, satellites, Internet-of-things, and connectivity solutions. 
Additionally, with the reopening of our region, we have 66 outdoor 
events planned through the summer, many of which will be streamed, to 
engage farmers, entrepreneurs, startup, and students of all ages.
    Since the launch of the Grand Farm initiative, and with the 
expansion of virtual meetings through the COVID pandemic, the team has 
been able to meet with hundreds of organizations from around the world. 
We've connected with industry, higher education, research 
organizations, grower organizations, and government agencies. We've 
discovered that the Grand Farm is uniquely positioned as a neutral 
platform for all, providing a place for agriculture technology 
innovators from all types of organizations to dream of the future. As a 
neutral platform, Grand Farm facilitates conversations--and those 
conversations lead to projects and collaborations and amplification. 
The Grand Farm provides the agricultural technology industry 
connection, facilitation, and amplification.
            united states department of agriculture programs
    Several programs administered through United States Department of 
Agriculture are of particular interest to the Grand Farm.
    The Rural Innovation Stronger Economy (RISE) grant program is in 
strong alignment with our five strategic pillars in its goal to provide 
innovation centers which improve economic resiliency. We intend to 
apply for this opportunity when the program is announced in the coming 
months.
    As the Grand Farm recruits and engages the agriculture technology 
industry from around the world, we do so to develop technology and 
commercialize products in our region with the goal of producing high 
paying jobs and accelerating the formation of new businesses. 
Additionally, our Emerging Digital Academy upskills our region's 
workforce by providing a low-cost educational program in coding and 
software development. These learners graduate with the skills necessary 
to fill entry level software development positions.
    We are planning for a grant application to this program this summer 
to accelerate the private investments of our corporate partners and 
begin building a long-term campus for the Grand Farm. It is our vision 
to have an innovation center surrounded by demonstration fields, 
research plots and creative spaces for startups and entrepreneurs to 
identify challenges and work collaboratively to find solutions.
    Another program of interest is the Agricultural Innovation Center 
Program, which we envision would provide support for amplifying the 
applied research at the Grand Farm. We're designing our applicaiton 
specifically to fund projects for value-added agriculture in our 
region, such as hemp, and to support the growth and commercialization 
of those products in our region.
    In 2020, our parent organization, Emerging Prairie, was awarded a 
$50,000 Rural Business Enterprise Grant from USDA Rural Development. 
This grant provided the funding for Emerging Prairie to establish the 
formal entity of the Grand Farm, to the develop and execute our initial 
business strategy. The foundational investment from Microsoft provided 
the matching funds needed for this helpful grant program.
    One offering to our ecosystem that the Grand Farm is developing is 
a potential Start Up Grant Support Program. This would provide support 
for start-ups and small businesses with applications to Small Business 
Innovation and Research, Small Business Technology Transfer, and the 
Agriculture Food and Research Initiative grant programs. These USDA 
programs are annually awarded and provide support to many start-ups and 
small businesses. Through this service, Grand Farm would provide start-
ups and small businesses with a faculty member or graduate student, 
industry mentor, and grant training. We are currently looking at a 
Small Business
    Administration grant opportunity to provide capital to start 
offering this service to start-ups and small businesses.
    Additionally, although not a formal USDA program, the Grand Farm is 
actively involved with the Federal Communications Commission Task Force 
for Reviewing the Connectivity and Technology Needs of Precision 
Agriculture in the United States.
    The Secretary of Agriculture sits on the Task Force and USDA staff 
provide support and expertise to the Task Force. On multiple occasions 
our staff has reported to the task force about the future of 
agricultural technology and the connectivity needs of autonomous 
technology for the farm of the future. Many of the connectivity 
projects on the Grand Farm are based on challenges and interest areas 
those task force members identified.
                        regional collaborations
    The Grand Farm initiative would not be what it is today without 
several key supporters and regional collaborators.
                       the state of north dakota
    Multiple agencies within the state of North Dakota have provided 
significant support to the Grand Farm, including the North Dakota 
Department of Commerce, North Dakota Department of Transportation, and 
North Dakota Department of Information Technology. Grand Farm continues 
to coordinate with these agencies to develop programs that support the 
goals of the state of North Dakota. Leaders from the State government 
sit on many Grand Farm task forces providing thought leadership and 
expertise to the initiative.
                  north dakota state university (ndsu)
    Following the launch of the Grand Farm, North Dakota State 
University quickly became a key partner providing thought leadership on 
the steering committee and the Emerging Prairie board of directors. 
Even as our first growing season at the Grand Farm began during the 
pandemic, it was a tremendous success due in part to our collaboration 
with NDSU. Several key projects at the Grand Farm were conducted by 
NDSU students, staff, and faculty members, and were amplified through 
industry connections, social media, articles and speaking 
opportunities. Key personnel currently involved are from the North 
Dakota Agricultural Experiment Station and the Office of Research and 
Creative Activities, but interest is growing to include NDSU Extension 
and others across the university.
                       university of north dakota
    At Grand Farm's inception, the University of North Dakota invited 
the Grand Farm team to the Big Data, Big Ideas conference. The 
conversations at that conference led to the development of Project X, a 
project focused on traceability in agriculture.
    Since then, Grand Farm has collaborated with UND's Research 
Institute for Autonomous Systems, Center for Innovation, and the 
Computational Research Center. These partnerships have led to several 
collaborative grant proposals focused on innovations in the autonomous 
industry and economic development. One such proposed collaborative 
program is the North Dakota Autonomous Technology
    Corridor. We have a grant application under development for the 
Economic Development Administration's Build-to-Scale grant program that 
would establish a regional ecosystem in autonomous technologies between 
Fargo, North Dakota and Grand Forks, North Dakota.
        greater fargo-moorhead economic development corporation
    Grand Farm and the Greater Fargo-Moorhead Economic Development 
Corporation work closely together to identify opportunities to increase 
economic development opportunities, bring collaboration with local 
companies and attract companies to the Fargo-Moorhead region. Through 
regular collaboration and close communication, Grand Farm and the 
GFMEDC are closely aligned on our goals to bring more energy to the 
region.
                   university of minnesota crookston
    The Veden Center of Rural Economic Development and Grand Farm 
worked with rural communities throughout Minnesota and North Dakota on 
several grant programs to support rural communities and military 
veterans in the agriculture industry. This partnership helped Grand 
Farm form early connections with rural stakeholders and provided a 
foundation in thought leadership about how Grand Farm could serve rural 
America.
                               grow north
    Grow North is an organization based in Minnesota focused on 
creating an interconnected, sophisticated, invested, and accessible 
ecosystem for Minnesota's entrepreneurs and innovators across food and 
agriculture. There were many synergies identified with their work and 
Grand Farm and work has begun on working together on growing the 
ecosystem and introducing companies to new work.
                               biokansas
    Through conversations with Biokansas, a nonprofit focused on the 
life science ecosystem in Kansas, it was recognized that there were 
opportunities to amplify the work being done in both ecosystems. Just 
yesterday we co-hosted a virtual event that featured the Lieutenant 
Governor of Kansas and the Commissioner of the North Dakota Department 
of Commerce discussing work being done in each state. It showcased four 
startups and four established companies, highlighting the innovative 
work they're doing in ag tech and life sciences. By jointly amplifying 
the innovative work in both states we hope to build continued 
connection, identify and build on synergies in the two ecosystems and 
continue to highlight the innovation happening across the Great Plains.
                   midwest agtech innovation corridor
    At the heart of Grand Farm is the idea of innovation through 
collaboration and the importance of promoting innovation in our 
ecosystem and across our region. Grand Farm is in preliminary talks 
with other Midwest innovation catalyzers about building a Midwest 
AgTech Innovation Corridor to facilitate communication and dialogue to 
work together across the region. We have initial interest from 
BioKansas, MBOLD, Grow North, Wabash Heartland Innovation Network, 
AgriNovus, Aglaunch, Agriculture Utilization Research Initiative, and 
the Midwest Row Crop Collaborative.
    And we offer the invitation to other Midwest innovation catalyzers 
to reach out to us if they would like to learn more.
                            success stories
    In the few years since Barry Batcheller's challenge to the Fargo 
region, the Grand Farm initiative is grateful to report several key 
success stories.
                        emerging digital academy
    Since launching in April 2020, Emerging Digital Academy (EDA) has 
graduated 31 learners over three cohorts and has had a graduation rate 
of 92 percent. Before entering the program, these learners had an 
average salary of $24,460--upon placement into jobs, these learners 
have an average salary of $52,000. All learners from the first two 
cohorts who actively sought jobs found employment. This transformation 
is life changing, as highlighted by this learner from the first cohort:
    ``Receiving a scholarship to EDA was a turning point in my life. 
Had I not received the scholarship, I would not have been able to 
afford the academy. EDA took me from my lowest point of my life 9 
months ago, to the peak I'm at now. I have secured a reputable position 
with a company I previously would've only dreamed of working for. My 
perspective on life has changed and I'm excited to see where my new 
career path leads me.''
    Emerging Digital Academy has been supported by the private sector, 
with seven Founding ``Forever'' Partners (Microsoft, Scheels, Bushel, 
OnSharp, Fueling Our Future, Sycorr, and CoSchedule) and four Academy 
Supporters (Codelation, Stoneridge Software, AT&T, and Network Center). 
This support has extended beyond launch, with many of these partners 
hiring learners who have graduated from the program. The steering 
committee supporting the development and launch of Emerging Digital 
Academy included:

