Employment Outlook is Promising for New College Graduates in Agriculture

This is a joint press release with Purdue University College of Agriculture.


WEST LAFAYETTE, Ind., December 9, 2020 – A new report, released today by USDA’s National Institute of Food and Agriculture (NIFA) and Purdue University, shows a strong job demand for new college graduates with degrees in agricultural programs. U.S. college graduates can expect approximately 59,400 job opportunities annually between 2020 and 2025. This reflects a 2.6 percent growth from the previous five years. Employer demand will exceed the supply of available graduates with a bachelor’s degree or higher in agriculture-related fields.

“Future development of our complex global food system requires the brightest minds from a wide range of backgrounds, cultures and disciplines working together to solve the challenges before us,” said Parag Chitnis, acting director of USDA’s National Institute of Food and Agriculture. “This report shows that students across America who are studying food, agriculture and related sciences to take on these challenges have made a sound career choice and will graduate into a strong and growing job market in the years ahead.” 

The preparation of the report began before the coronavirus pandemic when global socio-economic conditions looked much differently than they do at the release of this report.

“It was extremely challenging to project the success and perseverance of current college students, let alone the employment opportunities that await new graduates during a global pandemic,” said Marcos Fernandez, principal investigator on the project and professor in the College of Agriculture at Purdue University. “Regardless, the project team confidently concludes that the need for graduates and employment opportunities in agricultural fields will remain strong and steady.”

Graduates earning degrees with emphasis in food, agriculture, renewable natural resources and the environment (FARNRE) will account for 61 percent of the annual supply pool. Most of the employment opportunities will be in business and management at 42 percent and another 31 percent in science and engineering. Openings anticipated in education, communication and government will make up 14 percent, and 13 percent will be in food and biomaterials production with nearly 92 percent of those jobs going to FARNRE majors.

“Diversity and inclusiveness are strategic for the future workforce,” said Allan Goecker, co-principal investigator and emeritus staff of Purdue University. “For the food, agriculture, renewable resources and environment sector to fully address the needs of the United States, it must reflect the population it services.

“A more diverse and inclusive workforce will support a more innovative and creative agricultural industry for the future,” Goecker said.

Other highlights of the report(link is external) include:
 

  • Over the past two decades and across all levels of degree attainment, more females than males have graduated in food, agriculture, renewable natural resources and the environment.
     
  • Some majors tend to attract a greater proportion of female students, including animal sciences, agricultural education, agricultural communication and veterinary medicine.
     
  • Other majors tend to attract more male students, including agricultural engineering, forestry, agronomy and crop science.
     
  • There will be a strong demand for graduates with expertise in data science across all disciplines.
     
  • Expect to see strong employment for specialists in marketing, e-commerce, field technical service, water quality and environment, climate and invasive species, food technology, and environmental and rural policy.

The report, Employment Opportunities for College Graduates in Food, Agriculture, Renewable Natural Resources and the Environment, United States, 2020–2025(link is external) is ninth in a report series of five-year projections initiated by the U.S. Department of Agriculture in 1980.
 

###

Ag Provisions In The Latest COVID Aid Package – FOCUS ON AG

Written by Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank

The “FOCUS ON AG” Column is sent on a weekly basis via e-mail to all interested parties. The Column features timely information on crop and livestock production, farm management and marketing, ag policy, renewable energy, and other timely ag topics.

Previous “FOCUS ON AG” Columns are available on “The FARMER” magazine web site at: https://www.farmprogress.com/focus-ag
or on the MinnStar Bank web site at: https://www.minnstarbank.com/category/focus-on-ag/

After months of debate, Congress passed the COVID-19 Relief Package by a wide margin on December 22, which was signed into law by President Trump on December 27. The legislation authorizes nearly $900 billion in coronavirus related aid, which was part of an overall $1.4 trillion spending bill that will fund the Federal government through September of 2021. The COVID aid package includes financial support and relief for a large segment of the U.S. population and for many small businesses, including farm operations. Many of the direct payments to farmers are built off of previous payments through the CFAP program.

