“With anhydrous ammonia prices jumping to as much as $1,400 per ton in the past several years, green ammonia production could offer anhydrous ammonia in the $200 to $450 per ton range in the future.”
— Guy Swanson
A fledgling ammonia-for-fuel industry is sparking interest in an electrically powered, carbon-free infrastructure that could rewrite the cost of anhydrous ammonia for North American farms.
When anhydrous ammonia jumped to sky high prices in late 2021, growers intensified their scramble to find black ink on 2022’s farm spreadsheets. It was a long-term challenge, considering natural gas, the main feedstock for anhydrous ammonia, was trading at near-record-high prices.
While short-term alternatives to cut fertilizer bills are scarce, Guy Swanson says farmers need to be aware of some industrial changes tied to the clean-air movement that theoretically offer anhydrous ammonia in $200-450 per ton range.
So-called “Green Ammonia” has captured the imagination of many as a hydrogen-rich fuel which has many applications, including its use as a nitrogen fertilizer, says Guy Swanson. The long-time veteran of the no-tillage movement, having grown up family farm where his father, Mort, in the late 1960s built the heavy-duty Yielder drill for no-tilling the steep slopes of the Palouse area of southeastern Washington.
Guy today is the head of the Exactrix Company in Spokane, Wash., which manufactures and markets extremely precise fertilizer application systems. Seeing the sky-high fertilizer prices being paid in the past several years by growers, Swanson has turned his attention to developing the green anhydrous ammonia processing process that could lead to huge reductions in nitrogen prices. Listen in as Guy talks about the future use of green ammonia on North American farms.
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Welcome to the No-Till Farmer Influencers and Innovators podcast. I'm Frank Lessiter, editor of No-Till Farmer. SOURCE by Sound Agriculture sponsors this podcast about the past, present and future of no-till farming. Guy Swanson of Spokane, Washington is a longtime veteran of the no-till movement, having grown up on a family farm where his father Mort in the late 1960s built a heavy-duty yielder drill for no-tilling the steep slopes of the Palouse area of southeastern Washington. Guy today is the head of the Exactrix company which manufactures and markets extremely precision fertilizer application systems. Seeing the sky high fertilizer prices being paid in the last several years by growers, he's developing what is called a green ammonia processing process that could lead to huge reductions in nitrogen prices. Listen in as Guy talks about the future of green ammonia on North American farms.
Guy Swanson's who we're talking to today, and you've been in a pioneer family for no-till for many years. Your dad Mort was no-tilling for years. I think I read you've been No-Tilling the family farm since 1973, and your dad came up with the pioneer drill that became the yielder drill and then you got involved in fertilizer at Exactrix and now you're talking about green ammonia. So we're going to talk about green ammonia today and what it means to no tillers, and I guess we better start off and have you explain what green ammonia is.
Okay. Well thanks, Frank, for the great introduction. World is changing, it's changing really fast now and due to the wars that we're fighting and also just oligarchy is forcing a change. So I want to talk a little bit about green ammonia. Let's go there first, and all Ammonia today built around the world is done with a process called steam methane reformation or SMR. And there is a lot of gases that are lost into the atmosphere with this technique. And it was US developed. In fact, the United States military, as I understand was actually involved in it very early on. But the actual advent of steam methane reformation came from the petroleum industry, and a Houston company by the name of Kellogg Brown Root invented the process of a single train compressor. And this allowed them to produce copious amounts of ammonia, nitrogen. About 1962, up until that time, Frank, the ammonia in the United States was built with dams.
It was built at the Wilson Dam and the TVA, I remember touring that and looking at the old equipment from the era of World War I. So we actually have been building ammonia for nitrate to fire the guns of World War I. But following World War I, the TVA had a mandate to become a fertilizer development center and it later became the National Fertilizer Development Center, and that's where your anhydrous ammonia development work all came from. So it was green ammonia and done with hydro power. You've probably been out west here, you know where Trail, BC is just north of Spokane on the Columbia. And when I was a boy, I applied green ammonia with the Caterpillar. You did a lot of recropping with green ammonia. Recropping is when you raise wheat on wheat.
So green ammonia is strictly done with solar and wind today. Dams aren't near the choice, but it's all about energy. How do you get the most economical form of energy and the cleanest energy? And the chase is on to find that. And what happened in my particular case, I got so fed up with Koch brothers in Kansas taking all the money away from my great producers and shipping it to Brazil to build another ammonia plant. Why don't we just get control of this situation?