  --Byron Snider, Board Chair, SIS-Leader, Scheels

  --Nathan Joraanstad, Director of Engineering, Bushel

  --Taya Spelhaug, TechSpark Manager, Microsoft

  --Kelly Dawson, Senior VP--Human Resources, Border States Electric

  --Katie Bjornson, Technology Solutions Provider, Sanford Health

  --Darin King, Vice Chancellor of IT, North Dakota University System

  --Kirk Anton, Senior Sales Manager, Heat Transfer Warehouse

  --Gary Inman, IT Manager, Bell Bank

  --Staci Holzheimer, University & Student Development Coordinator, 
        Bank of ND

   north dakota department of transportation autonomous truck launch
    On October 6, 2020, Grand Farm hosted the launch of an autonomous 
truck developed through a collaboration between Kratos Defense and 
North Dakota Department of Transportation (NDDOT) to increase safety 
for NDDOT employees. The development of this autonomous truck 
technology was achieved through a grant provided by the Federal Highway 
Administration's Accelerated Innovation Deployment (AID) program.
    Following this launch, Grand Farm worked within the AgTech 
ecosystem to identify agricultural challenges where this autonomous 
technology could be adapted for immediate impact. These stakeholder 
conversations identified substantial workforce shortages in the 
sugarbeet industry. This identified challenge led to facilitated 
conversations between Kratos Defense, American Crystal Sugar, 
Transystems, and CHS. Just this week, executives visited Fargo to 
continue planning for a pilot of an autonomous truck during the Fall 
2021 sugarbeet harvest.
                      traceability in agriculture
    Following the Big Data, Big Ideas conference with the University of 
North Dakota in September 2019, Grand Farm began engaging stakeholders 
such as Microsoft and USDA's ARS in discussions to understand 
traceability and blockchain in agriculture. These conversations 
identified gaps in the pre-competitive space around blockchain and 
traceability. On February 26, 2021, Grand Farm held a virtual 
Blockchain in Agriculture event. This event gained global attention, 
with over 550 attendees registering from 20 countries. From the energy 
created from the Blockchain in Agriculture event, a steering committee 
was formed which further identified how Grand Farm could provide the 
most value and build on this momentum around this identified challenge.
                        grower pain point report
    At Grand Farm's Grower Roundtable in 2020, a collection of growers 
and industry professionals gathered at the Grand Farm Test Site to 
discuss pain points facing growers. From crop and soil management to 
data visualization to autonomous systems and the farm of the future 
design, 23 pain points were identified and outlined in a report that 
published in the Future Farmer magazine. In 2021, there are plans to 
continue this investigative work with growers.
                          economic development
    Grand Farm has worked closely with Greater Fargo-Moorhead Economic 
Development Corporation and North Dakota Department of Commerce to 
bring innovation to North Dakota. Grand Farm meetings regularly with 
these organizations to discuss and compare organizations being engaged. 
This has resulted in joint announcements as companies come to North 
Dakota or release products. On September 30, 2020, Trilogy Networks 
made their announcement that they would be engaging with North Dakota 
to research, test, and implement their cloud network platform:
    ``We're excited to partner with Grand Farm, the Greater Fargo-
Moorhead Economic Development Corporation, and the North Dakota 
Agricultural Experiment Station to add the critical connectivity 
element to their amazing ecosystem. We're already seeing the value of 
edge computing capabilities at our Farm of the Future series pilot 
project. Bringing this technology to Grand Farm wtfl allow us to 
support and scale precision agriculture applications to advance the 
autonomous farm. Collaborations with ecosystem partners like Grand Farm 
wtfl allow us all to deliver on the promise of precision agriculture.--
George Woodward, Chief Executive Officer, Tnfogy Networks.''
                           global recognition
    Partnerships with industry and higher education often lead to 
unique opportunities to engage a global audience. One such partnership 
was with Agronomeye, an augmented reality company from South Australia. 
The large-scale project completed at the Grand Farm led to a joint 
presentation between Agronomeye and Grand Farm, with Stu Adams, Co-
Founder of Agronomeye, and Dr. William Aderholdt, Director of the Grand 
Farm Program Management Office. This presentation was viewed by a 
global audience, drawing tens of thousands of impressions in the first 
month--most of these impressions were from outside the United States.
                             engaging k-20
    One of the exciting roles Grand Farm has had is engaging K-20 
students in thinking about the future of agriculture technology. Since 
launch, Grand Farm has hosted club events, tours, and facilitated 
projects with industry. Liberty Middle School's science fair team, Team 
CO2, expressed interest in tile drainage systems, Grand Farm was able 
to connect the team directly with Ellingson Companies, one of the 
largest tile drainage companies in the United States, and the largest 
in the Red River Valley.
    Liberty Middle School was the 1st Place Winner for North Dakota of 
the U.S. Army Educational Outreach Program's STEM-In-Action Grant, 
providing them funding to create a ``iron-enabled biochar design was 
created to be attached to a drain tile pipe and filter phosphorus from 
the runoff water passing through.''
                      the future of the grand farm
    Through our collaborative work with private companies, start-ups 
and entrepreneurs, we continue to focus on how we can provide the most 
value to the agriculture technology industry and farmers. We are 
discovering that our highest value is providing a neutral platform 
focused on facilitating collaboration between private industry, higher 
education, and government, with few to no barriers of entry to the 
conversation.
    Over the past couple of months, Grand Farm has found a unique 
opportunity to energize conversations around hot topics in agriculture, 
such as traceability and blockchain, and now under development, a 
virtual event focused on carbon. Our facilitation brings together both 
the ecosystem building efforts and innovative projects of the Grand 
Farm, resulting in a prime environment for catalyzing solutions.
    In the coming months, Grand Farm will be selecting a long-term site 
for our future campus that will provide expanded space for projects and 
demonstrations, connection to thought leaders in agriculture 
technology, and amplification through speaking opportunities and 
networking events.
                               conclusion
    In conclusion, we want to emphasize today for the subcommittee that 
the entrepreneurial spirit is alive and well in rural America and that 
programs like the soon to be announced RISE program will strengthen 
entrepreneurs across the nation, and hopefully in the Fargo region.
    I'd like to thank the distinguished members of this subcommittee 
for your continued support of entrepreneurs, including farmers and 
ranchers, as you consider ways to promote the diversification of on-
farm income. I would be happy to answer any questions at the 
appropriate time.