The COVID aid package provides a stimulus payment of $600 to any individual that earned less than $75,000, based on the adjusted gross income (AGI) on their 2019 federal tax return. Married couples with an AGI of less than $150,000 would receive a total payment of $1,200. This is half of the amount that was paid in the Federal stimulus payments under the CARES act last Spring. There would be an additional payment for every child that was claimed on the 2019 tax return. These direct aid payments are expected to be made before the end of 2020. Individuals with an AGI exceeding $99,000 or married couples with an AGI exceeding $198,000 would not be eligible for the stimulus payments. The legislation also extends supplemental unemployment benefits of $300 per week for 11 weeks through March 14, 2021.

A big portion of the latest Caronavirus relief package, approximately $284.5 billion, will be directed to assist small businesses through another round of funding to reopen and strengthen the Payroll Protection Program (PPP) through the U.S. Small Business Administration (SBA). The PPP loans will be reserved for businesses with less than 300 employees that incurred at least a 25% loss of revenue due to COVID-19. The PPP provisions allow for forgivable loans up to 2.5 times the average monthly payroll costs for the year. The maximum level for PPP loans will be $2 million, and PPP loans of less than $150,000 will have a simplified application process. While specific details on the next round of PPP loans are not yet available, farm business will likely qualify for the PPP loans again, including farm operations that file taxes as sole proprietorships. There were other provisions in the legislation that clarified eligible entities for PPP loans, eligible deductible expenses or PPP loan forgiveness, the loan forgiveness process for PPP loans under $150,000.

Approximately $13 billion in the COVID aid package was allocated toward agriculture related provisions, including about $11.2 billion allocated to USDA to support agriculture producers, processors, and contract growers that were impacted by the coronavirus pandemic in 2020. This legislation was more specific than previous COVID relief bills as to how the funding linked to agriculture related programs is to be spent. Following are the provisions in the latest COVID bill that relate to farmers and agriculture:

• Supplemental payments to row crop producers that were paid under the CFAP2 program earlier in 2020. While no specific details have yet been announced, it is likely that the additional payments will be $20 per acre for eligible “price-trigger crops”, which include corn, soybeans, wheat, barley, sorghum and cotton, as well as for the long list of “flat-rate crops” such as alfalfa, sugar beets, oats and flax. One piece of good news for farm operators with 2020 tax management challenges is that the additional payments will not occur until after January 1, 2021.

• Additional direct payments to cattle producers for both market and breeding livestock that specifies payment rates for animal marketed or sold before April 15 and after that date. Payment rates vary depending on the type of cattle and weight for market cattle. There were no provisions for additional payments to hog producers or producers of livestock other than cattle.

• Directs the USDA Ag Secretary to provide additional assistance to some producers of livestock, dairy and specialty crops that had payments reduced by certain provisions in the CFAP1 and CFAP2 program.

• Payments to livestock and poultry producers that had to depopulate their herds or flocks, or had to euthanize market animals, due to COVID-relted disruptions in processing and the supply chain.

• Payments to contract growers of livestock or poultry that had grower contracts cancelled or reduced due to the impacts of COVID-19.

• Additional payments to specialty crop producers that had processing and marketing access reduced due to the pandemic• Provides the USDA Ag Secretary the authority to extend the repayment deadline for CCC marketing loans an additional 3 months, which would extend the maturity date from 9 months after the loan is initiated to a 12-month loan period.

• Specifies that the producers of ethanol and biofuels are eligible for the COVID-related assistance payments, as well as extending certain tax credits for the producers of biofuels.

• Provides for an additional $1.5 billion for food purchases under the USDA Farmers to Families Food Box program and similar food aid programs.

• Provides for a 15 percent increase in Supplemental Food Assistance Program (SNAP) benefits to eligible individuals and families for the next six months.

• Allocates funding to provide grants for small meat and poultry processing plants to upgrade and expand existing processing facilities.

• There were also provisions in the legislation and funds allocated to further assist small dairy producers, to expand rural broadband access, and for farm stress programs.

• In a non-related item, the legislation also fully funds all 2018 and 2019 WHIP+ disaster payments, which many Midwest crop operators qualified for due to crop losses in the 2018 and 2019 crop years. Previously only 50 percent of the funding had been allocated for the 2019 WHIP+ payments. The legislation did not address any provisions for crop losses in the 2020 crop year.

In the coming weeks, there will likely be many more specific details released on the provisions and programs in the COVID relief package related to farm operators, processors, and others in the ag industry. The coronavirus pandemic has caused much personal and economic hardship to families and businesses across the U.S. in 2020, including to many family farm operations. Just as with the CARES legislation earlier this year, the previous PPP payments, and the CFAP payments, it appears that the latest COVID aid package will provide some additional much need financial assistance to many farm operations and other rural businesses.

