Midwest Agriculture Conference Session 3 Transcript

DAVID OPPEDAHL: Can you hear OK out there. All right. Welcome back. I'm David Oppedahl, as I said, this morning, and I cover agriculture and rural economics here. People are still making a little noise. Let's be seated.

All right. So this panel we're going to have this afternoon is looking at the "Implications of the Current Trade Environment for Midwest Agriculture." So we're trying to bring things a little bit after hearing a lot this morning at the keynote fireside chat about the larger picture and a lot of other things going on.

And so because of the nature of the Midwest, we're focused on agriculture and a lot of our communities, and we wanted to bring in some experts that could talk about different aspects of that. And we have April Hemmes here from Iowa, who's a soybean and corn farmer.

We have John Newton, who heads up Terrain, and as we go through, I'll let each of them explain what they do with the economy and how they fit into the Midwest. And then we have Kreg Ruhl, from GROWMARK, one of the largest cooperatives in the country, and Krista Swanson, representing the corn farmers, but also being a corn farmer.

So we appreciate all of you being here, and April, why don't you talk about your perspectives on how the current trade environment is affecting the Midwest.

APRIL HEMMES: Oh, you want me to start right off with that. OK. Wow. Yeah, and I'd like to thank the speakers for making me feel so great about my chosen profession, but where-- oh, OK. I was going to say the John Deere lady got John Deere combine there.

So I'm April Hemmes. I farm in North Central Iowa. This is my 40th year farming. I'm doing my 40th crop, I know. So that means I came home in 1985. So yes, I survived the '80s.

I farm. My husband doesn't farm. He doesn't help me at all on the farm, and he's newly retired, and I'm really having a hard time with him. He's enjoying it very much, but he's not helping me.

So anyway, he actually got in that combine once and did one round, and I thought, oh, right. He's going to learn how to drive it. And he goes, no, you can let me out at the end. I just wanted to see what a couple 100,000 would buy you. And I go, OK, because like any good wife, I don't tell them what I spend on stuff. So I understand, it's usually shoes and purses, but not with me.

So what else? What else should I talk about? We have one daughter. She's going to University of Michigan and getting her master's degree in public administration, with an environmental emphasis. I told her, that's great, just don't put me out of business. But she said, Mom, you just don't understand. There's policy-- you guys are going to love this. There's policy and reality, and the two just don't meet.

And I went to negotiate that, and I went, OK. So lately, I've been on a lot of leadership things. I was soybean and the United Soybean Board. And for two years, I was the demand chairman for the United Soybean Board.

And I've been very privileged to be all over the world talking about soybeans and a little about corn and what we do. And also, been to China about eight or nine times. So I've worked with the Chinese. I've also hosted a lot of people on my farm. So that's what's been great. It's been fun.

I don't mind talking about all this because I've been on Marketplace, which I just met the guy who I thought you suggested me, but it was another guy. You didn't tell me. So I talked to Kai Ryssdal. He's been on my farm during my combine. And lately, Michael Barbaro on The Daily, that was me.

Yeah. So if any of you listen to The Daily and it was specifically for Chinese and the soybean farmers. So it's amazing what's happened now. I'm glad a focus is actually on this and we're talking about this and how timely it is. And I really look forward to your questions. Was that OK? You want me to go on more? Because I can talk about myself forever.

DAVID OPPEDAHL: That was excellent, April. We appreciate that. And why don't you pass this down, because John is going to be next, and he has a few slides.

JOHN NEWTON: Yes. Care if I go up there?

DAVID OPPEDAHL: No, go ahead.

JOHN NEWTON: All right, I'm going to go up here. By the way, oh, wait. [INAUDIBLE]. All right. I got my PhD from the--

APRIL HEMMES: See, I was just going to say.

JOHN NEWTON: --Ohio State. National champions. Happy to be here.

APRIL HEMMES: I went to Iowa State, so I'm good.

JOHN NEWTON: They got a decent football team.

APRIL HEMMES: I'm pretty proud of them.

JOHN NEWTON: So I'm John Newton I'm with Terrain. Terrain is an offering of several Farm Credit Association banks. We have Farm Credit Services of America, American Ag Credit, Frontier Farm Credit, and Ag Country Farm Credit.

So we have 10 economists around the country that study various commodity markets and visit with customers, quite frankly, to talk about what we're seeing in the marketplace. I've been with Terrain for about a year. Prior to that, I was the chief economist for Senator Boozman on the AG Committee, where I worked for the last four years, to get a farm bill over the finish line.

A lot of that work was, ultimately, in the One Big Beautiful Bill Act. And then prior to my time on Capitol Hill, I worked for American Farm Bureau Federation as their chief economist. And way back in the day, I was on faculty at the University of Illinois on the farm doc team. I was actually hired at Illinois to replace Darrell Good.

And so everything I about grain marketing, I learned from Darrell good and Scott Erwin. But again, happy to be here. And I thought I'd just walk through a few slides with everyone. And I think the trade panels, the trade presentations this morning were fantastic. They covered a lot of the information that I originally had in my slide deck.

So I deleted several slides, and I thought I'd start off with one that's probably a little bit more provocative and that is the China Phase 1 deal, what should have been. A lot of folks, when you think back to the Phase I Agreement, China agreed to buy $80 billion over two years of agricultural products. But if you read the text-- how many people have read the Phase I Agreement, outside of David? I know David has read it.

If you read it, there's an annex in there that said the trajectory of purchases is supposed to continue until 2025. So I wanted to map that out and see what it would look like. And had the Phase I Agreement continued, China would be still in our market in a very, very big way. I believe the shortfall is anywhere between $150 billion to $200 billion of agricultural purchases that should have occurred under the Phase I deal, but quite, frankly, no one enforced the Phase I Agreement over the last few years.

And I do believe we're going to get another agreement with China in the near future. But I think it's important perspective to look at what potentially could have been, had the Chinese remained in our market in a very big way. Some people ask, well, can China even buy that much in agricultural purchases from the US. And the answer is, yes.

China imports about $250 billion worth of agricultural products each year. Brazil and the United States represent about 30% of it. So there is opportunity to capture some of that market share in the event that we get a Phase II deal.

But they're not in a hurry to buy US soybeans. I think everybody talked about that this morning. In preparation for where we are today, they've been stockpiling beans for a number of years. I think they're sitting on a stocks-to-use ratio right now at about 36%. And their storage levels are greater than what we typically exported to China during the Phase I Agreement.

So they knew what they were getting into, and I think they've held out. They've not bought a single soybean to date. And I actually had the opportunity to brief several officials in Washington over the last month or so on this very issue. And this is one of the charts I brought with me.

