This story was originally published by Hudson River Flows, a storytelling collaborative writing a new narrative in support of truly regenerative economic redevelopment of the Hudson Valley bioregion.
Housed at Stone House Farm in Columbia County, Hudson Carbon is emerging as one of the most ambitious testing grounds for carbon farming in the country. Soon to launch an e-commerce carbon offset market—with Stone House as its pilot—Hudson Carbon’s ultimate goal is to enable regional farmers to receive just compensation, not only for carbon sequestration practices, but for a full range of ecosystem services.
Matt Sheffer, managing director of Hudson Carbon, spent the summers of his youth in rural Edgar County, Illinois, on an 800-acre farm owned by his maternal great grandfather. He went on to work on a small lettuce farm in Sheffield, Massachusetts following his sophomore year in college. His undergraduate degrees in philosophy and English literature—which inclined him to think conceptually but work practically—prepped him well for the work he does today: helping to craft a bioregional land management strategy that, it is hoped, will make it possible for Hudson Valley farmers to prosper as they work collaboratively on the transition they must urgently make to a regenerative agriculture economy.
Introduction to Hudson Carbon
Hudson Carbon was conceived in 2015 as Stone House was beginning to transition from conventional, chemical-dependent corn and soy production to a more a diverse, organic farming practice. The 2,000-acre spread represents the aggregation of four farm properties originally purchased by Peggy McGrath Rockefeller in 1980, which she and her husband, working with the American Farmland Trust and the Columbia County Land Conservancy, put into a permanent agricultural easement in 1992. After the passing of David Rockefeller in 2017, the farm land and building assets came under the umbrella of the Peggy McGrath Rockefeller Foundation, and Stone House Farm became its own separate LLC that leases the foundation assets.
In 2013, Stone House began a transition away from a conventional, commodity cropping system, towards a certified organic operation. However, this transition went beyond what an organic certification required. It employed a set of complementary regenerative agriculture practices with the goals of reducing tillage; maximizing soil cover to enhance photosynthesis; increasing beneficial insects, plant, and microbial biodiversity; improving nutrient cycling; increasing water efficiency and infiltration; integrating pastured animals; and increasing carbon stock above the soil level through agroforestry techniques.
The farm immediately began to enjoy the synergistic benefits of its holistic land management approach. Instead of terminating cover crops, for example, these crops are allowed to mature, and crimped down to create a mat of mulch for the next crop planting. This technique suppresses weeds and reduces the need for tillage. Tillage is further reduced by “frost seeding”: intercropping companion cover crops with annual harvested crops. Red clover might be broadcasted into a wheat crop in early April when the ground is still freezing. The subsequent freezing and thawing of the soil allows the clover to germinate.
“This enables us to establish the cover crop without tillage after harvesting the wheat,” Sheffer says. “Instead, the clover matures with the wheat, which also provides green manure and nitrogen for the corn crop we might plant thereafter.”
Stone House’s recent foray into small-scale dairy farming illuminates another integrated land management approach that has yielded an abundance of benefits for the farm as a whole. Responding to the regional dairy farming crisis, Sheffer reports, Stone House is looking to demonstrate a viable model for dairy farming in this region. During the COVID crisis, smaller dairies have proven to be more resilient to supply chain disruptions than larger ones. Stone House has just completed renovation of the old Dairy Barn at the Hermitage, a farm on the grounds of a former mansion once occupied by a descendant of Robert Livingston, a signer of the Declaration of Independence. “We will begin milking our herd of certified organic Guernsey cows in mid-summer,” Sheffer says.
In 2014, to provide forage for grazing cows, Stone House introduced a practice called “full” crop rotation. A typical full rotation might begin with an annual like corn; the next crop might be an oil seed like sunflower, followed by a small grain like wheat, and finally a 3-4 year perennial grass. Animals are moved from pasture to pasture on the perennial fields, allowing them to graze just long enough to allow the plants to recover. This also has the effect of stimulating new plant growth both above and below ground. A process called root exudation then occurs, where roots shed carbohydrates that feed microbes deeper into the soil layers, Sheffer explains. Full crop rotation, combined with controlled grazing and reduced tillage, has the benefit of depositing stable soil carbon deeper into the ground.
