Faced with low commodity prices, spawned, at least in part, by uncertain trade and oversupply, farmers feel the pinch of a cost-price squeeze that threatens sustainability of their operations.
“The most urgent and pressing issue many farmers are facing is the economic uncertainty in major row crops,” says Paul Rea, senior vice president, Agricultural Solutions North America.
A lot of volatility over the last decade, Rea says, including “some great times and some challenging times,” has agriculture caught now “in one of the longer periods of a downturn. Margins in agriculture are tight.”
Rea, in an interview prior to Dinner is Grown, a “Farm to Table” evening of fine dining at the Fearrington Village Resort in Pittsboro, N.C., that tied farm to retail to chef to consumer, discussed a range of issues currently affecting agriculture, including sustainable practices employed by the ag industry from farm to consumption.
He said the ongoing downturn is “forcing farmers to make hard decisions about how they grow their crops, where they get advice and what products they use. I am sure those decisions are placing a lot of pressure on them, and it’s not getting any easier.
“The trade dispute over the last 12 months has been a real big issue for everyone,” he added.
He said of the trade issue, going back over the past two or three decades, agriculture got “used to it not being an issue. We’re all anxiously hoping that it will be resolved quickly and will provide better access to markets and better income for farmers.”
Rea said the trade challenges fall on top of what he calls “the perennial challenges farmers face. They have about 40 chances (in a career) to make a crop, and they ask every year what they can do to make this crop better than the last one.”
That impulse may be even stronger this year with the tight profit margins. “They know they are not going to get any lift from market development in terms of commodity prices. Farmers must control what they can control, and that’s a challenge.
“One of the things they can do to manage costs is to increase yield, grow more bushels per acre. That’s probably something they’ve been faced with forever. But I think now it is more acute, because, as I said, you can’t control the price of corn or soybeans, but you can control how many bushels you produce.”
Rea says selecting the products and management systems producers need to maximize production is becoming critical. Farmers and the industries that support them are looking at new partnerships to improve the odds.
“Producers make those decisions with retail partners at their side to say ‘this is a new piece of technology. This is a new way of farming; this is a new management system you can apply on your farm, on this particular field based on what you’ve told us your projected production objectives are. This product is worth evaluating and putting to work.’
“We have found this approach to be very effective. We have very high satisfaction rate from growers who work with BASF that way. We’ve seen them use a lot of our new technology and it has helped them improve yield and productivity overall.”
He says digital has a crucial role to play in improved efficiency to enhance what products are applied and where. “How do we unlock the full genetic potential of what we’re planting, whether it’s nutrients, seed treatments, or fungicides?”
Rea said only 20 percent of U.S. crop acreage is treated with a fungicide. “Yet we know full well that more acres would benefit from a fungicide application because often a problem is diagnosed too late. Conditions change, and if it’s not planned early enough or as part of a program, we don’t get the full effect of applying a product at the right time.”
A fungicide application is sometimes “a rescue treatment as opposed to a planned practice to enhance yield,” he added. “It’s an afterthought.”
Opportunity to Learn
Rea said the “Dinner Is Grown” event offers an opportunity to discuss the challenges farmers and agriculture face to produce a sustainable supply of high-quality, affordable, nutritious food for the planet.
“How we do that with the technology we know we’ll need today and in the future to produce food with the freedom from regulators and society to operate is key. And that’s why it’s important for BASF. We want to form partnerships. We want to establish open forums for discussion and dialogue, and we want to understand different perspectives so we can share information more openly to build stronger partnerships and trusts for our products, but we want to listen to other perspectives rather than just shouting at each other.”
“Dinner is Grown” included farmers, media from the traditional agricultural press as well as mainstream publications, a registered dietician, farm organizations and BASF representatives.
Producers from three North Carolina farms, representing a diversity of enterprises, were on hand to discuss what sustainable agriculture means to them.
Brent and Sue Leggett, Campbell Cox and Chris Naylor all expressed their commitment to resource stewardship but also noted that profitability must be considered crucial to sustainability. They also noted that the public misperception of farms and farmers continues to frustrate them and may result in regulatory pressure.
The goal was conversation, sharing ideas and perspectives on farming, sustainability and the contributions made by each segment represented at the dinner.
The Fearrington chef also addressed the group and explained advantages and challenges of providing locally grown food in the resort’s restaurant.
“The three family farms are very passionate about agriculture and the challenges they face, whether it be perceptions of farming overall, how they find labor, how they manage margins and what’s the legacy for the farm and how do they keep their local constituents supporting agriculture,” Rea said.
“I think you heard some interesting views from just North Carolina on the pressures they feel, which are real. And I think they want to do the right thing, but they feel misunderstood.”
The famers agreed that feeling misunderstood by the public is frustrating.
Campbell Cox, with Cox Brothers Farms in the Southern Piedmont of North Carolina, said the disconnect between what farmers do and what the public perceives is real. He explained the commitment the farm, which includes a hog operation, makes to sustainability and environmental stewardship, but expressed frustration at the lack of understanding from the public.
He said he was impressed that the mainstream media at the event were not judgmental but open to learn about his operation.
“I was not expecting that,” he said.
Brent and Sue Leggett, Nashville, N.C., operate a diversified farm, which includes strawberries and sweet potatoes, some of which were included in the evening meal. They said the term sustainability should be re-defined to include profitability. “If it’s not profitable, it can’t be sustainable,” Brent said.
They also noted that labor is an ongoing issue. “We use the H2-A program.”
Naylor, who grows corn and soybeans near Clinton, N.C., conceded that profit margins are tight. “Prices are low, but production costs remain high,” he said.
Industry Leading the Way
Rea said industry must lead the way in sustainability. “We know we have a role; we can have influence by creating habitats for Monarch butterflies in our living acres program, which we think is a great example of taking action — one farm at a time, one location at a time to reestablish biodiversity.”
He says the Milkweed project “provides habitat for what really is an iconic insect. And I think that’s an important step of sustainability as well as to protect what we have so that it’s there for the future.
Part of Corporate DNA
“For BASF, sustainability is part of our DNA. We see it as a responsibility and we’re very committed to ensuring we play our role, and then we help farmers play their role so that farming is successful for the long term. We are reducing our own footprint, including how we produce our products. We are recycling the packaging we provide to reduce the energy we consume.
“We try to live sustainably in our own organization because we believe we have a responsibility to do that. It’s also good for business. The less energy we consume, the less cost it takes to produce that product. Anything we can do to be more efficient, we see as a positive for BASF, but also for society and the environment.
“From a farm point of view, we’re doing an enormous amount to identify technologies, and digital is a good case in point. We’re investing heavily in digital tools to help farmers understand what fields need, what products, what part of the field is deficient, where it needs a higher dose or none at all.
“We see it as a responsibility, and we’re committed to ensuring we play our role, and then we help farmers play their role so that farming is successful for the long term.”