They've got time to wait. Typically, 70% of soybeans are purchased between November and April, so we've got a short runway to get something done. I think that's why you have so much angst in farm country that they want to see some progress made. They want to see some sales begin to occur.

But in light of the slowdown in trade, in light of the 98 billion acres of corn, or 98 million, not billion, sorry, Krista, million acres of corn and the record crops that we're expected to harvest, we're in our third year of a downturn in the crop farm economy.

Crop farm cash receipts over the last three years have declined by $71 billion. That's the largest three-year stretch that we've seen in history. And so it's really hitting farm country. And the other factor-- and again, I think it's been covered a lot this morning-- is while prices have come down about 30% to 40%, the input cost environment remains elevated.

Input costs are projected to $467 billion this year. That's a record high. And I know, Krista, with the Corn Growers, you all have calculated some break evens, given the yield numbers that we have today. And I went back and looked and I said, if we didn't have the inflationary pressure that we've had in the farm economy over the last few years, break even, people would be making money this year on the crops that they're raising. But because we've had so much inflation, margins are at or below break even for the third year in a row across the corn belt.

And the other challenge we have in Washington, DC is, folks look at USDA's net farm income and they think, wow, we've got a really healthy farm economy. Net farm income is $180 billion, the second highest in nominal terms all time. But when you take out the federal support to agriculture, when you take into consideration that a lot of this is driven by the cattle industry, the farm economy is actually in the third year of a downturn.

And people are asking, well, what's a flashing red light. And you look at any of the metrics that USDA ERS has, whether it's delinquency rates, debt-to-asset ratios, working capital levels, they all look very, very favorable. None of them paint a picture of the challenging economic environment that we're facing in agriculture, a lot driven by the slowdown in trade that we've seen over the last few years.

Congress did step in. Quite frankly, we saw this coming several years ago, when I worked for Senator Boozman on the AG Committee. But we couldn't get our colleagues on the other side of the aisle motivated to get a farm bill done. We talk about the record high input cost environment that we were in. We'd say these commodity prices are coming down in a hurry.

We need to get a farm bill done. And we could not get a farm bill done until this most recent Congress, until Senator Boozman and Chairman Thompson were able to get a lot of the farm bill elements that farmers have been asking for included in the One Big Beautiful Bill Act.

The One Big Beautiful Bill included $66 billion. That's a historic investment in farm programs, but the challenge we find ourselves in is, all those enhancements that were made to ARC and PLC to help farmers in the downturn that we're in now, don't come until the fall of 2026. And if you're in Washington, DC, the fall of 2026 also comes after-- what does it come after?

APRIL HEMMES: Elections.

JOHN NEWTON: I didn't hear it, but we've been a quiet group this morning. Matter of fact, it comes after midterms.

APRIL HEMMES: Elections, yeah.

JOHN NEWTON: So yeah, it comes after elections. And so Republicans in the White House, on Capitol Hill, I think a lot of them look at the $100 billion that they've delivered to agriculture across two different packages and think that that's enough. But a lot of that's not going to come for a very long time. So it's not offering much relief for the current situation we're in.

And I was in Kansas City last week at an agropolis event, and Secretary Rollins was giving her remarks. And at the same time, the President said that we're going to use tariff revenues to help farmers dealing with the trade uncertainty that they have today.

So I expect that they're going to get another round of support. I don't what it looks like, whether they use the CCC or try to change the authorities under Section 32, they're trying to figure that out now, see what tools are in the toolbox. But that they're going to be successful in getting some of aid package out the door.

But the other challenge that we haven't talked about today-- and we've talked about, how big of a market China could be and with China being out of the market, how that impacts US agriculture. If you think about longer term, what's happening in the world today-- so I'm from Kentucky. My mother was one of five children, my grandmother was one of 11 children, and I was one of one. And we only have one child.

Fertility rates are dropping rapidly around the world. In the United States, it's 1.62 births per live woman. That's below the replacement rate. In China, it's about one birth per woman. In Japan, 1.2. South Korea, 0.75. European Union, 1.4. What do all those markets have in common? Where do we sell our agricultural products?

You guys don't know where we sell our agricultural products? If we were in class and David was your professor, everybody would probably fail out of class. A lot of the markets that we do business in have already seen peak population, and that's a reality. When you think that China's population peaked in 2021, South Korea's population peaked in 2020, Japan in 2009, Europe in 2020. The markets where we do business in are shrinking every single day.

So we're talking about growing exports, and we're talking about China and all these other markets. But these markets are shrinking. And so they're going to be fewer and fewer mouths to feed in the markets where we do business in.

So I've had a lot of conversations I've presented on this topic at the US export Development Council about how do we start to think differently about agricultural exports, how do we think differently about renewable fuels, if the markets where we do businesses are shrinking every single year.

And where we don't do business, only about 2% of our agricultural exports go to Africa. A small percentage of our agricultural exports go to Southeast Asia, and those are the markets that are expected to grow over the next 10 to 15 to 25 years.

And the challenge we have is, how do we get a foothold in those markets when, per capita, GDP is so very low. How do you sell high-quality American agricultural products into a country where they live on $2 a day?

And I'll give you a great analogy. One of my good friends, Daniel Whitley, who's USDA administrator, said on one of our trade missions to Africa, we took the sugar growers. And in the United States, how many people have heard of Now and Laters, the candy? So here in the US, there are probably $2 a pack. That's more than they live on over there.

So what did the sugar industry do? They took two packs of Now and Laters over there to sell it at a lower price, to try to get a foothold into those markets.

So we need to think differently on how we do food and AG in this country and how we expand our markets around the world. So I look forward to the questions that we get from the audience. And I will turn it over to my good friend from GROWMARK.

KREG RUHL: I'll stay seated with that one. All right. Awesome. My name is Kreg Ruhl. I'm the vice president of crop nutrients from GROWMARK. And GROWMARK and FS would be the largest cooperative ag retailer in Illinois. So nationwide, would be the third largest ag retail system.

So I'm here to represent the voice of the supplier. So April has promised to rough me up last night and today because we sell all the inputs that she needs to run her farm, from seed to fuel, to chemicals, to pesticides, to fertilizer, grain bins, machine sheds, et cetera.

So we did cover quite a few topics. I appreciated that Sean led off with crop nutrients as a global market, because that's usually what I'm arguing for. So I can say we already settled that, but I was with the Farm Bureau last week, and I like to remind them that GROWMARK and FS is a member owned cooperative, so we are actually owned by farmers in the countryside.

So every day when we come to work, farm gate profitability is front of mind for us. So this is just a short five-year history. I didn't expand out to the 20 years, but you can see I think this correlates with what we've talked about. This is a constrained model. So we fix we fixed the assumptions for yield, fuel, pesticides, seed, all those kind of things. And then we're using replacement cost of fertilizer as we move through the marketing year.

