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December 4, 2023December 4, 2023

2023, the Ag Economy, and a New Year Ahead

What’s the first thing that comes to mind when I say, “Describe the year 2023 farm economy in one word?” Actually, I’m not sure one word would be adequate, especially if you live and work in rural America. The best way to describe 2023 in the agricultural community for many may be “Is it 2024 yet?”

Ag Economy, 2023 — In today’s ag economy, 2023 saw many of us pinching pennies to grow crops.

Dave Widmar is an agricultural economist with Agricultural Economic Insights in West Lafayette, Indiana, and keeps a close eye on the ag economy. We had a conversation during the last National Association of Farm Broadcasting Annual Convention in Kansas City in November, a week before Thanksgiving.

“One of the biggest stories of 2023 is declining net farm income,” Widmar says as the crowd in the Trade Talk event walked by in the background. “That’s not a big shocker to most people in rural America, but we have to put it in perspective. It’s still historically high, so we need to bring it into balance.”

Unfortunately, that income balance doesn’t apply equally to all parts of farm country. He said the Midwest and the Corn Belt did especially well during the last three years combined. In fact, he called the last three years (2021-2023) the “best three-year run” since the 1940s.

“On the other side of the narrative, commodity prices have trended lower,” he said, “especially on corn. We also had another year of below trendline yields combined with higher interest rates.”

AEI isn’t necessarily watching the interest rates the general public hears about during the evening news. Those are the short-term rates the Fed adjusts at their meetings, and, since June, the Fed has raised short-term rates 25 basis points. “On the other hand, long-term rates have increased 150 basis points,” he said.

“That may continue into 2024 as that yield curve un-inverts as we move into a different economy next year,” Widmar said. “As the Fed spent time raising rates, the curve got inverted, meaning short-term interest rates got more expensive than long-term rates. This is often thought of as an indicator that recession may be coming.”

2023 ag economy — The 2023 farm economy showed producers it’s time to keep a tight reign on how they use debt.

Now the Fed has paused interest rate hikes, the long-term interest rates have continued higher. That means the yield curve is starting to un-invert, something he’ll continue watching.

There is some good news for the economy. The unemployment rate remains low, which is a positive trend, and inflation has come down “significantly.” In his words, “the genie isn’t back in the bottle yet.” The country isn’t back to two percent inflation, and the last 150 basis points on inflation are going to be the hardest to reduce. “A lot of moving pieces in 2023,” he added.

So, what do those moving pieces possibly mean for 2024? For those looking for the economy to settle down, they may be disappointed. Widmar said “hold on.”

“The volatility is probably going to continue,” he said ruefully. “That isn’t all bad. Despite record fertilizer prices, the uncertainty around usage, demand, and inflation, the farm economy had a good run between 2011 and 2023.

“We could see some reversion to the mean,” Widmar added. “Farm incomes might be lower next year but not necessarily historically bad. What we need to realize is the last three years are not normal.”

The last three years weren’t typical in terms of government payments, commodity prices, or profitability. Widmar says it’s time to start recalibrating our expectations as to what’s normal and what we should plan on being normal in the future. Speaking of the future, what should producers be thinking about heading into next year?

“One of the big things we’re keeping an eye on is acreage distribution,” Widmar said. “There’s always at least some reallocation. One of the things that we observed in 2023 was that we had a lot of corn acres and not as many soybean acres. That’s resulted in an imbalance in ending stocks.”

That’s put corn ending stocks are above the long-run average, closer to 15 percent than the average of 13 percent. Soybeans are closer to five or six percent instead of the long-run average of eight.

“That means we may see some acreage reallocation,” Widmar said. “Producers should keep an eye on the relative price ratio and how that’s going to impact their budgets.

“They also need to keep an eye on fertilizer expenses,” he added. “Fertilizer has come down a lot recently, and that’s going to benefit corn budgets quite a bit.”

Another thing to watch for is farm debt. One of the things the economists at AEI have observed is new farm loans with different terms than in the past. Take a machinery loan, for example. The payment terms have been stretched out. How does that affect the bottom line?

“For every $1,000 of farm debt one takes on, the payments are going to be about the same as they were the last few years,” he said. “The payment hasn’t changed. What’s changed is the ‘stretching out,’ which means more payments get added to the backside. The extra interest expense is backloaded into the form of additional payments.”

Interest expenses are increasing as we go forward, and it will take more payments to maintain the same level of debt that farmers have had in the past. He said a lot of the economic challenges we face today may be getting “kicked down the road.” But there is one good sign amid some uncertainty looking to the new year and 2024 spring planting.

“Lenders are still confident and comfortable making long-term loans on things like machinery,” he said. “One of the big differences between the 1980s and today is back then, we had very high interest rates and short repayment periods. Some repayment periods lasted less than a single year.”

That created a large problem of no access to capital in the ‘80s. Today, Widmar said there’s a lot of available access to debt markets, which are very accommodating right now. But, he says, just because someone will lend to you at those terms doesn’t mean you as a farmer need to accept them. “Always be thinking about the implications of any loan terms you accept,” he added.

“Stretching the terms out has kept the payments low, but now that we’re in a high-interest environment, how are producers going to adjust,” he asked. If costs like fertilizer, electricity, or gasoline go up, Economics 101 teaches that we should be using less of each input.

