(Bloomberg) — After the United States lost its position as the world’s top agricultural exporter over the past decade, the country’s farmers are ready to fight back. Strategy: Maximize production.
Most Read Articles on Bloomberg
That’s the message from attendees at the Commodity Classic in Houston, one of the world’s largest agricultural shows, which drew a record attendance of more than 11,500 people two weeks ago. Even with abundant stockpiles and corn and soybean futures prices hovering near three-year lows, farmers appear to have little choice but to grow the largest crop possible. ing.
The U.S. Department of Agriculture predicts that farmers will continue planting at higher elevations, resulting in what could be the largest expansion of supply on record. This is expected to reduce net farm income by 26% this year, but could also help the United States regain some ground in export markets.
“Just by increasing the stock and getting corn that’s very cheap, you’re going to force buyers in your direction,” said Stephen Nicholson, vice president of grains and oilseeds at farm lender Rabobank. Because we have very competitively priced corn,” Stephen Nicholson, vice president of grains and oilseeds at farm lender Rabobank, said at the trade show. . That “will prepare us to move more corn offshore.”
The United States has dominated the international market for more than half a century, but ceded its corn export crown to Brazil in August last year. Over the past decade, the country has already lost its top spot in soybean and wheat exports to Brazil and Russia, respectively.
Read more: The twilight of an agricultural superpower: How the US lost a powerful national strategic tool
Lined up to help farmers at the Commodity Classic were machinery companies such as Deere & Company, as well as seed and chemical suppliers. As attendees sampled free soy lattes and popcorn, the companies tweaked their marketing plans to improve efficiency and keep costs down in a depressed agricultural economy.
“This is a great opportunity for end users to stock up,” said Stan Nelson, a southeast Iowa farmer and chairman of the Iowa Corn Promotion Council. He says he has no plans to reduce plantings, even though he already feels “supply is strained.”
To boost the agricultural market and its own profits, Deere has introduced a Starter Bundle to attract farmers who are not ready to purchase top-of-the-line machinery. A farmer can get him Deere’s latest computer display, modem, and satellite receiver for $2,000. You can also optionally pay extra for automation features that give you more control over your tractor.
“What we’re finding is that low upfront costs are attracting customers who haven’t done business with us before or in the past 10 years,” said Than Hartsock, vice president of precision upgrades at Deere. says. That includes his Hartsock father, an Ohio farmer who added a bundle to Deere models in 1977. “This was an easy way for him to get back on track.”
Kurt Coffey of Deere rival CNH Industrial NV says farmers are less concerned about which top brands they buy.
“We hear this a lot from customers: brand loyalty is declining and they’re looking at how they can stay profitable,” said Coffey, vice president of North America for CNH’s Case IH brand. ”.
Read more: US loses top spot as corn exporter to Brazil
Other companies at the show focused on helping farmers become more sustainable. US startup Indigo Ag Inc. pays farmers carbon credits for planting cover crops and reducing tillage, which improve soil health and ultimately increase yields. He is also introducing 30 new biological crop additives to increase yields.
“When I see commodity prices going down, I cringe when I think about farmers because I know the razor-sharp profit margins that farms operate on,” says Indigo. said Dean Banks, CEO of the company. “My hope is that the value proposition of our bio-based products will ultimately pay off in the form of yields.”
Meanwhile, Farmers Business Network offers 0% financing to growers who buy from its network of warehouses in the U.S. and Canada.
Farmers are limiting loans from traditional lenders in hopes of lower interest rates. “That means 0% is even more helpful to the borrower,” said Charles Barron, the company’s co-founder and chief marketing officer.
political promotion
The initiative comes as the agricultural industry also calls for government action. In November, industry groups endorsed a proposal by the President’s Export Council, an advisory panel on international trade, to strengthen the global standing of U.S. agriculture. The proposals included calls for diversifying agricultural supply chains, removing trade barriers and enforcing existing trade agreements.
The Commodity Classic focused on helping farmers become more efficient and increase production.
“The quickest way to reduce production costs is to increase yields,” said Matt Bennett, an Illinois farmer and AgMarket.net analyst.
–With assistance from Dominic Carey.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
