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Issues to be front and center for agriculture in the new year.
December 8, 2019
Climate: It doesn’t matter whether or not you believe it’s changing because of human intervention or it’s just a naturally occurring phenomenon. It’s changing so get over debating it with your friends, family and neighbors. It is not a political issue, and it isn’t a local weather thing. Climate change is when there is a big difference in normal climate patterns over a long amount of time. The Earth's climate appears to be changing very fast, something that has not happened since the end of the last ice age, 10,000 years ago.
Today, we’re faced with a never ending series of devastating fires in California, persistent drought in the Southwest, record flooding in Europe and Africa, following the massive spring floods in the Midwest, and record-setting heat waves in extreme Northern latitudes like the upper reaches of Scandinavia, Greenland and Alaska.
Major climate changes will cause an incredible transformation in the animals you can raise and the crops you can plant and harvest. The first scant 20% of this century has already seen a gradual move northward by the American cattle industry due to serious and long-lasting drought in the Southwest. An altered climate can mean a drastic revision in the availability of water; too much in some places, not nearly enough in others. How and what we farm will be much different 20 years from now.
Bottom line: The climate, it is a' changing (apologies to Bob Dylan). Be aware today and you might still be in business tomorrow.
Trade: A cattleman of substance once told me the industry paid the light bill with domestic sales and made its profit on international trade. He was being only semi-facetious. If he was still with us, I’m sure he would be alarmed at the uncertainty of trade today. Ending the Trans Pacific Partnership (TPP) shut down an important opportunity that’s only recently been remedied by individual, nation-by-nation trade agreements slowly worked out by the current Administration. Redefining NAFTA has also been a serious detriment to trade within the three North American countries.
Bottom line: Continuing to press the current Administration on international trade, supporting the good work of organizations like U.S. Meat Export Federation and developing products that are acceptable by countries that aren’t aligned with U.S. rules and regs will apply stitches and bandages to a trade wound that needs serious first aid.
Banks: They hate uncertainty but they supply cash, the lifeblood that powers agriculture. The annual visit with your local banker, hat-in-hand to plea for next year's financing, is a rite of passage that insures another harvest. A bank's confidence in a farmer means the money needed for equipment, seedstock, fertilizer, feed; everything needed to keep the farm alive and well is forthcoming. But climate change and trade issues create uncertainty. Will conditions be ripe for a good harvest or ripe for failure?
New crops? Have you tried to talk hemp with your local banker? Maybe asking him for funding so you can plant a few hundred acres? You’ll stand a good chance of having all your accounts shut down if the bank decides it’s an ‘unacceptable risk.’ Corn? Soy? With international trade being so uncertain, it might be harder and more expensive to get a small loan. You remember that old saying about a farmer being the only businessman who buys retail and sells wholesale? Yeah, that’s a heckuva way to play with money, too.
At least the feds are making one part of agricultural banking just a little bit easier. The Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), FinCEN, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors issued a statement saying banks are no longer required to file suspicious activity reports for customers engaged in the growth or cultivation of hemp just as long as it’s in accordance with applicable but often contradictory federal, state and local laws and regulations.
Bottom line: Agriculture is entering one of the most uncertain times since the 1930s. Expect banks to step back and take a much more tedious review of your accounts. It’s one industry that can claim it’s more hidebound than agriculture.
The Future of Food: The history of food has always been written in the fields and pastures of a nation. Will the future of food be written in test tubes, glass beakers and petri dishes? Artificially grown cell- and plant-based meats are emerging, joining long-established nut-based milks as major players in share of space in the grocery cart. Almond and oat milks combined with declining dairy consumption have seriously wounded one of our most important ag industries. Approximately 550 dairy farms have closed down in the last 12 months in Wisconsin alone. Will beef, pork and poultry soon be staring down the same rocky path?
The lab is changing the way we look at our food supply. It is no longer the exclusive purview of the farmer. Agriculture, a business traditionally suspicious of outside influences, is always ripe for disruption. Entrepreneurs, flush with cash from the super wealthy, are hard at work, attempting to offer viable alternatives to field-grown foods and consumers are interested.
Bottom line: Ignore the future and it will destroy you. Whether or not you agree with change, it happens and many will get left in the basement coal bin. You do remember those, don’t you? How about 8 tracks? Cassettes? TV dinners in aluminum trays? Winnowing scoops, hoes, rakes, flint-bladed sickles, ploughs, and hoisting well water with a shaduf?
Tribal Bitching: It happens everywhere, the “us against the idiots who don’t understand the goodness that we do” mentality. Too many in agriculture, often egged on by surly industry commentators, look at outsiders, as ignorant ‘cubicle dwellers,’ unappreciative urban people or silly city folk and forget their real name is ‘consumers.’
“This behavior is creating an environment of discord, further driving a wedge between the gate and the plate,” wrote Megan Brown, a sixth generation Northern California rancher who often preaches the gospel of acceptance and inclusion in agriculture and just as often gets attacked for expressing her point-of-view.
Every successful marketplace understands one cardinal rule: Respect the consumer or risk losing them forever. To be successful, know that you need them, they do not need you. They might be reluctant to leave you but they can and will find alternatives if you make the conditions of staying untenable.
Bottom line: If American agriculture still wants to put food on the plate of consumers – 98% who could label themselves as unappreciative, cubicle dwelling city folk – understanding and appreciating their changing desires is critical. Disagree? Go back and reread The Future of Food.
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