    Senator Baldwin. Thank you, Mr. Carroll. And I want to 
thank all of our witnesses for excellent testimony.
    We are now going to begin a round of questions. I am going 
to yield my time at first to Senator Tester, who has to shortly 
run for another hearing. And so, please begin.
    Senator Tester. You are very kind, Madam Chair. Thank you 
very much.
    And it is always good to see you, Senator Hoeven.
    I thank all the witnesses. I am going to start with you, 
Jason Weller.
    I am in production agriculture myself, and I can tell you 
in my small community in north central Montana, there were a 
lot of co-ops around coming out of the 30s, 40s, 50s, and 60s. 
In the '70s, they started to disappear. So congratulations on 
your 100 years.
    The question I have for you is you guys obviously have been 
very successful using the cooperative model. How come we don't 
see more cooperatives today?
    Mr. Weller. That is a conversation, Senator Tester that may 
take a little bit more than 7 minutes. I think in the end, I 
would like to start with what is the value of the cooperative 
system and what we see it enables. And it really, as a farmer 
and producer, you understand this, it is where we can come 
together as farmers and as small rural businesses in rural 
America.
    And collectively, together, whether through services to 
help the farmer, the dairy producer, be successful, but also on 
the marketing side. Where, together, when we form a 
cooperative, we can create additional economic value, access to 
market, but also services to produce the food and the dairy 
products and protein.
    At the same time, in balance, the cooperative system, the 
cooperative model, respects the primacy and the privacy, the 
independence of that family farm or that retail business in 
rural communities and allows them to make the decisions that 
work best for their farm or for their business. And that is 
what we try always to hold in balance.
    The cooperative system is definitely under stress, and I 
think it is more representative of the stress the agriculture 
industry has experienced certainly over the last decade. And 
like in dairy farming, like in row crop production, we also see 
this in ag retail where there is consolidation, where 
efficiencies of scale, unfortunately being to access the market 
and be able to produce effectively and have a return to at 
least get through to the next season, it requires increasingly 
because of the downward pressures of commodity prices, but also 
the upward pressures of increasing crop input prices with the 
costs. Those pressures that a family farm would experience are 
the same pressures that an Ag retail, whether it is an 
independent retailer or a cooperative, is experiencing.
    Senator Tester. So let me ask you this, though. Is there 
anything we can do at the Federal level to encourage people to 
utilize the cooperative model?
    Mr. Weller. So one thing, from my experience, Senator 
Tester, is to see the cooperatives that are there today, and 
there are still hundreds of cooperatives that are among the 
world's best in agronomy and services for agriculture. And what 
has been amiss, I think, for some, particularly in the policy 
arena, but as speaking from experience in the conservation 
arena and the public sector, oftentimes they get missed. And 
they have a vital role of providing services to the farmer.
    Instead of seeing them out there as a private sector 
entity, they need to see them as a potential partner and 
collaborator, to provide technical assistance for conservation 
to adopt, to help be a conduit to build communities and 
projects around innovation in Ag technology, to see them as a 
node, like we are trying to do at Land O'Lakes, for access to 
the Internet and to other innovation technologies, as 
demonstration and trial locations that fully demonstrate 
innovation technology for farmers to adopt.
    Senator Tester. Okay. Thank you.
    Mr. Carroll, thank you for being here today. I think there 
is incredible opportunity in precision Ag, there is no doubt 
about it.
    I am a small farmer in north central Montana, and last 
spring, just for fun, I called up to see what an Autosteer for 
my tractor would cost--$15,000 to $20,000. And I got two 
tractors.
    So I had to make the decision in my mind whether turning 
around and looking where the drill was on the furrow and maybe 
overlapping once in a while or making a skip once in a while 
was worth that $20,000. It is a small farm. Most of my 
neighbors are 5 or 10 times bigger than I am. They have got 
Autosteer on their tractor.
    What are you doing? Because we are talking about rural 
America drying up and consolidation and people going out of 
business. And by the way, the dairy industry is the tip of that 
spear. But what can you do, doing really good work in precision 
Ag, which is really important. But if you can't afford it, it 
doesn't do you a damned bit of good. What are you doing in the 
affordability realm?
    Mr. Carroll. I think there are two elements to that 
question. First, we want to drive technology to solve 
solutions. So the first way that you do that is by bringing the 
grower right in the middle of the innovation. So at the Grand 
Farm, a big part of what we do is we bring the grower right 
onto the farm and listen. Understand what those pain points are 
and then bring private companies, innovators, collaborators, 
and research organizations together to solve those. As that 
happens, we get this feedback loop between the grower and the 
innovators and the technologists in which we are creating 
solutions that are more specific to the problems that are being 
solved.
    I think over time, as we bring more automation online and 
we have the ability to do these things, it is going to bring 
the size of the equipment down. It is going to make it much 
more affordable. But also the application of that equipment is 
going to be designed around specific challenges.
    Senator Tester. Well, I would just say this, and like I 
said, I think precision Ag is where it is at. But I would like 
to have you keep it in the front of your head the affordability 
angle. I am probably too old to be able to go down the 
technology line, but the truth is, is that if it is not 
affordable, you can do the best research in the world.
    And Microsoft is being--and by the way, I need to commend 
you. I asked my staff member to find out where you guys are 
getting your money, and if you are getting it from Microsoft, I 
think that is good. It is better than getting it from one of 
the consolidated groups that control agriculture a lot more. So 
just keep affordability in mind.
    I could ask this questions, this next question--I will be 
very brief--to either Lucey or Sweeney, and I am going to go 
with Dr. Lucey really quick. As I said, dairy farms closing up 
has been kind of the tip of the spear in production 
agriculture. These guys have been put under pressure. These 
family dairies, they are just having a hard time surviving, and 
it is damned hard work. Being a dairy operator is probably the 
hardest work in agriculture, in my opinion.
    We have a bunch of folks who live in cities now, and not 
many of them have a connection to the farm anymore. We have 
seen people move away from cow's milk and go to a different 
kind of liquid that is made with rice or soy or, God knows, 
probably have some made with wheat, I don't know.
    But how important is it to have the connection with the 
consumer that seems to be gone in this world we have today? I 
am talking about the farmer's direct connection with the 
consumer. My dad used to always joke people think milk comes 
out of a carton. It doesn't. It comes out of a cow.
    Can you add some light on how important that connection 
with the consumer is, Dr. Lucey.
    Dr. Lucey. Yes, Senator Tester. As I mentioned in my 
remarks, I grew up on a dairy farm. So I guess there is not as 
many people anymore that grew up on a dairy farm or dairy farm 
communities. And that, unfortunately, is a trend that 
continues. So this gap between people who grew up on farms or 
farm communities and know where our food like dairy products 
and milk comes from and those that don't is going to get wider 
over time.
    So I think education is important, and I think also making 
the connection back to the fact that it is not just about the 
products that we get from it, like milk, but it is the farm 
story as well and making sure that we understand that the 
farmers are there to be stewards of the land. And I think that 
is a message that resonates, too, with millennials and others 
as well.
    But I think it is basically an education effort, and I 
