Show notes
Matt Nicoletti, Business Development Director for Fresno’s Penny Newman. ————————————————————-Transcript: Translated by Artificial IntelligenceTwo Guys Regenerative Farming Craig Scharton: [00:00:00] Matt Nicoletti is in charge of business development for penny Newman, which we established, we think is the second oldest business in Fresno. Uh, Fresno ag has you beat by two years. Pretty close Matt Nicoletti: though. You, you, Craig Scharton: you still Matt Nicoletti: look pretty young. Paul Swearengin: So how, how old, how old is his number? Is the number two oldest company in the history of France. Matt Nicoletti: I’d have to do Craig Scharton: subtraction, but it’s 1878. Matt Nicoletti: So let’s see. So is that one 42, one? Uh, yeah, 142 years. All right. And your, Craig Scharton: your younger brain cells worked very Matt Nicoletti: well. Yeah. Um, well it’s, uh, yeah, um, phone number. I should be tracking readily able to answer. Um, but, uh, yeah, no we’re, um, penny Newman, um, uh, uh, like we said, was founded in 1878 and it was an agricultural dry goods store. It wasn’t all too different from Fresno [00:01:00] ag in that respect back in the day. Um, but evolved into a commodity trading business, marketing of grain. Um, uh, marketing of planting seed, um, and then it evolved into a feed business. As the livestock sector really exploded in California and the production of grain and feed type of ingredients really declined significantly in California. So that industry became more heavily reliant upon industry structure, um, that was owned and operated by companies like penny Newman. That could bring in large quantities of grain and feed type of ingredients from out of state where, which are the largest production, larger production sheds of those types of agricultural goods. It’s kind of inverse of what you would think of California, because we’re such a net producer, net exporter of agricultural goods. Um, but these types of commodities that make up penny Newman’s core competencies were very much a net deficit state. Craig Scharton: And yeah, he had to keep buying bigger and bigger quantities, which is kind of an unimaginable volume. I just can’t even picture it [00:02:00] when we were talking about it the other night. Um, but we are a huge producer of dairy products. And so you’ve got to get the grain into them. Right. Matt Nicoletti: Indeed. Yeah. And we they’ve th the, the California produce stuff that the dairy sector consumes here. It’s mostly byproducts almond, wholes, obviously being a really popular one. We just harvested our largest almond crop ever, you know, 3 billion pounds, um, byproducts from the food processing. You know, we’ve got a lot of grapes and the great pumice from the winery sector, the, um, bakery waste, the mill feed bride products from all the flour milling that we have in the state. Those are. Those are very much, you know, staples in the dairy ration, but the, the most th the, the most high value, um, commodities in the dairy ration are for the most part coming in from either out of state or even overseas. Craig Scharton: Yeah. And what, and what we wanted to kind of jump to was I was really excited to hear Matt Nicoletti: about, Craig Scharton: uh, your, uh, interests in, [00:03:00] um, In regenerative ag. So we kind of nerd it out about that, uh, through our mutual friend and, uh, your employee fan Telus, and I, um, Uh, had a beer in my backyard a week or two ago. And, uh, we just, we really went pretty, pretty far off the nerd cliff, uh, Matt Nicoletti: for most people, Paul Swearengin: but Craig Scharton: it was very fun to have someone local that I could do that with. Matt Nicoletti: Thrilled to see that you were so interested in it as well with the op-ed piece and everything. I mean, it’s, it’s great to see that, you know, we’re not stepping out too far in the, in the lunacy, uh, ledge by, by, by really committing to this movement. But it’s something that I just continue getting proof of concept with in the field and, you know, with every. Every grower that, you know, we participate with. And the more sophisticated we get about collecting data and realizing the potential of taking a more biological approach to crop production, the more I believe in that [00:04:00] legitimacy of this movement. So it’s, it’s really, really exciting, um, to see folks, you know, coming to the table and, and, and really realizing the potential. Well, and Craig Scharton: it’s, I think with Paul, you know, being a pastor and he’s been doing some interesting, um, panel discussions, you know, it all starts kind of lining up. Like if you believe in a creator and creation or whether you’re more science-based and you believe in the biology and, and, and, uh, you know, the inner workings of, of, uh, Chemistry about how all of these things are starting to line up with people. You know, all, all, it seems like Matt Nicoletti: all of our needs can Craig Scharton: kind of be met if we start working toward or walking toward the, the programs that you guys are putting out there. So how you D you defined, uh, regenerative ag in your, uh, September [00:05:00] newsletter. I thought really well, Matt Nicoletti: if you remember Craig Scharton: what that was, how, how do you state it for a person that’s just tuning in, or even for a farmer that’s