The takeaway from here is we're in the red. That is not where we want to be, and that makes the challenge day in and day out. So we recognize the struggles that April and her cohorts have, as they face going to the fields here this fall in preparation for next year's plantings. Because the decisions are not easy when the ink is red, no matter how you crunch the numbers.

So we also talked about-- so I did. I've started to win April over. She's already conceded to me that she's softening. But I always highlight as our role in the industry is to maintain connections around the world. So this map actually represents global trade flows of fertilizers. So each one of those lines is an export originating from some producing country and then landing as an import into some destination country.

So these are all different products. I like to remind people nitrogen is everywhere on the planet Earth. All you need is natural gas, and you can make nitrogen.

Phosphate and potash are more unique because you have to have an ore body to mine and then process into finished-grade fertilizers or inputs. And those are things, we do have some phosphates in Florida, but by and large, they're not things we can replicate in the P&K space domestically through tariffs and/or protectionism. So what one April over was me telling her my job is to maintain open lines of communication to find whatever the best supply is around the planet Earth to get to her farm in Iowa.

I also know we have a lot of economists in the room, and I respect that. I saw on a lot of charts today there was vertical lines that indicated the beginning of the Russia-Ukraine conflict. I would argue that this started actually in September of 2021, when the Nord Stream 2 fell apart, because that actually kicked off a huge period of energy unrest for the entire European area.

So when we think about fertilizer production and some of those old industrial businesses that were founded in Europe in the early 1900s, a lot of those are energy intensive. And when the Nord Stream 2 fell apart, they had no inputs to make their supply. So this graph, the red squiggly line there, basically, indicates the Dutch natural gas price in dollars per MMBtu. And then I'm extrapolating that to a cash cost of ammonia, which is step one in making all kind of downstream nitrogenous fertilizers.

So basically, the takeaway here is, that energy complex sets a global floor price for nitrogens that is extremely high compared to relative, baseline thinking.

APRIL HEMMES: So you're promising me my nitrogen price is going to go down?

KREG RUHL: Well, that is not what this chart says at all, April.

APRIL HEMMES: That's how I'm reading it.

KREG RUHL: Later, we can talk about freight inefficiencies, tariffs, all sorts of things that add to.

APRIL HEMMES: I see what you're doing there.

KREG RUHL: Domestically, though, like I say, a room full of economists, I respect that. If I just think about the US history over the last 20 years relative to nitrogen production alone, I've taken this chart. So the vertical red lines represent the count of nitrogen plants in the US.

The shaded area behind that indicates the number of companies operating through that period. And then over the top, I've overlaid what I consider to be the big input themes. Fertilizer takes the hit a lot for driving costs higher, but from the period of 1999 to about 2007, domestic production was being shut down. Prices were low, costs were stable, but prices were low, and we were rationalizing. We were facing global competition.

In 2007, that would have been the kickoff of the renewable fuel standards, where we grew corn acres from 78 million up to 95 million acres. So that set us into a bit of a boom on corn production, but that required us to call in a lot of imports. In 2012, we figured out how to frack natural gas, which solved the energy crisis that had plagued us ever since Hurricane Katrina.

And you got to see production restarted and investment restart around nitrogen production. And then just in this last couple of years, I kind of termed that low carbon, because the 45Q programs drove a lot of conversations around expansion there. So I think with that, I'll stop and see what Krista has to share.

KRISTA SWANSON: Good afternoon, everyone. So my name is Krista Swanson. I'm the chief economist for the National Corn Growers Association. NCGA is an organization that represents 36,000 dues paying-members across 48 States, but also, over 500,000 farmers who are growing corn, who are contributing to checkoff programs.

We work to serve and protect the interests of corn growers, of our farmers growing corn. And one of the things that I was thinking about when we think about trade uncertainty and some of the earlier presentations already also took this angle, but what's really happening is it's exacerbating what is already a weak farm economy.

And so one of the things I wanted to start with is in NCGA, recently did a survey of over 1,000 corn farmers from across the country and asked them questions about their thoughts on the farm economy. And one of those questions that we asked them was, do you think the US is on the brink of farm crisis. And 46% said yes, 33% said maybe. Collectively, 80% of farmers surveyed are pointing towards a farm crisis.

In the same survey, 2/3 of farmers told us that they are more concerned about their farm financials today compared to a year ago. And I think when we look at-- versions of this have been shared on other slides already, but it's no surprise that farmers are concerned about their financials right now. When we look at this view showing the poor profitability picture for crops, for corn and a number of other crops.

And as others have also pointed out, 2025 is year three of the situation where it costs more to grow these crops than what farmers can sell their crops for. And next year looks to be similar or even worse, depending on which crop you're looking at.

And so there's two parts of that equation. There's the production cost side, which is where I want to start here for a moment. We saw, really, production cost pretty steadily rising up until 2021. And as we've talked about a big jump in 2022, and then we've pretty much stayed the same since then.

And there was a question earlier that kind of got tossed around to a few people. But I think what the question was trying to ask was, yields have been growing in this time too. So what if we take this production cost and divide it by yield. Is it really increasing on a per bushel basis. And the answer is, yes.

I'll speak to corn, at least. From 1975 to about 2007, the cost per bushel steadily rose from $2 to $3. From 2007 to 2021, it rose from about $3 to $4 per bushel. And then since 2021, so 2022 forward, that cost per bushel has been right around $5 a bushel. So we have seen this major jump.

So even though farmers are producing more on a per bushel basis, that cost is still higher than what we have seen historically. And one of the challenges that some of the others have alluded to is, when we look at this information, a lot of the costs that farmers have are not products that we can easily track costs in real time or see what those impacts are.

Fertilizer is one where we can a little bit. But as Sean pointed out, and some others have talked about, when we look at this, one of the questions that I'm getting a lot is, if production costs are so high, isn't that because of the tariffs? And like I said, I think Sean already talked about this, but going back to 2022, I think there's various different trade uncertainties that others have dug into and talked about and other geopolitical events happening that are playing into that. But the cost since 2022 are not all attributed to the tariff situation of the present time.

And so again, looking at how can we track what is happening, fertilizer is our primary input that we can see what prices are doing on a current type of basis. And when we look at fertilizer, someone else was showing fertilizer prices earlier as well. The prices of today are not compared to 2022. We're not back up to those levels, but we have seen increases in fertilizer prices since the first of the year.

And how much of that is potentially due to tariff impacts, I guess one thing that I would point out here, the point I want to make is what I find concerning is we're already at very high-cost levels and high-cost levels relative to corn. Some of these products in the past month have been at their highest cost relative to corn in history. What's concerning is, there may not be much impact if tariffs in these yet. And, looking ahead to next year, what happens if when that is part of that and pushes costs even higher.