“What do we do then with the higher cost of money,” he said. “Using less of an input is one particular approach. We can also shift the way we’re using money, including using more long-term debt last year and then shift it to short-term debt going forward. We always have to be evaluating how we’re using debt.”

In closing, he pointed out that agriculture hasn’t been in many rising interest rate environments in the past. The 1980s was one, and farmers and now in another. Producers need to revisit the strategies they’ve been deploying around farm finances, the use of farm debt, and their cash flow.

September 28, 2022September 28, 2022

Ag economic conditions strong, but for how long?

Ag economic conditions are still quite strong in 2022, but how long will that last? Nate Kaufman, vice president and Omaha bank executive for the Federal Reserve Bank of Kansas City, spoke during the recent Agricultural Outlook Forum in Kansas City. He told the audience during a presentation that incomes are still in good shape.

“Economic conditions in agriculture are remarkably strong. And I want to start here because this is not something I would have said probably two-and-a-half years ago. And I think it is an important place to start just because of how significantly different conditions are today relative to what we might have said back then. Incomes are incredibly high. We’ve seen commodity prices pick up, and yes, there are very high input costs that are leading to some concerns, but generally speaking, economic conditions in agriculture, with some caveats, are quite strong.”

Land values are a good example of the strength of the ag economic conditions.

“Land values, for example, are about 25 to 30 percent higher than what we might have seen before the pandemic. That was a time that land values had been declining the first couple of months of the pandemic, and it was maybe thought that we would see further declines, but here we are a couple of years later and seeing that conditions are much stronger. Before the pandemic, we worried about gradual increases in loan defaults. We looked at bankruptcy rates, we looked at other things that we thought there was going to be more financial stress and not less going forward. And the reality is that loan delinquencies are at one of their all-time lows, working capital levels are very high, and producers are generally in a strong position. And so, we’re seeing again from a financial picture things are rather strong there too.”

Despite the current strength of the ag economy, analysts expect slower economic growth next year.

‘Six percent growth in 2021 and 2022, that number is expected to be less than one percent, and there are concerns about economic growth in 2023. The second one is inflationary pressure. For those 10 years that we spent in the longest economic expansion on record after the financial crisis, inflation was generally less than two percent. And the Federal Reserve, as many of you may know, has a goal for inflation at two percent. We’re at eight percent, and that’s significantly higher than two. There are concerns about what inflationary pressures might do concerning some of the costs that have been mentioned.”

The other significant headwind is the interest rate.

The last one that I’ll mention then is interest rates. At the end of 2020. If you were to look at some of the projections that Federal Reserve officials would have suggested would be appropriate interest rate policy for 2022, many would have indicated that rates were likely to still be approximately zero by the end of this year. Instead, we’re in a different environment. And this is in large part because of inflation, where we’re now seeing interest rates closer to four to four-and-a-half percent by the end of this year.”

The Ag Outlook Forum was sponsored by the Ag Business Council of Kansas City and Agri-Pulse.

August 10, 2022August 11, 2022

Rain Finally Shows In Farm Country Last Weekend

Rain. Finally. Last weekend saw at least some rain in parts of farm country. Had a chance to talk with John Baranick (rhymes with mechanic), ag meteorologist for DTN, who lives just down 169 from me in Jordan, Minnesota. He says while the rain benefitted the parts of rural America stuck in a drought, other areas didn’t need a lot of rainfall.

“It wasn’t just here in southern Minnesota. We also saw that it was even heavier south of the border in Iowa, with a lot more four-to-six inch amounts there. Very helpful for some areas, but not a lot of those areas needed it. It also extended down through southern Wisconsin and into Northern Illinois. A lot of those crops, again, didn’t really need it, but it’s definitely helpful wherever it hit. And that front is starting to come through the eastern half of the Corn Belt. Again, a lot of these areas are doing much better than we are out here in the West, but Illinois, Indiana, and Ohio are all seeing bouts of rain this week. They’ve had some flooding in some of these areas, but the rainfall that’s gone through is mostly favorable. It’s just those Western states that just haven’t.”

The Dakotas saw mixed results from the weekend rain.

“South Dakota got some pretty good rainfall. The eastern half of it did, but the western half didn’t, really. North Dakota has kind of been missing out on a bunch of rain lately, although their soil moisture, for the most part, and the crop conditions are still pretty good.”

The Plains States are still struggling with drought…tape

“It’s the states of Nebraska, Kansas, kind of northern Missouri that have missed out on a lot of the rainfall even with these fronts coming through, and they’ve had a lot hotter. Temperatures have been up near or eclipsing 100 degrees very consistently all summer long, so the heat has been putting on a whole lot of stress for those areas.”

There may finally be some cooler air on the way into the Plains next week and may bring at least a little rain with that front…tape

“We’re seeing late next week, maybe mid-to-late next week, a push a cooler air move through and that’s gonna come with a bit of showers too, so it’s not a whole lot of rainfall and probably on the order for most people have a half inch or less, But the temperatures are going to cool back down. Instead of seeing highs in the 90s and up near 100. It’s more like the 70s and 80s for several days, so it’s actually gonna be below-normal temperatures for a bit. That kind of occurs late next week into the following week, so it’ll be a nice relieving break for them.