heard about it and doesn’t really know what it means. Matt Nicoletti: Yeah. So, and I appreciate that question because it’s super complicated. If you were to Google it, I mean, the answers you’d come across are. Diverse. And in a lot of times there’s an emphasis on the practice. It’s about integrating livestock with crop production. It’s cover crop. It’s no till or conservation tillage, it’s X, Y, and Z. And you know, what we tried to, uh, really convey in the newsletter is what are all of those things intended to accomplish? And really in our opinion, the simple definition is farming with an emphasis on soil health. Um, and I do think that is a succinct definition, but right. What the heck does soil health mean? You know, so you’ve got to sort of take it one step further and define that. And, um, really, you know, no over simplification would be to say so healthy soil is that, which is [00:06:00] rich in organic matter. And biodiversity, it supports a robust population of microorganisms, bacteria, and Michael, as a fungi are the two that, you know, are sort of the main ones when it comes to the, the, the, uh, uh, the, uh, microbes that are doing the work that the plants are ultimately beneficiaries of. Um, but the organic matter it’s, it’s really great. I mean, they can create an environment. Those microbes are what create the organic matter. It’s organic material. You know, the leaf falls off the tree when that leaf breaks down and gets incorporated into the soil. It’s being decomposed by those microbes. Right? And so that organic material becomes organic matter, which creates an environment that is more suitable for more microbes, which are doing all the hard work of mining the nutrients and transporting the nutrients to the plant. So you get this crazy myriad of benefits from both a productivity perspective. And an environmental stewardship perspective. It was honestly hard to believe when I really first started diving [00:07:00] into the science and the potential behind all this stuff. So, but to answer your question, it’s farming with an emphasis on soil health and, you know, it’s just a healthy living soil is really what we’re trying to accomplish with regenerative agriculture. Paul Swearengin: So it’s, it seems like long-term having healthy soil is going to have, you’re going to have a good return on that investment. Is it. Does it lower the profit margin short term. Uh, and, and you’re doing it for charity and generosity to the earth, or does it have a, is it profitable to do regenerate work the way you are doing it? Matt Nicoletti: So a part of our sort of ethos and strategy is everything that we’re. Implementing on farm. We like to see a return on investment in year one. You know, long-term, if you’re really, really taking a plunge and implementing every practice, that would be a part of our full program soup to nuts. You might be slightly exceeding your standard conventional budget, you know, and there’s. Well, weird conflation and confusion with what’s the difference between organic and [00:08:00] regenerative. Um, organic, there is a huge premium and the production costs with the, just the premium on the fertilizers. The, you know, generally expected compromising yield. Um, but organic is all about what you can’t use. Right. You can’t use synthetics. It’s not just the pesticides. It’s also this instead of synthetic fertilizers and most of our fertilizers are synthetically produced. Um, but in the case of regenerative, it’s all about what did you accomplish? You know, are you moving the needle in a direction towards healthier soil? And what we like to see is growers get that return on investment in year one. I mean, we have a number of products that can be used as a standalone where we say use this instead of this. Make room for the budget in this, by getting rid of that other thing you’re using, which by the way, is adding, is compromising your soil’s ability to propagate microorganisms and, and host that biological life that is, you know, essentially the bedrock of regenerative agriculture. So, um, use this other alternative [00:09:00] instead. And if you see, you know, a percentage increase in yield and quality to the point where, you know, You’re generating a significant ROI in year one, then, you know, it’s hard to argue against it, right? Because a lot of the, the, the, the challenge with different environmentally based movements, they require such significant upfront capital intensive investments, you know, clean energy, cleaning up after yourself costs a lot of money. Right. And one of the reasons I’m so optimistic about regenerative agriculture is because of how often we see an ROI in year one for our growers. Craig Scharton: Well, without naming names, you’ve, you’ve been doing some kind of on the ground research already. Right? So Matt Nicoletti: what is that, Craig Scharton: what is that yielding? What are you, what are you learning? Matt Nicoletti: So, you know, when we first started getting into this, it might be fun for me to give you guys a little bit of context as to how we got here to, uh, because it was serendipitous. Uh, admittedly, I’d love to tell you that I was. You know, incredibly forward thinking and doing a lot of outreach and trying to figure out how we [00:10:00] can get into this space. And there was a little bit