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The Shrinking Slice: Farmers Receive Less Than 6 Cents of Every Food Dollar

Tue, 31 Mar 2026 20:30:41 GMT

For the past two years, USDA has estimated farmers and ranchers received less than 6 cents of every food dollar. In 2023, that was 5.9 cents, and using the latest data from 2024, it’s 5.8 cents.

“Our oldest data point right now is 2007 [USDA updated the data series] and that’s 14.7 cents per dollar, and now we’re down all the way to 11.8 cents per dollar,” says Faith Parum, economist with the American Farm Bureau Federation. “So we’ve really seen that decline year after year. It reflects how much of the value of things in the grocery store or when you go out to eat is going to other parts of the supply chain and not necessarily to farmers and ranchers.”

Livestock vs. Crops: A Widening Gap

The aggregate decline masks a widening gap between sectors. While the overall farmer share is down, livestock and crop producers are seeing divergent trends:

Crop Farmers: Share dropped from 2.9 cents to 2.5 cents (a 2.5% year-over-year decrease).
Livestock Producers: Share increased from 3 cents to 3.3 cents.

“Overall, the farmer share is down. But we have those two markets really at odds,” Parum says. “We’ve seen that tale of two farm economies where our livestock producers maybe have seen a little bit of better days than they had had in the past, while our row crop farmers and our specialty crop farmers are really facing strong headwinds in the market.”

Effect at the Farm Gate

As highlighted by USDA, farm finances are quickly strained when farmers/ranchers are capturing a small percentage of the food dollar and even modest swings in commodity prices and/or input prices take place.

Parum adds, “when we talk about the health of our farms and the health of future generations on the farm, and being economically viable and sustainable and being able to keep their operations open, the trends we’re seeing right now are really hard for those farmers. Our ranchers are seeing a little bit of better days right now with high beef prices, but that’s not going to last forever, and with production expenses continuing to increase, we’re really going to see that that question come up of, what is sustainable if, if these dollars we’re spending in the grocery store aren’t making it back to our farmers.”

Where Does the Money Get Distributed?

The key takeaway: farmers produce the raw commodities that make food production, however, the price is clearly more determined by what happens after the products first leave the farm.

The USDA Food Dollar Series tracks how each dollar is spent by consumers and then divides it across the industries contributing to the value in the supply chain, such as farming, food processing, transportation, packaging, wholesaling, retail and food service. As noted by the USDA, with each step in the process, the additional services, labor, transportation and infrastructure add value and increase costs to the final food product.

USDA’s Economic Research Service Food Dollar Series shows in 2024, farmers received 11.8 cents of every dollar spent on domestically produced food, the remaining 88.2 cents of the food dollar went toward the ‘marketing bill’, which includes costs associated with food processing, transportation, packaging, wholesaling, retailing and food service. Over time, this shift illustrates how an increasing share of food spending is driven by services and supply chain activities rather than farm production itself.

Groceries Leave the Most on The Table For Farmers

Farmers’ share of consumer food spending varies widely depending on the type of food purchased. For example, the farm share of the food-at-home dollar was 18.5 cents in 2024, up slightly from 18.4 cents in 2023. But even in this category it means only than one-fifth of what consumers spend on groceries goes back to farmers.

As you may expect, products with minimal processing, require less of the value to be retained in that part of the food system, and therefore return a larger share of the food dollar to producers.

“The highest commodity that gets the most of that food dollar is fresh eggs,” Parum notes. “That’s just because there’s limited labor to process that food.”

Examples include:

Fresh Eggs: 69.1 cents (+6% from 2023)
Beef: 52.2 cents (+4.8%)
Fresh Milk: 50.8 cents (+5.6%)
Pork: 23.7 cents (+7.2%)
Poultry (+3.1%)
Fish (+2.8%)
Tree nuts and peanuts (-1.7%)
Fresh fruits and vegetables (unchanged)
Bakery Products: 4.8 cents (-9.4%)
Soft Drinks/Bottled Water: 1.3 cents (-7.1%)

Iowa Farmer Battles Today's Pests While Eyeing Tomorrow's 'Mean Sixteen' Threats

Fri, 12 Dec 2025 19:31:41 GMT

For Worth County, Iowa, farmer Sarah Tweeten, the list of high-priority agronomic threats isn’t a political abstract — it’s a harsh reality she deals with every season.

Farming with her parents, Brian and Julie, and her uncle Roger, Tweeten has been steering the partnership toward more resilient cropping practices since joining the operation in 2021. This includes shifting from conventional tillage to strip tillage and splitting nitrogen applications.

The changes are part of a broader mindset: Protecting yields today from weeds, disease and insects while aggressively preparing for the next generation of agronomic threats. This forward-thinking approach is what led Tweeten to Washington, D.C., earlier this week as a Farm Journal Foundation farmer ambassador to help introduce a new report: “ The Mean Sixteen: Major Biosecurity Threats Facing U.S. Agriculture and How Policy Solutions Can Help. ”

Today’s Battles and Tomorrow’s Warnings
Researched and developed by Stephanie Mercier, PhD, the report takes an in-depth look at 16 significant pest issues U.S. farmers face now or could realistically in the future.

Tweeten is already battling a couple of the problems that underpin the urgency behind the research. For example, Palmer amaranth (pigweed) is gaining ground in her fields and across Iowa. The pervasive broadleaf weed can drastically reduce yields, with studies showing corn yield reductions between 11% and 91% and soybean yield reductions of 17% to 68%.

“We’ve struggled with pigweed as it continues to establish more resistance to our herbicides in our toolkit,” Tweeten says.

Two additional agronomic issues the report details include:

1. Asian Soybean Rust. First detected in the U.S. in Louisiana in 2004, this fungal disease has spread to southern states like Georgia and Mississippi. Scientists warn that warming winters could enable its migration to the Midwest, adding to existing disease pressures.

2. Corn Ear Rot. It can lead to aflatoxin production, making corn unmarketable and posing risks to humans and livestock. Aflatoxin is an issue Pickens County, Ala., farmer Annie Dee says is an ongoing problem for corn growers in her area.

“If we have aflatoxin, it can be impossible to sell the corn,” says Dee, also a Farm Journal Foundation Farmer ambassador.

A more recent threat she references is the impact of Highly Pathogenic Avian Influenza (bird flu) on local poultry farms.

Since January 2022, HPAI has been confirmed in a commercial or backyard poultry flock in all 50 states.

(USDA)

“An important market for us is poultry feed meal, so that’s a constant worry. The trickle-down effect is if we can’t move our corn then we can’t meet our financial obligations,” Dee adds.

Despite agricultural R&D offering a high ROI — $20 in benefits for every $1 spent — the Farm Journal Foundation report notes public funding for ag research has been declining over the past two decades.

“Farmers urgently need sustained support for aflatoxin research and prevention because these risks threaten our yields, our markets and the trust consumers place in American agriculture,” Dee says.

U.S. public spending on ag research and development has been falling for two decades.

(USDA-ERS)

African Swine Fever Has ‘Devastating Potential’
Looking to the future, Tweeten says she is concerned about African swine fever (ASF) and its potential to impact crop farmers as well as hog producers. The highly contagious swine disease hasn’t been detected in the U.S. mainland, but it isn’t far away. ASF has been confirmed in the Caribbean countries of Haiti and the Dominican Republic, roughly 700 miles from Miami, Fla.

“Being a farmer from Iowa, where we have probably eight times the amount of pigs as we do people, an outbreak of ASF would be just devastating to our state,” Tweeten says.

Hogs are among the biggest customers for the corn and soybeans Tweeten and her family grow. If African swine fever were to shut down hog production or exports, it wouldn’t just be a blow to livestock producers – it would hurt the entire agricultural community, she contends.

Read about 5 livestock diseases that could impact U.S. food security and economic stability.

Food Security Is National Security
When it comes to justifying funding for ag research, Tweeten knows there’s competition for every federal dollar. But she believes agriculture deserves a front-row seat — not only because of its economic weight and impact on farmers, but because of its role in national security.

“There’s that argument that food security is national security,” she says. “If there’s one thing COVID made us aware of, it’s that a disruption to our food chain can be terrifying, quite frankly.”

The pandemic made consumers and policymakers more aware of supply chain vulnerability. In 2020, the shock to the supply chain came from a human disease and logistical bottlenecks.

(Sarah Williams Photography)

Next time, Tweeten says, the disruption could just as easily come from animal or plant disease — whether African swine fever in hogs, Asian soybean rust or some other pathogen in crops. She worries about scenarios where farmers could face a fast-moving disease or crop pest while critical tools are still hung up in regulatory delays.

Her message: Farmers need a full toolbox, not one that’s half-built by the time a threat arrives.

“Ag needs to be in a good position when these sorts of emerging diseases and pests come into the country,” she says, “to have the tools in our toolbox ready for farmers to pull out.”

About the Farm Journal Foundation
The Farm Journal Foundation is a farmer-centered, non-profit, nonpartisan organization established in 2010. It works to advance agricultural innovation, food and nutrition security, conservation, and rural economic development.

FBN Spins Out Its Crop Protection Business, Focuses on Marketplace and Technology

Thu, 09 Oct 2025 15:24:44 GMT

Last week, just a few hours after Corteva announced its spin out dividing seeds from crop protection, Farmers Business Network (FBN) announced it is separating its businesses. Moving forward FBN will focus on its digital marketplace for farmers, and the newly launched Global Crop Solutions will be an independent supplier of crop protection products.

FBN leaders say the timing is coincidental. Their motive for the timing was brought about by the new fiscal year. But they offer both of the announcements together could be a sign of a trend of vertical integration getting unwound in the name of efficiency and focus.

“We’re doubling down, allotting capital on digital innovation for FBN’s future,” says Diego Casanello, CEO of FBN. “FBN’s core business is a digital commerce and fintech platform. We want farmers to be able to buy, finance, and market everything they need while sitting in their combines. These are technology challenges, so the core competence you need to be successful at FBN is different from managing the supply chain of the crop protection business.”