Update on WHIP+ Payments
According to the latest information from the USDA Farm Service Agency (FSA), local FSA offices are now authorized to make payments to farmers for any 2018 and 2019 WHIP+ disaster payments on applications that have been reviewed and approved. The WHIP+ disaster payments are for eligible crop losses from the 2018 and 2019 crop years in specific areas of the U.S. Applications for the WHIP+ program closed earlier this Fall. The payments include the entire amount of approved 2018 WHIP+ payments and 50 percent of the approved 2019 WHIP+ payments. These payments may be made by the end of 2020, so farm operators may need to account for these payments when doing 2020 year-end tax management. The funding for the additional 50 percent of the 2019 WHIP+ payments was just passed by Congress; however, those payments will likely not occur until 2021.

Whether or not the 2018 and 2019 WHIP+ payments occur yet in 2020, or are delayed until 2021, will vary from county-to-county, depending on the progress with processing the WHIP+ applications at local FSA offices. If applications were received by the deadline, but have not yet been processed or approved, the eligible WHIP+ payments will likely not be paid to farmers until 2021. Farm operators should check with their local FSA office regarding the status of the 2018 and 2019 WHIP+ payment for their farms.

**********************************************************************
Note — For additional information contact Kent Thiesse, Farm Management Analyst and Senior
Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960);
E-mail — kent.thiesse@minnstarbank.com) Web Site — http://www.minnstarbank.com/

 

Honorees Announced for 2020 Greater Mankato Business Awards & Hall of Fame

Each year Greater Mankato Growth, Inc., which includes Greater Mankato Growth, Visit Mankato, City Center Partnership and GreenSeam, recognizes outstanding businesses, organizations and professionals at the Greater Mankato Business Awards & Hall of Fame. This year’s event is presented by Xcel Energy and will be held virtually on November 10 from 11:30 am – 1 pm. Greater Mankato Growth, Inc. is proud to announce this year’s 2020 honorees:

Greater Mankato Growth Awards

Hall of Fame (Each year, at least one outstanding private sector business from the Greater Mankato region is inducted into the Business Hall of Fame for their contributions to our vibrant community. Those contributions include: to better the quality of life in Greater Mankato through the creation of quality jobs and developing opportunities for their employees; demonstrates personal and business ethical qualities, including dedication to family, community, the environment and private enterprise; demonstrates qualities of entrepreneurship by assuming the risk of organizing, developing and managing a successful private business enterprise in Greater Mankato): 
2020 Hall of Fame Inductee:  Quality 1Hr Foto/SPX 

Distinguished Business Award (Each year, one private outstanding business from the Greater Mankato region is honored for their contributions to our vibrant community. Those contributions include demonstrating personal and business ethical qualities, including dedication to family, community, the environment and private enterprise; demonstrates qualities of entrepreneurship by assuming the risk of organizing, developing and managing a successful business enterprise in Greater Mankato): 
2020 Distinguished Business: Kato Crossfit

Brian Fazio Business Education Partnership Award (Each year, recognizes partnerships that enhance education and business in Greater Mankato) 
2020 Brian Fazio Business Education Partnership Award: Greater Mankato Area United Way and Capstone

Young Professional of the Year (Each year, one distinguished young professional between 21-40 years of age is recognized for leadership and service through commitment to community, service and volunteerism; involvement in efforts to enrich the professional/leadership development of other young professionals; and be actively involved in welcoming young professionals to learn, live, work and engage in Greater Mankato) 
2020 Young Professional of the Year:Laura Jans

Visit Mankato Awards

Bring It Home Award (recognizes an individual, group or organization that works alongside Visit Mankato to bring a significant event to Greater Mankato):
Silo Art CityArt Mankato

Hospitality Award (recognizes an individual, group or organization who has gone above and beyond to provide outstanding hospitality to the visitors of Greater Mankato OR who has helped promote Greater Mankato as a great destination to visit):
Mankato Area Mountain Bikers

City Center Partnership Awards

City Design Awards of Excellence recognize outstanding architectural design enhancements that elevate and spark the perceptions of the City Center in regard to renovation, new construction, beautification efforts and public art (permanent or temporary). This also includes projects that celebrate and preserve historic buildings or landscapes and incorporate sustainable elements into any of such projects. The categories are:

  • New Construction over $5,000,000: Eide Bailly Tower
  • Renovations between $500,000 – $1,000,000: Ridgley Building /Cultivate Mankato
  • Renovations under $500,000:LocAle Brewing Company
  • Downtown Detail: Vetter Stone Plaza
  • Creative Placemaking: Mankato Playhouse
  • Preservation Stewardship: 129 N. 6th Street
  • CityArt “People’s Choice” & “Jury’s Choice” Awards: To be revealed at event

GreenSeam Awards

Seamed in Success Award
The Seamed in Success Award honors an outstanding business, organization, community or individual which has made a large impact and added value to the community and region. This award recognizes those who have shined a light on the importance of agriculture, with an emphasis on rural vitality building upon our agricultural roots.  
2020 Seamed in Success: Brad Schloesser 
 

Register for the 2020 Greater Mankato Business Awards & Hall of Fame at: greatermankato.com/hall-fame.    


About Greater Mankato Growth, Inc. 
Greater Mankato Growth, Inc. is comprised of four business units: Greater Mankato Growth, the regional chamber of commerce and economic development organization; Visit Mankato, the local convention and visitor’s bureau; City Center Partnership, a downtown development organization; and GreenSeam which utilizes agriculture to build on the region’s extensive agribusiness assets to develop the ag economy. 

 

###

GreenSeam celebrates agriculture, looks ahead

Article is from the publication, The Farmer.

Janet Kubat Willette | Aug 19, 2020

The organization has updated supporters on its fundraising campaign, goals and successes.

The past few months have been tough, with COVID-19 introducing a new normal of stay-at-home orders and virtual meetings, and more recently, the governor’s executive order requiring people in Minnesota to wear face masks in indoor businesses and public indoor spaces.

Through it all, agricultural workers have kept showing up, and a GreenSeam event held Aug. 4 at Franklin Rogers Field in Mankato celebrated those workers, agriculture and its contributions to everyday life.

Once in a while you’ll need a doctor, a lawyer or a preacher, but three times a day, every day, everybody needs a farmer, says Gary Koch, GreenSeam’s board chairman and vice president and general counsel at Christensen Farms.

GreenSeam, which was birthed by Greater Mankato Growth in 2013 to recognize and build upon the region’s agricultural assets, hosted the event on the home field of the Mankato Moon Dogs.

The event, “Ag Makes the World Go ‘Round in 2020,” was billed as a celebration of agriculture, a chance to climb out of basements and leave home offices behind to gather with other professionals in agriculture — in person, safely six-feet apart, with masks — to talk not only about the challenges presented by the pandemic, but also how agriculture has and continues to overcome those challenges.

Speakers took turns behind a microphone that was sanitized between presenters with Lysol wipes from the canister, a centerpiece on the head table. More than 10 tents from GreenSeam sponsors filled the plaza.

Wayne Kahler, who started Kahler Automation 40 years ago in Fairmont, shared his story of walking into the storm that is COVID-19. The governor’s stay-at-home order went into effect at his business’ peak season and he sent 50 of his 75 employees to work from home. He was amazed at how well business continued as employees worked from home offices. However, the business isn’t as agile as when employees are co-located, Kahler says.

In a typical year, Kahler Automation would send one or two individuals to a customer site to commission new fertilizer and herbicide measuring and blending systems. The team would change based upon customer needs. This year, the same technicians were paired for visits to reduce the risk of spreading COVID-19, Kahler says.

As Aug. 4, none of Kahler’s employees had tested positive for COVID-19. There have been challenges, like the team that was turned away from a hotel because they had traveled from another state, but he’s looking ahead.

“I do know everyone at Kahler Automation will be glad when they’re all back in the office,” says Kahler, a GreenSeam board member.

Andrea Vaubel, deputy commissioner of the Minnesota Department of Agriculture and a non-voting member of the GreenSeam board, says she was thrilled to be at the event. It was her first out-of-house event in she couldn’t remember how long, as she says COVID-19 has messed with her sense of time.

“COVID has and is really tough on everyone,” she says, but agriculture and agribusiness have innovated and pivoted quickly.

The glorious summer day was also an opportunity for GreenSeam to update its supporters on its $2.8 million fundraising campaign. The campaign launched 18 months ago and was set to enter a new phase this spring when COVID-19 struck and ground the campaign to a halt.

