Agroforestry ecosystem builder, Propagate, has built the foundation for agroforestry expansion in the U.S. and is now seeing their efforts pay off. In the past seven years of business, the company has grown from a concept around bringing the benefits of agroforestry to the U.S., to having planted more than 211,000 trees and shrubs since 2020. Today, as one of the most established and still fastest growing agroforestry project implementers in the U.S., they have learned a lot about how to build successful agroforestry operations that produce results for farmers and investors. Now, they are also learning more about how their work positively impacts ecosystems and communities.
Expansion
Founded in 2017 by three friends, the past seven years have seen Propagate bring to life their mission to make it easier for farmland owners to integrate agroforestry into their operations. In 2021 they launched Overyield, the most accurate agroforestry design and economic planning software available on the market, to support this mission. In the past five years, they’ve led the industry in acres and trees planted, with over 200,000 trees planted since 2020. On top of all of this, they help manage the largest agroforestry operation in the U.S., which is just shy of 2,000 acres. (More on this later.) With an estimated 158,000 acres of farmland in the U.S. suitable for tree crops (according to the Savanna Institute), this represents a greater-than-1%-start and a lot of opportunities yet to capture.
Propagate’s Expansion of Agroforestry – Trees Planted:
Keavin’s Expansion
To understand what Propagate’s work looks like on the ground, we can dive into the case of Keavin Hill of Hill Farms, who we met back in 2023 when we explored the transition of his traditionally farmed corn and wheat/soy fields to agroforestry. For decades, Hill has managed approximately 4,000 acres of corn, soy, and wheat across parts of both southern Ohio and northern Kentucky, but today the fields look different. In 2022, Keavin began working with Propagate on a plan to convert part of his operation to hay/chestnut production. Chestnut trees are known for their longevity, ensuring a stable source of income for future generations. Moreover, investment data shows that the Internal Rate of Return (IRR) for establishing chestnut production is around 15%-25%, depending on retail-wholesale market ratios. In an agroforestry system, the ecological benefits alongside annual hay production offered a compelling case for both short and long-term fiscal benefit. That spring and summer they planted 51,000 chestnut trees across 650 acres. In the past year, Hill has worked with Propagate to increase the number of trees and acres planted on the land he manages by nearly four-fold: Today, he has nearly 1,850 acres planted and about 140,000 trees planted, making his agroforestry operation the largest in the U.S.
Hill is a self-proclaimed innovator on the farm, always willing to try new things and figure things out. The addition of tree crops to his operation has been one of his biggest farming adventures, especially with the dramatic increase of trees and acreage planted in the past year.
He’s learning that managing new crops (let alone perennial tree crops) at this scale is intensive. He explains that a 1,850-acre hay operation is pretty sizable but when you put that hay between trees where you have to protect the trees as you manage the hay, it becomes more like a 5,000 acre hay operation, in terms of the time it takes to manage.
“So, we have to constantly search for efficiencies in order to maintain profitability,” he explains. “We’re learning fast and by next year we will have it all under control.”
He has already brought in new equipment to make things more efficient and is continually learning more about integrated hay and chestnut management at scale. His next big step is figuring out how to harvest the chestnuts most efficiently. While the newer trees have not yet started to produce, the trees planted in 2022 are producing chestnuts and will reach commercial grade maturity in another 5-6 years. In the next few months, he’ll make visits to tree farms in California, Tennessee and Michigan to learn how others are doing it and bring those lessons learned back to his operation.
The challenges and work involved in managing this scaled agroforestry operation are far outweighed by the parts that excite Keavin. When we spoke to him on a mid-September afternoon, he told us that it’s been extremely dry and his grain crop yields have been impacted pretty bad. But with the trees, it’s another story. After conducting a couple of survivability assessments he’s been pleasantly surprised that the planted trees are still sitting at 98th percent range that has survived the current drought. This fact gets him visibly excited: “That’s awesome and gives us great hope!” he exclaims.
He also lights up when he speaks about the financial potential: the hay is currently being harvested and brings in some cash from the start of the project, but when the chestnuts mature, they will be a very profitable crop and there are potential benefits from carbon sequestration that eventually could generate additional economic value.