In the past 14 months, FBN has been refocusing its business. First, it spun off its insurance business, then its Gradable business into a joint-venture with ADM. Now with its crop protection business spin out, Casanello says the FBN marketplace will feature GCS products, such as Willowood USA branded products, via a strategic partnership, and GCS products will explore distribution beyond the FBN marketplace.

“The big unlock for GCS is the opportunity to serve the entire retail and co-op industry,” Casanello says. “It frees GCS of any channel conflicts and hits the ground running with one of the largest portfolios of products in the industry. And it frees FBN from similar constraints as we move to an open marketplace architecture. We are onboarding new sellers and their portfolios every week. We provide them the tools to manage pricing, marketing, and placement. FBN is open for business and we’ve had significant interest from additional partners before and after the announcement.”

FBN’s Marketplace Strategy

Currently, FBN says it has 120,000 farmer members in the U.S. and Canada. The business provides a marketplace with farm inputs and supplies, financial services and data-driven intelligence.

FBN co-founder Charles Baron says the FBN marketplace has expanded its product range to include crop protection, seed (with additional partner news coming soon), fertilizer, livestock products, veterinary pharmaceuticals, farm supplies and more.

“To farmers, there’s no change in their experience. And over time, we’ll bring an even broader assortment of goods,” Baron says. “You’ll be seeing announcements from us every two weeks or so about the suppliers coming on the platform. It’s one of the most exciting times in our history.”

The leaders say farmer use of e-commerce has increased every year since they launched, and in 2025 FBN served a record number of customers. “Farmers are really focusing on value right now and maximizing every dollar,” said Baron. And per their analytics roughly 35% of U.S. farmers visit FBN.com to browse inputs, apply for financing, or look for information.

The Future of GCS

As a newly formed independent crop protection supplier, GCS has a portfolio of 250 registrations on post-patent products. The company will specialize in sourcing, managing first mile logistics, developing new products and regulatory aspects.

To lead the business and its team, Amy Yoder, most recently EVP of FBN’s livestock division, is incoming CEO.

“Global Crop Solutions launches today as an independent powerhouse,” said Yoder, in a press release. “For the first time, our extensive portfolio and efficient global supply chain are fully available to all partners— from retailers, to distributors, to co-ops. Our independence unlocks immense growth potential and allows us to be the most reliable and collaborative partner to the entire agricultural industry.”

West Nile Virus Activity Spikes to 20-Year High in the Midwest

Thu, 14 Aug 2025 22:08:01 GMT

Scouting cornfields now might net you a different problem than the insects you might have anticipated encountering. An Iowa State University researcher says there are “very high levels” of West Nile virus (WNV) trending in Iowa and other Midwestern states currently.

“This week had the highest observed WNV activity at this point in the summer observed in over 20 years. This trend is of serious concern for the next eight weeks when WNV transmission risks are the highest,” writes Erin Hodgson , ISU Extension entomologist specialist.

To date in 2025, there have been 219 cases of WNV reported in 29 states. In 2024, there was a total of 1,466 cases of WNV reported in the U.S., according to Vector Disease Control International.

In Iowa, data is generated from ongoing mosquito surveillance efforts coordinated by Ryan Smith, ISU associate professor and entomologist. Smith has implemented an interdisciplinary approach to examine mosquito immunity and mosquito-borne disease transmission.

Leading Cause Of Mosquito-Borne Disease
West Nile virus is transmitted through the bite of a Culex mosquito, commonly called a house mosquito. It typically picks up the virus by feeding on an infected bird. West Nile virus is the leading cause of mosquito-borne disease in the continental United States.

In general, people do not spread the infection.

There are no vaccines to prevent or medicines to treat West Nile in people. Fortunately, most people infected with the virus do not feel sick, according to the Centers for Disease Control and Prevention (CDC). About 20% of people who contract the disease will experience mild symptoms like fever, headache, and body aches.

In a small percentage of cases, the virus can cause serious neuroinvasive disease issues, such as encephalitis or meningitis, which can be severe and even fatal, the CDC reports.

People older than 60 and those with weakened immune systems are at highest risk for severe illness.

The CDC offers an interactive site where you can view and track the total number of human infections of WNV reported on a county-by-county basis. See current results in your county here .

Implement The Three Rs
To prevent mosquito bites, the CDC encourages people to practice the ‘Three Rs’:

REDUCE - make sure doors and windows have tight-fitting screens. Repair or replace screens that have tears or other openings. Try to keep doors and windows shut. Eliminate, or refresh each week, all sources of standing water where mosquitoes can breed, including water in bird baths, ponds, flowerpots, wading pools, old tires, and any other containers.

REPEL - when outdoors, wear shoes and socks, long pants and a light-colored, long-sleeved shirt, and apply an EPA-registered insect repellent that contains DEET, picaridin, oil of lemon eucalyptus, IR 3535, para-menthane-diol (PMD), or 2-undecanone according to label instructions. Consult a physician before using repellents on infants.

REPORT – report locations where you see water sitting stagnant for more than a week such as roadside ditches, flooded yards, and similar locations that may produce mosquitoes. Your local health department or city government may be able to add larvicide to the water, which will kill any mosquito larvae.

Your next read: Southern Rust Has Infected Iowa Corn in ‘Likely Every County’

Could EPA Decision Signal The Beginning Of The End For DEF?

Thu, 31 Jul 2025 16:26:25 GMT

Mike Berdo has strong words to describe his ongoing experiences using machinery requiring DEF ( Diesel Exhaust Fluid ) on his southeast Iowa farm.

“It has been an absolute nightmare, at least for us. Mechanics make trip after trip to do little stuff that’s very expensive to fix,” said Berdo, who produces grain and beef cattle near Washington. “We had planting delays last spring … little stuff that came from it and just seemed like [an issue to deal with] day after day.”

The ongoing mechanical issues and costs are why Berdo said he is “all for” EPA rescinding the 2009 Greenhouse Gas Endangerment Finding. The Finding has enabled the agency to regulate greenhouse gas emissions under Section 202 of the Clean Air Act and, in recent years, and launch requirements such as the use of DEF systems in diesel-powered engines.

EPA Draws A Line In The Sand
On Tuesday, EPA Administrator Lee Zeldin released a proposal to rescind the 2009 Finding.

If finalized, the proposal would remove all greenhouse gas standards for light-, medium- and heavy-duty vehicles and heavy-duty engines, EPA said in a follow-up press release .

The move would start with EPA’s first greenhouse gas standard set in 2010 for light-duty vehicles and those set in 2011 for medium-duty vehicles and heavy-duty vehicles and engines.

EPA said the proposal is expected to “save Americans $54 billion in costs annually through the repeal of all greenhouse gas standards, including the Biden EPA’s electric vehicle mandate, under conservative economic forecasts.”

Zeldin made the announcement to rescind the Finding in Indiana, alongside Energy Secretary Chris Wright, and called it the largest deregulatory action in U.S. history.

What The Decision Could Mean To Farmers
Specific to U.S. farmers, the proposal could potentially result in DEF systems no longer being included on new tractors and other heavy equipment using diesel-powered engines, said Chip Flory, host of AgriTalk, during a Farmer Forum discussion on Wednesday.

South Dakota farmer Ryan Wagner told Flory he has a wait-and-see perspective on how or whether the EPA proposal goes into effect. He anticipates that reversing the Finding will take considerable time and effort for EPA to implement.

“It took a long time with the interim engines and things to get into full DEF in the first place,” Wagner said. “I don’t know how long it would take to unwind all that and how quickly manufacturing will just take those systems right off, but it’ll be interesting to see what happens.”

To Wagner’s point, here’s a brief look back at some timing showing when DEF rolled out in agriculture and nonroad equipment and became mandatory . The regulations were phased in over several years based on the type of equipment and engine size:

2008: DEF became required for all new diesel engines with engine sizes over 750 horsepower.

2011: the regulations expanded to include equipment with engine sizes between 175-750 horsepower.

By 2015, all new nonroad diesel engines were required to be Tier 4 compliant and utilize DEF, regardless of equipment type or engine size.

As Wagner considers DEF, he noted its use in diesel engines has provided him with one benefit: “On the plus side, I do like that they don’t make the walls of my shop black. That’s been nice,” he said. “You can run them inside for a short time and not not feel like you’re breathing in a bunch of soot and making everything black.”

Expect Legal Challenges To EPA Decision
A number of environmental groups have already blasted the move by EPA, saying it spells the end of the road for U.S. action against climate change, according to an online article by Reuters .

Legal challenges from various environmental groups, states and lawyers are likely ahead.

That fact wasn’t lost on Flory and the Farmer Forum participants during the AgriTalk discussion on Wednesday.

“If this proposal is finalized, it’s going to start a lot of conversations … and the dominoes are going to start to fall, something that we need to keep track of, no doubt,” Flory said. You can hear the complete Farmer Forum discussion on AgriTalk here:

EPA will initiate a public comment period to solicit input. Further information on the public comment process and instructions for participation will be published in the Federal Register and on the EPA website .

Your next read: Right To Repair Granted? John Deere Launches Digital Self-Repair Tool for $195 Per Tractor

EPA To Address ‘Government Overreach’ on Defining WOTUS

Thu, 13 Mar 2025 20:49:01 GMT

EPA Administrator Lee Zeldin announced on Wednesday the agency will undertake 31 historic actions “to advance President Trump’s day one executive orders and power the great American comeback.”

Among the announcements, Zeldin said EPA will work with the United States Army Corps of Engineers to deliver on President Donald Trump’s promise to review the definition of Waters of the United States (WOTUS).

“The agencies will move quickly to ensure that a revised definition follows the law, reduces red tape, cuts overall permitting costs, and lowers the cost of doing business in communities across the country while protecting the nation’s navigable waters from pollution,” Zeldin said in a prepared statement.

“Given the U.S. Supreme Court’s watershed decision in Sackett v. Environmental Protection Agency, it is time for EPA to finally address this issue once and for all in a way that provides American farmers, landowners, businesses, and states with clear and simplified direction,” he added.