think you brought up about people looking at other products, 
other beverages and things like that. I think it is important 
to really talk about what is the nutrition of those and the 
naturalness of those, and I think those are messages that I 
know some of the manufacturers of dairy products are looking 
at, trying to make sure that people don't forget these products 
have been around for a long time. They are made by very simple 
types of processes.
    But there is always new types of products that will come on 
and compete, I understand. But talk about the nutrition and 
value and wholesomeness is very important.
    But I think we do have to emphasize and educate people, and 
it has got to be an essential step for us. I am a university 
professor, and many of my students in my freshman classes that 
come in--and even here in Wisconsin don't know where our 
products come from and have all kinds of interesting stories 
and misconceptions about it.
    I think we have got to continue to give factual, science-
based answers to those. And it is not just about dairy, but it 
is about animal treatment and sustainability. There is a whole 
bunch of topics that they are interested, but I think we have 
got to continue to communicate those as a group and as an 
academic, but also across all our dairy and Ag sectors as well. 
We can't ignore it.
    Senator Tester. Thank you, Madam Chair.
    Senator Baldwin. Thank you, Senator Tester. Senator Hoeven.
    Senator Hoeven. Thank you, Madam Chair.
    And actually, I will follow up on a question that Senator 
Tester started with because I think it is right on the mark. 
You know, when you look at the cost of equipment now for our 
farmers, it is just unbelievable. And so it seems to me that he 
is making a good point in terms of what some of the things that 
you are doing there at Grand Farm, obviously there is a lot of 
them. But to try to make precision agriculture not only highly 
effective, but more available for farmers across the board, not 
just the big, really sophisticated operator. And farming and 
ranching has become a very complex, sophisticated business.
    So talk a little bit more about how you are going to make 
this precision--these applications in precision Ag more 
affordable. So it is not only making them better, right, it is 
making them more affordable so everybody can use them.
    And I think of Jake Joraanstad and Bushel and how that 
company is linking the farmer directly to the grain elevator 
with their handheld, and that is something that everybody can 
have, very affordable. So, I mean, seems like that should be a 
big part of what you all are doing there at Grand Farm.
    Mr. Carroll. Yes, thank you, Senator, for the question.
    And what I would say is, as we think about the Grand Farm 
and bringing all of our partners together, new business models 
will start to emerge. And one that is really exciting for me is 
farming as a service.
    There is an organization called Sabanto that is providing 
services to farmers on demand, almost like an Uber for farm 
equipment. And as you start thinking about that and you start 
thinking about the implications, this could bring down the cost 
structure. It could be much more specific, but it also can 
bring other farmers into the industry that had not considered 
that before.
    I have the advantage, my father-in-law is a farmer in 
southern Minnesota. I am able to use his equipment. And because 
I can use his equipment, it gives us an opportunity to do 
things at a low cost. And I think that the future of innovation 
and technology could see an impact of that in different markets 
that we are just imagining right now will start to emerge.
    Senator Hoeven. What is most helpful to you now in terms 
of--as you guys ramp up, get things going, you are off to a 
fabulous start. What is most helpful to you?
    Mr. Carroll. The biggest help for us is if you think 
Microsoft was our first big partner, and that multiplied to 
nine partners last year. Now we are at 37 partners. We expect 
to be over 50 partners by the end of the summer, and our hopes 
is to have over 100 partners.
    And those partners are the organizations that we will start 
to work with, collaborate, and look at how we can apply 
technology to solve these specific grower pain points. And so, 
to me, the ability to move the partnership model, bring more 
people into this ecosystem, connect with people that want to 
solve problems is what has me most excited.
    Senator Hoeven. So I am going to start with you on this 
next question, but then it is for really each member of the 
panel to respond to as well. We talked about some of the USDA 
programs and their efforts to help in rural America. But one of 
the criticisms of Government programs is they tend to be siloed 
and overly bureaucratic.
    Touch on that. What can we do to make sure that these 
programs actually are usable to you and to others that are 
working not only in agriculture, but rural America?
    Mr. Carroll. I would just identify a couple ones. If you 
think about our strategy that we have within the Grand Farm 
specific around building ecosystems, the code school, the 
collaboration, those types of language, that type of help could 
help us identify where we could apply and where that 
information would be really valuable.
    And as we think about solving problems and as we heard from 
the other testimony, we are doing similar types of things. And 
our ability to tailor some of that towards those activities 
would be extremely helpful.
    Senator Hoeven. Okay. And I would ask that for the other 
witnesses as well, and we could kind of go in the order that 
you gave testimony, here we go. Start with Mr. Goodwin.
    Mr. Goodwin. Yes, Senator. I think one of the biggest 
things that actually as a young farmer and a farmer of color is 
when I look at FSA, especially here in the State of North 
Carolina, there is a level of cultural competency that needs to 
be dealt with within USDA. Also we understand, we know there 
are discriminatory practices over the years, but when I looked 
at the application for a microloan, which I was told it would 
take 1 to 2 weeks, it is daunting.
    And the fact that when you go in the office, a lot of the 
loan officers are not diverse as to their production style. And 
so when you are looking for funding, and the funding is hard to 
get, and USDA may be the only one of the outlets, it is hard to 
fill out that paperwork.
    And so, on the one hand, the USDA says they are there for 
beginning farmers and farmers of color, but it doesn't look 
like it translates over. And so it is very, I think, endemic, 
but it is also one of the factors I think leaves a lot of young 
farmers not to want to get in the business because when you are 
starting out as a young farmer, and I am a first-generation 
farmer, land, equipment like you are speaking about, it is 
costly.
    And so I think that the more streamlined we can make these 
programs and the more that USDA can understand that everybody 
is not maybe a row cropper or large-scale poultry or swine 
operator, that helps get some of these applications processed 
in a much quicker manner so that it doesn't take me 6 months to 
a year to get my money when I need it now.
    Senator Hoeven. That makes sense. Dr. Lucey.
    Dr. Lucey. I would say under this DBIA program, I have to 
say that we have worked very well with our USDA reps on dealing 
with any questions, concerns on the administration of this 
project. I would bring up two kind of--if you talk about kind 
of frustrating bureaucratic things related to the overall topic 
we talked about this morning is modernizing our standards of 
identity for dairy products is a big topic that I know the 
industry struggles with, but we also struggle with it at the 
university because it becomes a barrier to innovation.
    So the language prohibits a lot of companies or restricts a 
lot of companies to actually take on technologies that 
Europeans, the New Zealanders, the Australians can all readily 
use, but our manufacturers and co-ops feel very restricted with 
it because it doesn't include that language and those 
standards. And modernizing those, it just seems to take a lot 
of time because of the bureaucratic process. I will just give 
you my two cents on it as an academic looking at the innovation 
side.
    And the other aspect to look at is we get a lot of research 
funding that comes from dairy check-off programs. But I think 
now, as we look broadly towards the future, can we use those 
kind of programs to look at utilizing dairy wastes, our co-
products, and what could those co-products be made into?
