This Week in Ag #83

Grandpa Fred never saw me. Despite the fact I was at his house nearly every day for over two decades. That’s because he was blind. From a farm accident. An anhydrous hose burst and shot the gas in his eyes. He wasn’t wearing goggles, he was in the middle of a field alone, and there was no freshwater tank handy to rinse his eyes. So the hardest-working, most active farmer anyone had ever known spent that last 30+ years of his life without his sight. That’s why #NationalFarmSafetyWeek hits so close to home.

My father-in-law had his pelvis shattered when an unblocked grain platform crashed down on him. A childhood friend became poisoned due to insecticide exposure, when he failed to wash his hands after filling insecticide boxes on his planter. All three of these life-altering incidents – affecting seasoned farmers – could have been avoided with proper safety precautions. The world’s greatest profession is also the most dangerous. In 2022, 417 fatalities occurred on the farm. From 2021-2022, there were 21,020 reported injuries among agricultural workers. Conditions are ripe on the farm for accidents. Farm workers are exposed to weather elements, chemicals, heavy machinery, large animals, insects and hazards such as shifting terrain and grain bins. They work long hours, often during low light levels. They encounter impatient motorists on roadways. And during the spring and fall, caution becomes the enemy of time. While medical know-how has advanced since Grandpa’s accident, other modern issues provide a growing risk. In the past two decades, more than 200 rural hospitals have closed, further distancing farmers from emergency care. Nearly one-third of US farm workers can’t speak English, providing greater challenges in terms of communication and safety. Many companies, such as Huma, have a dedicated safety officer to educate workers and instill practices and processes. No such position exists on the vast majority of farms. But it should. Safety must be a priority, a routine and a mindset. So I encourage you all to do what I do. When talking to my farmer friends, I try to end our conversations – especially in the spring and fall – not with “good-bye” or “see you later”, but with “be safe.” Because I do want to see them later, and I want them to see me, too.

The Fertilizer Affordability Index is a tool used to compare NPK fertilizer prices with commodity prices. A positive score shows favorable economic conditions for farmers to invest in the products that directly lead to higher yield and income. Currently, the index is in the neutral range. However, indications suggest the index will turn negative during the next 6-8 months. Much like the commodity crops they nourish, fertilizer is a global market. Current dry weather conditions in Brazil (the worst in 30 years), where the safrinha crop is upon us, is not encouraging fertilizer demand. A similar situation is occurring in Mexico this year. The first component of the FAI is commodity prices. When high, they can offer incentives for higher fertilizer usage. But both the USA and Brazil are reporting near record crop yields. High global stocks, along with high labor and transportation costs, and high inflation, are impacting export markets. Farmers are facing challenging operating margins, due to the low crop prices and high crop input costs. And while fertilizer prices have dropped dramatically over the past two years, they are still historically on the high side. Thus, overall demand for fertilizer will likely remain soft. But the demand for making fertilizer work harder has never been greater.

Will it be ¼ or ½? That’s the big question this week, as the Fed is expected to announce an interest rate reduction. Any cut would be welcome by the credit-intensive industry known as farming. A 50bps reduction, eight weeks ahead of a national election, would further signal what the political party in power does not want affirmed: the economy is more than worrisome. Just twice in the past 24 years has the Fed made an initial 50bps cut, both preceded a recession. Regardless of how deep the cut, it may not be the last we see this year. Of course, the downside of any rate cut is the risk of further inflation, which is still far from under control.

Brock Purdy has made quite a splash in the football world, going from the final pick in the 2022 NFL draft to leading his San Francisco 49ers to the Super Bowl last February. He became beloved in farm country (as if playing quarterback for Iowa State wasn’t enough) last fall while spending his off week driving a combine on his wife’s family farm in Iowa. Ag marketers soon took notice. He became a pitch man for Pioneer Hi-Bred seed company. He led the viral campaign for John Deere to identify a “Chief Tractor Officer.” And last week, he became a brand ambassador for leading western and work-wear brand Ariat. Sure, good looks and a golden arm are great assets for a spokesman. But to appeal to farm country, strong faith, values and humility are equally as important. Brock checks all of those boxes.