Zeldin’s announcement was an important step forward in correcting what the Supreme Court had ruled in 2023 as EPA’s overreach in defining WOTUS. At the time, the agency had charged ahead ignoring concerns raised by the Supreme Court, 26 states, and farmers and ranchers across the country, according to American Farm Bureau Federation (AFBF) President Zippy Duvall.

“The Supreme Court clearly ruled, almost two years ago, that the government overreached in its interpretation of what waters fell under federal jurisdiction, but inaction and vague implementation guidelines by EPA led to permitting delays, litigation and uncertainty,” Duvall said in a prepared statement on Wednesday.

Listening Sessions Are Being Scheduled By EPA
Mary-Thomas Hart, chief counsel for the National Cattlemen’s Beef Association (NCBA), told AgriTalk Host Chip Flory on Thursday the Supreme Court had ruled EPA’s overreach on WOTUS in 2023 amounted to a violation of a landowners’ constitutional rights.

“Because there are criminal liabilities that attach to violation of the Clean Water Act, a landowner has to be able to know when they look at their land or when they look at a water feature, what is or isn’t WOTUS,” Hart said.

A priority for the Trump Administration moving forward will be working cooperatively with state partners, empowering them and local officials to protect water bodies while accelerating economic opportunity. As a result, “decisions will be made efficiently and effectively while benefiting from local knowledge and expertise,” EPA’s Zeldin said.

To inform those decisions, EPA has issued a request for information from stakeholders about how they’re impacted by WOTUS and will host a series of listening sessions from late March through April 2025, according to information on the agency’s website.

EPA will hold at least six listening sessions, with two open to all stakeholders, one open to States, one open to Tribes, one open to industry and agricultural stakeholders, and one open to environmental and conservational stakeholders.

The agency said registration instructions and dates will be forthcoming at the following website: https://www.epa.gov/wotus/public-outreach-and-stakeholder-engagement-activities.

Persons or organizations wishing to provide verbal recommendations during the listening sessions will be selected on a first-come, first-serve basis. Due to the expected number of participants, EPA said individuals will be asked to limit their spoken presentation to three minutes. Once the speaking slots are filled, participants may be placed on a standby list to speak or continue to register to listen to the recommendations.

Listen to the AgriTalk discussion on WOTUS with NCBA’s Mary-Thomas Hart here:

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:50:09 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

Ag Lenders: Just Over Half of Farmers Will Be Profitable in 2024

Thu, 14 Nov 2024 21:52:58 GMT

The American Bankers Association (ABA) and the Federal Agricultural Mortgage Corporation (Farmer Mac) have released their joint 2024 Ag Lender Survey.

The big takeaway: lenders believe only 58% of farmer borrowers will be profitable in 2024. That’s down from 78% in the previous year’s study.

“The agricultural economy is inherently cyclical, and ag lenders are navigating the changing conditions across the sectors they serve,” said Jackson Takach, chief economist of Farmer Mac.

“While the responses highlight slowing land values and a profitability shift from crops toward animal proteins, ag lenders remain steadfast in leveraging their resources and relationships to guide producers through all parts of the cycle,” Takach says.

Profitability expectations did vary by region and commodity category. Optimism was greater for livestock producers over row crop farmers.

The two top concerns listed by lenders for agricultural producers are liquidity and farm income.

For lending institutions, the respondents said the biggest concern was credit quality along with agricultural loan deterioration in the next 12 months.

“Agricultural credit quality remained robust in 2024, but lenders expect deterioration in the coming year as farmers face a more challenging environment,” said Tyler Mondres, senior director of research at the American Bankers Association. “Lenders are taking prudent steps to manage risk such as tightening underwriting standards, and they remain committed to working with and supporting their borrowers.”

Demand for loans secured by farmland and agricultural production loans increased in 2024, and both categories of loans are expected to rise in the next year as well.

The ABA/Farmer Mac survey has been conducted for nine years, and this year’s responses included more than 450 ag lenders who represent institutions ranging from less than $50 million to more than $1 billion.

You can read the full report here

Become a More Anticipatory Leader

Fri, 27 Sep 2024 02:21:56 GMT

Dave Mitchell uses his two-decade career in corporate HR to coach businesses on improving company cultures and reaching peak performance. And he says he’s not afraid to slay some dragons when it comes to tools many businesses may rely on, but don’t provide the service leaders are seeking.

“There are some things that we’ve adopted over the years that really aren’t particularly useful and I think in some cases even detrimental to our performance,” he says.

For example, he encourages leaders to stop using employee surveys.

“It’s just a waste of money. It’s offensive, and it does more harm than good,” Mitchell says. “Employee surveys don’t fix the problem. To be a great leader and reach peak performance, you have to get feedback in a more genuine and immediate way.”

He says today, leaders need to become more anticipatory managers—and identify and address problems much quicker.

“Leaders need to be plugged into what’s happening on a daily basis,” he says. “The people that have authority need to be better aware of what’s really happening and the people that know what’s happening have to have a conduit to educate those people that have the ability to make change.”

Mitchell has noticed a large trend of too much distance between managers and the work being done. This has created a dangerous gap for problems to linger, grow larger and cause major issues.

“As such, leaders must build in systems in their culture that reconciles that distance,” he says. “The fact that leaders don’t know what’s going on, doesn’t mean they don’t have plenty to do, so they often wait until they hear something.”

Mitchell uses “people preventative maintenance” a method to identify problems while they are still small—before they are exacerbated.

“We have a tendency just to wait until something becomes so obnoxious to the employee that they’re willing to storm into someone’s office and complain about it, and by that time, this is probably beyond the tipping point,” he says.

He says more and more organizations are using this method and building in the mechanisms to make problems known earlier.

Hear more in The Scoop Podcast:

How Important is U.S. Ag and Food to the Economy?

Fri, 27 Sep 2024 01:31:09 GMT

As the saying goes, “numbers don’t lie,” and this rings especially true in the 2023 Feeding the Economy report, showing the economic importance of U.S. food and agriculture to communities throughout the nation.

Sponsored by 25 food and agriculture groups across all areas of the food supply chain, the report illustrates the food and agricultural impact on local and nationwide economic activity, underscoring the sector’s resilience and reliability amid a number of global and domestic disruptions.

“Feeding the Economy demonstrates how agriculture is connected to each stage of the supply chain, every item in the grocery store and relied upon by multiple other indispensable industries. The report provides insightful data and research on how the food and agriculture industry consistently generates a positive trade balance as well as millions of jobs while boosting economic vitality in rural and urban areas,” says Mike Seyfert, president and CEO of the National Grain and Feed Association.

Economic Output

Showing an increased economic output in all 50 states compared to the 2022 report, the industries contributed to over $8.6 trillion, nearly 20%, of the country’s economic activity. In addition, the industries accounted for over $202 trillion in export value.

Reflecting a rebound in national economic activity, the largest total output gains were from Hawaii (31%), North Dakota (26%), New York (23%), Nevada (22%) and Florida (21%), according to the report.

Agriculture and food businesses also contribute over $947 trillion to federal and state taxes, including $565.3 trillion and $382.5 trillion, respectively.

Jobs and Wages

Despite the economic challenges and disruptions associated with the COVID-19 pandemic, in 2023, a total of 22,924,189 million jobs are tied directly to the food and agriculture sector, claiming $927.4 billion in wages. This contributes to a total of over 46.2 million jobs and $2.6 trillion in wages supported across the whole supply chain, increasing nearly 2% since 2019.

Productivity

“The strength and growth highlighted in this year’s report reinforce that agriculture is evolving and innovating to meet the demands of the 21st century,” the report says.

USDA notes that between 1948 and 2019, land use for agriculture decreased by 28% while land productivity grew nearly four times and labor productivity grew more than 10 times, the report adds, with agriculture’s total factor productivity growth rate among the highest of U.S. sectors.

While producers raise crops, produce and livestock on two of every five acres of U.S. soil, millions of other U.S. workers fulfill jobs in over 200,000 food manufacturing, processing and storage facilities to strengthen the food supply chain across the world. Additionally, approximately 200,000 retail food stores and over 1 million restaurant locations provide food for communities from coast to coast.

The sheer number of jobs and total of wages, taxes and export values highlight the vitality of the industry to our nation. However, for many Americans, both rural and urban, agriculture and food are more than simply a paycheck.

“American agriculture is really the foundation of our lives and our economy. This study reveals the numbers, and maybe some of the spirit, of this one indispensable sector,” says Roger Cryan, chief economist at the American Farm Bureau Federation.

The full report can be found on the Feeding the Economy website .

The Subtle Change To Notice From The Latest Fed Reserve Meeting

Wed, 19 Jun 2024 23:02:21 GMT

The latest Federal Reserve board meeting left interest rates unchanged, but there’s a subtle shift in its monetary policy Vince Malanga, Pro Farmer economic consultant and president of LaSalle Economics, says should be noted.

“It’s back to the dual mandate,” he says. “It was all about inflation. Now with inflation coming down, they’ll start to watch the economy carefully.”

With the next Federal Reserve board meeting not until the end of July, Malenga says there’s a lot of data to come out between now and then that will inform and drive any potential rate cut.

“There’s a 25% chance that they could cut the rate in July, but I think regardless, we’re going to see at least two, maybe three rate cuts before the end of the year,” Malanga says.

The indicators he says are most influential are labor market data and personal consumption expenditures price index.

Jobless claims are tracked and reported weekly. The Bureau of Economic Analysis will release two updates to its price index before the end of July.

“If there’s an easing in labor market conditions, that would encourage them, especially in front of the election to cut rates, even if the inflation target is not met,” he says. “If the unemployment situation is softening, especially three or four months before an election, I think you’re going to start to hear some people yelling at the Fed, that they’ve overdone it.”

Malanga says we are in an affordability crisis, especially for first-time home buyers. And while the housing market was previously a leading indicator, that is no longer the case.

“The affordability issue (home loans, vehicles, etc) is a major constraint on the economy. There’s not much that they can do about that in the short run, but it’s clearly showing up in the data. You’re starting to see a trend toward weakness in consumption.”

