Blockchain, hemp, crop insurance, and more learning opportunities at Farm Bureau's Economic Summit: The Spokesman Speaks Podcast, Episode 14

 

Narrator: Welcome to The Spokesman Speaks, a podcast from Iowa's leading agricultural news source. Brought to you by the Iowa Farm Bureau. Now, here's your host, Laurie Johns.

Laurie Johns: Welcome to The Spokesman Speaks Podcast. This is our June 3rd edition. Thanks for joining us. Today's episode features a detailed preview of Iowa Farm Bureau's upcoming Economic Summit. We have Dr. Sam Funk here. Say Hi, Sam.

Dr. Sam Funk: Howdy! Laurie Johns: There you go. So Dr. Funk, who is our Senior Economists, is going to share what's unique about the summit and the value that you are going to receive by joining us for that summit on June 28th. And this episode also includes extended interviews from our new Iowa Minute on the inspiring measurable progress being made in one eastern Iowa watershed. But first, let's chat with Dr. Funk about Iowa Farm Bureau's 2019 Economic Summit. Welcome back to the podcast, Sam.

Dr. Sam Funk: I'm very glad to be here, Laurie.

Laurie Johns: And I know that this is certainly crucial timing for so many farmers because a lot hangs in the balance. The rains, the floods, the markets' trade. There's a lot going on right now. Where do you get them started? Tell me about the summit and the people that will be there and what they have to learn from it.

Dr. Sam Funk: Well, I appreciate the opportunity. You know, the important part about this Iowa Farm Bureau Economic Summit is that when we recognize these challenging times. We've come off a series of, you know, commonly low commodity prices for Iowa commodities. Some picked up like, you know, we've seen hog prices come back up and in other aspects. We've got a lot of challenging times. So one, we recognize these challenging times. We recognize the period of low prices. We recognize the, you know, the challenges we had with flooding this year. The problems that we've had with a wet spring, which has brought us to some of the, you know, this cropping season to plant. It's been a real challenge in Iowa and across the United States. But beyond those challenges, there are opportunities that are going to avail themselves for us to one, survive through these challenging times. You know, some may not be able to and it may be that they've had to incorporate so much of that short term debt into longer term equity positions and to reduce that equity position that it's been a challenge where, you know, there may be some potential to have to consider off farm employment or other forms of income in through there. But at the same time there are other opportunities on the farm that will avail themselves to producers. And what we wanted to do was to bring in a number of experts from around the country who can bring in what are those opportunities? How do we manage our way through some of these equity positions? How do we get the most from our on farm operations, how do we use risk management tools and crop insurance for our marketing advantages out through here? And then how do you bring this global set of information home for Iowa farmers and for those around here who need to understand what are those global implications and what do they mean for me managing forward? What are the strategic opportunities and what are the further threats that we need to mitigate yet? And so, we're going to have experts from around all those topics coming in here at a one-day event, where producers can come in and really hear what some of the solutions may be for their operations and what they consider managing forward.

Laurie Johns: Tell me about a couple of those experts. You know, whether it's something in crop insurance to help them manage that.

Dr. Sam Funk: You know, so the crop insurance side really will be keyed on by Dr. Art Barnaby. So Art was the father of CRC Insurance. If you will, he's one of those who helped to develop the first revenue policies that came about for crop insurance. And so Art's going to bring a lot of information and insight into how to utilize crop insurance as a tool to mitigate risk in your marketing plan. So, you know, one of the things he might talk about is how crop insurance can act, if you will like a put. And I know that's one of those challenging topics. It's like we start to talk about puts and calls and, and other marketing strategies using futures and options. But at the same time, Art has this really great manner of being able to take it and put it into a farmer perspective for what these tools mean. Because Art's a farmer as well. Grew up on a farm in Elk County, Kansas. And Art will tell you about how he utilizes crop insurance in his operation, which won't be like, you know, most Iowa farms because Elk County, Kansas just isn't like Iowa. But at the same time he faces a lot of crop risk and so he's going to be able to tell about what that means. And he's done a lot of work with Iowa, obviously being one of the nation's premiere crop insurance experts for so long. He had to look at Iowa and has done in an depth manner. And so, Art will be able to tell us what does crop insurance mean for an Iowa producer and how can it be used and how can we think about it in a marketing framework and not simply as crop insurance.