of that in there, but, um, really it’s, it can be attributed to one gentleman by the name of Dennis butcher who walked into our office a few years ago. Um, gentleman from Utah that had an idea for a soil amendment. And we said, great. You know, that’s a market, we’re not really that active or participating in. Tell us a little bit more about that, your idea for it. And, um, you know, you know, as, as we started, as I started gaining a better understanding of what his amendment and his agrinomic program, he has since introduced us to quite a number of other products that make up our agronomic program, um, I’m also, you know, becoming aware of this growing movement with regenerative agriculture. And I realized that everything he is promoting, um, is exactly what this movement is calling for. It’s the emphasis on the soil health, the soil biology, the microorganisms. And so, um, it, uh, I realized I’ve got to figure out how to connect these two things, right? How do I take advantage of this movement to at [00:11:00] least just increase awareness around what we’re doing, or figure out how to reward growers for, you know, hitting these new environmental standards and those sorts of things. But one thing that I recognized just simply in our sales process, and you know, again, we’re new to this game relatively is you have to prove what you’re saying. These things do are actually being accomplished in the field. Right. So, you know, in the case of regenerative, are we seeing an increase in organic matter? Are we seeing increased micronutrient uptake without the addition of micronutrients, um, you know, growers spend an immense amount of money on micronutrient for, for fertilizers, zinc, boron, and the like, um, whereas, you know, what, what we’ve one thing we do in particular that is really unique is with a soil analysis. Um, Or your standard soil analysis only shows what’s quote unquote available. It doesn’t show what actually exists. There, there is a signal in, particularly in the West. We have very minerally, nutrient dense soils. And so when you look at a, um, [00:12:00] standard soil analysis, it, it there’s because of the bonding between those minerals and the ratios being a bit out of whack and the lack of the, um, uh, bacteria that are there to break the bonds and make those things available to the plant. Um, you’re actually not seeing the availability of what’s there, there might be 200 times more calcium in that soil than what’s showing available. So what we like to do is. Something called a natural nitric acid or totals test. Um, and not a lot of folks are doing that. It blew my mind when I found out, found out that that’s not status quo, that we’re not trying to figure out what’s there and mind what’s actually there that we’re adding these, you know, expensive, typically synthetically derived inputs to make up for that deficiency. And I think a lot of folks don’t recognize that, you know, we’re really aren’t that deficient in, in, in mineral nutrients, we’re deficient in biology. Out here. And, um, so a lot of the stuff we’ve been doing is revealing the, uh, the, the potential that our soils have simply [00:13:00] by just nurturing them in a way that allows you to, um, uh, uh, uh, uh, uh, harvest what’s there and reap the benefits. And so just being, and it’s, it’s super simple stuff, you know, are we getting better nutrients? Take are we increasing the soil organic matter? Are we getting better water infiltration? Um, but we are going to start getting more geeky with it. We’re going to start counting earthworms and things like that too. So, uh, Paul Swearengin: how do you count earthworms? Is, is it a per, uh, per a, a particular measure and you just pull up some dirt cubic foot of dirt? Yep. Okay. Matt Nicoletti: regenerative agriculture. Paul Swearengin: I love it. Counting earthworms that you get paid big bucks Matt Nicoletti: for that totally. It’s a labor intensive process. And that process is yet to be automated. So it’s costly, Craig, it looks like you’re on mute. Paul Swearengin: I lost you, Craig. You’re not on mute. Craig Scharton: Oh, there you go. That’s my it’s my microphone. [00:14:00] Paul Swearengin: Okay. Craig Scharton: My grandsons don’t know I’ve been training them for that job for several years. Uh, I bought them a couple of kids size shovels a couple of years ago for Christmas. And when I come over, they go let’s hunt for earthworms, grandpa, Matt Nicoletti: and we just start Craig Scharton: digging in the yard and pulling them. So I’m working on your, uh, Matt Nicoletti: your labor force mat. That’s great. Yeah. Except I’m not sure the legalities of that. We have pretty strong labor laws here in California, regulatory intensive. So, um, we’ll figure something out there, correct? Craig Scharton: We like to say, uh, well, they can volunteer, I think maybe Matt Nicoletti: a volunteer. Um, and I think Fenn was telling me he got your soil, that soil, that analyses done for your backyard there so Craig Scharton: bad, Matt Nicoletti: we can help. Craig Scharton: It is so bad. I need Paul Swearengin: more earthworms. Craig Scharton: I do. Matt Nicoletti: What’s your average organic matter out there? Did, did he tell you Craig Scharton: what it was? It was really bad. Matt Nicolet…
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