    Right now, there are some restrictions to be able to make 
them into nonfood materials, and I think that would be helpful 
for us because I think the farm sector is seeing it, too, with 
manure and other kind of waste materials that they are dealing 
with. We need to find some value-added use in it. Perfect, if 
it is food. But if it is a chemical and a valuable thing we can 
sell, all the better. At the end of the day, all of it returns 
value back to the farmer.
    And those are two kind of issues that are affecting us all 
the ways back up to the innovation. I will let Rebekah talk 
more broadly about issues that she sees from the industry side.
    Senator Hoeven. Okay. Ms. Sweeney.
    Ms. Sweeney. Well, thanks for the question. I first want to 
say that we all know USDA has very powerful tools to help the 
industry advance and also to sustain food supply chains through 
moments of crisis. And I think that we saw that very clearly 
this past year through the COVID-19 pandemic. It was a major 
shock to the food and dairy community, of course, as it was to 
everyone.
    And our dairy processors and farmers, they saw very 
significant and very abrupt changes in their markets. And we 
saw restaurants shut down, schools close, travel, tourism stop. 
We saw disruptions in our exports. And triggered things like 
the benchmark price for mild cheddar dropped to lows that it 
hadn't seen in decades.
    So what happened in this crisis is USDA had the ability to 
step in and to create some stability and also support those 
facing food insecurity by marrying both producers and 
processors with those in need through nutrition programs. And I 
think that as the pandemic continues and as people continue to 
see economic disruption in their own lives, it is incredibly 
important that this committee and that the Federal Government 
as a whole continue to invest in nutritional assistance 
programs that make sure that we address the needs of those who 
are hungry and also sustain the industry and make sure that 
there is a viable future for all.
    I think that sometimes those nutrition assistance programs 
leave out some of our artisans and small manufacturers, and so 
it is also important that we create opportunities perhaps 
through the States to make sure that local food producers can 
also have opportunities to sell to their local markets. I think 
that there is tremendous opportunity in that.
    Beyond that, I would just say kudos and thanks to USDA for 
making the Dairy Business Innovation Initiatives a very easy 
process for those of us who are running programs. Completely 
accessible and nothing but great things to say about the staff 
and their partnership.
    Thank you.
    Senator Hoeven. Mr. Weller, I guess, your turn. You might 
specifically reference the conservation programs, just based on 
your background, and making sure that the conservation programs 
help our farmers and don't create undue burdens.
    Mr. Weller. Thank you, Senator Hoeven.
    Yes, this specifically is my background, having been an 
employee of USDA and an employee of NRCS. I would like to also 
just expand and agree very strongly with Ms. Sweeney, first 
thank USDA and NRCS. And also this committee, the investments 
this committee makes in the NRCS conservation program, but also 
broadly, the programs and the authorities of the Department 
foundational to this entire conversation we are having today, 
particularly on the conservation front.
    Whether it is through the Title II programs to other 
innovative authorities and foundational technical assistance 
programs of NRCS, we wouldn't be having a conversation about 
sustainability, around carbon credits, around the science of 
helping dairy producers address their waste stream if it wasn't 
for NRCS and for the conservation authorities of USDA.
    To your specific question, I think the good news is there 
are already authorities that Congress has provided USDA, and 
they have within the conservation programs unique authorities 
that USDA, to their credit--NRCS specifically are really 
starting to push the boundaries on and innovate on, like 
through the Regional Conservation Partnership Program. And 
there is authority tucked in the farm bill called Alternate 
Funding Arrangement, AFA, for those on the committee that have 
kind of locked out on this. And USDA, to their credit, are 
really pushing out and trying to experiment new ways to deploy 
the capital, financial capabilities of NRCS, and to really 
partner with both nonprofit, for-profit, and public agencies 
out on the ground to help farmers.
    But I think really at the core of this is this committee's 
encouragement in maybe setting the expectation. There need to 
be also some cultural hinges, and some of the other witnesses 
have already kind of touched upon this.
    But specifically, speaking from an Ag retailer/cooperative 
perspective, there are already hundreds, if not thousands of 
other professionals out in the field today, working one-on-one 
with producers, whether they are dairy farmers, row crop 
producers, specialty crop producers. And these professional 
agronomists and advisers have the training and expertise, and I 
think culturally USDA needs to get increasingly comfortable and 
see this as an additional resource, an additional channel that 
connect to their existing customers, but also to reach out 
perhaps to new farmer customers that the USDA does not do 
business with today.
    And so I think USDA could really be more aggressive and 
more assertive in trying to reach out and meaningfully engage 
the infrastructure already in place today that works every day 
of the year with farmers to be successful, and that is where I 
think this committee can help by encouraging and oversee a more 
holistic and strategic approach to USDA's deployment of 
assistance.
    Senator Hoeven. Thank you. Madam Chair, sorry about going 
over my time. But thank you to all the witnesses.
    Senator Baldwin. I want to start with a question for Mr. 
Davon Goodwin. Mr. Goodwin, you wear a lot of hats. You are 
involved in many aspects of agriculture production and 
assisting other producers with diversifying their operations.
    As board president of the National Young Farmers Coalition, 
manager of Sandhills AGInnovation Center, and owner/operator of 
your own farm, can you briefly discuss the opportunities and 
challenges producers have as they look to diversify their 
operations and become more profitable?
    Mr. Goodwin. Yes, ma'am. Thanks for the question.
    When I look at diversification, it is essential to a young 
farmer and a family farmer being successful. But 
diversification is, I would say, a gift and a curse. Obviously, 
the more you spread your risk out on the farm, obviously that 
cost goes up.
    But when I look at the advantage of diversification, it is 
essential to us at my farm and other farms in my region because 
the last 4 years we have had major hurricanes that wipe us out 
normally. And so when I look at the intensification of climate 
change, it is really important to diversify my crops so I can 
spread my risk out over my farm.
    Because when you are a first-generation farmer, you got one 
shot at this. There is not a lot of money to be able to fix 
what goes wrong a lot of times, and so I believe that the more 
diversified a farm can be, the better they are off. And I see a 
lot of my young farmer counterparts making sure that they 
diversify their farm in many different ways.
    And one way that we do it is by the value-added products 
because, number one, and not just for sales of our products, 
but we are able to utilize our product in many different ways. 
And so when I look at the future and my future and at my farm, 
I really look at being able to have access to more capital so I 
am able to do more diversification because I really feel like 
with climate change, bearing the burden that it will bear, if 
we don't start looking at diversification more intensively on 
the farm, I think we will have more family farms go out.
    Senator Baldwin. Sticking with you, Mr. Goodwin, can you 
share a little bit about your experience with cooperative 
extension and how they are a critical, yet perhaps underfunded 
resource helping farmers to diversify and increase on-farm 
income?
    Mr. Goodwin. Yes, ma'am. Cooperative extension has been a 
godsend for me. They have been hand-holded me for my whole 
journey into farming. If it wasn't for cooperative extension I 
don't think I would be able to be in farming just because when 
you are a first-generation farmer, there is so much knowledge 
that you didn't come from. And so cooperative extension has 
been there for me from day one, making sure that I get the 