The other side of that profitability equation is the yield times what farmers can sell it for. And one of the things that I wanted to talk about is US production. And we're looking at a record corn crop, 16.8 billion bushels. I also note since this was brought up, my chart doesn't go all the way back 100 years.

But Austan Goolsbee in his comments, made the comment about the mass increase in productivity over time. And we have a similar number of corn acres this year as we did in 1937. And this production right here, this production level is more than six times larger than the 1937.

So I think that-- yeah, wanted to just highlight the story of productivity in corn and what farmers have been able to do. So anyway, we have this record US corn production, but also, globally, a record production of corn, soybeans, and wheat as well. And I wanted to mention that just to put into perspective the mass amount of grains and oil seeds that are into play right now.

And despite all this, US corn has remained competitive. There's been a lot of focus on soybeans for good reason when it comes to trade. But US corn has managed to be competitive in the global market. I'm going to come back to that at the end. But first, I wanted to talk about this year. We do have a lot of corn acres.

And one question I've gotten is how much of that is, do we have a really large number of corn acres because of the concerns for a trade war with China that we're brewing ahead of planting. And I do think that that probably is potentially playing into some of this.

But I think that it's important to realize that price signals were already signaling to corn all the way back in mid-September of last year, and continue to grow throughout the winter months. Also, farmers are paying attention to insurance revenue guarantees, and those were a lot more favorable for corn relative to soybeans this year, and finally, weather allowed for corn to continue to get planted.

And so I think what is, perhaps, a bigger thing to think about is-- and I put a red flag here with price signals for 2026. Normally, we see this trade off between several million acres that flip back and forth. In the total number of corn and soybean acres we have some up and down in corn and soybeans every year. What happens if China continues to not buy any soybeans between now and planting. What does that do for those signals in the market and potentially, for corn acres next year and that becomes starts to be really concerning from a supply and demand standpoint.

So that's something that I'm looking ahead to.

Another point I wanted to make and the reason I have these maps up here is, where are there more corn acres for this year? A lot of those additional acres were in the Plains and North and South Dakota. So I wanted to point out that, because of extra corn acres, we're talking about a lot more quantity of production.

And someone else alluded to the storage capacity potential. But we think about a lot of the grain from that area normally gets railed West to the Pacific Northwest ports and with the extra corn there and China not buying soybeans, just wanted to flag that that's like another factor of trade uncertainty right now that's impacting region of our country.

And then wanted to close out by just-- I mentioned earlier, corn has remained competitive despite this record production, US record production globally. The green bars here represent US corn exports in bushels. And again, record export level for this 24-25 marketing year that just ended on August 31. And this crop that we're getting ready to harvest is expected to even top that more.

So volume, from a volume perspective, record exports. But the solid blue represents our corn exports in billions of dollars. And then I also threw up the dashed line, which is the inflation adjusted. The point I wanted to make is that even though we have record corn export volume, this is not a record corn export from a value perspective.

And we care about the value that makes it back to the corn farmers. And so that is a really important component of this. And so I think we are still putting the foot on the gas pedal in terms of wanting more export opportunities and to clear some of those market access hurdles, because it's going to take expansion in order to see that value improved and make it back with the farm.

So that concludes what I had planned. So I'll turn it back to Dave.

DAVID OPPEDAHL: Thanks, Krista. We appreciate everybody's remarks. Let me see. I'll just go back to this one. And it's interesting to hear all the different perspectives, maybe pulling a little bit from what Krista was saying, a little bit what Kreg was saying. It seems like there's a lot of concern about fertilizer prices and supplies for the 25-26 crop year. You what do you anticipate happening in the next year with that regard, and are there any other inputs that are noteworthy in your thinking, Kreg?

KREG RUHL: Well, I guess the first one. I love it. Yeah, well, I think the lunchtime conversation when Mr. Goolsbee was talking about products versus services, I think we're seeing those tariff premiums come through in all the goods we're buying, so the combines that April was talking about. So I think we're seeing it in every product that we're seeing come through.

I think uncertainty is creating additional risk premium in a lot of the equation, because the uncertainty of doing business with the United States right now has left us in last place, primarily with anybody that wants to import. We're the last choice market for them. And then we've talked a lot today as far as exports go, we've put ourselves in a last place position in some of those markets as well.

But to your other question about which products, so I mentioned our company sells all the inputs, energy, and crop protection seeds. But crop protection would probably be second most impacted. And Sean covered some of that in some of his statistics. That's because a lot of the technical material is formulated in places like Switzerland and China, like he shared.

But if I do our flashback back to the COVID days, we even struggled with the little tin foil seals that go on top of crop protection jugs to make sure they're sealed for transport. Those all come from China. We couldn't get them during COVID, so we can make the product, and we could put it in jugs, but we couldn't seal them and ship them. So the constraints sneak out of the corners at us.

APRIL HEMMES: Can I answer part of that?

DAVID OPPEDAHL: Of course.

APRIL HEMMES: My nitrogen went up 30% from last year, and my guy said, I'm not even going to tell you what your P&K k is going to be because I can't handle you screaming at me that much. So that's what farmers are facing, just in that part of it. You want me to go on?

DAVID OPPEDAHL: Sure.

APRIL HEMMES: Because I can.

DAVID OPPEDAHL: Yeah, I was going to ask you next.

APRIL HEMMES: Well, and then farmer conversations, September we usually renegotiate land rents in September 1, and no farmers, none of my little chat groups, nobody's rent went down. So that's another thing we're looking at.

I didn't mention I farm my family's. It'll be 125 years of my family, and it's about 1,000 acres. So I set my own rent. And part of my ground that I bought is paid for. So I'm in a little bit different situation, but when we have all these inputs, like everyone is talking about the price of our commodities, inflation has not gone with the price of the commodities, as much as our inputs have.

So that's what the farmers are facing. And before I came, I talked to a bunch of them. I said, what do you want my message to be? And they said, it was inputs was number one. And number two was I just want to be able to get funded, a new line of credit. And there's a lot of farmers worried about that.

And these are guys I'm on the United Soybean Board with. I mean, leaders in the industry who are very, very worried about their economic success.

DAVID OPPEDAHL: Because you really need to have that funding every year to keep the operation going, right?

APRIL HEMMES: Yep. Yeah, we operate off of line of credit, unless you're really rich, which I don't know why you'd farm if you had a lot of money, but it's beyond me. I fund myself farming. No. Why are you doing this?

But yeah, that's what-- and so what I've said and what I've read is still, you have to have a good relationship with your banker. Keep them informed. Don't ghost them. Don't not talk to them at all. I feed my bankers information all the time about what's going on, what we're going through. Things like that.

