ICYMI: Farm Bill & Ag Economy Are Top Concerns at 10th Ag Outlook Forum

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Jim barcus photo

KANSAS CITY, MO.  ---- Navigating a softening agricultural economy and Congress’s struggles to pass a new farm bill preoccupied speakers and attendees at the Tenth Annual Ag Outlook Forum on September 16, 2024, hosted by Agri-Pulse Communications, Agricultural Business Council of Kansas City, and presenting sponsors, American Ag Credit, FCS Financial, and Farm Credit Services of America.

In its 10th year, the Ag Outlook Forum Is a Key Stop for Leaders in Agriculture, as Kansas City Becomes America’s Agricultural Capital

The Ag Outlook Forum has become a critical annual information exchange between national leaders in agriculture policy, economics, and business during harvest season. This year, prominent speakers included USDA’s Under Secretary Robert Bonnie, ERS Administrator Dr. Spiro Stefanou, and Chief Economist Dr. Seth Meyer, as well as U.S. Senator Jerry Moran (R-KS) and U.S. Rep. Tracey Mann (R-KS-01). From the private sector, executives from Delta Air Lines, Corteva, John Deere, Summit Carbon Solutions, and Zurich North America also spoke to innovation and business developments across the food and agriculture space.

Agriculture is Closely Watching Congress’ Progress on the Farm Bill

Opening the forum, Sara Wyant, founder and president of Agri-Pulse, noted that agriculture is getting more attention from Americans in general. But farm bills have become a challenge as tight budgets and increasing national partisanship bleed into the typically bipartisan Congressional agriculture committees.

 “Passing the bill this year is critical,” said Senator Jerry Moran (R-KS), the forum’s opening speaker. He argued that an extension of the legislation is insufficient. “Let’s just go with what we have doesn’t work anymore,” Moran pressed. Following conversations with Senate Ag Chair Debbie Stabenow (D-Michigan), however, Sen. Moran expressed optimism that a Bill could reach the finish line this year. U.S. Rep. Tracey Mann (R-KS-01), whose district is among the top three in agricultural production, offered that five year farm bills provide necessary certainty for producers and consumers alike.

Uncertainty Ahead as Agricultural Economists Predict Valley in Ag Business Cycle

In his U.S. Ag Economy Overview, Seth Meyer, USDA Chief Economist, said most crop prices will likely continue their downward trend in 2024, but so will total production expenses, alleviating some losses.  “Crop receipts,” he said, “are expected to lower net farm income for 2024.” He went on to explain that farmers can have several good years of farm income that can carry them through leaner times.  “At the moment that appears where we're at,” Meyer added. John Newton, most recently chief economist for the Senate Agriculture Committee who is now the head of Terrain, warned that an agriculture downturn will affect rural America more broadly, pointing out that agriculture was responsible for 20% of U.S. Economic Output in 2023 (valued at $9.6 trillion) and 15% of U.S. employment. Said Kanlaya Barr, Director of Corporate Economics at John Deere, “The difference between these times and the last [agricultural business] cycle is the interest rate. Yes, the market talks about a .25-.50% drop, but the point is that it is still a very high interest rate.”  Said Jackson Takach, Chief Economist of Farmer Mac, “Liquidity will be a premium in 2025—having access to extra working capital [for producers] will be increasingly important in more variable economics conditions.”

Speakers addressed other emerging issues and opportunities in Agriculture, including:

  • California’s Prop 12

    • California's Proposition 12 mandates minimum space requirements for certain farm animals and prohibits the sale of meat and eggs in California from animals confined in spaces that do not meet these standards, regardless of where they are produced. Last February, USDA Secretary Tom Vilsack said, “If we don’t take this issue seriously, we’re going to have chaos in the marketplace.” Lori Stevermer, President, National Pork Producers Council, argued that Prop 12 could violate Interstate Commerce statutes. She said, “The California poultry industry can’t tell other states what to do; the issue needs federal regulation.”  Since Prop 12’s implementation in July 2023, California’s pork product retail prices increased by an average 20%.

  • Climate Smart Agriculture

    • Robert Bonnie, Under Secretary for USDA’s Farm Production and Conservation, presented on the $19.5 billion in new conservation programs passed in the 2022 Inflation Act. “Farmers, ranchers and forest landowners are the best stewards of our lands and waters, he said, “and they play a critical role in climate change mitigation,” USDA is committed to working with farmers, ranchers, forest landowners and partners to increase climate resilience, sequester carbon, enhance agricultural productivity and maintain critical environmental benefits through voluntary conservation efforts. Over the last three years, USDA has invested $330 million in 85 locally driven, public-private partnerships to mitigate climate change and address other natural resource challenges through the Regional Conservation Partnership Program.

  • Biofuels

    • In a panel representing a cross-section of the biofuels value chain, Greg Krissek, former CEO of Kansas Corn, moderated a discussion about the future of biofuels. Additional infrastructure modifications are required to accommodate the distribution and storage of the biofuels. More importantly, the economics of biofuel must be competitive with fossil fuel to drive widespread adoption, said Jeff Davidman, Vice President, Government Affairs for Delta Air Lines. “We have stockpiled millions of gallons of sustainable aviation fuel (SAF), but it is two-to-three times more expensive,” he pointed out. As the biofuel sector endeavors to scale SAF supply, it needs to know what the policies and incentives will be, said Donnell Rehagen, CEO, Clean Fuels Alliance. “Nevertheless,” stated Lee Blank, CEO, Summit Carbon Solutions, “it’s an exciting time during this development of biofuels.”

  • Seed Innovation

    • Tim Glenn, Executive Vice President, Seed Business Unit, Corteva, provided any overview of innovation on the farm, from seed genetics, farm management practices, and data collection. “Seed innovation has enabled higher corn yields with fewer inputs – tripling corn hybrid yield under drought stress and flood since 1940. And that’s just traditional plant breeding… what NGCA yield contests show over time is possible now [from innovation in the last 25 years] is that there is still more potential for corn yield. Last year we had a customer in Virginia who delivered a 626 bushel corn yield.”

Full Speaker List:

  • U.S. Senator Jerry Moran, Kansas

  • Spiro Stefanou, Administer, Economic Research Service, USDA

  • Lori Stevermer, President National Pork Producers Council

  • U.S. Rep. Tracey Mann, Kansas

  • Robert Bonnie, Under Secretary for Farm Production and Conservation, USDA

  • Dalynn Hoch, Head, RCIS for Zurich North America

  • Seth Meyer, USDA Chief Economist

  • Jackson Takach, Chief Economist, Farmer Mac

  • John Newton, Executive Head of Terrain

  • Kanlaya Barr, Director of Corporate Economics, John Deere

  • Tim Glenn, Executive Vice President, Seed Business Unit John Deere

  • Greg Krissek, CEO Emeritus, Kansas Corn

  • Donnell Rehagen, CEO, Clean Fuels Alliance America

  • Jeff Davidman, Vice President-Government Affairs, Delta Air Lines

  • Lee Blank, CEO, Summit Carbon Solutions