Trends and Events to Watch as Ag Producers
Article By: Jenny Jereczek
"Get comfortable with being uncomfortable." This is a phrase we have heard all too often over the last couple of years. With all the domestic and global events happening, I think it is safe to say we should plan on not being "comfortable" in the near future. Here are a few trends and events to keep an eye on:
- Russia / Ukraine War
- Impacts of this ongoing war will be felt for years due to the extensive destruction of infrastructure. Therefore, the supply of products from these regions will certainly be impacted for the foreseeable future.
- Russia and Ukraine combined provide 29% of world wheat production, 14% of global corn exports, and 80% of sunflower exports.
- 30% of nitrogen and potassium come from Ukraine.
- These areas also are exporters of a rare gas product used in the production of semiconductor chips, further impacting industries already dealing with the lack of chips.
- Concern is building around whether inputs will be available for the 2023 growing season and if they are available, at what cost?
- As of mid-June, 62% of the US was impacted by varying levels of drought
- Locally, we have been fortunate to receive timely rains lessening the impact of the warm, windy days we have had over the last several weeks.
- Dryness is expected to continue to plague the southwest, especially Texas and western parts of Oklahoma, Kansas, and Nebraska.
- Parts of Iowa and Illinois are expected to see an increased risk of drought as ridging sets up over the US with global wind patterns slowing and water temperatures in the northeast Pacific Ocean remain cold.
- Not only are we seeing increased competition for on-farm labor, but many industries delivering products or providing trucking also are having difficulty filling positions.
- One proposal to support the trucking industry includes expanding driving hours from the current 10 hours to 12 hours.
- Automation is a buzzword and has sparked the interest of many business owners and farmers looking to reduce risk related to labor.
- While robotic milkers can provide both labor savings and many other efficiencies, these machines also come with unique management requirements which should be thoroughly vetted.
- The Farm Workforce Modernization Act passed by the House in 2021 would expand the H-2A guestworker program to three years; however, the Senate has yet to act on this bill.
The full effects of each of these events are yet to be determined. However, being aware and educated on the various events and how they might impact your operation will allow you the opportunity to be proactive, develop plans, and implement risk-mitigating tools when applicable. Being prepared will certainly go a long way in providing reassurance that you have managed your operation to lessen the impact of these variables.
Jenny Jereczek is the director of Ag Banking for Security Financial Bank. She has expertise in several government lending programs, including Farm Service Agency (for which SFB is a Preferred Lender), SBA, WHEDA, and USDA programs, and is licensed to sell crop insurance including multi-peril crop, and crop-hail insurance. To reach Jenny, call 715-672-2427 or email email@example.com.