Now it's not a vendetta, it's just a simple case of it's a runaway and we need to build the ammonia much more economical. And so we're going to turn the clock back, Michael J. Fox, we're back to the future. We're going to build it with electrolysis. So it's a very straightforward process and very common. To certain people, I mean it's very common. That's kind of a brief rendition of green ammonia.
Solar and wind is the optimum choice. But you can also use hydro, which has been done. And of course you can use some more expensive processes like pumped hydro where you actually build a reservoir and run water up and down the hill. Or you can go to geothermal, you can punch a hole into the ground and try to get some of that good energy from the planet. In general, there's a few other approaches.
Most of the ammonia we're using today in the US, is it produced in the US or imported?
About 2 million metric tons comes from outside the United States and it's related to the Mississippi River and the New Orleans port. It comes from the Caribbean or it can come from Europe, wherever they can get the best buy. It's got to move up the river. And so our Mississippi River is very key. The Magellan Pipeline is now closed and that's the one that ran from Texas, Oklahoma, Borger, Texas, all the way up into the northern states. That particular pipeline has been a mystery to me why they would do that. And now I think I know, and I think the handwriting is on the wall for the old mega plants. They're going to be fading away. I don't think we'll ever build another one would be my guess. There's 35 of these plants, by the way, and most of them are located on coastal plains and related to river transport to reach into those more inland markets.
And of course Iowa has a very recent one, but it was not US built, it was built by Aramco. So you have some movement thinking that maybe we need to get in control, a little more control of our national security by building our own ammonia plants and getting away from the mega approach and not worry about the rivers, let them be. I think we have now figured it out. It's very simple. You just build it right in your town. You just go local. And the county commissioners seem to like us thus far. We've had really good acceptance.
If we build these plants across the states, how big would they be? How much ammonia would they turn out and what would they cost to build? There's a loaded question for you.
Yeah, yeah. Oh no, I got it all down now. Geez man. Oh god, we got the A-Team working and there's numbers flying around and spreadsheets. And so to answer your question kind of piece by piece, the plants are not oversized. They have very little impact. They consume about 2.5 gallons a minute of water. So it's a residential rate, so there's no impact of any significance on the aquifer. We even are considering using rainwater because it's soft. The plants have a footprint of about 40 to 80 acres. It kind of depends on the area we're in.
The production is not like a magnanimous mega plant. It's about 10 ton a day. And we store ammonia right at the plant in pressure vessels. They're large 60,000 gallon and 30,000 gallon pressure vessels. And we have discovered that the ammonia tanks double and triple their value from their original price. In fact, this morning I was just working with a producer in Nebraska and he paid three times more for an ammonia 30,000 gallon tank than what it was cost to be built in 1997.
So yeah, it's steel. But the other thing that happens with ammonia, the two of them are meant for each other. They just fit so well. And so there's very little internal corrosion at all inside of a tank. Most of it is to keep the paint on the tank so we don't get external corrosion. It's very important to protect the value, and of course the people that really have to say so are the insurance companies. And so Hartford Steamship and Boiler ensures all these tanks. And then we have our state boiler inspectors, state fire marshals, they make all the follow up in the field, they catch the mistakes. If anything is wrong, they catch it early.
People think, "Oh, there's just too much regulation." Well that's what makes it work is the regulation. And so you get a hazmat driver and he's in a big truck and you've seen him going down the road and he has an impeccable safety record if he's driving in an ammonia truck. So let's see. And the general gist of it, it has a couple wind towers, maybe three. It has about 20 acres of solar panels. And then we have a little bit of an extra bonus with the plants. Kind of depends how we set up the stool or we call it the three legged stool. And so renewables have a little issue from time to time. They go burp and they'll shut down for 20% of the time, both solar and wind. They never overlap perfectly. And so you have to run spreadsheets and try to figure it out.
And so we make up the difference with what they call a PPA, a power purchase agreement, a swap agreement where we exchange power back and forth to the grid. Or in some cases we go gridless. If the grid is not supplying green electricity, well we don't get the bonus at the end of the run. So the new IRA, you've probably have heard about all the things going on. We get a $3 per kilogram credit that goes back in our hip pocket and we get about 1,600 kilograms a day. And so there's a little $4,800 bonus at the end of the day for building it green. And yet, it's not required. We just use that to build the next plant. That's our approach is to don't get that into the operating budget because they might take that away. So our goal is to build it as cheap and economically as we can.