resources, the education, and just that person who is 
advocating in your corner.
    Oftentimes in farming, it can be very demanding, obviously, 
but it can be very daunting on you, and you need that person 
that you can go to in your county to be able to, if you have a 
problem, they are there to make sure that you are able to do 
soil samples, you are able to do things that can launch your 
farm and make it a lot more successful. And I think that if 
this committee could look at giving cooperative extension more 
funding, they would be able to work with a lot more farmers.
    What we see in North Carolina is we see one agent doing 
multiple counties, and that is a huge disservice to them 
because they are not able to reach everybody. And the cuts that 
happen, I think if those cuts would be able to not happen and 
there was more funding appropriated to cooperative extension, 
they could do a lot more outreach than they are already able to 
do now.
    Senator Baldwin. Thank you.
    Dr. Lucey, you have had 20-plus years of research 
experience, and I would like you to talk a little bit more 
about how the research you do translates into new opportunities 
for producers, in addition to all the other work we have been 
describing with innovation.
    Dr. Lucey. Thank you, Senator Baldwin. I guess it is always 
a fun thing to talk about, for university professors to talk 
about their research.
    But I think I am very fortunate to work in the dairy foods 
side, where you can actually have products that people can 
consume and enjoy and taste. And I think if you look at some of 
the cool things that are going on in terms of research, I just 
want to give you a couple of kind of broad scopes or ideas of 
it.
    Over the last number of years, we have focused a lot on how 
do we extend the shelf life of cheese? Particularly cheeses 
that we sell here and manufacture here in the U.S. like our 
mozzarellas, cheddars, things like that.
    And the reason was to see if we could start to export those 
cheeses to the world. It is all very well and good if you make 
cheese here in Wisconsin and put them on a truck, and you ship 
them down to Chicago. That only takes hours, maybe a couple of 
day.
    But if we were to supply cheese to the world, we have to 
get those products shipped to somewhere like China or Korea, we 
need a lot longer shelf life, maybe many months of shelf life. 
So we have done a lot of research here at the university 
looking at what processes are going on during the cheese 
storage and ripening that are impacting the cheese quality, 
such as its shreddability, melt, et cetera.
    And I am happy to say that we have developed processes here 
at this university that can extend the shelf life and 
performance shelf life of things like mozzarella and maybe make 
it for 9 months, 12 months, where it still is perfectly 
suitable to go on a pizza or to be used.
    And again, these are kind of the technologies that we have 
been looking at to slow down some of those breakdown reactions 
that will allow us to ship to the world. And I think we have 
seen that in the pandemic with the COVID issue that we have 
faced, a lot of people, lot of dairy plants were looking at 
what can we make now because the food service sector was badly, 
badly hit with most restaurants shut.
    So we were very busy translating some of our research on 
shelf life extension to help them make products that could last 
3 or 4 months or maybe longer so that they could get around the 
shutdowns that we had last year and waiting for things to open 
up. So being able to translate that for a completely different 
purpose, for the COVID lockdown, was really exciting.
    Now the other things we do here a lot is we work on 
specialty cheese. And obviously, it is near and dear to our 
hearts here in Wisconsin, and we produce about 50 percent of 
all the specialty cheese here in the U.S. But we do a lot of 
research in that, looking at what is going on in the ripening 
processes, in the aging processes, and what kind of bacteria 
and fora are involved in it. So that is very exciting.
    And we are able to translate that directly into the 
industry by our short courses. And we train over 1,000 industry 
attendees from Wisconsin and nearby States every year, and that 
is a very rapid way to get that information back out to our 
industry.
    And there are other products we work closely on as well. I 
spend time also working on beverages and things like that. So 
we are very excited to try and innovate in new types of dairy 
beverages. We all know that fluid milk, our gallon jug sales 
are declining, and so I think we need to focus on research 
there. And we are doing some research on how to make new kind 
of dairy beverages, high protein, high calcium, low lactose, et 
cetera, and how to make those successfully and then, basically, 
see those commercialized.
    So it is a very exciting field. I just tried to give you a 
couple of examples.
    Senator Baldwin. Thank you. I appreciate that.
    Next, Senator Hyde-Smith.
    Senator Hyde-Smith. Thank you, Chairwoman Baldwin, for 
convening this meeting today and this subcommittee. And I 
certainly appreciate all the witnesses that we have that are 
participating today.
    And my question is for Mr. Weller. Mr. Weller, as you know 
from your previous role as chief of the NRSC--or I mean NRCS at 
USDA, the Conservation Stewardship Program provides assistance 
to producers in Mississippi that we have certainly taken 
advantage of for a long time, and it is to maintain, improve, 
and to adopt new conservation activities on their entire farm 
operation. And through the Conservation Stewardship Program, 
producers are able to identify and solve natural resource 
problems, which allows them to obtain higher stewardship levels 
in an environmentally beneficial way, and also it is very cost 
effective in most cases.
    But Mississippi is one of the leading States for acres 
enrolled in CSP, but unfortunately, some changes to the last 
farm bill that limited the future enrollments. And while I know 
that for any changes concerning that to the CSP, it is more 
appropriate to discuss that with the authorizing committee in 
the next farm bill, but I want to take this opportunity to 
visit with you.
    Given your previous experience as the NRCS chief, can you 
speak to some of the benefits of the CSP and the benefits to 
the producers, as well as the environment? And do you have any 
suggestions on how Congress could improve that program in the 
future so that it could provide even more innovative 
sustainability solutions to improve both farmer profitability 
and environmental quality?
    Mr. Weller. Thanks, Senator.
    Well, first, I want to commend the producers in 
Mississippi, but also my former colleagues in NRCS in 
Mississippi. You are exactly right. I think Mississippi really 
stands out not just with its delivery of the Conservation 
Stewardship Program, but also innovative use of other farm bill 
program authorities.
    And in my time here at NRCS, I had a few opportunities I 
could visit with producers in Mississippi, and every time I 
visited, I was really impressed with I think the seriousness 
that growers and producers and land owners took their 
responsibility for naturally for stewardship, but also always 
with an eye towards productivity and profitability of their 
businesses. And I was proud to see how NRCS and the 
conservation title of the farm bill was actually providing help 
on the ground.
    Specifically to the Conservation Stewardship Program, I 
think it is a really innovative approach. The types of 
practices and enhancements that the program supports are 
exactly what we have been talking about and some of the other 
witnesses spoke about today.
    In my view and in my experience, the future of conservation 
and the future of agriculture must be precision. We talk about 
driving additional profitability. We talk about growing more 
with less. We talk about trying to store the carbon back in the 
soil, reduce emissions, and reduce loss of nutrients and 
sediment for crop fields. At the end of the day, we have to 
provide both the tools, the technical assistance, and some 
financial assistance to help producers install the technologies 
and help provide the delivery, the implementation and adoption 
of those practices on the ground.
    And the Conservation Stewardship Program in particular is 
that draft horse, is that workhorse to help producers innovate 
and adapt and try new precision Ag technologies, as well as 
enhanced management systems on their soil, to drive soil 
health, drive nutrient management.
    Specifically on innovations or new ideas on CSP, I think 
