Insight: In "Green Wheat" drive, Wal-Mart may transform farming

Thu Jun 21, 2012 1:10am EDT
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By Michael Hirtzer

CHICAGO (Reuters) - Wal-Mart Stores Inc has long used its commercial might to forge a global supply chain with ruthless efficiency. It now has a new target: U.S. wheat fields.

As part of efforts to reduce its carbon footprint and burnish its image as an environmentally responsible company, the huge retailer is sending senior employees into the fields for the first time ever, looking for ways to help farmers reduce their use of carbon-intensive fertilizer or improve logistics.

"We don't have a lot of visibility in the supply chain, so we started in the field," says Robert Kaplan, a sustainability manager at the Bentonville, Arkansas-based firm. "I hadn't seen a wheat field before and I wanted to find out how we go from a green crop in the fields to flour on our shelves."

This May, Kaplan and a colleague were the first Wal-Mart employees ever to attend the annual crop tour across the No. 1 winter wheat state Kansas, a rite of passage for traders, analysts, academics and buyers for the past 55 years.

The aim is simple: use Wal-Mart's commercial muscle to get its Great Value-branded flour and wheat products from field to shelf more efficiently, using less carbon.

In the process, however, Wal-Mart may end up initiating transformative changes in the way U.S. farmers grow wheat, lowering costs and improving yields for a crop that has failed to keep pace with the dramatic improvements in sustainability of other commodities such as corn and cotton.

There are some relatively easy wins: convincing more farmers to abandon the practice of plowing their fields after each harvest, and using satellite imagery to optimize fertilizer use.

But the challenge is substantial. Wheat is already one of the least-intensive crops in terms of nitrogen fertilizer, using half as much as corn to produce an acre of grain.   Continued...

A Walmart store is seen in Rogers, Arkansas, November 8, 2009. REUTERS/Lucy Nicholson