Agriculture is struggling. Contrast it with the national economy and as attendees at the 8th Rural Economic Outlook Conference at Stillwater, Okla. heard, the two are as different as night and day.
From Dr. Nathan Kauffman with the Kansas City Federal Reserve Bank — Omaha Branch, to Dr. James MacDonald with USDA Economic Research Service to several OSU economists, the message was clear, agriculture is in a prolonged downward turn, while the national economy is gaining momentum.
“The U.S. is in its 112th-consecutive month of an economic expansion — one of the longest, if not the longest, in modern history,” says Kauffman, vice president and Omaha Branch executive. “The U.S. economy is in a relatively strong position. It's been gaining in momentum for over the last four or five years at a time when ag has been turning the other way.”
Kicking off the conference, OSU Division of Agricultural Sciences and Natural Resources Vice-President Dr. Thomas Coon, welcomed guests while recognizing the taxing times at hand. "Today we are facing considerable challenges in rural Oklahoma and the agriculture sector. On the one hand, we seem to be able to produce a pretty tremendous crop, and on the other hand, we might have trouble finding a market for it," he explains to bank executives, lenders, producers, economists and graduate students. "On the one hand, we might be trying to figure out how we can raise more cattle, and on the other hand, we're finding that some of the impediments we thought we were facing might not be there, at least not yet. It really is a challenging time."
BancFirst Senior Vice President Bo Jett of El Rino, says while much of the agriculture economy is feeling the sting of the downturn, his landowners sandwiched between the Oklahoma geographic area known as STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher Counties) and the three top oil-producing counties referred to as SCOOP (South Central Oklahoma Oil Province), aren't feeling much of the ache. "Energy prices are really helping the ag markets because we've got a lot of landowners who are getting royalties," the 20-year banking veteran says. "We are right in the middle of the STACK and the SCOOP plays here in Oklahoma. We've got guys selling water to the oil field, so that's what's really propped them up while we’ve had the depressed ag prices. The cattle deal has worked out pretty well for a lot of our guys. Right now, I think it’s going to continue to do well, depending on when they can get the wheat in."
As for what stood out to him at the conference, Jett says OSU economists' Dr. Kim Anderson's talk about the necessity to produce quality wheat to compete and Dr. Derrell Peel's comments encouraging producers to plant their wheat now. "We’re going to have a longer grazing period, and that should help the prices as well," says Jett. Otherwise, he says the symposium was a mixed bag. "I think there were some good signals they pointed out and then there are some things that are going to make you sit down and have a longer conversation with your producers as to how they are going to move forward, what are their plans, how are they going to strategize.”