Wal-Mart’s Focus on the Fields: New Fertilizer-Optimization Program
Wal-Mart Stores (NYSE:WMT) might not be pleasing everyone right about now, but it is currently in the good graces of a number of conservationists and agricultural groups — that’s at least something the Bentonville, Arkansas-based company can celebrate. USA Today reported over the weekend that Wal-Mart is getting serious about its focus on developing sustainability measurements for the products its sells, and the company has set a goal of reducing fertilizer on 14 million acres of farmland by 2020. The company’s executives have been presenting a new fertilizer-optimization program at a number of farm association meetings over the winter, meant to help Wal-Mart realize this ambition.
According to USA Today, fertilizer is one of the biggest sources of pollution in lakes and rivers, with over-fertilization contributing to water quality problems across the country; Wal-Mart has been working since 2009 to reduce water pollution while making agriculture production more efficient. Though its efforts in some years have been more conspicuous than others, this winter, Wal-Mart has shown a clear focus. The company began announcing in the fall that it in its newly established program, it will require suppliers of crops — including corn, wheat, and soy — to begin developing fertilizer-optimization plans. Participants include food supplier Cargill and producer Kellogg Co. (NYSE:K), according to USA Today.
Wal-Mart’s new initiative is significant, because up until now, the retailer has had very little contact with its farm producers. Brittni Furrow, a director of sustainability at Wal-Mart, explained to USA Today that at first, farmers were reluctant to answer the retailer’s call this winter because they work on opposite ends of the supply chain. Eventually, the producers recognized that Wal-Mart simply maintains the same work principles that farmers do — the desire to optimize and produce efficiently — and that’s why many eventually took up the company on its new program’s offer.
And Wal-Mart’s image isn’t the only thing benefiting from its new fertilizer-optimization program. Farmers are expected to reap the benefits, too, because fertilizer is one of the biggest expenses they endure, and employing it efficiently is always in their best interest. Wal-Mart’s program, USA Today reports, requires extensive soil testing, as the soil tests can tell a farmer the right time, location, quantity, and type of fertilizer to apply in a given area. These evaluations help ensure that no fertilizer is wasted or applied excessively, later leading to the risk pollution that results from over-fertilization.
Wal-Mart’s program not only helps farmers improve their efficiency and detracts from the risks of pollution but also reflects one of the first times a major retailer has offered a market solution to sustainable farming, rather than relying on the government to do so. In its report over the weekend, USA Today spoke to Suzy Friedman, the sustainable agriculture director for the Environmental Defense Fund, who explained how Wal-Mart’s program could help the push for sustainable farming take off dramatically. She said: “Farmers talk a lot about how they want the market to drive demand for what and how they produce. I think this is the first time this is going to happen in a big way.”
Now, Wal-Mart will push its low-cost fertilization plan and hope that many suppliers latch on. Conservationists and agricultural groups praise the initiative as a win-win, but it’s still possible that not all those on the other side of the supply chain will be interested in supporting Wal-Mart anymore than they already are. That’s still up in the air, but considering that many state lawmakers are already considering bills to establish similar programs, some suppliers might have no choice in the matter sooner rather than later.