Unfortunately, many parts of rural America are still stuck in a drought. We’ll talk about that more later this week.

Again, that’s DTN ag meteorologist John Baranick

May 4, 2022May 4, 2022

Market Prices are Still Higher, But How long?

Market Prices are still higher, but for how long? Commodity markets are rarely dull and sometimes are outright wild. One-quarter of the way into 2022, and we’ve seen a lot of upward pressure in several commodities. The curious question is how long is this going to last given multiple outside factors that could bring the higher push to a halt.

Mike Zuzolo is the founder and president of Global Commodity Analytics in Atchison, Kansas. He’s been working in the markets in various positions since November 1995. Zuzolo has seen a lot of ups and downs over the years, and the corn market has been near all-time highs for quite a while.

“We’ve been within reach of the all-time high for corn set in August 2012, at $8.43 3/4,” he said on the phone from Kansas. “You have the Hard Red Wheat drought, you have the E15 blend increase this summer, planting delays that are pressuring a marketplace that’s expecting more acres than what the USDA predicted earlier this year.

“And then you have the soybeans getting support from the vegetable oil market, which is supported by the crude oil market, and that is supported by the biggest feature of all, the war in Ukraine,” Zuzolo added.

Over the past four months, Zuzolo said there are two overarching factors that had the most influence on the corn market prices. One is the idea from the Federal Reserve that the U.S. had transitory inflation. At roughly the same time the Fed began to publicly acknowledge that wasn’t the case, Russia began its attack on Ukraine. He said most people didn’t seem to truly expect that would happen.

He calls these two events “black rhinos.” Those are events the public knew were possible but kind of turned away from, not thinking they would actually happen. “They aren’t like black swans that we didn’t know where out there,” he said. “You didn’t think they would have the impact on the markets that’s happened so far.”

The market prices could potentially feel the impacts of the war in Ukraine for years. Zuzolo, a long-time market observer, says the length of the impact may depend on who “wins” the war and how big it may get before it’s done.

The commodity markets may feel the impact of the war in Ukraine for years to come. (Photo from Hindustantimes.com)

“Does NATO get involved?” he wondered, “It would then go from two countries directly involved with a lot of support from multiple other countries, or does it expand into a NATO and China and Syria and Iran conflict. The regional conflict would have a great chance of blossoming into more of a full-on world war.”

He thinks the trade is beginning to take the potential conflict escalation into account, “and they should.” A recent weekly stocks report of distillate fuels in the U.S., which is mainly heating oil and diesel fuel, showed America’s distillate fuels at their lowest point since 2008.

“All of the sudden, we have a situation where the wheat market is contending with a situation similar to 2008 in terms of drought potential, knocking down yields,” he said. “Now, we have the energy sector also looking like 2008. If you throw the Russia/Ukraine issue on top of that, then yes, you could have something that lasts for quite some time.”

There are a lot of negative features out there that can affect market prices. He said the trade can’t get a handle on what the supply is right now. Folks in the markets don’t know if the demand is being rationed aggressively enough at this point, because they don’t know if the supply has stopped going down yet.

“The Highly Pathogenic Avian Influenza is in 20-something states right now,” Zuzolo said, “we have a hog herd that is shrinking as of the March Hogs and Pigs Report, and we have a cattle herd that is seeing an almost-weekly drop of one-to-three pounds on a dressed basis. I think we’re only four or five pounds above where we were a year ago, and this is in the beginning of what could be one of the worst droughts in cattle country.”

The International Monetary Fund (IMF) recently cut world GDP by almost a full percentage point just since January. While the IMF puts a lot of it at the foot of the war in Ukraine, Zuzolo says it goes back to the supply chain issues. The U.S. couldn’t afford any more problems on the supply side with energy and crude oil than what the country already faced because of COVID-19.

Thinking long term, Zuzolo spoke to the possibility of the U.S. having to ration exports in order to make sure the U.S. had enough food to feed the country. He doesn’t think it will happen in terms of food exports, but it could happen in other sectors.

“In terms of crude oil, we recently lost a lot more barrels of oil than the trade expected,” Zuzolo said. “It wasn’t because of extra strong demand, it was three times more than the trade expected because we were exporting it out the door. If we can’t bring up the rig count here in the United States and start producing more to meet international and domestic demand, it will then be time to start thinking about rationing.”

Zuzolo said this will have to be a topic of conversation three-to-six months down the line if the war expands and the conflict gets any bigger than it already is. In the meantime, it’s harder than ever to guess what’s ahead in 2022 for the markets.

“I’m gonna stick with what I’ve said recently,” he said. “Because this is a supply cost-push, weather-induced, inflationary move, I still feel the first half of calendar year 2022 is the best time for grain hedgers to get their hedges in place, and yes, I do think they’ll need them. It’s because of the fact that it’s not demand led, and that we are on track for a recession, a greater than 50 percent chance, by the fourth quarter of this year.”

Commodity markets are never dull, are they? (Photo from wikipedia.com)

He says it’s important to get grain hedges in place by the end of June. For the livestock and poultry producer, the second half of 2022 is going to give them a better opportunity to hedge better profit.