Hear the full interview with Malanga from AgriTalk

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Is the U.S. Ag Economy Heading Toward a Recession? A One-on-One with the President of the Chicago Fed

Farmers’ Time to Know Their Breakeven Is Now

How To Translate Generational Misunderstandings

Tue, 18 Jun 2024 16:24:36 GMT

The week of June 10, Farm Journal is celebrating the next generation of American agriculture. Our goal is to encourage you to plan for the future and cultivate multigenerational success through the transfer of skills and knowledge. Think tomorrow, act today to align your asset, resource and financial legacy.

Communication between one generation to another can seem like talking a different language.

“I suggest you approach looking at another generation with curiosity rather than judgment,” says Kim Lear of Inlay Insights.

In her work, Lear shares generational theory insights and highlights how these are trends, not traits, but can inform better teamwork.

Why It Matters Now

Taking a refreshed approach to understanding on-farm team members from other generations is top of mind as today there are four generations actively employed across our economy.

When bringing more than one generation into leadership roles on the farm, it’s helpful to understand how to communicate.

“Dates given for generations are just a starting point. Generational theory is taking formative events from our growing years and seeing how they shape the people who lived through it,” she explains

A typical generation spans 15 to 18 years, and while general trends can be highlighted, Lear also notes there are exceptions.

“There are individuals who sit between two generations, and those people can serve important roles communicating between the generations. They are generationally bilingual,” Lear says.

3 Steps for Generations To Work Together
“We are in a unique time where we have four generations in the workforce,” says Kim Lear. She suggests three steps to bring together a productive team. 1. Prioritize clarity over brevity in communication. 2. Instill respect as the foundation. 3. Deliver feedback in a way that motivates to improve rather than paralyze with fear. Give a clear path for the road to improvement with the tools to get where they need to be.

3 Steps for Generations To Work Together

“We are in a unique time where we have four generations in the workforce,” says Kim Lear. She suggests three steps to bring together a productive team.

1. Prioritize clarity over brevity in communication.

2. Instill respect as the foundation.

3. Deliver feedback in a way that motivates to improve rather than paralyze with fear. Give a clear path for the road to improvement with the tools to get where they
need to be.

We Are Getting Older

The scales are tilting toward an older society, and there are fewer members of the younger generations.

“The story of aging is changing in America,” she says. “We have cliff diving birth rates and low immigration. Also, we are an ageist society.”

Today 62 million adults ages 65 and older are living in the U.S., which is 18% of the population, according to the U.S. Census. In 30 years, 84 million adults ages 65 and older will make up an estimated 23% of the population.

With the recognition of how our population is structured, and how your on-farm team members reflect their generational trends, you can evaluate your communication.

Next Gen Insights

Lear shares trends about Generation X (birth years: 1965 to 1979), millennials (birth years: 1980 to 1994), and Generation Z (birth years: 1995 to 2012).

Members of Generation X can exhibit fierce independence. For example, they can have an aversion to traditional sales tactics.

“If a brand crosses them, they are hard to earn back as a customer,” she says. “It’s telling — the divorce rate doubled during the Gen X birth years.”

As another data point, 55% of startup founders are Gen X.

As for millennials, the rise of double income households really took off as millennials grew up.

“Millennials are collaborative, empowered, networked, risk averse and in search of meaning,” she says. “But America has more single parent households than anywhere else in the world. It’s one way to understand why work-life balance is at the forefront of recruitment and retention.”

For Generation Z, our present serves as the backdrop of their formative years. Already, Lear has seen how Gen X parents and Gen Z children have relationships rooted in friendship.

“They are highly influential over each other’s decision-making. For example, Gen Z will bring job offers to their parents to vet,” she says.

Lear continues with an example of how Generation Z makes decisions.

“They are showing how they can abandon any obsession of convenience with an obsession of optimization,” she says. “For example, a regular stationary bike is convenient versus a Peloton is synched with stats and analytics. It’s the expectation of personalization and customization.”

Lear gives an exercise to test your transgenerational communication.

“Look at processes, procedures and norms. What are you holding on that is a sacred cow? And then ask your team to think about where can we focus on that’s more useful and more productive for us?” Lear outlines. “You’ll identify priorities and open up how our team talks to one another.”

More Wind, Rain and Hail Likely Ahead in June

Wed, 29 May 2024 20:14:22 GMT

The long line of severe storms that swept across the Midwest on Friday – from parts of Nebraska, through Iowa and into Illinois – has been officially classified a derecho by the Storm Prediction Center.

The Center classifies derechos as a wind damage swath that “extends more than 240 miles and has wind gusts of at least 58 mph or greater along most of the length of the storm’s path.”

It signaled the start of what became a severe weather weekend and a 2024 Memorial Day, with dozens of reports of strong winds, rain or hail hitting many parts of the U.S.

“We have obviously seen an absolutely, astronomically high number of severe weather reports over the last month,” says Michael Clark, chief meteorologist for BAMWX.com.

Clark says during May alone, there have been 469 tornadoes, 3,475 severe wind events and 1,640 severe hail events in the U.S. The number of storms reported is one of the highest for the month of May, if not the highest, since 2011. See You Can Now Blame El Niño and La Niña For the Extreme Weather Outbreaks, Planting Delays This Spring

“I’m looking at the map right now, and it’s almost as if every state east of the Rockies has reported a tornado during the month somewhere,” he says. “It’s kind of hard to wrap your head around how much there’s been.”

A Tough Transition Is Underway
While the number of storms this month has been unusually high, their occurrence has been expected meteorologists say, as the country transitions away from an El Niño into a La Niña.

“In spring, whenever you see these transitions, severe weather is amplified quite a bit,” Clark says.

According to the National Centers for Environmental Prediction, there is a 49% chance La Niña develops between June and August, and a 69% likelihood it will be in place sometime between July and September.

Clark and his meteorologist colleague Bret Walts told AgriTalk Host Chip Flory that they are predicting La Niña will be in place sooner than later – likely by July.

“I think that the atmosphere has already been trying to respond to that,” Walts says. “We’ve certainly seen it with this severe weather.”

More Rough Weather Ahead This Summer
Walts believes high winds and big rainstorms will continue throughout late spring and into the summer months. See Iowa Crews Search For Survivors After Deadly Tornadoes

“I’m concerned that as the heat ramps up later on into June and July that we could get more of these derechos going through,” Walts says.

In addition, Walts and Clark are concerned significant heat domes will occur over the Corn Belt and rain events will slow significantly as the second half of the growing season gets underway. See Expect a Hotter Than Normal Summer This Year

“When La Niña sets in, I am under the impression that in the later part of the growing season the moisture will be potentially shutting off,” Clark says. “This happens in big hurricane seasons where that ridge of heat sets up over the northern U.S., over the Great Lakes. It steers hurricanes into the Gulf of Mexico, but it shuts off precipitation in the Corn Belt.

“That’s a concern I have this year,” Clark adds. “These very wet springs with a lot of moisture going into La Niñas historically don’t really turn out to be very friendly the second half of summer.”

The complete weather conversation is available on AgriTalk here:

US Justice Department Probing ADM Accounting Practices

Tue, 06 Feb 2024 15:38:35 GMT

The U.S. Justice Department is probing accounting practices at Archer Daniels Midland Co, according to two people with direct knowledge of the matter, ramping up pressure on the global commodities giant.

New York-listed shares of ADM’s stock dropped 24% on Jan. 22 after the company disclosed the previous day that it had suspended its CFO amid an internal probe into accounting practices related to its Nutrition division. The company’s probe was prompted by a Securities and Exchange Commission (SEC) inquiry, it said.

The two sources said that in recent days the U.S. Attorney’s Office for the Southern District of New York (SDNY) has interviewed former ADM employees about accounting practices at the 122-year old, Chicago-based maker of animal feed, sweeteners and other products.

The sources each said a SDNY prosecutor asked about the company’s pricing practices related to the sales of goods from ADM’s commodities units to its Nutrition division.

A third source with knowledge of the matter said that the SDNY had opened an investigation into ADM. The source was unaware of the substance of the probe.

Reuters could not immediately determine the scope of the probe or the degree to which it had advanced.

Spokespeople for ADM and SDNY declined to comment.

Government investigations are not evidence of wrongdoing and do not necessarily result in charges.

Still, a probe by the Justice Department, which has the power to bring criminal charges and impose steep fines, increases pressure on ADM and is likely to inflame investor concerns.

Shares of ADM extended earlier losses on Monday, falling 4.3% to $53.29 at around 1:43 p.m. EST (1843 GMT).

Reuters could not ascertain if the Justice Department probe directly relates to the company’s internal probe. That focuses on “intersegment transactions” in ADM’s Nutrition reporting segment and the transfer of goods between segments, according to ADM’s Jan. 21 disclosure in which it also said it was delaying its financial results.

The Nutrition division manufactures ingredients used in pet food, animal feed and consumer products, such as energy bars. It is a relatively small unit of ADM, a giant in global grains trading which has a market capitalization of nearly $30 billion. Since 2020, however, the division has played a major role in the doling out of executive compensation.

A change by ADM’s Compensation and Succession Committee in 2020 tied half of long-term executive compensation to the Nutrition segment’s operating profit growth, according to ADM’s regulatory filings. Previously, long-term compensation had been based on ADM’s adjusted earnings, return on invested capital and relative total shareholder returns, the filings showed.

ADM’s 24% share price plunge was its biggest single-day fall since 1929, according to the Chicago-based Center for Research in Security Prices.

The company has since told employees that it will delay bonuses for some senior executives until its financial statements were completed and audited, Reuters reported last week.

(Reporting by Chris Prentice and Jody Godoy in New York; Editing by Michelle Price, Caroline Stauffer and Matthew Lewis)

ADM Puts CFO On Leave With Ongoing Investigation In Cooperation with SEC

Mon, 22 Jan 2024 19:37:47 GMT

On Sunday, Jan. 21, announced it has appointed Ismael Roig as Interim Chief Financial Officer. This is following the ADM Board of Directors placing Vikram Luthar, Chief Financial Officer and Senior Vice President, on administrative leave.

