Content ID


11 Things I Learned At Commodity Classic

Tough farm Economics, new weed-management technology, and a skyscraper economic indicator (who knew?) were some of the things I gleaned at this year’s show.

Interviews with CEOs and high-ranking corporate officers of agricultural companies are standard fare at Commodity Classic. Normally, such conversations are limited to the exciting and new (even if they aren’t) developments within their companies. A disarming CEO I interviewed last year was different, though, as he gave an unbiased and unvarnished view of his industry.

“Hmm,” I responded. “Usually, these interviews sound like a commercial.”

“Oh, I thought you’d like something different,” he grinned as he gestured toward the trade show that housed hundreds of agricultural companies. “This whole show is a giant commercial.”

That it is.

Still, it’s one of my favorites of the year. It provides a pulse of what farmers and the agricultural industry are thinking and also unveils some pretty cool technology. Here’s some of what I picked up earlier this month when Commodity Classic was held in San Antonio, Texas.

1. It’s Tough Out There. No surprise, but it’s still stunning to see the numbers. Farm income in 2017 is down 50% from its 2013 peak, says Nathan Kauffman, assistant vice president and Omaha branch executive with the Federal Reserve Bank of Kansas City.

2. There’s Some Good News, Though. Prices for corn and soybeans were able to bounce back last winter from late fall lows. Good export demand has occurred, and near-record ethanol production has also helped support corn prices.

Meanwhile, Purdue University crop budgets show fertilizer costs have backed down from 2012-2013 highs. Cash rental rates have also modestly declined. Conversely, seed costs haven’t largely come down from 2012-2013 highs, while pesticide costs have risen. This reflects the fact that farmers are using more expensive herbicide formulations as they battle herbicide-resistant weeds.

Long term, agriculture has a bright future, says Jason Henderson, associate dean and Extension director at Purdue University. “We just have to get through this swamp,” he says.

3. Smoot-Hawley. To economists, those two words describing a 1930 tariff action are akin to what Palmer amaranth is to soybean farmers.

“To me, what triggered the Great Depression of the 1930s is the Smoot-Hawley tariff that spiked a trade war,” says Henderson. By raising U.S. tariffs on over 20,000 imports, it killed U.S. trade during an already weakened economy. Over 1,000 economists petitioned President Herbert Hoover to veto the bill, but he instead signed it.

Predictably, U.S. exports dried up when other countries raised their tariffs. “We could not export agricultural commodities across the globe and generate income from those sales,” says Henderson.

Flash forward to 2017, when President Donald Trump pulled the U.S. out of the Trans-Pacific Partnership trade agreement and is threatening to pull the country out of the North American Free Trade Agreement.

“One thing to think about is how does (U.S.) trade policy play out going forward when 95% of the world’s population lives outside its borders?” says Henderson.

4. Meatless Meat. I was on a panel at a United Soybean Board meeting a couple years ago when a farmer asked about meatless meat. I was stumped.

“Companies are trying to make meat without animals,” says Louisa Burwood-Taylor, chief editor of AgFunderNews. “Startup companies are addressing it.”

Who knew? It’s not just startup companies, either. Tyson is exploring making meat out of vegetable products.

5. Watch Skyscrapers. And not just for the view, either. Vikram Mansharamani, a lecturer at Harvard University and Yale University, showed a slide of the Empire State Building that was finished in 1931, early in the Great Depression. He also showed the former World Trade Center completed in 1973, just before the stagflation of the late 1970s. The world’s largest tower in Burj Khalifa in Dubai was started in 2004 and finished in 2009, right in the heart of last decade’s financial crisis.

It’s part of the Skyscraper Index, a concept that purportedly shows the world’s tallest buildings are started on the eve of economic downturns. “These skyscrapers work as an indicator of financial crashes,” says Mansharamani. “They illustrate easy money conditions.”

If this index holds true—and there are those who argue it is not reliable—one disconcerting factor is Saudi Arabia’s Jeddah Tower. Set for completion in 2019, it will surpass Dubai’s Burj Khalifa as the world’s tallest building.

6. Not All Rural Areas Have Broadband. Vivian Howard, who is a chef on the PBS television series, A Chef’s Life, lives in Deep Run in eastern North Carolina.
“Sixty percent of the kids in my community go home and there is no internet access,” she says. “The remaining 40% still have dialup. I equate broadband with the paved road of the 21st century. This is basic infrastructure.”

7. Morocco Has Fertilizer Muscle. Chances are the only time folks think about this northern African country is when the movie Casablanca is shown on late-night television. However, it holds 75% of the world’s phosphate rock reserves, says Mansharamani. With a growing population to feed, Mansharamani believes Morocco is poised to become to fertilizer and food production what OPEC has been to oil.

8. Inflation Is lurking. “Inflation comes from too much money chasing too few goods,” says Purdue’s Henderson. “In the next decade, 70% of the U.S. economy will be consumer spending. We have two huge demographics in which spending is going to be high. Millennials are spending money on homes, cars, and families. Baby boomers will be spending money on retirement and health care.”

9. New Weed-Control Technology. Herbicide resistance is making it harder to manage weeds. New technology, though, is being developed to help farmers. Ben Chostner, vice president of business development for Blue River Technology, talked about see-and-spray technology in which sprayers apply herbicides only to the weed and not to the crop or soil. Currently, there is a cotton prototype that is being tested that could have potential for other crops. For more information, check out

10. Industry Involvement Can Help ROI. “I often questioned what is the ROI for (agricultural) advocacy, says Deb Gangwish, co-owner of PG Farms, Inc., and the Diamond G in Shelton, Nebraska. “On our farm, it was an eye-opener when our banker presented our operating note to his committee. One thing he mentioned was our community involvement, our advocacy. Our banker recognized that it is impactful to our own farm and the ag economy, in general.”

11. Agricultural Mergers Remain On Track. Well, so far, anyway. Bayer officials gave an update on Bayer’s proposed purchase of Monsanto That’s not the only update, though. ChemChina’s purchase of Syngenta remains on track for closure at mid-year, says Paul Minehart, a Syngenta spokesman. EU and U.S. regulatory approvals are currently being sought, he says.


Read more about

Tip of the Day

Lower steps to grain drill platform

Smaller steps to grain drill platform After I became unable to step up on the back platform of my grain drill, I built a short ladder and attached it to the platform. At 31... read more

Talk in Marketing

Most Recent Poll

Will you have enough on-farm storage for harvest?

I just want to see the responses
46% (26 votes)
39% (22 votes)
No, it’s going to be a bin-buster
7% (4 votes)
Maybe, depending on yields
5% (3 votes)
No, I am looking at new bins or temporary storage
4% (2 votes)
Total votes: 57
Thank you for voting.