And so Washington State University, Kansas State University is all involved in our feasibility studies. Some of the top men in the world in anhydrous ammonia and ammonia manufacturer, they come from Germany. These people are fantastic supports. Kansas has a special interest because there's so many acres that are fertilized. Every acre gets fertilized when you get out in the western part of the state because soybeans don't work very well anyway. And so we've got Milo, there's 8 million acres of Milo and we got the dryland corn, a big technical movement there. There's no more summer fallow, that's all gone. It's all done with winter wheat, nice rotations, strong returns. Garden City, Kansas, I've got a fantastic guy with 14,000 acres and he has just made fabulous inroads, top yield 120 bushel average in one year on winter wheat. I just couldn't believe it. Dryland too, about 14 inch rainfall. So it's those old bands and no-till that makes it work.
And so these are some of the fellows that are involved in green plant ammonia. They're a lot of Exactrix owners, almost 100% Exactrix owners that have signed contracts with us for seven years to deliver ammonia. It's somewhere between $100 and $300 a ton. We let it float a little bit in there just to cover our bets, and right now I think we're targeted at $247 a ton for year 2025. That's our kickoff year. The solution is in the wind. I mean, the power costs have come down so much. And here's a zinger for you. A factoid. I called the guy that built the first one, the first big 6,000 acre wind farms at Tulia, Texas. And we were talking and he was a land use manager. Well-educated, top notch guy.
And he says, "In Tula, I left my previous occupation as a urban planner," land use guy, "And I went into the rollout of wind," and he says, "We sold those first contracts for 2 cents a KW, and today you get the same contract, 2 cents a KW."
What that mean? Yeah, right. Level all the way through for 20 years, a level playing field. And it's a phenomenal story. We could have been building ammonia, we could have made money at $200 a ton all through that 20 year period. And you go take a look at what happened, and the oligarchy wiped it out. Let's put it this way, oligarchy set the stage for a guy working in his basement. Somebody had figured it out and it's good old America. These things come true if you stay focused. And so we're very close to having a fabulous announcement coming up in February about what direction we'll be going next.
And of course, we're very intense with the USDA right now and we also have investment group and we also have even taken a look at some major oil companies that might want to look at us. But right now I think that would be a little premature to suggest that anybody with oil in the ground may not be too interested in long-term performance, because we really do change the world. And this is part of the story is financing. So I'm going to answer your question about how much money does it take?
And that's what everybody wants to know. How much money does it cost to build one of these plants? In our initial approach, done so many different spreadsheet layouts, but right now we think we can build the first four or five for about $44 million a piece, and we really need to build 10 because they all tie together, they're interlinked like a golf course. And so from Watford City up in the McKinsey County, the oilfield, the Bakken deposit, we have a plant about every 150 miles in some of the best wind corridors in the United States.
What state are you talking about?
North Dakota to Pampa, Texas. And between Pampa and Watford City in North Dakota, we are looking at 10 total plants that all work together like a link on a golf course. So some days it's the wind's not blowing in North Dakota or the wind got cloudy, just environmental conditions. So these plants are eveners. They help us bring us into an average and then we can lose a plant due to repairs and not really throw the mechanism off.
I kind of knew about this concept. I was talking with a good friend from Koch and he mentioned that to me and, "Yeah, that's kind of cool, but I don't know. Yeah, we might take a look at that." And so that was, geez, 15 years ago. But in 2013 is when we had the breakthrough where we got connected with Europe and we were able to find the small scale Haber Bosch processor. It's not unusual for this to happen, by the way. The diesel engine got its start as we all know in Germany. And it was Mercedes that set up Caterpillar. So the fuel system was the key. And before long in 10 year stretch, Caterpillar became the largest diesel engine manufacturer in the world by 1938.
So Europe leads, they always seem to have got things figured out a little differently and it's because they have no fossil fuel industry in Europe. And this is where the opportunity began to show up because we're so dominated by fossil fuel thinking here, and that's okay. That's how we evolved. The steam locomotive had to turn into a museum piece eventually and the diesel engine will turn into a museum piece. It is just changing. And that's all we have to do. We simply have to accept those vital words. It's all that we're really looking at here is change. It will change and it will be difficult for certain states that have big petroleum interests. They will fight tooth and nail, they'll tell the story their way and that's okay, you expect that, but I know we have the grip on it and we'll share the business for a while, but by 20 years from now it'll be done with wind and solar.