Luthar’s leave is pending an ongoing investigation being conducted by outside counsel for ADM and the Board’s Audit Committee. The investigation is in response to ADM receiving a voluntary document request by the U.S. Securities and Exchange Commission (SEC). Specifically, the request regards accounting practices and procedures with respect to ADM’s Nutrition reporting segment, including as related to certain intersegment transactions.

“The Board takes these matters very seriously,” said Terry Crews, Lead Director, in a news release. “Pending the outcome of the investigation, the Board determined that it was advisable to place Mr. Luthar on administrative leave. The Board will continue to work in close coordination with ADM’s advisors to identify the best path forward and ensure ADM’s processes align with financial governance best practices.”

The company says it is cooperating with the SEC and ADM with the Audit Committee’s oversight is working with its advisors to complete the investigation. Any future updates will be after the board of directors of ADM approves announcing any further disclosure.

With the CFO announcement, ADM also said it will delay its earnings release and conference call relating to fourth quarter and full year 2023 financial results, as well as the filing of its Annual Report on Form 10-K for the year ended December 31, 2023.

Regarding its future outlook, because of the ongoing investigation, ADM withdraws all of its forward-looking outlook for the Nutrition reporting segment.

Roig joined the company in 2004, and he most recently served both as President of Europe, Africa and Middle Eastern markets at ADM.

In the company’s news release Roig said, “I look forward to working closely with the management team and Board, including the Audit Committee, as we resolve this matter and continue to drive value for our stockholders and customers.”

Chair of the Board and CEO Juan Luciano said, “We are fortunate to have a leader of Ismael’s caliber step into the Chief Financial Officer role on an interim basis. Having served in various leadership positions at ADM over the past 20 years, as a member of the Executive Council for ten years, and with his global financial and operating experience, Ismael is the right choice to lead the Finance organization. We appreciate Ismael’s willingness to take on the Interim CFO role at this juncture.”

Exclusive: Presidential Candidate Nikki Haley Shares Her Vision For The U.S., Agriculture

Tue, 09 Jan 2024 19:26:13 GMT

Nikki Haley, a candidate for the 2024 Republican presidential nomination, joined AgriTalk on Tuesday to share her plans for the U.S. and U.S. agriculture if successful in her run for president.

Haley is a former ambassador to the United Nations and former governor of South Carolina.

AgriTalk has extended an invitation to all presidential candidates to join Host Chip Flory and answer five standard questions about what they would do if elected. That information follows below. You can also listen to the full conversation between Haley and Flory here:

Q1: What’s your motivation to be President? Why do you want the job?

A: The long answer to that is that my parents came here 50 years ago to an America that was strong and proud and full of opportunity. I want them to know that country again. I’m doing this for my husband, who is a combat veteran and who’s currently deployed. I’m doing it for him and his military brothers and sisters, because they need to know their sacrifice matters. They need to know that we love our country.

I’m also doing this for my daughter who just got married. I saw how hard it was for her and her husband to own a home. The average homebuyer right now is 49 years old. And I’m doing this for my son who’s a senior in college. I’m tired of watching him write papers and things he doesn’t believe in just to get an A. That’s not us.

Right now, 81% of Americans don’t think their kids are going to have as good of a life as we did. We can’t be OK with that. I’m not OK with that. I think we have a country to save, and I’m determined to do it.

Q2: What’s the No. 1 issue or challenge for America? How and when will you address it as President?

A: I think the first thing we have to do is end this national self-loathing that’s taken over our country – the idea that they say America is bad or rotten or racist. Our kids need to know to love America, they need to be saying the Pledge of Allegiance when they start school every day. And once we get that national self-loathing out of the way, we can start focusing on the economy and getting inflation back on track. We can start focusing on getting our kids reading again and going back to the basics with education. We can start focusing on securing our border with no more excuses. We can start focusing on law and order in our country, and we can start focusing on a strong America that we can all be proud of.

Q3: Let’s talk rural America, agriculture, farming and ranching. What issues will you address as President?

A: Well, you know, I grew up in an agricultural state, and I was governor of an agricultural state. So, I know the challenges. The first thing would be to get the EPA out of the way. Right now, they care more about sagebrush lizards than they do about whether we can afford our utility bill. Then, we need to start seeing producers as the partners that they are. Food security is national security; that’s always been the case, and we can’t ever be OK with getting our food from overseas. We have to make sure not only do we have enough food produced here in America, but that we have more than enough that we can export overseas so we can make it the powerhouse that we know it can be.

That’s the same with energy. You’ve got biofuels here in Iowa, and it’s hugely important that we see that for the opportunity that it is. So the biggest thing is, get the EPA out of the way, and let producers know that we’re partners and support them through the process. The one thing I saw in South Carolina is farmers are the ultimate survivors. They can’t control the weather, they can’t control pricing. So, the last thing they need is to … have government go and put other mandates on them, whether it’s water, whether it’s anything else. We’ve got to stop all that.

Q4: Describe your energy and renewable energy policy plans.

A: First of all, things that Russia, China and Iran never wanted us to have are a strong military, and they didn’t want us to be energy independent. I don’t want to be energy independent. I want to be energy dominant. We need to make sure that we do that by getting the EPA out of the way. We should roll back Washington’s old rules dictating when we can sell E15 fuel. The rules don’t make sense anymore, and we should get rid of them.

As president, I’ll roll back all of the Biden administration’s green mandates, especially the ones on electric cars that he’s trying to force on us. And when we start to focus on that, then we can see what economic incentives we have to make sure that we grow biofuels and biodiesel in a way we can export it. Let consumers decide which fuels they prefer. I think that’s the biggest thing. I’ll be completely supportive of Iowans and completely supportive of biofuels, and that includes supporting the Renewable Fuel Standard.

Q5: How will businesses small and large view the fiscal policies of a Haley administration?

A: If you put an accountant in the White House magic happens (Haley has a bachelor of science degree in accounting and finance from Clemson University). I will tell you that we are $34 trillion in debt, and we’re having to borrow money just to make our interest payments. China owns some of that debt. What we need to do is we need to stop the wasteful spending. We’re seeing that in both Republicans and Democrats.

The first thing that we’ll do is we’ll stop the spending, we’ll stop the borrowing. I’ll eliminate all these pet projects, and I’ll veto any spending bill that doesn’t take us back to pre-Covid levels. Secondly, we’ll move as many federal programs as we can to the state level. That way, you’re reducing the size of the federal government, but you’re empowering people on the ground and moving more of those resources to let the people decide how best to use them. Then, we want to let the middle class breathe, and the way we’ll let the middle class breathe is we will eliminate the federal gas and diesel tax in this country.

Then, we’ll cut taxes on the middle class and simplify the brackets, and then we’ll make sure that we make the small business tax cuts permanent. They made corporate tax cuts permanent, but they made small business tax cuts temporary. We’ll stop double-taxing farmers the way they are right now, which is keeping them from having generational farms taking place. When you do those types of things that’s when you really get spending back on track. You get inflation under control, and you help those that really need it. I know small businesses are the heartbeat of our economy. We need to start acting like it.

Q: On trade policy, former President Trump says he’s going to invoke at least a 10% tariff on all imports into the U.S. Is that something you would consider?

A: No, because you can’t. When you do that you’re costing Americans more money. The time you want to apply tariffs is when you’re dealing with an adversary, when you’re dealing with a situation where you need to go and make sure that you’re making things harder for them. We need to do more trade with more friends, and we need to do it in a way that we’re exporting as much as we possibly can. As governor, I focused on how to (help) businesses export as much as they could. As president, it should be no different. I would be the No. 1 salesperson of American products, of American produce, of American things.

If you just start doing tariffs on everybody, guess what? They do it right back to you, and then everybody suffers the consequences. So, you have to be strategic. You have to be smart. That’s when you can make sure that it’s more of an advantage and you use it as leverage. You don’t just use it as an across-the-board plan.

To date, along with Ambassador Haley, AgriTalk has also talked with presidential hopeful Ron DeSantis. That conversation is available here:

Exclusive Q&A With Presidential Hopeful Ron DeSantis

New Legislation Looks To Connect Farmland And Ranchland To Broadband

Fri, 10 Nov 2023 15:39:11 GMT

U.S. growers and livestock producers increasingly rely on the internet across the farm and ranch, yet many still don’t have access to it. A report USDA released this past August, “ Technology Use, Farm Computer Usage and Ownership, ” found that 15 percent of farms and ranches have no access to the internet today.

New legislation announced Nov. 1 looks to change that by expanding high-speed broadband internet access across rural America.

Two members of the House Agriculture Committee, Congressman Brad Finstad (MN-R) and Congresswoman Yadira Caraveo (CO-D), introduced the legislation called “Linking Access to Spur Technology for Agriculture Connectivity in Rural Environments (Last Acre) Act,” within the

USDA’s Office of Rural Development.
The Last Acre Act would create a new competitive grant and loan program at USDA to expand high-speed broadband internet access across eligible farmland, ranchland, and farm sites.

The Federal Communications Commission (FCC) currently defines minimum broadband internet service as internet access with a minimum of 25 megabits per second (Mbps) download speed and upload speeds of 3 Mbps or more.

One generally accepted rule of thumb is that anything above 100 Mbps is considered “fast” internet because it can connect multiple devices at once.

How Farmers Connect
In its Technology Use research, USDA found 51 percent of internet-connected farms utilize a broadband connection while 75 percent of internet-connected farms have access through a cellular data plan. Additionally, 69 percent of farms have a desktop or laptop computer while 82 percent of farms had a smart phone.

(Farm Journal)

The Last Acre Act is among the latest moves by legislators to address the digital divide between urban and rural America.

“As a farmer, I understand the important role precision ag technology plays in increasing production and maximizing efficiency. Yet, many rural areas of southern Minnesota and across the country don’t have reliable access to the wireless connectivity needed in order to utilize these techniques,” said Rep. Finstad, in a news release.