Laurie Johns: I mean, you know, with the weather being what it is, it's always kind of hard to predict those long-range forecasts. But I know that you do have some people here, the state's new climatologists who will be talking about some possibilities, maybe if it's, because it's all about planning ahead, right?

Dr. Sam Funk: You know, a lot of it is about planning ahead and we are going to have several breakout sessions will focus on very important information. So the long-term weather outlook is always something that we need to talk about. So we're going to bring in a subject matter expert in that one, a PhD, a meteorologist to come in. But when you think about these people coming in, whereas long-term, it's very difficult to generate, you know, between all these various models that will tell us about what kind of weather we're going to expect. What we do know is we've had challenging period already. So by June 28th when we're kind of past that challenging period, what does the future hold as far as for that summer and going on? You know, we've talked about some of the challenges that we've had for getting the, the, the crop planted this year, both for corn and for soybeans and on a national scale, we are behind in our planting progress at this date behind what we've been for those years when we had the highest prevented planting in years prior. So we might have a distinct threat to the crop that is out there. If you were fortunate enough right now to have a crop, especially the corn crop planted and its emerged and you haven't been flooded out again with some of these rains which have just been torrential across Iowa. what are the opportunities for that crop to develop? We need to take care of that crop. I mean we've already seen now some national stories coming up on potential for having to moderate the demand for that crop for this coming year because we could have a short fall now with how delayed planting has been and how short we might be in that overall crop. So what can we do to manage our way with that crop and what's the outlook for that crop in through here? You know, the other aspect is obviously when we think about that supply side, there's the demand side and that's something we really need to focus on as well. And we're going to have Dr. Lee Schulz coming in from Iowa State University and he's going to talk with us about the livestock outlook, what we might see in there. Obviously we've had everything from global African swine fever, ASF if you will, coming out of China and across Europe in something we really want to avoid here. But what are the threats that potentially would come at that global challenge out there? Could it come here? We pray not, but what will be those opportunities for producers, especially on the pork side and for other meats as well? Because if ASF takes even a stronger foothold, it could impact all other meats, sectors, and not just pork.

Laurie Johns: I know the nation's eyes, or the world's eyes, are on trade as well. And that seems to be changing by the minute, but I know that you can have some experts here to talk about that too, to kind of navigate the ups and downs and possibilities. And it's all about planning ahead.

Dr. Sam Funk: You know, in that general session with the full crowd, not even a breakout, but everyone's gonna be able to hear from John Hitters coming from the U.S. Meat Export Federation. John will talk about, you know, pork, the gains we've made there, the opening of some of these markets that with the reduction of the retaliatory tariffs from Mexico, that'll make a stronger case for pork going there, which has been a very large market for the United States. And thus for Iowa pork, when we lead the nation in pork production. He'll also talk about the opening of the Japanese market with some of the restrictions being lifted there off of U.S. beef. So that's a gain that can be had. He'll talk probably about some of the changes in China. What may happen there is they have ASF taking out such a large portion of their sow herd, what might happen for the potential for U.S. pork going to China or filling some of those global shifts as we've seen China take different portions of production from other areas. That opens up new markets for U.S. pork exports and other places. He'll also talk about the potential. They may have to look at more beef. Uh, what shifts may come from their increase in poultry in eating more chicken out through there. So these are lots of things that John will probably have a dialogue with us. And then we're going to have a representative coming from the U.S. Soybean Export Council. And obviously soybeans in China have been in the news for so long. But it's a very important market. And soybeans are one of those crops where over the years there's been years when we've exported more than 50% of our soybean crop. So it's obviously a big challenge for us when our largest marketplace for those soybeans had seemingly disappeared. So what we've looked at here in Iowa Farm Bureau's analysis has been that we basically had a 19% overall reduction in our exports of soybeans. So what does that mean for us? Where can we look for those next advantages? What's the current status for being able to open up trade with China again, for looking at soybeans? And where can we look forward to? And obviously when we think about an overall basis, and I'll just tell you right now, from seeing 29% of our soybeans planted across the United States during this last week's crop progress report, there may be a supply reduction soybeans which could consume part of those excess supplies and stocks that we'd built up. So what's the future of that going to hold for exports? What might some of these challenges and opportunities mean again? And again, it all comes back and it's this if you will systematic approach because you've got everything from the mitigation for the losses might've had. The changes in the demand that we're looking forward to, and how can we manage again our way through that? Now one speaker coming in that I want to highlight here, in addition to all the other great ones, is going to be Dr. Allan Gray coming in from Purdue. Purdue University. So as Allan comes in, and in my intro you heard my howdy, it's my Texas A&M background. And Allan got his PhD at Texas A&M, we overlapped in our time down there. And Allan's been at Purdue now for a number of years, I won't tell you how long cause that will age me. But, it's been more than 20. So Allan is a fantastic individual to look at the management aspects and what management strategies can we put in place and his key focus and what he relayed to me from, he's been in Brazil working on a project down there now for several months. Allan's key is that it's not about minimizing cost necessarily. It's about optimizing yields while you're controlling costs. So as you look at the overall management of the farm, if I wanted to minimize cost, I wouldn't plant anything. That's how you minimize cost.