Let's take this plant that you're thinking of building in North Dakota at $44 million. Are these 10 plants going to be owned by an investment firm with outside capital or are you going to ask local people to contribute or what?
Our first rule is a triple play. Anybody that wants to invest needs to be a producer and to get the risk down and to get into the game of low-cost ammonia. Now it's not co-op. It's done as a business, and the triple play comes in the environmental side. You just flat don't use as much and you get a great crop and low risk and you have a chance to make a lot of money. And so the net dollar returns, we know an irrigated production in Kansas or Nebraska, it's somewhere between $100 and $150 more net income per acre. And that's all pretty well tested now, and time proven out.
And so the heightened part of my enthusiastic discussion here is that it's like 1962, we're starting over, we're going to wipe out the fossil fuel part of ammonia. Now it'll be around for a while, but we can drive land values and just all of a sudden you realize, well geez, the land banks will loan you money on this because they get a great play out. These guys can pay off their debt. They're not hoping for federal crop insurance to pay the fertilizer bill. The risk goes way, way down.
I've had some real experience on the Great Plains, it's one of my favorite places to operate. And you can't believe a number of acres that are not properly fertilized because the nutrient costs are too high. It's a mess. And this is what brings on these goofy thought processes. Well we don't need fertilizer. We'll do rigidity farming and all that. Hey wait a minute, if the price drops, all that will go away. So it's just the fertilizer's overpriced and we know who's causing it. And it's not anything to do with natural gas, it's just oligarchy and greedy people involved. I might also emphasize that there's some great technical papers that are available. If your listeners or the people involved in the iPod here would like to source those papers, we'll be glad to supply it.
And a lot of them are actually stored in a warehouse in somebody's computer at AEA, Ammonia Energy Association. And you can go look at what 20 countries are doing. They have over 200 members. Africa is coming alive, there's in gigawatts, I might add solar and wind to build ammonia. And everybody jumps back when they see these announcements. Oh this can't be true. It is, it's going on. And we have a really great connection in Holland that allows us to oversee what's going on around the world in green ammonia. Not blue ammonia, but green ammonia.
[inaudible 00:22:17] invests in one of these plants and is going to take some green ammonia on his crops. A year ago he may have been paying $1,400 a ton for it. And you're saying that maybe he can get it for $250 a ton. Is he going to pocket all that extra money or is he going to put more ammonia on and go for higher yields?
Well this is a lot of the thought process. Everybody knows when it gets really cheap that they get carried away with over application. We know this. And most of that over application, it has been done because of poor equipment, Frank. They were not metering correctly, they just set the controller as high as it would go and they'd waste the ammonia, and now we won't be doing that anymore. It's pretty well, it's serious business because these guys will have to invest in equipment also. That's some of the criteria. They have to have a delivery truck, they got to have a storage tank, they need to have some help on the toolbar. We build them, so does John Deere. But it will be Exactrix metering systems that go on these machines to assure that we know till. We're not going to be letting it be a runaway with shank application.
You may even see strip till start to take the heat as we begin to understand and it's no till with those 15 inch bands that really makes the difference, and you get these top yields if you just pay attention to where the nutrients are at. What throws a lot of people off is they don't realize that phosphate is going down and so is potassium and so is sulfur. And so when you make this nutrient package and it's all absolutely uniform, it'll stay in place for many years and those bands are available for future crops. You probably heard me talk about it. It's rotational band loading that makes it work. It's got to be no-till, and that's why strip till's kind of okay, I know you have a lot of subscribers in strip till, but in general most strip tillers become no tillers eventually.
We'll come back to talking with Guy Swanson in a moment. But first I'd like to thank our sponsor SOURCE by Sound Agriculture supporting today's podcast. SOURCE from Sound Agriculture unlocks more of the nitrogen and the phosphorus in your field so you can rely less on the expensive fertilizer. This foliar application has a low use rate and you can mix it right into your tank. Check out SOURCE. It's like caffeine for microbes. Learn more at www.sound.ag.
Before we get back to today's discussion, here's a little known no-till fact. John Baker's a longtime no-till researcher at the University of Massey in New Zealand and he's published more than 80 international papers on the science of no-till machinery and its interaction with the soil. He developed this cross slot technology that's now used in many areas at world. John is convinced the science and practice of no-till has passed the point of no return. He believes no-till is within sight of becoming the most common system on the planet for seeding row crops. And now back to my conversation with Guy Swanson on the future of green ammonia.