Stone House Farm has also implemented permaculture design techniques like Keyline, which draws water from wetter to dryer areas of the farm. Seventy-five hundred trees have been planted along swales and ditches to increase carbon stocks in aboveground woody biomass.
Measuring Carbon Flux—Going Wide and Deep
To determine the impacts of its regenerative land management practice over time, Stone House established 10 stations on the farm to measure carbon flux (defined as the exchanges between the earth’s carbon pools) as it is happening in plant biomass, soil, and water. “The impetus for the research project was to gather data to quantify the benefits of transitioning away from conventional ag, towards a more diverse, integrated, regenerative system,” Sheffer says.
“To track flux in plant biomass, we do three replicates at each research site every month, and year to year.” While most soil research only measures to a depth of 30 centimeters, Stone House measures to a depth of a full meter or 100 centimeters. “We are seeing the most steady stable gains in these subsoil layers,” Sheffer says. “Particularly due to the implementation of the full perennial rotation and the integration of animals into the rotation.”
In 2016, Hudson Carbon began partnering with the Woods Hole Marine Biological Lab to measure atmospheric greenhouse gas flux—carbon dioxide and methane (which includes carbon as CH4, and nitrous oxide) using a “portable chamber” method. On a weekly basis, a chamber is placed over a crop with a transparent collar to measure carbon flux as the plant is photosynthesizing. A black covering is then placed over the chamber to eliminate photosynthesis so that plant respiration can be measured. Together these techniques measure a plant’s full rate of carbon flux. These flux measurements are then integrated into the data processing of their eddy covariance systems, which measures greenhouse gas flux over a large area based on a three-dimensional measurement of wind speeds. Three eddy covariance towers installed across the farm provide high-frequency measurements—every 30 minutes—over an entire season. One of the towers is located on acreage of a neighboring farm that is currently conventionally managed, and the others on organic acreage. The highly anticipated conclusions from this study are expected at the end of the current growing season.
Measuring carbon flux variability from field to field is a major challenge, Sheffer says, and Hudson Carbon is addressing this in a variety of ways: “We are looking at metrics that can be measured in the field at high frequencies like electrical conductivity, and red and infrared reflectance. These markers can give you a picture of spatial soil variability at specific points in different fields. We are implementing this into our full quantification of the full flux over the last five years.” Water quality monitoring is also being conducted to determine how much carbon, nitrogen, and organic matter are leaving the farm through soil drainage.
Measuring Carbon at Remote Locations
Looking ahead to its goal of growing a regional carbon offset market, Hudson Carbon must also find ways to use remote sensing and modeling techniques to measure carbon sequestration values. “Carbon monitoring and measurement is expensive to do and you can’t expect every farmer to have the level of data they would need to show the impact their practices are having on their farm,” Sheffer says. “Instead what we can use are process-based models that measure carbon sequestration of certain ecological processes.”
Hudson Carbon is a a part of a collaborative project to calibrate the DeNitrification-DeComposition (DNDC) model, using its rich dataset. It is also building its own process-based model that will be regionally specific to the Northeast. The goal is to enable a farmer to calculate the carbon sequestration values of a specific type of practice like no-till without doing the data monitoring themselves but rather based on what the process-based model predicts will be sequestered. “This is how process-based models work,” Sheffer explains. “Empirical data about the effects of certain practices, coupled with basic plant physiology, soil processes, and meteorological factors, are used to create a simulation, which generates estimates of emissions and uptake within a specified range of uncertainty.”
Other tools under development include a remote sensing platform that will track field-level management using satellite imagery. “There is a huge cost to combing through data to be sure a farmer actually did what he said he did,” Sheffer says. “With this remote sensing platform, we hope to cut project registration cost to put more of the offset money into the farmer’s pocket.” This tool will also enable farmers to monitor the impacts of their practices and adjust them based on measured benefits year over year.
Addressing the Deficiencies of Current Carbon Markets
In early 2019, when it began researching the carbon offset markets, Hudson Carbon quickly began to recognize its limitations. Not only did its models significantly undercount the benefits of regenerative agricultural practices, the markets lacked transparency and did not offer a price for carbon that would incentivize farmers to participate.