And we were talking at lunch or supper last night about interest rates, which you guys have control over. Some of you. Yeah. And we're thankful it went down. The interest rates went down, but the cost of interest to me has gone up because my inputs have gone up. So I was reading an article about that and I went, oh, jeez, I never thought about that.

So it's just I'm calling it everything, everywhere, all at once. Farmers are used to dealing with tariffs or dealing with high inputs and dealing with low prices, just not all at the same time, and it's all hitting us now. So there. I wasn't too hard on you.

DAVID OPPEDAHL: Krista, do you have any more thoughts on this?

KRISTA SWANSON: I mean, I could say something, but I feel like it's been covered well.

DAVID OPPEDAHL: So one of the other things I was wanting to explore a little bit more was the feeding the world part of what you talked about, John, and how are you seeing this play out? We're hitting peak population in some areas. And your implication was that our markets might be shrinking. How fast, and is that something that's going to even make this a more challenging environment in the future?

JOHN NEWTON: When we talk to people about it-- is this on?

DAVID OPPEDAHL: Yeah.

JOHN NEWTON: When we talk to people about it, the challenge, David, is people are going through pretty tough times right now. And so when you try to talk to them about what's coming 10 or 15 years from now, they're more focused on next year or this crop that you're harvesting right now.

So we like to start having the conversation with people. And if you think about you're putting in an almond orchard, for example, when you're taking out a 30-year note to do it. Well, by the time that note matures, you're dealing with peak population already. So that next generation that's coming to the farm, they're going to have to start thinking about what does this world look like with fewer consumers. Yields are going to continue to increase.

What are we going to do with this? Do we need fewer acres? Is the answer biofuels? Is the answer more nutrient dense products? I don't have the answer, but we're starting to ask the question now.

DAVID OPPEDAHL: And you're bringing up areas like California, where they're seeing some pretty tough times as well, right?

JOHN NEWTON: Absolutely. I mean, a big part of our portfolio is the wine industry. And I was talking to Sean in the hallway. He mentioned that Canada took the tariffs off of wine. What they're also doing is they're boycotting US agricultural products. So if you go to the grocery store in Canada, there's flags everywhere. It's buy Canadian. There's no US wine on the shelves. There's no spirits on the shelves.

So while the tariffs are gone, it has an impact on other sectors of ag. I tell a lot of folks, this is more than just a Midwest or deep South issue. You pick a commodity, you can find a challenging situation that they're facing. We talked about new world screwworm. There's about a million head of cattle we normally import from Mexico that we're not feeding. So feed yards aren't running at full capacity.

Migratory bird season is picking up. So bird flu in dairy cows, bird flu in egg-laying flocks. I mean, there's all sorts of challenges that are facing the farm economy.

And then I guess going back to you, Krista, maybe a little bit, do you see the infrastructure and some of those kind of aspects of what undergirds agricultural exports. Is that uncertain now too? Are there some challenges there?

Yeah, so I think you're maybe asking about what I was alluding to with some of the maybe transportation or ore storage capacity. Yeah. I mean, when we think about China not buying any beans, and there's been several graphs shown today that show how many soybeans are normally being exported throughout the fall months.

And then a large corn production year, an acre yields a lot more corn bushels than it does yield soybean bushels. So when we think about a high number of corn bushels and the collective storage capacity, a grain bin on my farm could hold soybeans or corn. And so some of those areas and regions that, yeah, definitely limiting storage capacity.

My colleague Gretchen Cook, other economists at NCGA is working on-- well, she did an article a few weeks ago on storage capacity, but is diving a little deeper into that and something right now. But there's some of those challenges. And then I guess on the infrastructure front, I would also point out, not necessarily trade related, but again, of exasperated by trade-related issues, as some rail transportation.

Last year in September, as we continue to ship more and more grain and oil seeds to and especially corn, but other products too to Mexico by rail. There was some holdups last year. There was some concern for that again. Then we have the situation of rails to the PNW.

And then for the fourth fall in a row, low water levels on parts of the Mississippi. And so you have a bunch of different transportation and infrastructure-related issues that are adding to an already tough trade environment and could result in some problems. And those things all flow back to the farm and leave the farmer with a lower price available for their products.

DAVID OPPEDAHL: Anyone else want to comment on that?

APRIL HEMMES: Well, it's figuring in the cost of storage too. So I'm lucky. I'm in Iowa, even though we're second in soybeans. Whatever. We have the most biodiesel plants, most ethanol. I don't know if it's lower priced.

KRISTA SWANSON: We have available for the products.

APRIL HEMMES: So I have the way to get rid of my commodities domestically. And that's very fortunate. North Dakota and you guys talked about it. Totally different story. If they don't have on-farm storage, the co-ops or the pressures aren't taking it. And if they are it's $1.70. I've heard under.

Because that product was made to go out the Pacific Northwest. And biofuels is great, but when you crush a soybean, less than 20% of that is oil and the rest is meal. So our meal markets are very important. So what happened with Argentina lifting those exports and they're the largest meal market in the world.

So a lot of those needs were taken care of then and then where does that leave our meal market? So that's another thing to consider. But the cost of storage on a farm is something farmers don't think about and need to put it in their balance sheets a lot more.

KRISTA SWANSON: I would add one more thing. April is alluding to just the cost to store, which even if you're doing it on your own farm, has some cost. If you're holding it at a grain elevator, then it has even more cost. But then farmers have to weigh that between if they can sell it, if they're in an area that's where most of the US where they could sell, then the prices aren't so great.

But that's the trade off--

APRIL HEMMES: Except for the least loss this year.

KRISTA SWANSON: Yeah, but there's a trade off between how long do you hold that. And you already talked about the high costs that you probably have borrowed on an operating loan. And then you're continuing to not-- the longer that you don't make a sale because you're holding out for, potentially, a higher price, the longer that you're operating node is racking up interest, and you don't have funds to help pay that down.

And so it's this trade off of, could I get a better price in March, but how much is it costing me to wait till then? And we don't know that we'll have a higher price then.

APRIL HEMMES: Exactly.

KRISTA SWANSON: So a lot of factors that go into it. Don't you all want to farm? I think it's great.

DAVID OPPEDAHL: At the same time, you can take some financial strategies to help minimize those risks. I mean, are there options available that farmers have in some of the financial markets, for instance?

APRIL HEMMES: Yeah. Well, you mean options and things like that. Yeah, there are. But everyone I've listened to said don't get cute, because, honestly, I'm usually-- well, I'm serious. Don't do this, whatever, the bracket.

Anyway, I'm usually 30% to 40% sold on the crop I'm taking out of the field right now, which by the way, my combine sitting, so I'm really happy to be here. But I'm 0% sold, because there was no way I could sell ahead and ensure a profit. So what do you do? Yeah. Do we sit here and go, come on?