Why is he so confident in the potential of his transformed operation? There was a whole lot of research and preparation done, together with Propagate, he explains, and that has really contributed to his comfort, his hope, and his enthusiasm.
“It’s just exciting!” he booms. “Anything new is exciting and that’s where we tend to live our lives. We’re always on the edge of what’s the next big new thing. We’re thrilled to be part of this.”
The Right Ingredients
Driving the success of Propagate to this point – and its ability to work successfully on such a massive expansion with Hill – is a well-thought-out, holistic approach to supporting farmers in their integration of agroforestry and solid financial backing from diverse sources of capital.
With a proprietary planning software technology (Overyield), a strategic implementation team, and a finance arm (Agroforestry Partners), Propagate’s suite of capabilities serves as an ecosystem of its own to drive the larger agroforestry sector expansion. These capabilities enable Propagate to serve farmers who want to integrate agroforestry crops in multiple ways, including technical assistance, farm services, and access to trees, genetics and other inputs. And for those farmers who need financing support, Agroforestry Partners raises capital from investors in order to offer equity-based leasing for chestnut agroforestry.
Earlier this year, Propagate was recognized as one of the fastest growing companies in 2024 by Inc 5000, ranking 70 in its industry category. Investment has played a part in this, as the team has been successful in raising capital for their efforts. Notable investments include a $1.5 million seed round in 2020, and a $10 million Series A in 2022. The company has helped develop a program that leverages the Climate Smart Commodities funding from the USDA as well as various concessionary capital programs.
“Funding has truly been a game-changer for our company, significantly enhancing our ability to scale operations and accelerate innovation. With the capital we’ve raised, we’ve developed software that improves speed and efficiency in the industry, enabling us to serve landowners more effectively and provide reliable data to project investors. These investments have also allowed us to launch additional agroforestry projects, offering concrete examples of how regenerative practices can be successfully implemented at scale. With this support, we’re not just advancing our mission—we’re helping to pave a clearer path forward for the industry,” explains Ethan Steinberg, co-founder and CEO of Propagate.
These two things – a holistic approach and investment – sit at the foundation of Propagate’s continued success but what also distinguishes the company and their achievements is that they did it before anyone else and have arguably progressed the most. They are leaders paving the way for not only the expansion of agroforestry in the U.S. in a way that no one had done before them, but also for investment into it.
Impacts Generated Coming to Light
With expanded acres and a high rate of survivability, Propagate is poised to deliver on ecosystem services and their data is starting to prove this. In 2023, Agroforestry Partners released their first impact report and was able to start talking about the expected and realized impacts of the agroforestry systems they are working to establish.
Carbon
Carbon sequestration from agroforestry systems and the potential to generate additional revenue from carbon credits is an area for significant potential impact. In early 2023, the team enlisted carbon experts to do an initial feasibility study which estimated that the finalized carbon project would capture an estimated 81.7 tCO2e per acre. The team further estimated that the combined plantings from 2022-24 would sequester 111,853 metric tons of carbon dioxide over the life of the current planted acreage – the equivalent of 24,891 cars removed from the road for an entire year. The team is also working on monitoring, reporting and verification (MRV) of carbon sequestration through the issuance of Verified carbon units (VCUs) and they are establishing crediting baselines and methodology in line with September 2023 Verra protocol.
Biodiversity
Biodiversity has the potential to contribute to the value of a project in two ways. It can improve the value of a carbon credit by demonstrating measurable co-benefits and biodiversity is also emerging as an independent crediting mechanism.
Propagate contracted a third party to conduct a biodiversity study across 2 farms and 20 sample sites in Mason County, Kentucky. The sites were selected based on production system and system age: chestnut-hay agroforestry systems at different maturity levels, bench marked against a conventional soy baseline.
They monitored bird and insect activity using a combination of manual and technologically assisted methods. The results showed that the two-year-old agroforestry plot was more than 2x as biodiverse as the 2022 and 2023 plots, which hosted similar or marginally better levels of insect diversity than the soy plot. The conclusion is, then, that as trees mature, biodiversity increases. The 2022-planted chestnut orchard was 40% more biodiverse than the soy plots in terms of bird species richness, while the value from the newer farm was nearly 30% higher.