So far, $1.3 million has been raised — including a $75,000 state investment — to fund the organization’s efforts to promote the region as the place to be if you’re involved in production agriculture. The GreenSeam region is the “Silicon Valley of Ag,” its supporters say.

A feasibility study, which included interviews with 75 influencers, guided the board as it set its $2.8 million goal, said David Krause, past chairman of the GreenSeam board and Pioneer Bank CEO. The $2.8 million is designed to fund GreenSeam operations for five years.

The August event was a chance to reboot the campaign by showing supporters what GreenSeam is doing and entice potential donors to support the organization that supports agriculture and agribusiness across not only southcentral Minnesota, but also into western and northwestern Minnesota and northern Iowa.

The organization is focused on retaining and growing agribusinesses already located in the region, attracting new businesses to the region, attracting, retaining and developing a workforce and growing awareness of the region and its brand, Krause says. Their five-year goals include increasing agricultural industry output by 20%; generating $1 billion in new agribusiness capital investment; establishing six new ag specific degree and certificate programs at the region’s two- and four-year colleges; increasing the number of students enrolled in ag-related classes, certificate and degree programs; and positively impacting ag employment by 10%.

Krause highlighted successes including Mankato Area Public Schools hiring a full-time ag teacher for the first time in 25 years, record attendance at its Rural Forum in December and Minnesota State University-Mankato adding an agribusiness and food innovation minor.

COVID-19 has spotlighted agriculture, Krause says, with meat packing plant closures, supply chain disruptions and trade discussions dominating national news during earlier days of the pandemic.

“It shows how significant agriculture is and how important agriculture is to all of us,” he says.

Kubat Willette is a Farm Progress digital content creator.

 

New Economic Contribution Study of Agriculture Shows Industry Adds More Than $37B to Minnesota Economy

More than two dozen Minnesota ag organizations collaborated on report

Saint Paul, MINN.—Today, AgriGrowth and more than two dozen leading Minnesota agricultural stakeholder groups released the 2020 Economic Contribution Study of Minnesota Agriculture and Forestry. This comprehensive new report demonstrates the significant contribution agriculture has in Minnesota, from adding $37.1 billion in value to the state’s economy to creating more than 388,000 jobs.

The study was conducted by Decision Innovation Solutions to show the overall economic contribution of agriculture to Minnesota’s economy with further breakdowns by county and industry. Key highlights from the study found that agriculture and related industries in Minnesota are estimated to contribute:

  • $37.1 billion in total value added
  • 388,134 jobs
  • $105.6 billion in output (sales)
  • $21.4 billion in household income

“Agri-food and forestry are an integral part of Minnesota’s economy, and we’ve seen that demonstrated even more this year as our industry innovated, collaborated and overcame numerous challenges to ensure that Minnesotans get the food, fuel and fiber they need to keep our economy moving and families fed,” said Tamara Nelsen, Executive Director of AgriGrowth. “Altogether, this study paints a complete and detailed picture of what agriculture means to our state.”

“We were thrilled to be a part of and support the completion of this important study,” said Thom Petersen, Minnesota’s Commissioner of Agriculture. “And while it confirms what we knew, that agriculture is a critically important to the state’s economy, it also shows the tremendous diversity of Minnesota agriculture—something that bodes well for the long-term health of our industry and state.”

DIS analysis also indicated that 99 percent of Minnesota farms are considered family farms, and that metro counties Hennepin, Ramsey and Dakota were the top three counties respectively with the greatest value-added contributions from agriculture, forestry, and related industries.

“Agriculture is significant to Minnesota as a whole and also seen in fields and businesses in every locality throughout the state,” said Lucas Sjostrom, Executive Director of Midwest Dairy. “We shouldn’t forget the benefits of having our food grown here helps connect eaters to the processes required to grow it, and respect for the people and jobs in the entire supply chain making it happen.”

“Agriculture plays such a vital role in Minnesota’s economy,” said Tom Slunecka, CEO for the Minnesota Soybean Research & Promotion Council. “While we in the industry are aware of the importance, this study really hits home just how impactful agriculture is in providing jobs and economic benefits to the state.”