And I, unlike my fellow panelists, I don't think there's a China deal anytime soon. I think they're going to play the long game. I think they're going to stay out of it as long as they can. They might have an announcement of an agreement, but it took years to get phase I put into place.

And then we also found out what are-- the repercussions if they don't buy, how do you hold them accountable. So I'm just Debbie Downer today, I guess.

DAVID OPPEDAHL: Well, we thank you for coming here instead of being in that nice, air-conditioned combine. So I guess there's a lot of other ways we could go, but I think I'll take some of the questions that are coming in online. And one of them is to you, John, about the statistics from USDA that show the farm economy is hanging in there. It's not breaking, but basically, everybody agrees it is breaking. And so when will those data show some stress, and which data would you look to show the stress first?

JOHN NEWTON: That again is another. these are all lagging indicators. None of these are leading indicators on what's happening in the farm economy. Some people are tracking Chapter 12 farm bankruptcies. Those are also a lagging indicator.

They're also about half of what they were, back in 2020. So one of the things I'm tracking is just listening to what farmers are actually saying, because they're going to tell you what's happening out there. And I travel the country and talk to a lot of farmers. And in my role, I've been talking to a lot of farmers for a long time. We knew this was coming. I mean, this is not a secret. It's just we're here now.

DAVID OPPEDAHL: And then following up with that about the China trade deal that might be coming or might not be coming, are there any domestic economic indicators within China that are guiding you to think that a trade deal might be coming is--

JOHN NEWTON: So no, there are no indicators that-- it's my gut. And what my gut is telling me is that this administration wants to show some wins before the election, whether that's, OK, if we don't have a deal, then we're taking care of our soybean producers. They want to have lower interest rates.

I mean, everything they're doing and having lived in Washington, DC, having been on Capitol Hill, everything they're doing is about the election coming up and keeping control of the House and the Senate.

DAVID OPPEDAHL: Thank you for that. Any other thoughts? I mean, feel free to jump in if you have any ideas that you want to share. So one of the other questions was about the focus on tariff impacts and the decline in the dollar could be a bigger factor, especially since it is likely to continue. Are you thinking about changes in the dollar this year? Is it still relatively high in your opinion, or has it come down enough that it's maybe not going to be a factor? Anybody that wants to take a view on that. Don't jump in, everybody.

APRIL HEMMES: Wow. Come on, guys. Come on.

DAVID OPPEDAHL: To be clear, the Federal Reserve does not influence the dollar in terms of policy. We allow that to be the Treasury's department.

KREG RUHL: I'm an input guy, so the strong dollar helps me. I've got the big stick when I go to the global market. So I mean, that helps me on the input side. So the tariff on that maybe a comment on the tariff side is we've talked singularly about our tariffs. But other people are doing tariffs too, which is adding complication.

So if I try and explain to April why her nitrogen prices are up so much, the EU has imposed tariffs on Russia who has been a primary supplier of their nutrients traditionally. So the way I foresee that path working out is it's $40 a year, a ton. Russia drives right past the EU and comes to the US with their exports. And in turn, they've now created a premium market in the EU that domestic US producers will see as a premium and start funneling exports to fill the void.

So when April calls and wants her price for fertilizer next year and I tell her it's higher, I'm going to tell her that we exported everything to the EU. So not literally, but it definitely creates this circular thing.

And then to Krista's comment about logistical constraints is, when I sum up the tariff conversations and the trade problems right now is like everything is originating from the wrong country and being delivered to the wrong country, and it's taking three times as long to transit.

I mean, we don't bring phosphates from Morocco like we did four years ago. It comes from Saudi Arabia or Tunisia or other places. And that is all just eating freight capacity and driving freight rates higher.

So if you flip that around to the export side of the conversation, that makes your delivered cost of number two, yellow that corn, into a foreign delivery market higher too because you've just driven inefficiency into that channel.

APRIL HEMMES: And don't the conflicts really have a lot to do with that? Because doesn't that interfere with the natural flow of trade?

KREG RUHL: Everything is just in the wrong place and costs more. I mean, we talked about geopolitics too. I mean, we export regularly out of Israel, and we export out of the West Side in Ashdod. When they were bombing with Iran there a month and a half ago, I mean, we had to switch vessels three times to get a captain that would go into a war zone and pick up our fertilizer.

So all these things add cost and risk and insurance costs is a whole other-- we talked about inflation today, but insurance costs are a huge dynamic that's increasing for everybody as well. Does that cover it?

DAVID OPPEDAHL: Well, that covered a lot.

APRIL HEMMES: There's a lady with a question way in the back. Can we answer that?

DAVID OPPEDAHL: Well, I guess we've got a few online, but go ahead. We'll come back to you, OK. So Juan is wondering about how much will Trump trade deals really matter in terms of bailing out the agricultural sector. I mean, we've seen a lot of data about how deep the hole is. What do you feel about that, April? I don't want to get-- you're not holding it back, are you?

APRIL HEMMES: Oh, never. So you mean as far as farmers getting payments.

DAVID OPPEDAHL: Yeah.

APRIL HEMMES: Is that the bottom line? I have, if you listen to any interview I've done and most farmers don't believe in the payments we get. We don't like them. We would rather have the free and fair trade. We'd have the fair trade. It's never free.

But the studies that have been done, the money that we get, over 70% goes out to pay for my fertilizer and other input. So it goes to the other input. It goes to everything else. The landowner knows. Everybody knows we're getting it, so we don't really get to put in our pocket. It goes to other input.

So it'll be welcome. My banker said it'll be easier to make that new line of credit for some of the people. But I don't know. That's just my feelings. I'll let these guys go from there. The policy guy.

KRISTA SWANSON: I can take a different angle because I was thinking that it meant maybe some of the frameworks that are out there, are those really going to matter in terms of are they going to materialize into our products going somewhere. And earlier the question was specifically about Taiwan. And so I'll just use that as an example.

But with some of these frameworks, we've seen initial dollar values of agricultural product purchases that are intended. A lot of these in place, like UK and Taiwan and Japan, it has just been initial details and not a whole lot else about how those will fully function.

And like I said, with the Taiwan example, as already explained, we're already exporting more ag products than what that pencils out to. So in some of these, does it really materialize to more? It doesn't seem like most of them necessarily materialize into more. I guess it's maybe that solidifying that that will continue into the future. And maybe there is more for certain commodities than as are today.

I think one of the issues in some of the frameworks that we've seen so far, the high-level detail is that or the high-level statement is a certain amount of product value. And with some of these markets, what we really need is breaking down some of the non-tariff barriers that exist. There's phytosanitary barriers. Some of them are biotech barriers. There's different types of things that are limiting our ability to penetrate a market that could be really positive.