So one of the things you're going to have with all these plants is you're going to cut your shipping and transportation costs by quite a bit, right?
That's right. And yet, you think it through and you say, "Hmm, what is the cost to move ammonia?" And it's really pretty minuscule and it's very safe. The plants are about 150 miles apart. So initially, now we plan to build 2,000 so it may just be a matter of 15 miles and you can go get it. So that's our long term goal, which will take about 20 years to do this. But for now we'll be about 150 miles apart. These plants will lean on each other, they'll share production. There's trucks running between the plants. It costs us about $48 a ton to run a 10,200 gallon DOT transport. So you can run $48 a ton and run 150 miles. So that means that we're conjoined, we're connected or spiderwebed. Were linked like a golf course.
So when you sign up for green play, you understand that you've solved some of the problem because you have storage on your own farm, which the government will pay for or help you pay for with low interest loans. And the machinery part of the mystery can now be shaved away. We can get this high quality machinery that lasts for a long time and it will fit into our economic scenario. Not for all farmers either, I got to tell you. There's just some guys that want to be shortcuters and you have to let them shortcut, but they'll have a real price penalty if they elect to go different directions because the big guys will adapt quickly.
It may be a little difficult for the small guys, they may have to form machinery rings or try to figure out the machinery side. But we're just basically a simple local place to buy ammonia. We don't have a triple tier marketing program or we don't share with the other fertilizer manufacturers because we're green. We maintain a fungible certificate on the product. So that certificate goes with the ammonia. If you want to sell it back to us, you have to present us the certificate and then we watch the tanks electronically to see if something funny is happening.
And so we can confirm that it is in fact green play ammonia. We also have another way to technically study it and we have a little nanoparticle program that goes with the green ammonia. So we IP it, we know exactly that, yeah, that was built at this plant or that plant. So we have a little chemical tag that goes with it. This is part of the problem because the fossil fuel people want mix and blend gray with blue and they think, "Oh we'll put a little green in with that. This will be our carbon offset." But they quite frankly, you cannot miss the opportunity to get $3 a kilogram for H2 that's green, green H2.
So I've known you and your dad for five decades I think since we started a No-Till Farmer in 1972. And I don't think I've ever met anybody gets excited about a new idea as you do and as optimistic. But when you get some of these no tillers out there, I mean we got some farmers, they can be conservative. I'm sure they'd all like $250 per ton ammonia. But some of these people will say, "Well but I don't want to put any money into this plant." But then you've got other guys that get so excited, they're going to write you a check before they know the amount.
Well it's probably a matter of education, and there's followers and there's leaders and it's kind of like the no-till era in the '80s. We had a lot of unique guys that just sold off all their machinery and went no-till. You know who I'm talking about. And they just had fabulous results by moving into no-till. Yeah, it's not for everybody. One time I told the guy, "Well, what we're doing here is really for the top 5%." Well, that's going a little too far because you know tend to, you get a little too small a market share. In this particular case we're going to do it with price. We'll do it with the lowest cost price, but we want you to do it our way. We want you to do it the way it was originally laid out. And we don't want him messing around over in the tillage area.
You need to save ... So many people like to pop dress or throw solution 32 through the pivot. There's so much nitrous oxide that gets up in the atmosphere. It's 300 times more powerful in CO2. And this is where the real problem lies with the greenhouse gases, the methanes, the nitrous oxide and the CO2, we just have really, this is a great period where we can finally straighten out our outlooks on how to farm and will lead the planet.
The Chinese will never compete with us. Absolutely not. They're probably the most wasteful with commercial fertilizer of any country in the world because they don't have the massive acres of the great plains and the on up into Canada. It's just a fabulous bread basket to the world, and we just need to pay more attention and keep the dirt in place and get the water to go in the ground where it falls and get the fertilizer to stay in place and a few little cover crops in there and lengthened rotation and adding fumigant grade cropping into it. There's really some solutions here and we can take care of the seed corn people in the process. We can keep that still going. But [inaudible 00:32:05], it's a real change in the outlook of how to fertilize crops and how to protect the environment and get that triple play. And if you can get a triple play out of an investment, then you really have done something.
Do we have green ammonia facilities working in other areas of the world now?