CSP can be and has been and even further can be a really 
powerful tool to drive the type of adoption of precision ag 
both technologies, but also the management systems that 
producers will need, whether you row crop, livestock, specialty 
crop. When we talk about unlocking new revenue opportunities 
around voluntary markets for environmental services like carbon 
storage, greenhouse gas emissions reduction, enhancement in 
water quality, and biodiversity, the stewardship program can be 
one of, if not the foundational platform to help producers 
install those technologies, adopt those new management systems 
to unlock new revenue streams.
    And I think to think strategically about how USDA and its 
conservation programs, starting with CSP, but the other 
authorities, can be that installation, that transition program, 
like with organic transition in the soil health systems, 
transition into precision ag systems, that then can unlock new 
revenue streams and allow the private sector to then be the 
offtake for those new environmental commodities, that is where 
I think there is huge opportunity to think strategically about 
the conservation title generally and CSP specifically.
    Senator Hyde-Smith. Thank you very much. Because it has 
really been beneficial in Mississippi, and I like your focus on 
trying to capitalize on that.
    Thank you, Madam Chairman.
    Senator Baldwin. Thank you, Senator Hyde-Smith.
    I want to stick with Mr. Weller and talk a little bit more 
about the TruCarbon program. It offers farmer-friendly, 
streamlined experience that is making it easier for producers 
to develop and sell carbon credits so they can focus on crop 
production and stewarding the land.
    Can you please describe this new program and how it may be 
different from other carbon capture programs that are being 
discussed? And how can the USDA be helpful in speeding up the 
adoption of new conservation practices so more farmers can take 
advantage of new markets?
    Mr. Weller. Thanks, Senator.
    So I will just briefly describe our program, and then, of 
course, I want to address the really important part of how USDA 
can be core foundational to this.
    So we are very excited to begin this journey around 
sustainability and how conservation and enhanced management can 
unlock new revenue streams. So specific to carbon, we launched 
in February what we call TruCarbon, which is our first carbon 
removal offer. And we are very fortunate to have a buyer on 
hand who is willing to actually pay for farmers and the 
services they are offering through soil health practices to 
sequester carbon and store locked up carbon back in the ground, 
which is really great for crop production and for the 
operations and the function of the soils we need, of course, to 
feed our country and the world, but then also provide great 
environmental services like buffering a changing climate.
    TruCarbon, the approach we take as a farmer co-op, start 
with the farmer first. We are farmer-centered. Secondly, we are 
a cooperative of cooperatives. So our approach is to partner 
with our Ag retailer cooperative owners across the United 
States and engage their farming network.
    So it is a way through our large scale across the United 
States on millions of acres of crop production how can we then 
partner with our local owners, our local ag retailers to engage 
their farmers and help those farmers baseline their current 
practices, adopt new practices, in this case now be compensated 
not just for the grain production, but to double crop. In this 
case, the additional profit is going to be a carbon credit.
    So we start with the farmer. We streamline it. We want 
farmers to focus on food production and maintaining the 
conservation. Truterra then handles a lot of the overhead 
complexity around the data collection, the soil testing and 
sampling, the third-party verification, the registration. These 
are all complex, sometimes onerous and costly activities but 
are needed to ensure the quality and the value of the credit.
    Truterra and our retailer team takes on that responsibility 
on behalf of the farmer. And critically, we respect the privacy 
of the farmer's data, and we ensure the integrity of that data 
so that we are helping to secure a farmer new access to market, 
in this case the carbon market, while also ensuring that data 
is used just for the carbon credit creation.
    Coming to your question on USDA, a little bit in the prior 
conversation on CSP, when you looked at what a carbon credit 
entails, what we are offering today is $20 a ton for soil 
organic carbon sequestration. When you do the farm math on 
that, that works out to be about maybe 10 bucks an acre, maybe 
a little more, maybe a little less.
    That is not going to be, at the end of the day, why a 
farmer takes these practices on, particularly when you look at 
the upfront cost. The capital cost, the technical assistance 
cost, the technology cost which we talked about in this hearing 
that is going to be the order of magnitude higher than $10 an 
acre.
    And so I think where USDA can really be an accelerant and a 
way to expand access to install these systems, they have the 
power and the authorities to go and help install this 
infrastructure, to then unlock this new commodity opportunity 
and revenue stream.
    But just as importantly, and it has also come to this 
hearing--and Mr. Goodwin has acknowledged this, and it is a 
really important thing we have to emphasize that we have to 
ensure, we must ensure that all producers, regardless of size, 
regardless of economic means, can access these marketplaces. 
Have the technical assistance, have the access to the 
technology, have access to the Internet, have access to the 
financial systems to install these practices so that whether 
you are on 10,000 acres, 1,000 acres, 100 acres, 10 acres, this 
is a new revenue income stream, and we need to ensure through 
USDA authorities and through their capabilities that growers of 
all means and backgrounds have an opportunity to this new 
marketplace.
    Senator Baldwin. Thank you.
    Wisconsin dairy farmers have built nearly 40 anaerobic 
digesters. Over half of those were made possible by the U.S. 
Department of Agriculture's Rural Energy for America Program, 
otherwise known as REAP. These digesters, in my mind, are a 
win-win, helping farmers manage their manure and reduce methane 
emissions and make money while doing so.
    Nationwide, we have about 270 on-farm digesters. Many are 
on dairy farms, but we are also beginning to see them built on 
swine, poultry, and beef operations. In total, I believe that 
108 of these digesters received REAP grants or loans. Without 
those critical REAP funds, most farms simply cannot make these 
expensive projects work out.
    So, Ms. Sweeney and Mr. Weller, starting with Ms. Sweeney, 
can you share with us the importance of those REAP grants for 
farmers, as well as for other farms--dairy farmers as well as 
other farms, as they look to tap into these new renewable 
energy markets and cut their own on-farm energy costs?
    Ms. Sweeney. Thank you, Senator Baldwin.
    Of course, sustainability is on everyone's mind right now 
because we know that the emerging consumer cares an awful lot 
about how their food is made, where it comes from, and how 
their food impacts the world at large.
    We are all aware of climate change in our daily lives, and 
so, I am so impressed with the dairy farmers of Wisconsin and 
really across the Nation in the investments that they 
themselves are putting forward to increase the sustainability 
of their operations. But it is a tremendous challenge because 
not only is there an initial investment, but it can also be 
challenging to make these projects cost effective long term.
    I think about one of our members, Crave Brothers Farm and 
their Crave Brothers Farmstead Cheese operation as well, and 
they have an anaerobic digester. I have been out to see it, and 
it is a tremendous amount of time, effort, and money to operate 
in that way, but they are committed as a business model to 
sustainability.
    In fact, one of the projects Dairy Business Innovation 
Alliance funded for them was another sustainability project, 
and that was a water recycling system. Really innovative, one 
of the first of its kind that makes them a little more cost 
effective, but also more sustainable. And they are a tremendous 
example, a case study really, for industry and how sustainable 
operations can also be more profitable.
    But they are also an example of how they are partnering 
with the State and the Federal Government to make these 
projects come to life. It is hard to find those dollars, 