“The Last Acre Act will help drive agricultural innovation into the 21st century by bringing the latest farming technology and tools to every corner of farm country, giving farmers and ranchers – in even the most remote areas – greater ability to adopt precision ag applications and ensure optimal efficiency in their operations,” added Finstad.

The USDA Technology Use report released in August shows that 32 percent of farms used the internet to purchase agricultural inputs this year, which was an increase of 3 percent from 2021.

“Additionally, 23 percent of farms used the internet to market agricultural activities, which was an increase of 2 percent from 2021,” the USDA said. “Farms which conducted business with non-agricultural websites in 2023 increased by 2 percent to 49 percent.”

Precision Agriculture Needs
Increasingly, legislators and broadband providers have fine-tuned how they look at the internet needs of rural America, according to Mitchell Bailey, CEO for GRM Networks, a member-owned cooperative that supplies broadband and other communication services to residents in parts of northern Missouri and southern Iowa.

“The terminology used has changed from ‘fiber to the premise,’ which focused on connecting homes to more of a focus on ‘fiber to the acre,’ because we understand the need to make sure we’re connecting every acre of farmland to advanced technology,” Bailey told Farm Journal.

“In an ever-changing marketplace, it is imperative that corn farmers use the latest in precision agriculture technology to remain competitive and sustainable, and this is only possible through access to high-speed broadband,” added Harold Wolle, National Corn Growers Association president.

The Last Acre Act is endorsed by the American Farm Bureau Federation, Association of Equipment Manufacturers, Competitive Carriers Association, National Corn Growers Association, National Milk Producers Federation, National Cattlemen’s Beef Association, National Farmers Union, John Deere, Ethos Connected, and Wireless Internet Service Providers Association.

Monthly Average Costs
As part of its Bipartisan Infrastructure Law passed in 2021, the Biden administration committed $65 billion to help ensure that every American has access to affordable internet service.

The price of internet service ranges widely across the U.S., from $20 to well over $100 a month.

The price consumers pay depends on a range of factors, including internet speed, the type of connection, and what’s available in a specific area.

A Forbes survey of 37 internet service provides (ISPs) across the U.S. earlier this year found consumers paid an average cost of $65 a month. That’s in line with recent findings by Consumer Reports , which found in 2022 the median monthly internet cost was $74.99.

How States Stack Up
A February report from BroadbandNow Research , a firm that conducts comparisons on internet companies using data from the FCC and internet providers, identified what it calls the “best and worst states” for broadband internet service in the U.S. Its considerations were based on two factors – overall coverage and quality of connections.

The report ranked Maryland as the best overall state for broadband internet, followed by New Jersey, New York, Delaware and Washington. The rankings considered overall access to broadband, access to low-cost broadband, download and upload speeds, and access to fiber-optic service.

At the other end of the spectrum, in the worst category, West Virginia came in last.

West Virginia was followed in the report by Alaska, Mississippi, Arkansas and Vermont. All five states at the bottom scored a zero on internet quality, or latency, which is the time it takes information to go from one source to another.

There were 16 states in the report that scored a zero in the quality category, including North and South Dakota, Nebraska, Michigan, Iowa, Ohio and Wisconsin.

The state with the slowest average download speed was Kansas, followed by Alaska and South Carolina.

John Phipps: Is Broadband the Secret to Reviving Rural America?

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“Technical Debt” Continues To Grow Rapidly In The Agriculture Industry

How to Talk to Team Members About Poor Performance

Mon, 07 Aug 2023 14:53:29 GMT

Every team has one. That employee who is not contributing his or her fair share. The rest of the team knows this person is a poor performer. You can try to sweep the employee’s bad behavior under the rug, but that only makes it acceptable.

As the boss, you must coach this employee to be an all-star — or show them the door. Here’s a step-by-step process to help guide you through these tough conversations.

1. State the behavior and outcomes. You owe it to the employee be honest and let them know what the conversation is about, says Bob Grace, a leadership and organizational development consultant with The Leadership Effect in St. Louis, Mo. You don’t want them to feel threatened, but you must be direct. Stick to the facts.

2. Allow for reaction. This is the most commonly skipped step, Grace explains. “We don’t give people much time to react,” he says. “You have had time to move from emotion to reason, but the other person has not had time to react.”

After you state the poor behavior, stop for a little bit of silence. Grace suggests asking: What do you think? What is your reaction to this?

3. Agree on ownership of the problem. “The first time someone shows me that they don’t know how to do something, that is reflective of the leader,” says Dave Mitchell, founder of Walla Walla, Wash.-based consulting firm The Leadership Difference. “So that’s my fault. The second time is our fault, as they share some accountability. If there is a skill the employee doesn’t have, he or she needs to tell me.”

The third time, it is the employee’s fault, Mitchell says. “If you have that model, you don’t fire people—they fire themselves,” he says.

4. Discuss new outcomes and behaviors. Clearly state what a better outcome would look like and what behaviors could close the gap between what you need as a boss and how the employee is performing, Grace says.

5. Select a course of action. Outline the plan to better performance. Include a timeline and milestones, Grace says.

6. Express confidence change can be made. “Your goal as a leader is to make sure your team has high levels of self-efficacy,” Mitchell says.

Self-efficacy is having confidence in your own ability to achieve results. “Basically, it’s the feeling that I’ve got this,” Mitchell says.

Train and encourage your team and let them know it’s OK to make mistakes.

7. Follow-up on the plan with the employee. This step is critical, Grace says. Put the follow-up meetings on your calendar and keep your own copy of action steps and timelines.

8. Celebrate and recognize progress. Once an employee is on the right track, look for opportunities acknowledge it, Grace says. “Say thank you and tell them they are doing a good job.”

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Tue, 01 Aug 2023 21:11:54 GMT

Learn how to avoid these frustrating and deal-breaking mistakes

Yes, recruiting members for your team is extremely difficult. But before you spend your time and energy on that challenge, focus first on your current team.

“Put retention in front of recruiting,” suggests Mel Kleiman, president of Humetrics, a human resource consulting firm. “Become a place that people want to work, and then when people hear you have an opening, they come to you.”

How do you prioritize retention? Analyze why employees leave your farm. Many times, their departures fall into these categories.

1. Substandard Co-Workers: “The good employees aren’t paid enough to cover for or put up with the hiring mistakes,” Kleiman says. Don’t force your good employees to compensate for others who are lazy, indifferent or undependable.

2. Mind-Numbing Tasks: New employees are often handed boring and repetitive jobs. Even in downtimes, come up with meaningful work, suggests Erika Osmundson, director of marketing and communications for AgCareers.com. Find ways to make roles on your farm fun or challenging.

3. No Attention or Authority: “When a supervisor is so busy fighting the fires created by problem employees, he or she never has any time for his best people,” Kleiman says. Many times, this busy leader also fails to delegate authority to capable employees, leaving those employees frustrated.

4. No Training: Forgot that often-repeated phrase that training is not a good investment because “they’ll leave in three months anyway.” Establish an ongoing training plan, suggests Wesley Tucker, University of Missouri Extension agricultural business specialist. “Utilize multiple methods to ensure employees absorb and retain critical information,” he says. “Look for opportunities for both formal and spontaneous training.”

5. No Chance for Advancement: Do you share insights about future opportunities or positions? Recognize how advancements drive retention and job satisfaction. “A lot of times, we hire young people and think they are great,” says Dave Allen, president of Agri-Search, a placement firm for agricultural jobs. “So, you let them go do their thing. But, if you forget about them, they will be gone in two years.”

6. Lack of Respect: Employees need positive recognition, Kleiman says. “Praise in public and criticize in private,” he says. Many times, supervisors avoid positive feedback for fear the recipient might ask for a raise – this is the wrong approach.

7. Scheduling Conflicts: When an employer promises “flexible hours,” but it turns out “flexible hours” means having to work whenever and however long the manager wants them to, good employees look for the exit door. “Structure work schedules to allow for flexibility,” Osmundson suggests. “Maybe you can work shortened hours during certain parts of the year. Look for unique ways you can offer flexibility.”

Learn more tips on how to lead your team at the at the 2021 Top Producer Summit. Register now!

Read More

10 Tips for Finding Allstar Employees

Build A Talent Pipeline

‘Tis the Season for Appreciation

Grade Your Business Management IQ

Wed, 26 Jul 2023 19:49:21 GMT

Take a high-level assessment of your strengths and weaknesses

Your operation can be moving forward, but still falling behind. “Management is more than just being smart and using your head,” says Danny Klinefelter, Texas A&M University professor emeritus. “Strategic management is about anticipating, adapting to, driving and capitalizing on change.”

Grade yourself in the following areas, Klinefelter suggests. In areas where you are deficient, set concrete goals to improve.

A = YES
B = SOMEWHAT
C = NO
_______ Are you strategic? How do you handle change?

_______ Do you provide effective leadership? Do you communicate a clear vision of where you want the business to go?

_______ Do you have a strong culture that attracts top talent? What is your turnover rate?

_______ Do you use sound financial management practices? Is income evaluated on an accrual adjusted basis or just cash basis? Do you understand your key financial metrics?

_______ Do you have a marketing plan, and do you follow it? Do you know your per-unit cost of production for each commodity and enterprise?

_______ Do you control costs, including family living? Are assets used effectively and efficiently?

_______ Are you a consistently good producer? How do you stack up against the competition?

_______ Do you set business priorities and follow through on them?

_______ Do you have a succession plan? Do you also have development and transition plans?

_______ Do you see and understand the big picture? Do you have a strategy for major economic or policy changes?
_______ Do you have policies and procedures in place? (Ex: personnel and safety policies, standard operating procedures, etc.)

_______ Do you hold regular meetings to address concerns, report on business performance and expectations? Is that information shared with all vested parties?
_______ Are you a member of a peer advisory group of top managers?

_______ Are you getting better before you get bigger?

Little actions can equal big results for leaders. Read a few pieces of leadership advice from military
heroes, leadership experts, award-winning coaches and athletes at AgWeb.com/6-leadership-tactics

Read more from Top Producer .