“Minnesota producers and value-added agribusiness have driven food and ag innovations forward for decades, and it’s great to see this current compilation of economic contributions that the industry provides,” said Shannon Schlecht, Executive Director of the Agricultural Utilization Research Institute. “Value-added agriculture produces benefits in multiple manners, including new commodity utilization and sales, capital investment, and jobs across the state.”

The study includes data and breakdowns by county, industry and more. You can read the full 2020 Economic Contribution Study of Minnesota Agriculture and Forestry here.

For More Information, Contact:
Chelsea Thompson, ct@k2andcompany.com

###

GreenSeam event highlights agribusiness accomplishments

Special presentation held at Franklin Rogers Field recognized agribusiness accomplishments and the continuous agricultural work during the COVID-19 pandemic

Full story on KEYC here >>

GreenSeam Hosts a Lead for Minnesota Fellow

MANKATO, Minn. (August 12, 2020) — Garrett Lieffring, a Fellow with Lead for Minnesota will be hosted for two years alongside the GreenSeam staff. He will serve as a Program Manager effective August 10, 2020. 
 
The Fellowship is a two-year service program, supported by ServeMN, the state’s federal AmeriCorps commission. Mr. Lieffring will be serving full-time, advancing the community and business development goals of GreenSeam. He will be working with the many GreenSeam committees and will be mainly focused on deployment of programs that strengthen rural and agricultural economies.   

Mr. Lieffring is originally from Truman, MN where he recalls helping on his grandfather’s farm. After high school, he attended Winona State University and earned a degree in Business Marketing. Since then, he has been working in the medical supply business.  

“Garrett’s experience and expertise in business marketing will be a key asset to our team as we continue to expand our programs,” said Sam Ziegler, Director of GreenSeam. “Having a program manager working with our committees and internal staff will help us continue to fuel our efforts and spread the word about GreenSeam.” 

“I am excited to get back into agriculture and economic development as well as being closer to my hometown and lakes.” Mr. Lieffring said. 

Learn more about hosting a fellow with Lead for Minnesota. 

About Lead For Minnesota 
Lead For Minnesota recruits, trains, and places young leaders in two-year paid fellowships across rural, tribal, and economically distressed urban communities. Lead For Minnesota works particularly in places with bold visions lacking the capacity to attract and retain the next generation of leaders to create a more unified Minnesota, built upon communities that care. Lead For Minnesota is a state affiliate of Lead for America, a national 501c(3). 

About GreenSeam, LLC 
GreenSeam is a grassroots initiative, created by countless businesses and professionals from southern Minnesota and northern Iowa. This initiative exists to build on existing ag business prominence maximizing a growing economic marketplace in order to be the premier ag business epicenter in the United States – the most diverse, balanced and sustainable. It is a place that is agriculturally relevant, responsive and diverse. GreenSeam is a business unit of Greater Mankato Growth, Inc. (GMG). Learn more at greenseam.org. 

About Greater Mankato Growth, Inc. 
Greater Mankato Growth, Inc. (GMG) is comprised of four business units; Greater Mankato Growth, the regional chamber of commerce and economic development organization serving the regional marketplace; Visit Mankato, the local convention and visitor’s bureau; City Center Partnership, a downtown development organization; and GreenSeam, which utilizes agriculture to build on the region’s extensive agribusiness assets to develop the ag economy
. 

Eide Bailly LLP – Jerad Michels

Importance of Tax Planning in Down Years

The common misconception for ag producers is that tax planning is only necessary when the ag economy is doing well and the farmer wants to minimize their tax burden. However, planning during down years is just as important to prevent losing deductions and credits that could be helpful during those tough times. It’s common practice for farmers to hold on to grain when prices are poor but operating expenses are still ongoing. This can cause large variances in income from one year to the next, but proper tax planning can prevent that variance and offset future income.

Read more

Where’s My Beef?

As the calendar flips to June, American’s will increasingly light the charcoal or fire up gas grills as part of their meal preparation process. Grilling season is prime time for beef as people enjoy the shift to warmer weather. But, as is the case with many sectors of the economy, the coronavirus has thrown some cold water on the beef industry’s fire.

Beef packing plants around the country reduced their level of processing due to worker safety concerns with COVID-19. While all of those facilities are up and running, Minnesota Beef Council Executive Director Karin Schaefer says production is still well below normal levels.