“At that point, not only will high market price prices for grains pull down the weights, the HPAI will pull down supply, as will some natural herd reductions. That will all begin to be felt in the market price and the available supplies of market-ready cattle and hogs by the time we get to August and September.

“I still want to hedge the livestock markets, but I don’t think we’re on as big of a timeline as I am on the grains during the first half of the year,” he added.

February 23, 2022February 23, 2022

Spring: when does it get here?

Spring weather is always a fun conversation across farm country, whether in the local coffee shop, after church, or during a sidewalk stroll down any small-town street in America. I came across a recent article from the National Weather Service saying that March might have above-normal temperatures and was intrigued. So, I got on the phone for an assignment from the National Association of Farm Broadcasting and began digging.

My first phone call was to Dennis Todey, the director of the Midwest Climate Hub in Ames, Iowa. As far as the March forecast goes, the veteran meteorologist says it depends on one thing: location, location, and location.

“The farther north you go, the less chance you have of being above normal during March,” Todey said. “But we should begin to rebound fairly quickly after the recent cold stretch that brought snow into parts of the Upper Midwest.”

Spring weather — Dennis Todey is the director of the Midwest Climate Hub in Ames, Iowa. (photo from climatehubs.usda.gov)

What you may not know is most of the cold that covered parts of the Upper Midwest was originally supposed to stay well to the north, especially up in Canada. Some of that cold worked its way into the North Central U.S., but it’s been limited mainly to the areas with snow cover.

As you go further west in the Northern Plains, there is less snow cover, so the temps haven’t been quite as cold. “The probabilities are not big, but the possibility of some warmer temperatures is there,” Todey said.

Looking out beyond March to the spring weather forecast, again, it all depends on which location you’re referring to. Out in the Eastern Corn Belt from Central Illinois and further east, they’ve had several storm events move through the area. The outlook in that location continues to look wet there.

“Planting delays are definitely on the radar in that location,” Todey said.

It’s the opposite in the Central and Southern Plains, where drought conditions have steadily grown worse in recent months as it’s been a dry and warm winter. The big question is whether the area is going to get any moisture anytime soon.

“It’s going to be interesting in the eastern Dakotas and parts of Minnesota,” he said. “They got some moisture late last year and recently picked up some recent snow as well.

“Places like Missouri and Iowa are more of a mixed bag right now,” he said. “Iowa still has some carryover dry soils, and then we have some dry soils in parts of Wisconsin in areas that keep missing out on moisture events.”

Speaking of dry weather, a good-sized part of rural America is short of moisture. The shortage in the plains begins in Nebraska and stretches to the south. It’s dry to very dry, but the lack of moisture doesn’t stop there.

“Parts of Iowa and Wisconsin are quite dry,” Todey said. “It’s quite dry in northern Illinois, which is a carryover from last year. Depending on which part you’re talking about, parts of the Dakotas had moisture while others didn’t get enough moisture for runoff for ponds and dugouts from a livestock standpoint.”

The winter wheat crop is really struggling because of the dry weather. The spring weather forecast hopefully has some moisture in it to help the wheat crop to at least somewhat rebound from the poor conditions.

As winter begins to wind down and spring gets closer, Todey has noticed an interesting trend in recent years when it comes to winter weather. Up here in Minnesota, we were able to take the dog for a walk in short sleeves or light jackets into November of 2021, which is almost becoming more of the norm rather than the exception.

“Winter has been showing up later than normal in recent years,” he said after some thought on the matter. “Let me frame this climatologically for you.

“The 90 coldest days on average for most of the Upper Midwest are typically December, January, and February,” Todey said. “That’s based on looking at data over the last 30 years. We’ve seen some of the coldest events of the winter occurring in late February.”

While late-winter snow isn’t uncommon, the larger events have been coming later and later, so “something is going on that’s a little different.”

September 22, 2021September 22, 2021

Dry Weather in Time for 2021 Harvest

Dry weather is a never-ending talker at the local coffee shops during the growing season, but even more during harvest. Farmers can get a lot of work done in a short time if the weather stays dry. John Baranick (rhymes with ”mechanic”) is a meteorologist with DTN, who says things might be a little drier as harvest continues to speed up across most of farm country.

Drying Off for Harvest

“A high-pressure ridge will continue to move into the Pacific Northwest and will block a lot of moisture from reaching the Upper Midwest for several days,” Baranick says. “Now through the last week of September should be pretty good for getting out there and harvesting the crops.”

The 2021 drought dried out a big chunk of rural America this year, but over the last several weeks, much of the American farm country saw consistent rainfall. Baranick, an Iowa State University graduate with degrees in meteorology and agronomy, says the consistent rain has recharged at least some of the deficit in soil moisture.

“It has,” he said. “We’ve seen some good rainfall in Minnesota, Iowa, the eastern Dakotas, Wisconsin, and Eastern Nebraska over the past several weeks. The level of drought keeps getting reduced in many of those areas. Some areas in the category of D3 drought were eliminated in northeastern South Dakota and northwest Iowa.

“Unfortunately, most of these areas have been so far behind on rainfall that getting almost a summer’s worth of rainfall in a month wasn’t enough to eliminate the drought,” Baranick added.