And so if we don't get to the bottom of fixing some of those things, so that way we aren't when the purchase commitment ends in a couple of years, like four years like Taiwan, we're not back to square one again. We've taken care of some of those things.

And so I think that when we start to see those, that's when we can really say that this could make a difference.

APRIL HEMMES: Yeah, I really took that the wrong way, didn't I?

DAVID OPPEDAHL: No you had a perfectly good answer.

APRIL HEMMES: No but to add on to that is-- especially China, any one of our trade partners wants stability. And we're not getting that now. And I think, for future trade, that's what they're looking at. And the non-trade tariff, non-tariff trade barriers are huge in a lot of that. So yeah, negotiating that part.

But stability. Agriculture needs stability now, and our trade needs stability. Is that fair?

JOHN NEWTON: I mean, I think you want access to these markets. Farmers want to be able to go in and compete and win in these markets. And some of these non-tariff barriers to trade make it very difficult to go in and compete. I'll give you a good example. USMCA, out of tariff rate quota Canadian-- US exports into Canada face like a 300% tariff. How can we go and compete?

And then the quota access that you did negotiate in USMCA, the Canadians know how to play that game better than anybody. You're not going to get a piece of that market. So how do you get people to play by the same set of rules is a challenge. And some of the deals that have been talked about, I know Sean mentioned India. I think a lot of people don't know there are about 5 million farmers in India who are heavily subsidized.

So the ability for us to get a foothold in that market is probably very, very small. There's nothing like the 800-pound gorilla in the room, which is China.

DAVID OPPEDAHL: Well, we have one follow-up question. Are there concerns that these ad hoc payments of the last few years, from the government to farmers, are distorting markets and keeping production costs high? I think you mentioned that a little bit, April, but are there any additional concerns? Is there any way out of this fix that we're in?

APRIL HEMMES: I don't know. You rip the Band-Aid off, and let the chips fall where they may. I don't know. I mean, that's all that can be done. We're in this system now where we just pay the farmer off. Pay the farmer off.

So that's where we're at now. I don't think Congress would-- I think they'd have a lot of people screaming at them if we didn't offer something. But I don't how long the public will go along with that. I don't know. What are your guys' thoughts?

I'm the farmer. I'm the recipient. I can say, oh, I don't want it, but I'll go, yeah, OK, yeah. It'll make my banker happy. So I mean, that's the tough spot we're in. But we always we're going to be first and forefront in any trade war because people want what we produce.

DAVID OPPEDAHL: So another one, with declining global population estimates and the long run inflation adjusted price for commodities being downward sloping, should the US lower their agricultural investments going forward?

JOHN NEWTON: Do you mean like trade promotion?

DAVID OPPEDAHL: I'm not sure precisely, but I presume should we invest less in agriculture? Instead of buying the big, new equipment, last longer with old stuff and things like that. Possibly. I'm not sure.

JOHN NEWTON: One of the things I do think that we can focus on is, Congress doubled market access--

APRIL HEMMES: MAP

JOHN NEWTON: MAP and FMD funding in part One Big Beautiful Bill. How do we dedicate a chunk of those resources to go to new markets, get a foothold in, I think, Morocco, for example, which has the largest port on the Mediterranean. How many trade deals are we doing over there? That's key, to me, is how are we going to show up and be in those markets in the future.

DAVID OPPEDAHL: And some of those are probably those expanding markets you were referring to in your presentation.

JOHN NEWTON: Absolutely. But we've got to make a commitment to be there. One of my good friends goes, you've probably done a trade mission to Africa, haven't you?

APRIL HEMMES: Yeah. Bimini.

JOHN NEWTON: What language is on the sign? What's on the sign out there?

APRIL HEMMES: English.

JOHN NEWTON: And?

APRIL HEMMES: Or Arabic. No.

JOHN NEWTON: Chinese.

APRIL HEMMES: Yeah. Because they're really--

JOHN NEWTON: They're making huge investments.

APRIL HEMMES: --going through the middle of it. Yeah.

JOHN NEWTON: Investments in the infrastructure. We talked about that earlier. And so we're not over there doing that type of work, and we need to be. And this is more of a joke, but somebody told me one of the other challenges of getting access to the African market is that the biggest export out of the EU is red tape.

APRIL HEMMES: I like that.

DAVID OPPEDAHL: So I think we've talked about this a little bit in terms of without an agreement to China, how will farmers who rent their land get access to credit? What can they use as a collateral. And maybe this especially applies to young and beginning farmers. Is that something you'd be able to expand on, April?

APRIL HEMMES: Yeah. Thankfully, I'm not in that situation. I'm much older than that. But what I'm afraid of is people my age, and I'm 65, just saying I'm not going to blow through my assets to lose money for the next five years. And then who are they going to have rent it?

Well, it's not going to be a beginning farmer because of the access to credit, unless they're a family farm and growing the family farm. I'm also not a banker, but I'm far more creditworthy than somebody just starting off. And if I was in the Dakotas or the South, the South, we haven't talked about the South. It's not the cool place like the Midwest, but those Southern farmers are really hurting also. They're hurting really bad.

So access to credit is going to be huge for a lot of them. And in fact, I think Farm Credit came out with 20% they might lose down there or something. But there's a lot to be considered there. And farming is one of those things, unless you marry into it or inherit it or it's in your family, you don't just jump right into agriculture.

And times like this are exactly why if you don't have access to the assets, which is land, which is every farmer's largest cost, then what are you going to do?

JOHN NEWTON: Had some of these young farmers come in, and all these guys in their 40s, they didn't go through the '80s. So for them, this is their farm financial crisis where we're at today. I'll tell you, I've been with Farm Credit for a year. Farm Credit, if you look at, our lending to agriculture, it's as close to a straight-up trend line that you could find.

And I don't know if any of my friends in commercial banks are in the room, but they get out of agriculture a lot quicker than what Farm Credit would. If they see a riskier environment, they're going to pull away pretty quick.

KRISTA SWANSON: Yeah, and I can speak to as Dave mentioned when he introduced me, aside from my role within NCGA, also farming. So I qualify here as a young, I think still-- a young farmer. But I think that we were talking about this, I was talking with some others, chatting on the sidelines here about this.

But how do young farmers survive in this? I mean, there's a reason I have a different job, too. And most young farmers I know in their 30s and 40s also have at least one off farm income. I'll just use my husband and as an example. I have this rule within NCGA.

We also have a seed dealership that is like my husband's job, and the two of us farm with his family, but we also farm our own, and they farm their own, and we do it together and own machinery together. But we farm enough to be a full-time job. So technically, between the three of us, we have three full-time jobs. Or you could say we both have a full-time job and we farm too.