“When coronavirus hit, we had challenges right off the bat from our packing plants, all the way back to our livestock markets,” Schaefer says. “Auction barns paused because there weren’t buyers and we saw that trickle down into the cow-calf sector where calves just weren’t getting moved into the next phase of production because there wasn’t any movement on the upper end.”

Beef packers are running at about 80 percent capacity, which is an improvement. But for many cattle farmers, serious damage has been done.

“Like other industries, it (coronavirus) was really hard on our market,” adds Minnesota State Cattlemen’s Association President and Walnut Grove farmer Mike Landuyt. “We saw over 35 percent decline in our prices just because of this.”

Landuyt says he knows fellow farmers who have lost $300 to nearly $500 per cow.

 

Chain Reaction

Schaefer says Minnesota is the 10th leading cattle producing state in the country. Minnesota cattle farms are a mix of feed yards, which feed calves until they reach market size, and cow-calf operations that produce the calves those feeders need. With fewer cattle going to market, the demand for calves was reduced, creating an unwanted trickle-down effect.

“We’re seeing the holdup for cow-calf operators,” Landuyt explains. “They’ve not been able to move their cattle. If we don’t have pen space in the feed yard, there’s no place for their cattle to go. They made their feed last summer based on how long they expected to have their cattle, now farmers are starting to run out of feed, and they have to come up with alternative ways to feed them.”

Unlike the pork industry which has seen some farmers forced to euthanize animals because of processing plant shutdowns, that unthinkable step has not been taken in the cattle industry. Landuyt says “so far everybody has been able to find a spot to tuck them and not have to do anything too drastic.”

The nation’s food supply chain is a sophisticated process that links growers, processors, distributors and retailers in a delicate dance to keep product moving as efficiently as possible. Hiccups anywhere in the path affects the other portions of the supply chain.

“I don’t think a lot of people realize just how intricate our supply system is, just how timed out everything is and how much thought goes into what happens each day,” Landuyt contends. “Which hogs, turkeys, chickens, cattle go where is all plotted out, sometimes years in advance, especially on the cattle side. The cattle that are being bred this year won’t calve until next year and won’t hit the market until the year after that. Decisions being made now are several-year decisions, so you don’t just change that overnight.”

While Minnesota has substantial cattle production, the state has limited packing capacity. Most of the state’s cattle are processed in other states.

“That’s one of the obstacles we have. We don’t have a lot of control over the packing capacity. What’s governed by states and governors in other states we have no control over that, but it does impact us,” Schaefer says. “This showcases the dynamics of our food supply and that its nationwide. What happens in one plant, even if Minnesota farmers aren’t selling to that plant, will affect all the other packers and it will affect cattle prices, too.”

Schaefer and Landuyt agree that it’s important for the beef industry to have plants up and running at full capacity while maintaining a safe work environment for employees. Schaefer says packing plants are prioritizing employee COVID-19 testing “so I think that’s going to be really helpful to make sure that those who have been cleared to go back to work feel safe.”

 

On the Shelf

Consumers have likely noticed changes in beef availability at the retail level. Some spot shortages have occurred, and Schaefer says not every beef cut has been available every day. While prices for cattle producers have gone down, prices consumers pay have gone up because of the value of primal meat cuts coming from the processors. Overall, Schaefer stresses, there is not a shortage of beef.

“Beef is coming to those grocery stores on a weekly basis, and on top of that, we know that our production capacity is increasing every day, so hopefully we’ll be digging ourselves out of this hiccup in production that we’ve had,” Schaefer explains. “Finding ways to get back to a stable production level while keeping employees safe is going to be the number one factor in moving everything down the line and making it function as close to normal as possible.”

“We have the cattle out here in the country to get to the plant,” Landuyt says, “but we need those important people in the middle to keep everything rolling.”

Ethanol Industry Eyes Rebound

Times have been tough for the nation’s ethanol producers and the COVID-19 outbreak has only made matters worse. But as states begin to reopen businesses and people emerge for shelter in place orders, some in the industry find reason for optimism.

“The nation’s ethanol industry has been bleeding pretty hard,” says Randall Doyal, CEO of Al-Corn Clean Fuel in Claremont and former chair of the Renewable Fuels Association board of directors. “The last couple of years have been tough, but the last few months things have been tough to the Nth degree. I’ve been in the industry for 40 years and I’ve never seen anything like it.”