He estimates that dry weather has put most areas around 6 to 8 inches behind on their average rainfall totals. It’s even worse in western South Dakota. “I was talking to someone that farms out there, and he’s 10 inches behind on their average rainfall total,” he added. “We’re way behind, and it’s going to take a lot of rain to reverse that trend.”

Baranick, a meteorologist with DTN since 2011, says the fall season will have a lot of variability in the systems moving through rural America. Early September featured some good rainfall, but for the rest of September into October and November, he says they don’t see a strong signal either way of above-normal precipitation that will eat into some of that dryness.

“Some areas may improve a bit while others could degrade,” he said. “I don’t think there’s going to be a lot of movement either way through the fall season. We also don’t see a lot of moisture recharge during the winter season either,” Baranick said.

“Even with good precipitation over the winter, an extra inch or two isn’t going to bite into the five, six, or even eight inches of rainfall deficit we’re looking at,” he said. “We’re going to be dependent here in all these drier areas across the Western Corn Belt, especially the Northwest Corn Belt, for recharging our soil moisture and getting next season’s crop off to a good start.”

Plains Staying Dry Too

Dry weather is affecting he Great Plains from southern Nebraska down through Texas, which makes up the country’s largest winter wheat-producing area. A recent look at the Drought Monitor showed drier areas spreading out quite a bit across even more of Texas, Oklahoma, and southern Kansas.

“We’re looking for some rainfall in many of these areas because it’s also been hot,” Baranick said. “The temps have been above 90 and approaching 100 degrees on many days. The temps have been way above normal, and it’s sucking the moisture right out of the soil. Unfortunately, any systems potentially coming through this week don’t look like they have a lot of moisture.”

The Plains State have been and still are quite dry in 2021. (Photo from bismarktribune.com)

He says that high pressure setting up in the western U.S. will help keep systems at bay in much of the Plains as well. Unfortunately, the above-normal temps and dry weather in the forecast will continue to sap the remaining soil moisture.

Looking ahead to the fall and winter seasons in the south, we’re heading into a La Niña weather pattern, which typically means warm and dry weather in southern states. These areas seeing their soil moisture drying away don’t have a lot of immediate hope for building that back into the soil.

“For wheat production in the Plains, we’re going to be dependent on moisture coming into the region,” he said. “Hopefully, fall rains will be timely enough to get some good root development in wheat through the fall before they go dormant in the winter.

“We’re hoping that the rains turn on right away when we get out of the La Niña in the spring,” Baranick added. “If we don’t, the winter wheat crop in the Plains is going to be hurting.”

South Finally Drying Up After Storms

Hurricane Ida and Tropical Storm Nicholas brought a lot of extra water to the Southern States and the Delta Region. Moisture coming into the region off the Gulf of Mexico was difficult to turn off.

Hurricane Ida, followed by Tropical Storm Nicholas, brought far too much moisture and damage in the south. Drier weather is on the way, so hopefully cotton and soybeans can dry out in time for harvest. (Photo from wkrg.com)

“We will see some dry weather conditions finally get into the South,” he said. “That’s good because it’s going to take a bit for soybeans and cotton to dry off.”

August 11, 2021August 11, 2021

Drought has Utah farmer in “survival mode”

Drought to an average person likely means “it’s dry.” And that’s fair. However, what you may not realize is drought, to a farmer, might mean “we’re struggling to stay in business because of something we literally have no control over.” It’s understandably a situation that non-farm folks have a hard time relating to.

The National Association of Farm Broadcasting’s News Service and the American Farm Bureau Federation undertook a project this month to put a human face on the challenges of drought, especially in the Western United States. That area of the country has been clobbered by a long and intense spell of dry weather.

Tyson Roberts is a farmer from Layton, Utah, who’s seen the challenge firsthand because he’s living it right now. I jumped on the phone with him on Tuesday of this week for an interview about what it’s like to face a drought of this magnitude. While drought is a big topic of conversation in 2021, he said the dry spell stretches back to 2021.

“We got started with this last year,” he recalled while on the phone from his Utah farm. “A lot of people may not realize that.”

It wasn’t quite as bad last year as it is in 2021. The water available for Roberts’ crops was below normal levels in 2020, but they still grew “pretty much” all of the crops that they would in a normal year. This year has been markedly different.

“We are a vegetable operation here,” he said, “and we grow fresh market vegetables for farmer’s markets.

“When you think about a tradition row crop farm, the producer plants in the spring and harvests in the fall,” Roberts says. “We work a little differently: we’ll start planting different vegetables in the spring and continue through most of the summer and into August.”

Their typical planting schedule came to a sudden stop. Roberts, the sixth generation of the Roberts family to work the farm in Davis County, Utah, got to the middle of June and figured out they wouldn’t have enough water to sustain the crops they have growing and grow the additional crops they’d be planting through the month of July.

“We ended up putting all of our planters away around the first of July,” he recalled. “About 20 percent of our property remained unplanted. We fallowed it because there just isn’t enough water to grow the amount of produce we normally plant in a given year.”

Drought is making the lives of farmers miserable in 2021, especially in the Western United States. (Photo from foxnews.com)

As someone who doesn’t live on a farm, imagine having to give up 20 percent of your income due to circumstances you had no control over. I don’t know about you, but a 20 percent drop in income would likely throw me out of my house and into the street.