Rural Bankers Rank Top 3 Farmer Challenges. Do You Agree?

Mon, 24 Jul 2023 18:50:00 GMT

Trouble continues in the rural economy. For the fourth straight month, the Rural Mainstreet Index (RMI) has declined. This is the second consecutive month of the RMI being below growth neutral.

For July 2022, the RMI sits at 46. That is down from June’s 49.8. The index ranges between 0 and 100 with a reading of 50 representing growth neutral and is generated by a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. “It is concerning as this is the first time since 2020, we’ve had back-to-back months of readings below growth neutral. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates — both long-term and short-term.”

Listen to Goss on AgriTalk with Chip Flory:

Bankers were asked this month to identify the greatest risk for farmers over the next 12 months. They include:

Rising input prices: 54% of respondents
Falling grain/livestock prices: 35% of respondents
Drought: 16% of respondents

Among bankers naming drought as the greatest risk, Jim Eckert, CEO of Anchor State Bank in Anchor, Ill., said “recent rains have improved crop prospects, but our area in central Illinois is still dry compared to northern and southern Illinois.”

Regarding risks to farmers, James Brown, CEO of Hardin County Savings Bank in Eldora, Iowa, reported “it’s the combination of higher input costs and a potential fall in commodity prices that are the biggest risks to farmers. Not just one or the other.”

Farmland Values Stay Strong

The region’s farmland price index for July declined to 66 from June’s 76.8, marking the 22nd straight month that the index has moved above growth neutral. July’s solid reading was the lowest index since February 2021.

Bankers were asked this month to project the change in farmland prices for the next 12 months. On average, bank CEOs expect farmland prices to advance by 2% over the next 12 months.

Over the last 30 days, Peoples Company Appraisal Team tracked 125 cropland auctions across 51 Iowa counties. In total, 11,812 acres of cropland sold in auctions for approximately $151 million, or an average of $12,780 per acre.

The July farm equipment-sales index sank to 56.5 from 71.4 in June. This was the 20th straight month that the index has advanced above growth neutral, but it marked the lowest reading for the index since January 2021.

Even with significant 2022 input price increases, bankers expect to record a half percentage point decline in farm loan delinquencies over the next 12 months.

The slowing economy, strong energy prices and agriculture input prices constrained the business confidence index to 26, its lowest level since May 2020, and down from 33.9 in June. This marks the lowest back-to-back readings since the beginning of the pandemic in April and May of 2020.

Share your view!

What is your biggest challenge in the next six months? Leave a comment below.

Have a Goal to Be a Better Leader in 2023? Here are Steps to Take

Fri, 21 Jul 2023 18:13:30 GMT

What makes an effective leader? How do great leaders narrow their focus and make the most of each day?

When you think about some of the most effective leaders you’ve met, have you noticed how they can seem to make the complex simple? Or how these great leaders can often distill their areas of focus down to a handful of priorities?

“Having interviewed dozens of turnaround CEOs I have seen this narrowing of focus with most of them,” says Mark Faust, president of Echelon Management . “They have a handful of priorities for the business’ growth, as well as a handful of priorities for their own leadership behaviors and role focus.”

Mark Faust will be speaking at the 2023 Top Producer Summit , which takes place Jan. 23-25. Register now!

Listen to him discuss the event with AgriTalk’s Chip Flory:

The first step in transforming your farm, Faust says, begins with you:

Are you willing to spend even a fraction of one hour a day to think about your strategy, like a good leader?
Are you willing to recruit the retired and outcasts, to build a great team?
Are you willing to build up a culture of hope, focused on an empowering vision and intensify their focus on winning not just for themselves, but the team, their community and their world?

“Your focus within your role as the leader has an amazing power to accelerate your organization’s growth,” he says. “A leader, just like a company, has a singular point of strength, that if intensified, gives the highest return on effort of anything else you could focus upon.”
Faust says the steps for a “Leadership Transformation” are:

Create a Vision of Your Role. You need to become the best version of yourself as leader.
Prioritize the top one to three organizational objectives with which you should be most involved.
Identify one to three of your organization’s greatest constraints, empower people, and kick off innovation efforts to ameliorate or eliminate those constraints.
Ask for feedback. Share with one to three of your team members your ideas, objectives and strategy. Ask: How am I doing as a leader? What is one thing I could do better to focus? Do not respond, just take notes and say “Thank you!”
Engage an outside third party from either your board or a strategic growth advisor to hold you accountable

“You can begin at any point in the year, but the power of this is that by improving yourself first, others follow,” Faust says.

Register for the Top Producer Summit!

Preventative Maintenance for Your People: How to Reduce Turnover and Boost Morale

Thu, 20 Jul 2023 20:33:00 GMT

Follow this strategy to reduce turnover and increase morale on your farm team

No news from your employees is good news, right? That approach might fit your leadership preference, but it’s an archaic way of leading your team, says Dave Mitchell, founder of Walla Walla, Wash.-based consulting firm The Leadership Difference .

“I’m stunned at how little leadership interacts with their team members,” he says. “Leaders need to be more assertive in reaching out to the employees to make sure any frustrations are resolved before they fester and cause permanent damage.”

This concept is something Mitchell calls people preventative maintenance. Essentially it is a system to create continuous feedback from the employee to the employer.

It can take several months for employees to be open to providing honest feedback. But over time, Mitchell says, team members will be more eager to participate and share.

“The key is you are consistent in collecting the information and reliable in acting on what you collect,” he says. “This cycle creates a continuous improvement process based on employee feedback.”

Simple and Purposeful System for Feedback

1. Create a spreadsheet with all your team members’ names in the left column and all the months as headers for the columns.

(Farm Journal)

2. Each month, schedule a casual 15-min. meeting (over a cup of coffee or during a drive to town) with each of your team members.

“The key is to execute the meeting informally but track it formally to ensure you speak with each team member each month,” Mitchell says.

3. Ask questions, such as:
How are things going at work?
What do you like most?
What do you like least?
What would you change to improve our work?
What do you need to make it easier for you to be successful?

4. Take notes on the feedback and identify any suggestions you should implement.

5. Note the meeting on your spreadsheet so you know you conducted the meeting.

6. Once you know which suggestions you will take, respond to the team member within a few days about the status of their suggestion.

Hear Dave Mitchell discuss how leadership hits your bottom line on the “Farming the Countryside” podcast:

Freight Rates Skyrocket

Tue, 15 Nov 2022 07:27:49 GMT

Transportation woes continue to haunt Northeast shippers as trucks remain hard to come by and freight rates skyrocket because of rising fuel costs and a scarcity of drivers.

“Trucks are at a premium right now,” said Tracie Levin, controller at M. Levin and Co. , in Philadelphia.

“It’s a major hindrance for our industry and anyone else that uses trucking, which is basically every industry out there,” she said.

Shippers can’t even buy trucks.

“We’ve been on wait lists to get more trucks, trailer and tractors,” she said. “You just cannot get those things these days.”

But Levin is optimistic that things will turn around. She said some relief is already in evidence.

“We’re slowly able to get things again in a semi timely manner,” she said.

East Coast shippers have been dealing with transportation issues, but there are trucks available, said Tom Beaver, director of sales and marketing for Sunny Valley International Inc. , in Glassboro, N.J.

“Obviously, the cost of brokering a truck, especially for our (less-than-load) business, has increased considerably, but the same is true for all of our competitors,” he said. “We’re adjusting to this ‘new normal,’ but the important thing is that we can get fruit loaded and out to our customers on time and in full.”

Transportation challenges are more prevalent during the winter than they are during the spring and summer for Vineland, N.J.-based The Freshwave Fruit & Produce and its growing operation, Consalo Family Farms , said Chelsea Consalo, executive vice president.

That’s because the company has more local deals during the warmer months.

During the winter, the firm must bring in products from outside growing areas, such as Mexico, and transport fruits and vegetables imported from offshore growing regions, such as Chile, from U.S. ports.

“We have more trucks on the road (in winter),” she said.

Transportation costs are a major concern.

“We’re managing to get the trucks,” Consalo said. “It is just more expensive.”

(Farm Journal)

The Freshwave has added Nick Crisafulli, who recently completed an internship at Americold Logistics LLC, to its logistics staff to help arrange transportation.

Vineland-based Flaim Farms Inc . has its own fleet of trucks for local deliveries, said president Ryan Flaim.

But trying to find trucks for destinations that are farther out is challenging.

The company has good relationships with trucking firms, but rates are much higher than they have been in the past, Flaim said.

Finding transportation isn’t a problem, as long as you’re willing to pay exorbitant fees, said Joel Fierman, president of New York-based Joseph Fierman and Sons Inc .

“It’s really a pity when your cost for transportation pretty much is as high as your cost for goods,” he said.

He blamed the price spike on high fuel costs and a scarcity of drivers.

“It’s a terrible, terrible thing that this country is experiencing right now,” he said.

An added problem during the Christmas season was that many trucks were sidetracked delivering Christmas trees.

“It’s fast, easy money,” he said.

Filindo Colace, vice president of operations for Philadelphia-based Ryeco LLC , attributes the skyrocketing inflation rate the industry has experienced to high freight costs.

“Freight has been a premium for quite some time,” he said.

While seed prices and other costs have also gone up, he said high freight rates are 90% of the cause of inflation.

“Nothing in the industry has gone up at the same rate as freight has,” Colace said.

But he remains optimistic.

“We think the country is moving on,” he said. “We’re going to be as back-to-business as usual as possible in the first quarter of next year.”

He expected buying patterns to return to where they were in 2019.

“We hope the workforce returns to those levels, as well,” he said.

“If that’s the case, it will be our expectation that freight rates will start to lower because there are more truck drivers coming back into the workforce.”

Related articles:

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Is the U.S. Now Officially in a Recession?

Fri, 28 Oct 2022 20:19:07 GMT

Friday brought mixed news for the economy. While data from the Commerce Department inflation pressures remained high last month, the Labor Department’s Employment Cost Index indicated a slowdown in private-sector wage growth for the third quarter.