Laurie Johns: But that's not gonna work.

Dr. Sam Funk: That's not gonna work. That's not the solution unless you were looking at phasing out. You've already leased out the ground and the equipment. So what his key is, you know, especially for looking at now with this short potential for the crop this coming year, you want to optimize yields while controlling costs and doing things that you can to be able to manage your way forward, to make sure you've got those yields to come forward, to be able to capitalize on any marketing gains that you can find, while at the same time controlling those costs and using technologies and methods that are available to you. You know, some of this isn't necessarily just the high tech precision agriculture game. A lot of it has been based on that to be able to control costs. Some of them might be looking at purchasing strategies for seed in the future. Some of them might be what other marketing alternatives that we've known about for a long time might be coming, not back into vogue just because of consumer trends, might be coming into vogue because of the opportunity to be able to control costs. You know, if we think about some aspects looking as well on, you know, what are those new technology changes out through there. Part of that, and a lot of people have heard about blockchain or distributed ledger technologies. A longer form, blockchain is kind of the short version of it, but what is blockchain and what does it mean to producers? Well looking at it from the livestock side? We're going to bring in Deb Baller from Cargill Protein and Salt. Deb is the Chief Information Officer for Cargill Protein and Salt, and it is a great opportunity for us to hear from someone who's putting together the technology aspect from a large multinational group, which Cargill is, but who's going to come in and tell us how they're using blockchain and what that future of blockchain could mean for them and for us as producers. If you think about the, the aspect of providing more and more information and consumers want more information with the food. They want to know, what am I buying? They want to know, where did it come from? They want to know, how was it grown? And so as they ask for more of that information, some of the firms have had a challenge of being able to know what is that information to hand over to them. And so they've put in several opportunities within Cargill to be able to provide that information to consumers. One of it is using blockchain. If you think about honeysuckle white turkeys, which are a Cargill product, here they started this program where you could actually scan a code on there and see where that Turkey came from on some of those turkeys. So as blockchain comes more and more to the forefront of how does it be utilized for all these, and we've talked about blockchain with the ABCDs, the ADMS, the Bungies, the Cargills, the Coughgoes and the Louis Dreyfuses of the world on grain when they're trading this grain around. And using this information to be able to have that, you know, quick transfer of relative information. Now it's coming to the livestock side and what does it mean? And Deb is going to be a great resource to bring in here. And I've had those from the pork industry tell me already, you know, we've heard Deb at various aspects and she's a fantastic speaker and she brings this out very clearly so it's understandable for folks what does blockchain mean. So, we are very fortunate to have her coming to join us on June 28th

Laurie Johns: In addition to the presentation should they also take questions from farmers, these, these folks? I mean that's an asset too. They might say, okay, that's great, but tell me, here's my deal and would this work?

Dr. Sam Funk: Absolutely. So I'm very fortunate that I get to be the moderator of this year's event. And so being up there, I will actually also moderate, not just to introduce who's going to be speaking, but I'm going to moderate the question and answer session. So producers and anyone who's in attendance will be able to ask questions during, you know, it's going to be limited for the scope of the questions because we have a very full day of activities and we're going to move on so that each of our speakers has the opportunity to present. But we will take questions from those in attendance. So I really hope that farmers across the state of Iowa will take this opportunity to come in. It's going to be just an information filled single day event on June 28th. They will be able to ask questions of who are arguably some of the leading subject matter experts, not just in Iowa, not just the United States, but around the globe.