The drought hasn’t forced Roberts to destroy any crops, but it has forced him to leave some crops in the field because they’re not harvestable quality, which amounts to the same thing. He offered up his sweet corn crop as an example.

“About 2/3 of the top part of our fields are pretty good quality and should get us good yields,” he said. “However, on the bottom end, we haven’t had enough water for all of the other plants. I guess you’d say we couldn’t get the water all the way to the end of the row.

“We’ve lost a lot of yield and in quality,” Roberts added. “In addition to the unplanted ground, there’s also a portion of the planted crops that are unmarketable.”

Crop farmers get paid when they harvest crops. Can you imagine knowing ahead of time that the one check you get for harvesting your crops won’t pay your bills? That’s what farmers face every year. These are the people that grow our food. It’s a rough way to earn a living.

He sums up the situation on his farm rather succinctly: “We’re in survival mode right now,” he said grimly. “With the unplanted acres and the loss of yield, we’re just trying to stay afloat. And I think that’s fair to say for a lot of farmers around us and across the state, as well as throughout the Western U.S.”

So how do farmers like him find a way to keep moving forward and get through this?

“I serve on the Utah Farm Bureau Board of Directors, and we met last week to discuss how we can help keep our farmers in business,” he said. “Every state has received a fair amount of COVID assistance, which is some help. We’re looking at the best ways to help the livestock farmers, the crop farmers, and get them the help they need.

“We’re looking into government programs to help them stay in business,” Roberts added. “I hate to say it, but sometimes a company or a farm may need a little help staying afloat when they face the challenges that we have for nearly two years.”

Roberts and his wife, Danna, have six children who each help on the farm, and Tyson’s parents, Dix and Ruth, also operate the farm with him.

July 13, 2021July 13, 2021

Dairying across the pond

Dairying in Ireland was an irresistible topic to a writer who grew up working at the Gerhold Brother’s Dairy of Castlewood, South Dakota. While on vacation in Ireland, Frank Costello, the gentleman that rented a beautiful cottage to us, put me in touch with a local dairy farmer named Tom Clesham. One phone call and a couple of texts later, I was on my way to visit the Clesham Farm in County Mayo, near Cong.

The 96-acre dairy farm stretches back several generations through his family tree. However, Toms’ father, Tim, and the rest of the Clesham family milked cows until 1990, when Tim switched to beef cattle. Over the next several years, the father-son farmers bred pedigree Limousine cattle alongside their commercial beef herd after leaving dairying.

But Tom became frustrated with the volatility of the Irish beef sector, something American beef farmers know all too well. So, looking at the books, Tom felt it wasn’t financially doable to keep raising beef animals. After 23 years, it was time to go back to dairying, and the work began in 2013.

“The process wasn’t too bad because a lot of the milking facility was still here,” Clesham recalled as the milk truck pulled into the yard. “Originally, when we took the equipment out, we filled the pit with clay, put plastic over it, and then covered that with cement. When we went back to dairying, I just undid that process.”

He runs a six-unit parlor that Clesham would like to make larger as he plans to expand his herd. When he redid the milking parlor, Clesham planned ahead by leaving room for a total of eight units. Once the cows are inside the parlor, Clesham hits a button to dispense feed into the automatic feeders to keep the cows busy while they give their milk.

“Every time I hit the button, I know they’re getting .6 kilos of ‘nuts,’” he said. “It’s a dairy pellet ration, or a ‘nut,’ as I like to call it, with a load of different ingredients. The cows are currently getting a 14 percent protein nut called ‘Grass Match,’ and is for feeding at lower levels while still giving a higher level of minerals and things for when they’re out on the grass.”

Tom Clesham’s six-unit milking parlor can be converted into an eight-unit stall when he’s ready to make the move. (Photo by Dr. Greg Bourgond)

“At the end of the year, I’ll start giving a little more protein in their pellets because they won’t be out on the grass as much,” Clesham added.

Cows get wiped pre-milking with a paper towel, and he’ll pre-draw them to check the cows, milk them, and then he applies teat dip from a spray bottle. “It’s also got a peppermint smell to it, and I think that helps with the flies,” he added.

As American dairy farmers know firsthand, expanding a parlor is a big undertaking. Clesham bought secondhand Pyrex parlor equipment over 20 years ago. The steelwork in the parlor will stay, but he plans on replacing everything else, including his milk pump, which is a diaphragm, in favor of an electric pump.

“It really wouldn’t be a difficult process, but it will be an expensive one,” the 40-year-old farmer said with a grin. “I got the equipment you see here off a well-known online platform in Ireland called ‘Done Deals.’”

From the first discussion about returning to dairying to the first milking, Clesham estimates it took two years to complete that particular journey. He spent a lot of time in meetings with the local milk cooperative on the way to running a full-time dairy and is quick to credit his father Tim’s knowledge of the business in getting it running.

“I also have a neighbor down the road named Martin Jennings who’s about the same age as I am and was a great help to me,” he added. “He’s a great friend of mine and is always at the end of the phone to ring him up and ask him about things I didn’t understand. Mark was a great help in that regard.”