Hudson Carbon’s offset marketplace was born out of a belief that it would be possible to address those deficiencies: to improve how credits were quantified and priced, and redefine how they were marketed in the context of soil carbon. “If we could improve the yield of offset projects and increase the value of an offset, we could guarantee more money to farmers to influence them to adopt new management systems,” Sheffer says.
Undercounting impacts: Hudson Carbon’s e-commerce carbon offset marketplace—launched in September 2020—hopes, over time, to compensate participating farmers for the full value of their greenhouse gas sequestration contributions. As noted above, current markets undercount the benefits of regenerative agricultural practices. But they also fail to differentiate regenerative ag from other less impactful sources of offsets. “Landfill methane capture or refrigerant destruction simply take one greenhouse gas and reduce it to another one that is less bad,” Sheffer says. “Regenerative land management is actually pulling carbon naturally out of the air and storing it in biomass and soil.”
Lack of Transparency: “Currently, carbon markets bundle credits like a commodity,” says Sheffer. “A buyer goes online to purchase a plane ticket and ticks a box. Buyers don’t know what they are buying or if it is real.” Hudson Carbon will instead enable the purchaser to select a third-party registered and verified offset from a specific farm, which will ensure that the credits are legitimate, not double counted, and backed by reliable data and measurement. “We want to eliminate that feeling of doubt and distrust,” Sheffer says, “and connect people to the real farmers on the ground doing the work.”
Undervaluation: Sheffer admits that at the current traded price of carbon—in the range of $8-20 a ton— the average farmer won’t be sufficiently rewarded to implement what are often, at least in the short-run, costly carbon-sequestering, regenerative practices. Based on its research, Hudson Carbon forecasts behavior will begin to shift at about $100 a ton. “This aligns pretty well with the Baker Schulz Carbon Dividends Plan that called for a $40 dollar price in 2016 with a $15 dollar price increase per year, which puts us at $100 a ton in 2020,” says Sheffer. “We think it is doable. We are seeing that it is achievable to sequester carbon at a rate of 1.5-2 tons per acre on our farm, five years post-transition. In fact, this is a conservative estimate. We are seeing rates upwards of 3-4 tons per acre in Stone House Farm’s regenerative system, based on our deep-soil research.” At a price of $150-200 a ton—albeit at what Sheffer reports to be “impossibly thin” conventional margins—Hudson Carbon believes farmers will be fully motivated to make transformations.
Hudson Carbon hopes to drive demand and the price of offsets higher in the short term through a combination of the CSA model, digital technology, and the power of storytelling. Sheffer paints the picture: “When purchasers come to the Hudson Carbon platform, they will see vivid farm imagery and narrative content that connects them with the farmer on the ground who is generating the offsets through his regenerative practices. The purchaser will be able to select any farm, learn about its farming practice, and even select a particular field to offset using GIS technology. Brand partners will be able to imbed a widget on their e-commerce website for direct purchases of their offsets.” Down the road, he says, Hudson Carbon even envisions farm tours as perks to offset purchasers. Other planned marketing techniques include unbundling units of sale to fractions of a ton, offering yearly subscriptions through a payment plan, and offsetting through brand partnerships. The latter partnerships will include food and fashion industry companies who want to improve the regenerative practices of the producers in their supply chains or to encourage their customers to support those regenerative producers.
The first wave of Hudson Carbon’s offset credits will be registered with Nori, a new third-party carbon registry that’s focusing on agriculture but will allow Hudson Carbon to use its own data. “The model that Nori uses only accounts for carbon down to a foot,” Sheffer explains, “whereas we are measuring down to a meter. This would represent a significant amount of carbon that would otherwise go uncounted.” Some of the carbon credits will be held permanently in a cryptocurrency—Nori tokens—as a buffer pool to hedge against future price reversals.
Toward a More Holistic Ecosystem Services Market
The offset credits that Hudson Carbon sells, registered with the Nori carbon removal registry, will represent only the carbon extracted from the atmosphere and stored in healthy soil through regenerative ag practices. It will not recognize regenerative agriculture’s many other contributions to ecosystem health, including avoided emissions through the use of organic versus synthetic fertilizers, through livestock management, biodiversity and water quality enhancement, and land conservation.