Biodiversity study conducted on Propagate agroforestry ecosystems. Source: Propagate
Rural Livelihoods & Community Engagement
While carbon and biodiversity outcomes are more obvious results of agroforestry expansion, the impact of agroforestry – and hubs as big as this one established in Kentucky and Ohio – have not received enough attention. The region that this hub sits in happens to be a historically under-served and under-resourced area of the North Central and Central Appalachia. Bringing jobs to the region and new businesses are a goal for Agroforestry Partners and Propagate as they develop their agroforestry projects. By 2023’s impact report, the company was able to attribute 7 full-time, year-round employees, the hiring of 20+ seasonal workers during spring and fall, and 5 additional seasonal workers for hay harvest, as a result of this project.
With the expansion of Hill’s agroforestry operation, integration of trees is highly visible. As a result, the group is also seeing growing community momentum for agroforestry in surrounding areas. Hill told us that all his neighbors were curious and that despite some initial misperceptions that reactions have been overwhelmingly positive.
Mason County Judge-Executive Owen McNeill shares in that enthusiasm and expects the addition of chestnut trees should be great for their region.
“Given recent plantings and thanks in no small part to Keavin, I believe it’s safe to say Mason County and Northeast Kentucky have grown into the Chestnut epicenter of the US with the largest commercial chestnut operation in the US. In addition to the national spotlight, chestnuts are providing another option for diversification for Mason County landowners who are no strangers to AgTech and agroforestry innovation,” he told local news outlet, The Ledger Independent.
Looking Ahead
The approximately 2,000 acres of trees that Propagate has worked to get into the ground gets them about 20% to their goal of 10,000 acres by 2030. The team is excited to continue to push toward this goal and they will lean on a few unlocks to make it happen: partnerships, internal capacity building, and capital.
Steinberg attributes the successful expansion to date to their ability to collaborate with partners along the value chain and stakeholders who have a shared mission in advancing agroforestry and regeneration. “Our focus moving forward is clear: supporting the growth of others. With the strength of our partnerships, we’ve enhanced our internal capacity, enabling us to deliver services that add real value. Coupled with strategic capital access, we’re positioned to drive even greater impact. For Propagate, success is about how well we can help others thrive, and I believe this approach sets the stage for continued growth and shared success.” This collaborative approach to developing the space, he hopes, will help evolve the fragmented agroforestry landscape that exists today into a more cohesive sector.
A complementary step to building through partnership, is the company’s focus on building capacity within the team to provide better project development for farms of all sizes – and many more of them. They also intend to streamline the process for farmland owners to access the capital (subsidies, investments, or credits) that they need to cover their OPEX/CAPEX requirements, ensuring that agroforestry systems sequester tons of carbon per acre while generating an attractive financial return from tree crops and potentially carbon credits.
This last objective is important because farmers are not the bottleneck in this system.
In 2023, Brett Hundley, President of Agroforestry Partners, told us that, “Farmers are not the bottleneck when it comes to the implementation of agroforestry. Many farmers in our network want to plant trees and repair their land. However, the funding still isn’t quite there. Financing for these projects continues to be the bottleneck.”
This remains the case today.
“The biggest bottleneck today remains to be capital availability,” he says. “This extends from equity investors through to lenders who might cover the pre-production years of an agroforestry system.”
An initial equity investment from Builders Vision, an impact investment platform launched by Walmart heir Lukas Walton, into Agroforestry Partners’ first fund has helped support expansion to date and also reinforced the viability and increasing interest in agroforestry as an investment opportunity. The backlog of farmers interested in engaging with Propagate and Agroforestry Partners presents a larger opportunity for LPs to easily engage in regenerative agriculture, while continuing to scale tree crops in the U.S. and the benefits that their propagation generates.
“We’re excited to roll up our sleeves and get to work on the next 2,000 acres,” says Steinberg. “Every acre we plant brings us closer to a healthier, more sustainable future, and we can’t wait to see what’s next.”
To learn more about Propagate, visit propagate.ag.
Sarah Day Levesque is Managing Director at RFSI & Editor of RFSI News. She can be reached here.