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VIDEO: Business message

As one of a panel of speakers at a winter agricultural marketing meeting recently, it hit me that times have changed. 

In the past, these gatherings were littered with speaker after speaker offering up their perspectives on the direction of the corn, soybean and wheat markets. The attendees walked away with some idea where their crop prices might be six months down the road.

Have you been to a marketing meeting lately? At this week’s AgCountry Farm Credit Services meeting, a price outlook wasn’t even touched upon until the final speaker, and even he didn’t spend much time on the topic.

Instead, farmers are being schooled on interest rate patterns, math formulas to follow the Gross Domestic Product (GDP), the LIBOR rate, trend-following funds and a basket of other economic indicators.

It almost seems like you are at the annual conference for the national association of financial advisors. Where is all of the talk of acreage battles, new agronomic challenges, equipment innovation, and innovative farm practices? When someone once said farming is now big business, they said a mouthful. 

As conference speakers, marketwatchers, including this reporter, and university economists, are spending their time helping today’s farmers understand the numerous ‘outside’ forces that rule their grain world. No longer is it possible for farmers to rely solely on weather reports and government supply/demand numbers as guiding lights for market direction.

For example, even though U.S. farmers are enjoying consecutive years of profitability, ‘guaranteed’ higher interest rates are the biggest threat to the farming industry, according to Dr. Edmond Seifreid, a Purdue University economics professor. Dr. Seifred offered his best advice to this group of North Dakota farmers by urging them to prepare for the future by opening an interest rate adjustment fund.


Meanwhile, Dr. Michael Boehlje, a Purdue University economist, asked for a show of hands of those farmers that read the Wall Street Journal. Very few hands were raised. “That is a problem,” Boehlje says. Farmers should be reading about the currency markets, unemployment rates, the housing market, and about the other economic indicators that ultimately affect their grain markets.” 

“Do you think we have reached a land price bubble,” Boehlje asked the room of over 200 northern Plains farmers. Again, few farmers raised their hands. “Do you even care, he probed. You better care and you should know that higher interest rates could cause a land price bubble.”

Don't get me wrong, the designers pieced together a very informative meeting. One that, if turned into action, can bear fruitful for the farmers' bottomline as early as this year. And the Red River Valley farmers should be thankful of the opportunity to learn how to better function in this 'business' oriented industry they are involved in.


From this reporter’s standpoint, it looked like the farmers in attendance were upbeat and eager to find out new ways to tackle risk management. Still, there appeared yearnings for the old days of market outlook embellishments.

“I can’t keep up with these markets,” one middle-aged farmer in attendance said, following the meeting. And when I talk to my dad, he really can’t understand how to follow these markets.”

As critical as it is for today’s farmer to grasp multiple economic indicators, as well as keep up with the old stand-by market factors of rainfall and crop reports, if you look close enough, you get the feeling their glassy eyes are saying, “Where are my boots, gloves, hat and the keys to my pickup and tractor?”

Maybe nowadays the ‘F’ in farming stands for financial, not fencing or feeding or fixing?  

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