Yes, there's about 180,000 tons of green ammonia. Now, at one time 30% of all the ammonia produced was done with dams. And that was up until the early '70s when they closed that part of the business down. So yeah, there are green small scale plants in Morocco and Switzerland. [inaudible 00:32:56] is the real leader in this project because they were the original builders of process equipment for ammonia in Europe. And so they have a big history in electrolysis, but they run the full gamut. They compete against Thyssenkrupp and Kellogg Brown & Root for the big plants and yet they do the small stuff too.
And so a company of engineers in Holland specialized in ammonia for many years and then they discovered, hey, we can build this. If the energy costs come down, we can build these small scale plants. And of course we've been in touch with them since 2013 on how to build ammonia economically. Once again, it's the story of the diesel engine. It came from Europe, that's exactly where it came from.
What's the goal of getting your first plant up and operating and turning out green ammonia for farmers to use? What year?
By the way, I wanted to add there are some green ammonia plants that are coming besides us, and we're all friends. I mean it's a growing market. There's no, like anybody's going to take anything away from the other guy. It's a phenomenal growth market. And so Minnesota, University of Minnesota has a small laboratory where they have I think a one megawatt capability, maybe one ton a day. It's a test facility. And I think the legislature in Minnesota authorized this development. I've not been in that lab. That came out of Proton Ventures I believe. And then CF at Donaldsonville has talked about a 20,000 tons per year. A small plant at Donaldsonville, and I think they're just kind of playing with it at this point.
But the problems for the mega plants is that they're all lumped together on the Mississippi River and yet the demand is not there. You have to transport it. And so when you get high transportation added to it, like where we plan to be, we'll never export it. If we're landlocked, it's just too far away from the ocean and too far away from the rivers. And so that's kind of a good thing for the producer because we don't run around trying to export our product when we can take care of everybody at home.
I think in general you'll see a trend, there'll be some greenwashing going on, a lot of talk about blue ammonia and really let them do it. I mean, it's fine because it's green ammonia that will win in the end. Locally built green ammonia, right in your town there'll be a ammonia plant and be very small and it won't be trailers going up and down the road from the ammonia plant. It'll all be in DOT trucks and the deliveries go right to the farm. And then you can have your little trailer at your farm if you want to use an applicator trailer design or if you want to have your own delivery truck to go to the field. You've probably seen some pictures of that. That's more of a western approach where you actually deliver right to your applicator then that's probably the ultimate and safest way to do it.
What's USDA think of this?
Well gosh, I don't get to talk to them. That's the funny part. But I know that we will have a meeting here shortly and I doubt if there'll be many others in the bidding process that will have as a complete a plan is what we do. At least that's what I'm told by the university people that have the contacts. I think there's three or four people that really make the decision at the USDA as near as I can tell. And so there's no political nightmares going on. We just want to compete. I like to compete. In the long pull we'll build a better future for American agriculture and these young guys are going to be able to pay off land debt. They're going to be able to buy land, and that'll drive land values and that'll keep these young guys down the farm where they can really make a good living and build their families.
One of the things that USDA's been doing this fall is they've invested some big bucks in climate change ideas. I would think with the reduction in gases into the atmosphere, this idea fits in with controlling climate change, right?
Yes it does. And I think that you will find that now there's a focus, there's a light in the tunnel about how to keep the greenhouse gases under control and there's only one way to do it. And that's the no-till. Got to be a no tiller. You've got to use rotational band loading. You've got to cut your usage way down. You're going to be running at about 0.7 of the recommendation in the case of phosphate. You may run at 0.2 of the university recommendation. And on sulfur, you're going to need a little more sulfur than what you've been using. And of course potassium had this new ... you've probably heard me talk about potassium sulfate, and this has really, really got something going. It's at least up to five times more effective than top dress potassium chloride KCL. And so it's targeted. It's right at that root system and it's got this nice column of ammonia around it and it attracts roots and all of a sudden the crop finds it and the weeds don't because of the targeting and you can take it to the next level.
So we'll reduce herbicides, keep the gases out of the atmosphere, allow us to keep the soil in place so we're not moving it down the rivers and into the lakes and we finally have a way to do it. And you've seen it coming for many years. You've seen it coming on. There's something we have to change and it's the fertilizer industry that it really deserves the comeuppance. There's a lot of promotion and driving forces that their typical philosophy is more-is-more. And they can't play in the game, they can't come and join us. It's just unfortunate. It's just human nature, inventory.