A combination of factors has led to sharp reduction in ethanol demand and consumption. The Environmental Protection Agency (EPA) has granted small refinery exemptions to dozens of oil refineries, relieving them of the obligation to blend ethanol with gasoline under the Renewable Fuel Standard. EPA granted exemptions to refineries that biofuel advocates say should never have been granted exemptions.

“Small refinery exemptions have been a destructive force for ethanol demand,” says Craig Willis, senior vice president for global markets for Growth Energy, the nation’s largest biofuels trade group. “The exemptions reduced the amount of ethanol they need to buy to meet their obligations under the renewable fuel standard. Four billion gallons have been exempted since 2016.”

Willis says U.S. ethanol production was just under 16 billion gallons in 2019.

“Economics have been ugly for a while with all the small refinery exemptions. Things turned absolutely brutal when Russia and Saudi Arabia went to war with each other over oil and just bashed the oil price,” Doyal adds. “Ethanol price fell like a rock. That started driving plants into negative margins. Then suddenly, because of COVID-19, everybody stopped driving. That lack of demand shows up very quickly.”

Major Impact

Minnesota has 18 ethanol plants with combined capacity of about 1.3 billion gallons year. Iowa boasts more than 40 plants and capacity of more than 4 billion gallons. Several plants in Minnesota have shut down or are running at reduced capacity because of the reduced ethanol demand. Guardian Energy in Janesville is shuttered at least through the end of May. Corn Plus in Winnebago closed in September. Others have trimmed their production.

Willis says small refinery exemptions and plummeting oil prices hurt ethanol production, but reduced demand due to coronavirus-related restrictions has been even more impactful.

“The biggest problem is nobody is driving,” Willis contends. “At its lowest point, gasoline consumption was reduced by 46 percent in the United States. Since ethanol is in 98 percent of gasoline, ethanol is going to follow. That’s where we’ve really been hurt.”

Willis says the United States is the largest gas consuming nation in the world, using about 35 percent of all gasoline.

“When the U.S. stops using gas, it’s going to be tough to hide,” Willis adds.

Loss of ethanol demand and reduced production means farmers have lost a key corn market.

Madelia farmer Harold Wolle is a member of the National Corn Growers board. He says what’s happening in the ethanol sector is directly impacting corn farmers. Corn prices hit their lowest marks in over three years.

“Numerous ethanol plants have closed, and a number have cut back to less than 50 percent of their normal production. We’re seeing that impact in estimates of increased corn carryover for next year,” Wolle says. “It’s tremendous the amount of devastation that has been caused.”

Doyal says the reduction in ethanol consumption has knocked corn demand down by 50 percent, and “that’s a big number.”

While some ethanol plants in Minnesota and Iowa have shut down or reduced their capacity, Doyal says Al-Corn has continued to run. They are also producing ethanol used in making hand sanitizer.

“Sanitizer isn’t a replacement, but it’s something,” Doyal says.

Look Ahead

Doyal says things are looking up for the ethanol industry as life in the U.S. gradually returns to normal. He says demand for ethanol in the Twin Cities, a big market for Al-Corn, is increasing. However, his plant is still operating below full capacity.

Even with increased ethanol demand, Doyal expects some of the nation’s shuttered ethanol plants will stay that way for good.   

“We are an industry that needed to get right-sized to demand. We were built beyond where demand was already,” Doyal explains.

Willis says gasoline consumption was down as much as 46 percent, and as gasoline demand goes, so does ethanol. If Americans start driving more again, ethanol demand should follow suit.

“Right now, we are seeing demand slowly start to come back up,” Willis says. “I fully expect that as demand increases, our producers will speed their plants back up or turn them back on as the market tells them to – but it may take time to get back to normal.”

Willis says the U.S. exports substantial amounts of ethanol around the world. Opportunities for increased exports to countries like China, Brazil, Mexico, Indonesia and Japan is reason for optimism. Ethanol was included in the list of agriculture products China agreed to buy in the Phase One trade deal with the United States.

Exports are vital for ethanol producers, but according to Willis, the first order of business that’s needed to get the nation’s ethanol industry back on track is to stabilize domestic markets.

“We have to have the U.S. market back driving close to normal. That’s my first ask,” Willis says. “Second, what would affect our producers the quickest would be for China to start buying.”

In addition to resumption of typical domestic driving habits and increased exports, resolving the small refinery exemption would give ethanol producers confidence that the RFS is going to work as it was intended, according to Willis.