Hudson Carbon’s longterm goal is to create a true ecosystem services marketplace that rewards all these practices. “We envision a platform where exceptional land management and natural offsets can be traded using different registry methodologies,” Sheffer says. He reports that at the moment, quantification models are not sufficiently developed to evaluate those services on a whole systems level. “It’s a problem we are seeking to address through our own model and projects with other model developers using our data,” he says.
Taking Holistic Farmland Management to a Bioregional Level
Stone House, at 2,000 acres and now in its sixth year of transition to regenerative agriculture, will be Hudson Carbon’s first carbon offset partner. However, its costly carbon flux monitoring system has been heavily subsidized by philanthropic dollars and will not be easy to replicate on other farms. While Hudson Carbon hopes to bring other large farms in the area onto its offset platform, Sheffer admits it will be hard to incentivize change in the near term even on large farms at the current traded price of carbon, let alone on a small farm.
However, as both a supplier of agricultural inputs and a grains market maker, Stone House is currently supporting the regional transition to regenerative agriculture in a variety of other ways. Stone House Grain, which mills and sells grains for animal feed and human grade products, provides a market not only for farmers growing certified organic grains but also for those in transition to organic. “The premium we pay to transitional growers is a huge benefit to them,” Sheffer says. During the minimum three-year transition from conventional to organic, farmers must pay more for costly organic inputs and engage in more meticulous record keeping, but until Stone House made a transitional grains market, these farmers were unable to sell grains at prices that at least partially recognized these added costs.
Stone House also sells cover-crop seeds—including oats, rye, peas, and buckwheat, as well as hay and straw—to local vegetable farmers, animal and small livestock producers, chicken and hog farmers, and to dairies within a 50-mile radius. Stone House’s prices are competitive with other regional suppliers of organic grains who source from Canada and overseas.
The farm is also sharing land in an intentional way with nearby farmers. For example, Stone House now leases some of its grazing land to a neighboring grass-fed beef producer. While Stone House benefits from the manure deposited by foraging animals and their physical impact on pastureland, the neighboring farmer gains access to forage.
Stone House imagines many more ways that local farmers striving to operate regeneratively can cooperate for their mutual benefit in coming years. “Regenerative agriculture necessitates biodiversity and therefore a diversity of crops and farm products,” Sheffer explains. While those practices automatically reduce the scale of any one crop on any one farm, he says that in the long run it doesn’t necessary translate into lower profits. “In many ways, diversity also creates resiliency, and spreads the risk out across many different cash crops and products,” Sheffer says. “It is true that a diversity of enterprises (i.e. grains, forage, livestock, specialty crops, permanent crops) requires more initial investment upfront, a more diverse skill set on the payroll, and more overhead costs.” But through land sharing, a farmer can focus on one or two enterprises and enjoy the value-added benefits, while at the same time reaping the benefits of full integration on a landscape shared with other farmers. “Imagine a small vegetable farm, a chicken operation, a large-scale grain operation, and a dairy operation—all separately owned, but all sharing the same landscape,” Sheffer says. “Then you can start to see how smaller independent producers can be integrated into this system, benefit from shared maintenance of the system, and shared profit from the sale of ecosystem services.”
Converting Conventional Farmers to Regenerative Agriculture
Stone House is converting more local conventional farmers to organic practices as it expands it market-making capacity. For example, it recently contracted with a veteran conventional commodity corn and soybean farmer in southern Columbia County to grow hemp organically. “The farmer is interested in transitioning more of his land to organic because he’s seeing the writing on the wall,” Sheffer says. “If a farmer wants to produce for us, they have to grow organic. There are a lot of people sitting on hemp because of a market slump, but our hemp business is coming along well because we have significant value-added processes.”
Stone House is now also in discussion with the same farmer to grow non-GMO transitional grain for its milling business. The farmer, in turn, is permitting Hudson Carbon to set up longterm research sites on his farm to monitor the transition of fields where he is growing grain under contract to Stone House.
“We are really trying to win conventional farmers over by demonstrating that there is a viable alternative system that you can create on your land that does not involve growing the same GMO crop every year and soaking your field in herbicide,” Sheffer says. “We have to get over this mentality that these so-called technological advances in agriculture—namely herbicides, synthetic nitrogen, genetic modification—are necessary for the longterm health of people and planet. We feel very strongly that they are not.”