Well one of the things you mentioned was strip till and how some strip tillers will end up doing at least part of their rotation in no-till. But one of the things that strip tours have had, I would think above no tillers in general, is they've been sold on the idea of banding rather than broadcasting. So they're kind of ahead of the game. A lot of them are ahead of the game there. So maybe if they come over to no-till, they'll be hooked on banding.
Well that's right. And so many no-till people, farmers in the high rainfall Midwest scenario don't really understand how critical it is to band because they get this high moisture. But if you move west, you have no choice. You have to band it. You cannot lay it on top. And so all that $20 million we spent in the '80s in the STEEP program, all that education from Washington State, University of Idaho, Oregon State, the nutrients have got to be banded. And yet today you find scenarios where guys are not paying attention to where the nutrients are at.
They've got to be in the ground, in the root zone. There's just more efficiency, just more and more. And the chances of getting it into the environment are greatly, greatly reduced. And why would you go down and order a nice meal at the restaurant and leave 50% of it behind? Why would you do that? It doesn't make any ... boy, you'd be in a restaurant lately, it's pretty expensive. You're going to feed the plant, you need to get it where it can use it.
So what have I missed talking to you about?
I think we covered it pretty well. Some of the reasons why we are located where we are, this has been one of the questions, why would we do this? What do they call that? The flyover states? Well yeah, right. Yeah, yeah. Just so happens they're the states with the most potential, and where does that potential come from? And it comes from the Ogallala, number one and conserving moisture, yet you're irrigating. And so when you no-till, you save about four inches of moisture, you get the nutrients banded, you know don't need as much. And so you can have deep wells, 400 feet, 600 foot deep wells.
They're deeper and deeper all the time because the Ogallala is going away. And so that's part of the business opportunity is irrigated production, and cattle. There's like 12 million head of cattle on feed at any one time and there's about 7, 8 million right in that stretch of the high plains. And so I tell my sales guys, wherever you're at, just make sure you're caught between the interstate 40 and interstate 94 and if you can see pivots, that's good. And if you see cows, that's really good. Keep them on the focus. That's where it's at.
And the other part of the challenge is the elevation. And so as you move into that 1,700 foot elevation level up to Denver at 5,200 feet, your soils are youngsters. They're not like the great soils of Illinois or Indiana, Iowa. These soils were covered with glaciers until about 20,000 years ago. So they haven't really developed. And so you're always missing some kind of micronutrient. You need manganese or iron and you're going to get a lot of iron chlorosis problems in soybeans.
But the real potential as far as green play is that's where the wind is at. And it's purposely called the Saudi Arabia of wind. And I guess if you spend much time at 4,000 feet, which would be from Amarillo North, that's some of the best corn production, and irrigated is all the way up into Nebraska. All these high elevation, what we call 4,000 foot farms or high plains produce these great yields. And it's because they have extra sunshine, there's more sun to raise the corn, they have good water and they have a lot of wind. And that wind can be harvested back into the crop with ammonia. And that means if your wife has got a clothes line out and she's drying clothes, you know it's an ammonia day, it's a windy day.
And so wind is what pushed the pioneers further west. It was so windy. In general, we just went past it. We went past the real business opportunity, and as the pioneers finally decided in western Kansas and Colorado, this is the place because we've got this great resource, we just need to harvest it and we'll be using wind and solar to build our ammonia and to run our pumps and to help with the overall economics of American agriculture in that scenario.
I think I've got a good friend, Dr. John Shanahan, he's working with Yara on carbon credits and we're starting to see pasture land that can be fertilized properly now. No more top dressing of fertilizer on grasses. It can all be banded. So you get in those marginal farming areas to get the price down. Well then the machinery can come in because it's got a fixed cost, it gets stretched over a much longer period of time. It's got a depreciation schedule. It's not like ammonia or nutrients, which are just a straight write off. And so the price needs to come way down and get back to where it used to be in relation to the price of the commodity. And I think the bankers are going to like it really well because the farmers can pay off land debt.
So we've been doing the National No-Tillage Conference for 30, 31, 32 years now. And I remember a speaker we had the very first year in 1993 in Indianapolis and it was Wes Robbins from Colorado or Kansas. And he talked then about the aquifer just going to go dry on us. Well that hasn't happened. And you were mentioning in woods, these guys today are just drilling wells deeper. Are we going to have enough water in 20, 30 years or ... well, no-till conserve four inches or more, so.