Laurie Johns: But in Canada. And we can't leave without talking about, there's a lot of questions about industrial hemp and we got a guy coming from Canada who's a grower, right? Industrial. He's got expert, he's got expertise. He's doing it.

Dr. Sam Funk: Absolutely. So industrial hemp is one of those demand areas where we've heard so much about some of the changes and what products may be available. The last iteration of the farm bill allowed for us to be able to now grow industrial hemp on a national basis. So the first thing is, in order to allow farmers in Iowa to grow industrial hemp, we had to have changes in state legislation. Now when we have those changes in state legislation that then have to prepare, if you will, they prepare a plan to go back to the federal level to get approved for how they intend to allow producers to take advantage of that opportunity. So first from the state of Iowa, Robin Prusiner will be coming in and she'll be discussing what the Iowa plan looks like. So what farmers in Iowa will be able to do to look at the opportunities to grow up to 40 acres of industrial hemp.

Laurie Johns: That's what the law says.

Dr. Sam Funk: That's what the law says. And that's what the plan will stay because they will not supersede that wall.

Laurie Johns: 40 acres, fellas, that's it.

Dr. Sam Funk: 40 acres. In Iowa, we're more likely to utilize those asset bases that we have for growing. Which means probably it'll be a combine going out there to harvest it. It won't be a hand harvested aspect like some of our other states may look at. They may look at more of a labor intensive aspect of traditionally some of those tobacco states might be looking at some of the hand labor because they're used to that. We're probably going to be looking at a growing and harvesting aspect. We're going to utilize the asset base we already have. So in that case, we've got a gentleman coming down from Canada who has been growing industrial hemp legally in Canada. So he's been doing it the right way and he's been following what the law was up there, but he has an opportunity to be able to tell us about what his experience has been going from traditional grains and oil seeds and then converting over to industrial hemp. He'll also tell us about some of the challenges. This isn't just an opportunity, there's a challenge in converting over to industrial hemp. And when you think about that, part of that challenge is where do you sell it? Who wants it for what purpose and what is the potential return on that? What's the market size? And so there's a lot of opportunities and challenges, both the come along with any new crop and that includes industrial hemp. It's not if you will, a necessary panacea. It's not the silver magic bullet. It's another opportunity. And as an economist, the more opportunities you have, the fewer constraints you have, the better your opportunity to maximize moving forward and have that optimal solution. And that's what we're looking for is what opportunities are out there now moving forward? We've seen the challenges, we will identify them and address them, but now what are the opportunities going forward?

Laurie Johns: Well, you've given us a lot to think about and again, once again, proving that knowledge is power and that's what it's all about. I love that. Thanks so much Dr. Sam Funk.

Dr. Sam Funk: Thank you so much Laurie.

Laurie Johns: Great Information. Oh, and remember that early registration, that early bird price, June 19th is the deadline. So be sure to register online right now and get that early bird price. Head out to IowaFarmBureau.com and check out the Iowa Farm Bureau Economic Summit. So from the farm economy, let's turn to another challenge that farmers have been addressing for years, even decades. The water quality progress made by Iowa farmers can be measured in many ways. But for the folks living in and around eastern Iowa's Lime Creek Watershed, the most significant sign of progress has been the return of important aquatic life. We covered the resurgence of Lime Creek Watershed, which is near the town of Brandon, by the way that's home to Iowa's biggest frying pan. We covered that in our newest addition of the Iowa Minute. You can watch it on TV stations around the state or go to our website and find that. But of course there's more to this story then what we can show you in a minute. So let's listen in for some important takeaways from the key players that we interviewed. Starting with.

Jen Kurth: I'm Jen Kurth and I am an aquatic biologist with the Department of Natural Resources.

Laurie Johns: Jen shared the following background information on Lime Creek.

Jen Kurth: So originally the stream was sampled in 1984 and they found nine species of mussels here. And then when it was sampled again in 1998, they didn't find any living muscles. So it was put on the impaired waters list because there was a decline of greater than 50% of the species. So then when we came back starting in 2007 and did the sampling we actually discovered six of the original nine species had made a comeback. And three of those six are actually threatened mussels in the state of Iowa. So that's even more special. The main problem here for the mussels in the stream was too much sediment coming in. So, what the farmers did was put in practices to keep the soil on their fields, which benefits the farmers and it also benefits the Biota that live in the stream, especially the mussels.