Even with a glimmer of hope, the Federal Reserve is still widely expected to bump interest rates another 75 basis points as the Fed works to get inflation under control. And with a recession looming, consumers are already adjusting their spending habits at the meat counter.

“The short answer is yes, we’re seeing consumer behavior change,” says Glynn Tonsor, professor of Ag Economics at Kansas State University who also tracks consumers buying habits through the Meat Demand Monitor.

So, are we in a recession? Tonsor says that’s something you can continue to debate, but it’s more important to watch changes in behaviors versus debating the definition.

“It’s easy to get caught up in the discussion and definition of a recession,” says Tonsor. “I encourage us to hone in on his consumer behavior changing the way you phrase the question and it gets the right way. And price sensitivity, consumers are responding to price stronger than they were a year or two ago. And I think that’s because real wages have declined, and when I say real wages, the cost of living has gone up more than what people are making. So there’s a price squeeze or the financial belt has been tightened in a lot of households.”

Tonsor says meat protein is one of several categories there’s evidence consumers are tightening their belt in their buying decisions.

“We’re seeing some trading down within the protein complex,” adds Tonsor. “Think about going from a bacon product to a ham product, or from a ribeye steaks to a sirloin steak. There’s a lot of examples like that. But the meat demand monitor project at K-State gives us a lot of points on that. And the short answer is yes.”

There’s also a debate on what’s fueling inflation, a factor in the recession debate. The supply chain issues are one, but some also think excessive government spending is fueling the higher prices consumer are seeing.

While the debate on why inflation is so high will continue, Lonnie Hobbs, Jr., a PhD candidate in Ag Economics at Kansas State University says it’s not just one thing aiding the higher costs.

“In terms of the supply chain, we’re seeing these rise in prices because of a variety of factors such as rising transportation costs, rising cost of ingredients, rising costs of the processing that goes along with a lot of these products,” says Hobbs. “We are seeing rising prices in all areas that can at times be good for the farmer [prices they receive], but in terms of consumers, it may alter some of their purchasing decisions.”

The transportation issues aren’t going away either. Low river levels and a looming rail strike in mid-November are two transportation issues that could fuel higher transportation costs. So, will the supply chain transportation issues go away anytime soon?

“In the short term? I will say no, I would see this going on into the next year,” says Hobbs. “I think over time, things will get better, especially as the labor force begins to pick up. But I do think that this is something that farmers should be aware of moving into the new year.”

U.S. Diesel Crisis Lingers as Europe Prepares for Russian Oil Ban

Mon, 24 Oct 2022 18:37:48 GMT

President Biden has another fuel crisis at hand: diesel. Tapping the Strategic Petroleum Reserve (SPR) won’t help much due to the lack of refining capacity.

Global diesel and distillate fuel stocks have fallen to dangerous levels and the U.S. has been exporting a lot of diesel to Europe and Latin America, but now things are changing. U.S. buyers are snapping up diesel cargos originally planned for Europe as the crisis deepens.

Europe’s Plan B

Europe is currently buying a lot of Russian diesel to fill the gap, but this will have to stop next February as the embargo on Russian fuels kicks in. Argus reported that Europe is in for a major diesel supply shock because of low inventories and strong demand.

U.S. Export Ban Revisited

Banning U.S. exports to secure supply is one option under White House review. A ban on exports could “decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war,” wrote Mike Sommers of API and Chet to Jennifer Granholm, U.S. energy secretary.

If diesel exports are banned, it will not please Mexico, Brazil and Chile who are short of diesel. In July, the last month with available full data, U.S. diesel exports to Latin America hit a record high of 1.2 million barrels, double the amount a decade ago.

Another Option of the U.S.

Biden could, instead, force oil companies to build up stocks quickly ahead of the winter by setting a minimum inventory level, similar to what the European Union did for natural gas stockpiles. Problem again is that this would lead to surging prices in Latin America as it would force American refiners to import more or reduce their exports — or both.

Either way, prices will likely continue to surge, as they have this week.

Markets React

Wholesale diesel prices in the spot market of New York harbor, a key pricing point, surged this past week to more than $200 per barrel. Bloomberg notes that excluding a three-week period from late April into mid-May, that would be a record high.

As a result, American refiners have the best-ever diesel margins, with the profit of turning a barrel of crude into one of diesel hitting a record high of $86.5 per barrel, up about 450% from the 2000-2020 average of $15.7 per barrel.

The current level is the lowest ever recorded for this time of year. Because most food and grocery items are transported via truck, cost structures will remain troubling and limit relief for consumers as winter approaches.

Facts and Figures

Currently, the U.S. has just 106 million barrels of diesel and heating oil in commercial stocks; the last time inventories were that low in mid-October was in 1951, when Democrat Harry Truman was in the White House. Typically, inventories should be 30% higher this time of the year.

More on fuel:

This Researcher Looks to Uncover Renewable Diesel Source in Unique Place
John Phipps: It’s Now Less About the Supply of Oil, And More About Refining Capacity in the U.S.

Protect Yourself: Lessons from Grain Elevator Fraud

Wed, 05 Oct 2022 18:44:12 GMT

Last week the Ashby Farmers Cooperative Elevator Co. abruptly shut down after its board discovered the elevator manager had allegedly siphoned $2 million from the grain elevator. The former manager, Jerry Hennessey, is now on the run and co-op leaders are evaluating the situation, seeking a new owner and exploring the legal ramifications.

Initial investigations show Hennessey had been pocketing funds while inflating grain inventories from the single-location grain co-op for at least a decade. He used the money for hunting trips, taxidermy and paying his personal Cabela’s credit card.

This case resurfaces memories of other similar incidents of embezzlement, fraud and Ponzi schemes occurring with grain buyers. Such as when Missouri grain dealer Cathy Gieseker cheated farmers out of more than $27 million in grain sales back in 2010. Or when Illinois farmer Robert James Printz and Timothy Boerma, a former manager of Towanda Grain Company, defrauded the central Illinois elevator in 2014.

Other examples can be found in Wisconsin , Nebraska and South Dakota (just to name a few).

These cases serve as reminders of why farmers should exercise due diligence when working with grain buyers, experts say.

Exercise the role of the board.

Board seats for grain elevators or co-ops are not honorary positions, says Erik Ahlgren, attorney with Ahlgren Law Office in Fergus Falls, Minn., who was hired by the Ashby Farmers Cooperative Elevator Co.

“You act as an overseer for the management,” he says. “The management doesn’t run the board; the board oversees the management.”

Since elevators tend to have small staffs, Ahlgren says, the board needs to ensure there are multiple internal controls in place to guard against embezzlement. This can as simple as one person reviewing invoices and a different person writing the checks.

“If I can write checks without anyone overseeing, then it is really easy to write a check to a taxidermist,” says Ahlgren, in reference to Ashby case.

Get grain contracts in writing, always.

Bona fide grain deals that involve some type of forward pricing will require a written contract between the dealer and the farmer, says Kevin McNew, Farmers Business Network’s chief economist and former president of GeoGrain.

“Each state regulates these differently, but as a general rule, if you are making a grain deal for something other than spot delivery, you should have it in writing,” says McNew, who was slated to be an expert witness in the Gieseker trial . A general rule of thumb, he says, is if you are making a grain deal for something other than spot delivery, you should have it in writing.

Review scale tickets and settlement sheets.

Don’t rely on scale tickets for the terms of your deal with the buyer; that’s the purpose of the settlement sheet, McNew explains.

“So, while the scale ticket is a document showing ownership transference and weight of the load, the settlement sheet is the key document that will show the payment on those bushels,” he says. “Whether you had a previous contract with an agreed upon price or whether you have no outstanding contract, so the load is given a spot price, this will all be transparent in the settlement sheet.”

Know the other party.

Nearly all states have grain-dealer laws that require licensing for entities buying grain directly from farmers, McNew says. Each state is different, but grain dealers must post bonds, go through annual audits and meet certain financial solvency requirements.

But, these requirements are generally inadequate to completely insure farmers if the buyer goes bankrupt.

“Whenever you are doing deals with a third party, it is important to use good judgement in the deals you make,” he says. “No laws, rules or regulations will completely protect you from bad business practices of those you trade with.”

Beware the “rolling hedge.”

“This fictitious instrument allows farmers to perpetually ratchet up their price on a market rally but never see their price fall if the market turns south,” McNews says. “It’s like hitting the lottery, giving the farmer the right to the highest price ever printed on the board without any downside risk or cost. The truth is no business would ever back such a one-sided contract.”

If you see something strange, speak up!

Remember the Transportation Security Administration traveler advisory: If you see something suspicious—report it.

McNew says in the case of grain fraud, it seems more onerous on grain buyers: If you see suspicious activities by your grain suppliers, you better report them, otherwise you might find yourself with a massive legal bill.

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Learn how to avoid these frustrating and deal-breaking mistakes

Learn more tips on how to lead your team at the at the 2021 Top Producer Summit. Register now!

Grade Your Business Management IQ

Take a high-level assessment of your strengths and weaknesses

Rural Bankers Rank Top 3 Farmer Challenges. Do You Agree?

Farmland Values Stay Strong

Share your view!

Have a Goal to Be a Better Leader in 2023? Here are Steps to Take

Preventative Maintenance for Your People: How to Reduce Turnover and Boost Morale

Follow this strategy to reduce turnover and increase morale on your farm team

Simple and Purposeful System for Feedback

Freight Rates Skyrocket

Is the U.S. Now Officially in a Recession?

U.S. Diesel Crisis Lingers as Europe Prepares for Russian Oil Ban

Europe’s Plan B

U.S. Export Ban Revisited

Another Option of the U.S.

Markets React

Facts and Figures

Protect Yourself: Lessons from Grain Elevator Fraud

Exercise the role of the board.

Get grain contracts in writing, always.

Review scale tickets and settlement sheets.

Know the other party.

Beware the “rolling hedge.”

If you see something strange, speak up!

Read More: Sticky Fingers Fraud: $2M Missing at Grain Elevator