Yeah. Well no-till has been a godsend to them, number one, because that moisture is timely. A pivot situation is never timely. And so the more you store, like we pre water in the northwest because we have such deep soils that we pull it out of the Columbia and the snake, we pre water the crop in on August, September to seed the winter wheat. So you don't turn the pivot on again. That's good enough, right? Well they don't do that in the Midwest. They don't have that much water to do that sort of thing and they don't quite have the soil depth and management styles are a lot different. But I can tell you that if we get caught and if we keep pumping it, we're going to get caught at some point. There's other alternatives and in Texas now we have irrigated pastureland where they've lost it, they can't get to it.
Or we may actually have to build a great southwestern canal and bring it out of the Missouri up at Lake Sakakawea and bring it on down, bypassing all the Indian reservations that we can and bring it right down that 4,000 foot level right down into Texas, so it can be irrigated. We're not going to lose these families in this wealth that we have in these areas. I know it's pretty disappointing for some guys because they just don't know when a well goes to about 200 gallons a minute, you're done. You can't do anything and you can't do drip irrigation. Subsurface drip irrigation, that doesn't work. With a well that's so low production, you're not going to risk all that investment into a drip.
And so the real part of the story is yet to unfold. But I think it's perennial cropping and alfalfa has been a powerhouse play with the dairies. We see some great things with alfalfa, that'd be Western Kansas for sure. Where there's so much alfalfa. It's a case of moving water, you got to move it. But that's probably for the next generation to figure that one out.
Well, one of the benefits we've seen in the high plains with no tillers is they've been willing to diversify their crop rotation and do something different, where right here in the center of the corn belt, it's just soybeans and corn because that's what's paid the bills over the years, and a lot of people haven't been willing to diversify because they lose income.
Well, I think so. But I see things coming, Frank. We will be able to interject a third crop and even though it's not an oil seed, the fumigation with crops like Pacific Gold Mustard as an example, we can fly it on to the soybeans and let that crop winter kill, but it leaves these big tap roots and it fumigates the ground. We've got some real interesting data that we're going to release here in February about how we stabilize the nitrogen and held the nitrous ammonius at bay. It's a little technique I learned at University of Idaho from Jack Brown and Jim Davis about why there is more nitrogen, more ammonium in rotations that use crops that have high glucosinolates.
So it brings back the comment of green manure, and now we understand what they were talking about. It's not like we have to work it in and try to get it to decompose. It's the fact that the nitrous ammonius can no longer convert near as much ammonium into mobile nitrate. And so they get great crop responses from using fumigant grade cropping. So you'll hear more about it. It's probably a little early to be talking about it, but you've probably been seeing some of the articles about relay intercrop with fumigant grade mustard. Yeah, well the data is in now, and boy, it'll be interesting for you to read about it. Yeah.
This has been fabulous. I think our people have learned a great deal about green ammonia and I think everybody would be happy to be paying $247 a ton for a green ammonia. So I think you're onto something, congratulations.
Right down the street from your farm too. It's so close. We don't have to worry about a mega plant and the fear marketing of the fertilizer industry. You got it. You own it, you got it. Anytime the wind's blowing, you're making money.
That was the end of today's conversation with green ammonia entrepreneur Guy Swanson. Before we go, I'd like to offer another little known fact about no-till. Since yields must increase dramatically to meet the growing food demand around the world, we need genetics that can handle higher plant populations and likely new plant redesigns. As an example, no tillers will need improved genetics to boost corn populations to 60,000 to 70,000 plants per acre. We'll also need drought tower and seeds along with lots of fertilizer and careful management to keep nitrogen from leaching into streams. Hopefully these things are coming in the next few years.
That's it for this episode of the No-Till Farmer Influencers and Innovators Podcast. Thanks again to our sponsor SOURCE by Sound Agriculture for helping to make this series possible. You can find more podcasts about no-till topics and strategies at no-tillfarmer.com/podcasts, and the transcript of this episode will be available there shortly. If you have any feedback on today's episodes, please feel free to email me at L-E-S-S-I-T-E-F@Lessitermedia.com or call me at (262) 745-3730. I would love to answer your questions about no-till and the people and the innovations shaping today's practice. For myself and our entire staff here at No-Till Farmer, I'm Frank Lessiter. Thanks for listening. Keep on no-tilling and have a great day.