particularly in these challenging times, to move innovation 
forward. And so USDA, the State governments, even sometimes 
through the direction of Federal dollars, are tremendous 
partners in that effort, and I really think that that is key to 
making things happen at the farm level, particularly for small 
farmers.
    Mr. Weller. And I think--I am sorry--to build upon, I 
think, the public-private partnership that is a specific 
example. So at Land O'Lakes, we have three primary milksheds. 
So we have Mid Atlantic milkshed, the Upper Midwest milkshed, 
and we have in California our milkshed. We have a number of 
dairy producers in California.
    And so specific to digesters, this is a story from the Land 
O'Lakes perspective, particularly from our dairy members' 
perspective, of how we can flip the script on what is 
traditionally a pain point, cost center, a regulatory risk into 
a solution, a new revenue stream, and a way to improve the 
operations on the dairy farm.
    So, overall, our dairy members in California have installed 
22 dairy digesters, manure digesters, methane digesters on the 
farm. But part of this, the specific example that is of a 
public-private partnership I really want to emphasize here, 
what started out as this potentially regulatory pinch or a real 
regulatory pain point, the State of California, trying to 
address its greenhouse gas emissions goals, has set out a goal 
to reduce methane emissions, methane being a very powerful 
greenhouse gas, from livestock manure, including dairy manure, 
by 40 percent over the next several years. By the year 2030, 
they want a 40 percent reduction in methane emissions.
    So, in this case, we worked with the State of California. 
The State of California is a great partner and has made some 
grant funding available to install digesters, and we worked 
with another private entity, the California Bioenergy, LLC. So 
CalBio and our Land O'Lakes dairy producers are installing and 
building out a network, in this case 10 methane digesters, as 
part of this project where it is going to be a distributed 
network, where we are going to be capturing that methane. And 
then Bioenergy, CalBio is going to be offtaking that gas, 
compressing it, enhancing the product in terms of cleansing it 
and injecting that into the local utility's natural gas 
pipelines, where those now thermal units can now be accessed 
for transportation infrastructure or energy infrastructure in 
California.
    So this is beyond just renewable gas, it is improving the 
management of manure on the dairy farm and creating new revenue 
streams. Where that is now some significant revenue that is 
adding--helping the bottom line of the dairy members in what 
has been a very volatile, in some cases stressful dairy market. 
But from a greenhouse gas standpoint, this project over 10 
years is estimated to capture over 1.8 million metric tons of 
CO2 equivalent, which is the equivalent of taking off the roads 
of California almost 40,000 passenger vehicles every year in 
terms of CO2 equivalent emissions. And that is just with our 10 
digesters.
    What unlocked this was the innovation from Land O'Lakes, 
innovation in terms of how we are helping our members finance 
it, innovative partners like California Bioenergy, and 
innovation through public policy and having a State partner 
like the State of California co-invest in the solution.
    Senator Baldwin. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    I would like to thank all of our witnesses for being with 
us today. I think we have had a really good discussion.
    And I also want to thank all my colleagues who participated 
today. Questions for the record are going to be due by 
Thursday, May 6th.
               Questions Submitted by Senator Mike Braun
                Questions Submitted to Mr. Jason Weller
    Question. As you know, many agricultural firms are making 
investments in feed and feed additives as a method to reduce on-farm 
emissions. However, feed additives require FDA approval, and the 
process can be is incredibly onerous, which can hinder innovation. Our 
biggest competitors are approving these products and claims within a 
year, but it can take several years to get through the FDA process.
    What are your thoughts about the use of feed additives and the 
potential for farmers to capture the value of reducing the methane 
emissions?
    Using feed additives to reduce methane emissions is a perfect 
example of how advancing technologies must be a part of solving the 
climate crisis. At Land O' Lakes, Inc. and across the dairy industry, 
dairy producers are interested in new approaches to feed management 
that can reduce enteric methane emissions and subsequently reduce GHG 
emissions from dairy production. Enteric methane emissions, including 
gas released from cow eructation, account for approximately 1/3 of an 
average dairy farms' GHG footprint.
    New feed additives, including plant extracts, fats, oils, and other 
by-products, can significantly improve digestibility and redirect 
production pathways of enteric methane emissions. Growing research and 
regulatory approvals in other countries demonstrate that feed additives 
can reduce enteric methane emissions by 30% or even more. However, 
current U.S. policy prevents timely market availability, hindering 
widespread adoption of these products.
    FDA's Center for Veterinary Medicine reviews and approves animal 
food ingredients to ensure their safety as they enter the marketplace, 
but we are concerned about the time associated with the ingredient 
review and approval process. In 1998, the CVM decided to use the same 
regulatory approval process for animal food ingredients that it uses 
for approval of new animal drugs, including antibiotics and hormones. 
This means that feed additive makers are bypassing the U.S. on account 
of its market approval process in favor of other countries that have a 
more streamlined process. FDA should use their existing authority to 
use an alternate approval process that would allow for these feed 
additives--whose mode of action is solely within the digestive tract--
to be regulated as animal foods rather than drugs, still ensuring their 
safety while avoiding the lengthy and necessary processes which animal 
drugs must follow.
    Capturing the value of these products means that farmers will be 
able to use the most innovative tools available to them to improve 
animal health, improve environmental health, and keep themselves 
financially sustainable.
    Question. What types of opportunities are farmers missing out on 
due to this regulatory barrier?
    Answer. The current requirement to obtain FDA approval for feed-
related animal health claims is presenting a barrier to expanded 
utilization of adjacent technologies, such as corn hybrids modified to 
incorporate amylase enzymes into the grain. There are companies 
developing these adjacent technologies, but not pursuing market entry 
due to regulatory barriers. These impediments are preventing farmers 
from using an ``all of the above'' approach to reducing their GHG 
footprint. Continuing the dairy industry example, dairy has committed 
to being net zero by 2050. This is a massive undertaking and at Land O' 
Lakes, Inc. alone, we are working with very small and quite large farms 
to reach this goal.
    To help our dairy farmers succeed, Land O' Lakes launched our Dairy 
2025 commitment, which consists of two parts:

  1. Land O' Lakes' dairy member-owners will complete an intensive, 
        industry-leading on-farm sustainability assessment aligned with 
        the U.S. Dairy Stewardship Commitment. It's a large-scale 
        measurement project that will yield more than 250 data points 
        per farm across Land O' Lakes' more than 1,600 member-dairy 
        farms located all over the United States.

  2. Second, Land O' Lakes' dairy farmer-members will maintain 
        universal compliance with the National Milk Producers 
        Federation's National Dairy Farmers (NMPF) Assuring Responsible 
        Management (FARM) program.
    The Dairy 2025 Commitment is an opportunity for Land O' Lakes to 
further demonstrate its leadership in sustainability alongside the 
groundbreaking work of its wholly owned Truterra business and the 
development of the Truterra\TM\ Insights Engine and the TruCarbon\TM\ 
Program.

                          SUBCOMMITTEE RECESS

    Senator Baldwin. And with that, I am going to call this 
hearing to a close. We are adjourned.
    [Whereupon, at 11:34 a.m., Thursday, April 29, the 
subcommittee was recessed, to reconvene subject to the call the 
Chair.]

                              [all]