It was at this point in the conversation that the milk truck was backing into the yard to hook up to the bulk tank. For the last few years, the milk coming out of the Clesham’s bulk tank won awards from Animal Health Ireland for its low Somatic Cell Count. “It doesn’t make you any more money,” he said with a smile, “but the cows stay healthy, and that’s important in dairying.”

Clesham credits that success to the cleaning routine and the drying-off process he uses for the cows. “Last year, I started doing a few culture tests on the cows,” he recalled. “That’s going along with my veterinarian and knowing what sort of bacteria we may be fighting by getting the right antibiotics.

“I’ve also been fairly strict when it comes to drying off cows,” Clesham says. “I won’t do too many at a time. I also never dry off cows in the evening; I dry them off in the morning. They’re standing up for a bit longer in the day and seal up. We treat them with dry cow therapy and teat sealers. If we do it in the evening, they’re probably laying down for the night soon afterward.”

Irish dairy farmer Tom Clesham has put in eight years of hard work to return to dairy farming after he and his father, Tim, left the beef industry due to price volatility. (Photo by Chad Smith)

With a big smile, Clesham added, ”Some people may say you’re daft, but it’s just the silly things I do.” Each of his dairy cows has a minimum of eight weeks when they’re dried off, not milked, and can recover to put on condition to calve again.

Calving season on the Clesham farm usually begins around the first of February. He gets the bull out to the cows and aims for them to calve in a six-week period. “I generally try to have the cows dried off by December,” he added, “and they’re off in January and hopefully calving by the first of February.

“I breed all my replacement cows,” Clesham said. “The only calves I keep for myself are Friesian females. All the rest of the calves will get sold.

“There’s a push now in Ireland that emphasizes the welfare of dairy-born calves that will be finished and put into beef,” he says. “The push says that that the animals are worth something even if they won’t bring you a lot of money. Family farmers in Ireland will still call the vet for a sick bull calf even if that might cost more than what he’s worth.”

Ireland has new regulations in place to ensure proper animal care for its 1.55 million dairy cows, including one that prohibits farmers from selling calves until they’re at least 10 days old. “It’s just to make sure the navel is dry, the calf is reasonably hardy, and it keeps two-and-three-day-old calves from going into the market, which is a good thing,” Clesham said.

Most, if not all of the milk produced in Ireland, comes from grass-fed cows. Clesham, one of more than 18,000 dairy farmers in the country, says that’s the most profitable way to do dairying in Ireland. In fact, the Irish dairy industry markets itself as selling “grass-produced milk from small family farms.” He said that is what makes Ireland dairying unique.

The temperate Irish climate allows farmers to grow large quantities of grass over a long season, so the 40-year-old farmer rotates his 80-cattle herd through a handful of different pastures, called “paddocks.” It’s going to get a little trickier over the next several weeks as the grass “slows down a bit come July” when grass gets a little “stemmy.”

“During this rotation through the paddocks, I’m going behind the cows and mowing the paddocks, which I call ‘topping,’ and trying to cut back any stringy grass that they won’t eat at this stage,” he said. “I think it allows the grass to come back a little better when I mow after the cows eat all they can get to.

“Some guys think it’s better to mow the grass before the cows come into a paddock,” Clesham added. “Other guys say it’s better to skip paddocks entirely and make baled silage out of it. We do cut some silage here in addition to running them out on paddocks.”

As with most American dairy farms, the milk goes to a local cooperative for processing. Clesham says Irish co-ops are now paying bonuses from dairy farmers for higher-quality milk, so the higher the protein and butterfat content, the higher the check. Clesham works on what’s called an “A, B, C Milk Payment System.”

While walking on the road running between different paddocks, Clesham stops in front of a new building to house the cows before they head into the barn for milking something American farmers might refer to as “stanchion barns.” The cows lay on rubber mats in each of their cubicles. While some Irish dairymen may put down chopped straw or sawdust, he puts down lime in each cubicle.

“The manure pit is down below where the cows walk,” Tom said. “We spread it out on our land here. It’s mixed around and stirred before it goes into vacuum tanker vehicles that put it down on the land.”

Speaking of caring for the land, an American Farm Bureau survey in November 2020 showed that Americans trust their farmers to do the right things when it comes to sustainability and the environment. Clesham feels the Irish hold their dairy farmers in equally high regard.

“What we produce is grass-based, and I suppose, is more environmentally friendly than big barn systems that feed a lot of grain,” he said.

Clesham’s beautiful Springer-mix hunting dog Ivy was more than happy to join us as we walked down the gravel road between the paddocks. (Photo by Chad Smith)

Carbon emissions Is another topic that American farmers understand, and the conversation has also begun in Ireland. The dairyman says there’s “been a little bit of flak” when it comes to farming and carbon emissions.

“I’m not an expert on the topic, but I do think some folks have been led a bit astray on what it is,” Clesham said thoughtfully. “There are some cattle on lands across Ireland, but there are also huge plots of land that absorb carbon too. On my farm, I can easily say I have more trees than cows.”

That in no way means Clesham isn’t concerned about caring for the environment. After all, if he doesn’t take care of his land, he won’t be able to continue dairying into the future, something he clearly loves doing. “As we talk here, you can see I’ve planted a long row of flowers I call my ‘Bee Bank,’ he said. “That’s to help the bees in my area stay healthy.”