And so it really takes that to be able to buy in and continue in a time like this. And so I also gotten some questions lately about what will grain farmers do to diversify, and will they look to livestock or other types of crops. And one of the things with that is, I guess my answer was they diversify by having off farm income is probably the first thing that they do.

I don't think that was the answer they were looking for, but even though if you're raising your own cattle, there's profits to be made in livestock right now. But if we were going to buy some feeder cattle right now and feed them out, there's a huge investment into doing that. That's not really the first place we would look to diversify our farm right now.

And as far as getting into other types of crops, we saw this, I think it was maybe four or five years ago, Illinois. So I farm in Illinois per approved industrial hemp as a crop. And there was this interest in it. And if you were calculating the profit margins, the potential profit margins based on the prior year, it was pretty astronomical.

But the problem was not a huge number of corn or soybean acres went to industrial hemp the next year, but way more than were needed did. And then when those farmers were harvesting that, there wasn't the market that they had anticipated, and there certainly wasn't the profits they had anticipated.

And I just use that as an example to show that in order to switch to a different crop, there has to be a market for it. There has to be infrastructure, and it also has to grow at a pace that fits with the growth of the market. And all of that is just very complicated. It's not like one day I can just decide that I'm going to plant a different crop.

DAVID OPPEDAHL: Well, before we cover something else, there is one point of clarification. Canada's 300% tariff only applies after levels that have never been triggered. Effective rates are nearly 0% in Canada prior to April in response to Trump. So that was just being pointed out. You want to--

APRIL HEMMES: Oh, here we go.

JOHN NEWTON: You've got to go develop a market. If once you get to that point, you've got a 300% tariff, you're not going to waste your time and energy to try to build that market out.

DAVID OPPEDAHL: Yeah. Well, we don't want to bash our neighbors because certainly they're still valuable trade partners. Number two, right?

JOHN NEWTON: Oh, yeah. Well, I don't know. Now, that they're not buying any wine and--

APRIL HEMMES: Booze.

DAVID OPPEDAHL: Maybe this year's data will be different. Well, we had a question in the back there. You want to push the button?

AUDIENCE: Oh, I got it. Hi. I was just wondering had mentioned about essentially, growers that were starting to have conversations with their bankers and trying to be able to extend or increase their operating notes for next year. Can you talk a little bit about what you guys are hearing from whether they're bankers or lenders from Farm Credit. How are they already starting to factor in this trade uncertainty into those discussions?

JOHN NEWTON: I have to answer the question?

APRIL HEMMES: Yes, and then I will.

JOHN NEWTON: So I think, TJ, what makes this environment so different than last time when we were in a similar situation is, the 10-year treasury note and nearby treasury notes are very close together. Whereas back in 2016, '17, whatever, nearby notes were really low. So if somebody was looking to term out debt could do that and probably, it wasn't a huge expense to do that.

Maybe you spent another couple hundred dollars to stretch out a $50 per acre loss on corn. Today, it's not a $50 per acre loss. It's probably $160 per acre loss. And then the interest rates are so much higher that it costs a

whole lot more money for a 1,000-acre operation or 2,000-acre operation. It's not $500 to stretch out that debt, it's $30,000 to stretch out that debt. So that's what makes this environment so much different and then goes back to an earlier point.

Part of that is the confidence in the US economy longer term is not there right now. And I think that's where it's impacting our interest rate environment that we have today.

DAVID OPPEDAHL: Did you want to reply?

APRIL HEMMES: Oh, no. He did a good job.

DAVID OPPEDAHL: Oh, he did a good job. All right, we'll let him. All right one more here then. Can you press your button, please?

AUDIENCE: I did press my button. This is my question. You've got high costs and low prices. The usual economic answer to that would be increased productivity. But, Krista, that was an amazing fact that you gave. 1937, we had the same number of acres being farmed for corn as today, but six times the production. So productivity has increased quite a bit.

What I wanted to ask is, what's the next big thing, and given labor force issues, is it robotics? And are any of you or all of you seeing evidence of robotics being employed in America's farmland? Maybe you could exchange robots with China for corn.

But it's a really serious question, because I think that in five years, we're all going to have a personal robot. Things are really changing much faster than we think. Is the agricultural industry taking part in that. Looking at that, has it started. Thank you.

APRIL HEMMES: Oh, yeah, I think it started a long time ago with autonomous. I've worked with John Deere on autonomous things. And I mean, if I had the money, I could push a button and my tractor would pull up with a grain cart and I could fill it while I'm out in the combine. So AI and autonomous things are already there and coming more, and they say it's going to come faster.

And as far as production, in my 40 years, I have doubled soybean production and almost doubled my corn production. So I mean, that's just in my 40 years, and I love to tell the story about my grandpa, who lived to be 101 years old, started farming with three horses, and lived long enough to see auto steer come into tractors.

So you think of his lifetime, and I've doubled production in my 40 years since I've been farming. We in agriculture accept change very readily. And I think the lack of labor will promote the autonomous things and drones. Austan and I were talking about that at lunch.

And so I've seen drones come in more and more and spraying and doing cover crops and things like that. So I think it's inevitable, and we'll see a lot more of it, mostly because of labor. And as long as they keep the cost low enough, I could have one or two, and an 80,000 acre farm could have a fleet of them. So that's how I see it.

Thoughts? I'm talking too much. You guys need to talk more.

DAVID OPPEDAHL: And I guess, thinking about places like California too and Michigan and other areas, it's not just corn and soybeans that would be using robotic-type technologies.

APRIL HEMMES: Cherries. Yeah, you name it. Produce.

KREG RUHL: There are certain real constraints to agriculture, though. You can only plant so many days of the year. It's only ready at certain periods. So I mean I think the robotics have to hit those peak periods to reduce peak labor demand and things like that. You can't alter mother nature's plan necessarily.

APRIL HEMMES: The field is wet. We can't go out.

DAVID OPPEDAHL: Well that's maybe a good point to close on that, there's some things happening toward the future. And all this uncertainty we're dealing with is something that we can manage through. In a lot of ways, farmers continue to farm. The crops will get planted next year. How many acres, we don't for sure and what mix.

But yet we drive on, and harvesting continues. April, you'll be out there tomorrow again in the combine.

APRIL HEMMES: I'll be out in my combine.

DAVID OPPEDAHL: All right.

APRIL HEMMES: Combine and soybeans and corn. So yeah.

DAVID OPPEDAHL: Well, I hope it's a safe return for you guys and that you guys all have a good fall. And I appreciate your coming here and helping to give some more information about the Midwest and trade uncertainty and how that's all affecting in so many ways, but yet, it's not the entire picture.

So thanks for your comments, and appreciate everybody being here today.

JOHN NEWTON: Thank you.

APRIL HEMMES: Thank you.

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