Laurie Johns: What's so important about the return of mussels in Lime Creek? Jen went on to explain the significance as only an aquatic biologist can.

Jen Kurth: I like to call them mother nature's water filtration system. They're filter feeders. So they filter out all of the stuff that we put in the water and they either eat the stuff or the stuff they can't eat they bind up in mucus and deposit on the river bottom for other animals to eat. So they've actually done studies, an adult mussel can filter between 10 and 15 gallons of water a day. So they really help to keep our rivers and lakes and streams healthy. Plus then they also will stabilize the river bottom as well. If you have muscles in your stream, they're really good indicator of a healthy ecosystem. We like to call them our canary in the coal mine.

Laurie Johns: Steve Hopkins also works for the Iowa DNR supporting watershed improvement efforts all around the state.

Steve Hopkins: I'm Steve Hopkins, I'm the nonpoint source coordinator with the Iowa DNR watershed improvement section.

Laurie Johns: He sees Lime Creek as a perfect example of how collaboration can produce results.

Steve Hopkins: We're happy that we were able to tie the improvement from the watershed project to the water quality in Lime Creek. So being able to show a cause and effect is we think great for the program and since we're trying to focus on improving lakes and streams in the state of Iowa, that's a perfect example of how the project helped to improve this local creek. And also the Lime Creek is on Iowa's list of Outstanding Iowa Waters, so it's a high quality warm water stream in the state of Iowa. So we feel that it needs to be protected and fortunately the farmers and producers in this watershed are helping to do that through the practices that they're doing on their farms. It takes land owners, producers as well as the public sector to work together to improve watersheds and reduce pollutants that are reaching streams and lakes in Iowa. And that's how we improve Iowa's water quality is everyone working together.

Laurie Johns: Local farmer Dick Sloan grew up near Lime Creek and was one of the key collaborators in the watershed.

Dick Sloan: My name is Dick Sloan and I grew up east of Brandon, about a mile and a half, right in between Lime Creek and Bear Creek and came back to farm in 1978.

Laurie Johns: His passion for protecting the land and water really came through during our discussion.

Dick Sloan: You just can't build soil as well as you can protect it. It's just, it's such a wonderful resource, but there's no replacing it. If it goes downhill, you know, you've lost future productivity for forever. We started Lime Creek watershed in 2006. So we got registered with the state and we had funding for a performance based watershed system where we could look at each farmer's fields individually and what crops they grew and the fertilizer programs and the tillage practices and evaluate all this stuff and help us understand better where possible nutrient losses, what soils we can change, we would change. Like one of my things that I realized was that on some soils they were more adaptable to a continuous corn rotation and other soils really needed to have the rotation. They didn't, any tillage was more damaging in some soils than, than others. And so I tended to look at my lighter soils as being my early fields to adopt no-till practices on and having success there. Why I've learned that even my heaviest soils sometimes now I feel like they're the ones that have gained the most from my no-till practices. So, it was great to get a start, but there's a lot to learn once you really get into it.

Laurie Johns: So, when you think about all these things you do and now the mussels are back better than ever, how does that make you feel?

Dick Sloan: Well, it's great to know that these mussels are here, but I'm always a little bit scared because success means they're here today, but failure means that they're gone forever, and so success is a day-by-day thing. We can't give up on these things. We really need to protect them. We can't ignore the impacts that farming might have on the environment. I guess that's my big thing. We need a hundred percent partnership on all these projects.

Laurie Johns: A big round of applause for the folks in the Lime Creek watershed and all of you who are taking on the challenge of protecting water quality in your own local communities. You truly inspire us. So keep up the great work. That's all for this episode of The Spokesman Speaks. Remember to go out to IowaFarmBureau.com and get registered for Iowa Farm Bureau's Economic Summit on June 28th. That early bird registration for your discount is coming up. And be sure to join us for our next podcast episode on June 17th. Until next time, thanks for reading The Spokesman. Thanks for all the great stories and inspiration, and thanks for listening to The Spokesman Speaks.

Narrator: Thank you for listening to The Spokesman Speaks, a podcast by Iowa Farm Bureau. Check out more podcasts and articles from The Spokesman at IowaFarmBureau.com/Spokesman. You can also find and subscribe to The Spokesman Speaks Podcast in the Apple Podcasts app, Google Play, and other popular podcast apps. We appreciate your ratings and reviews and welcome your feedback at Podcast@ifbf.org.