Clesham planted a row of flowers he calls a “Bee Bank,” something he put in just to keep the pollinators around his field happy and healthy. (Photo by Chad Smith)

Clesham is currently milking 47 cows and looking at more. He has visited with a government-run advisory service (Teagasc) that helps farmers with their dairying plans. At one point, they discussed not having any heifers and just having milking cows on the acreage.

“I might be able to milk over 70 cows then, but that would lead to other troubles,” he said. “I’d have to find a source for heifers. I’m definitely going to milk a few more next year as I have 16 in-calf heifers that will add on to the milking herd.”

Dairying is not the only thing keeping him busy: He’s working at the Falconry School on the grounds of Ashford Castle near Cong, Ireland, and raises pheasants for future hunting opportunities.

June 10, 2021June 10, 2021

Water Rule Reversal a Blow to Agriculture

Water is a touchy subject, especially when it comes to our agriculture and environmental discussions these days. I have to admit that I was worried about this from day one. The Environmental Protection Agency announced it intends to reverse the Navigable Waters Protection Rule.

American Farm Bureau Federation President Zippy Duvall his organization is very concerned about the idea and its potential impact on the nation’s farmers.

“The American Farm Bureau Federation is extremely disappointed in the Environmental Protection Agency’s announcement that it intends to reverse the environmentally conscious Navigable Waters Protection Rule,” Duvall says, “which finally brought clarity and certainty to clean water efforts. Farmers and ranchers care about clean water and preserving the land, and they support the Navigable Waters Protection Rule.

“Administrator Regan recently recognized the flaws in the 2015 ‘Waters of the U.S. Rule’ and pledged not to return to those overreaching regulations,” he added. “We are deeply concerned that the EPA plans to reverse the Navigable Waters Protection Rule, which puts the future of responsible protections at risk. We expected extensive outreach, but today’s announcement fails to recognize the concerns of farmers and ranchers.”

Duvall, a third-generation Georgia farmer, says this is an important moment for EPA Administrator Michael Regan and will be pivotal to his ability to earn the trust of farmers on this and other administration priorities. Duvall says the EPA boss must “keep his word” to recognize the efforts of agriculture and not return to flawed, overly-complicated and excessive regulations.

“We call on the EPA to respect the statute, recognize the burden that overreaching regulation places on farmers and ranchers, and not write the term ‘navigable’ out of the Clean Water Act” Duvall says. “On this issue, and particularly prior converted croplands and ephemerals, we also urge Secretary Vilsack to ensure that we don’t return to the regulatory land grab that was the 2015 ‘WOTUS’ Rule.

Duvall adds that clean water and clarity are paramount, which is why farmers shouldn’t need a team of lawyers and consultants to farm.

From a personal perspective, why can’t we meet in the middle here? You do realize that farmers don’t get to stay in business and pass on the operation to their kids if they don’t take care of their environment?

Am I anti-environment by being concerned about farmers? I’m not. I’m saying there has to be a way to preserve the environment and still allow farmers to make money. After all, they do feed us, remember? Food doesn’t just show up at Safeway.

May 3, 2021May 3, 2021

Farm State of Mind mental health website goes live

Farm State of Mind in recent years can be summed up in one word: stress. While things are starting to turn around due to higher commodity prices, it doesn’t mean farmers are out of the woods yet.

In recognition of May as Mental Health Month, the American Farm Bureau Federation launched a comprehensive, easy-to-use online directory of resources for farmers, ranchers and their families who are experiencing stress and mental health challenges.

The directory, which is on the Farm State of Mind website at farmstateofmind.org, features listings for crisis hotlines and support lines, counseling services, training opportunities, podcasts, videos, published articles and other resources in every U.S. state and Puerto Rico. Listings for crisis support, counseling and behavioral health resources that are available nationwide are also included.

“For far too long, farmers and ranchers have been trying to cope with increasing levels of stress on their own,” said AFBF President Zippy Duvall. “Our Farm State of Mind campaign is encouraging conversations about stress and mental health in farming and ranching communities. It is so important to spread the word that no one has to go it alone.

“This new online directory of stress and mental health resources in every state gives farmers, ranchers and rural communities a user-friendly, one-stop shop to find services in their area that can help them manage farm stress and find help for mental health concerns. Whether you’re looking for information about how to recognize and manage stress, trying to find counseling services in your area or are in need of crisis support, you can find help here.”

National research polls conducted and published by AFBF in 2019 and 2021 showed that a number of factors including financial issues and the impact of the COVID-19 pandemic are impacting farmers’ mental health, highlighting the need to identify local resources that can help farmers and ranchers cope with chronic stress and mental health concerns.

The Farm State of Mind directory lists resources specifically geared toward farmers, ranchers and rural communities in states where these specific services are available, with additional listings for county and statewide mental health and other support services in every state. The listings can be filtered by state and type of resource, including hotlines, counseling services and published information.

AFBF partnered with the University of Georgia School of Social Work to research available resources across the U.S. and Puerto Rico and compile comprehensive information included in the directory.

Farmers and ranchers are encouraged to share the directory with their family, friends and community networks to ensure widespread awareness of the availability of these important resources.