March 30, 2023

A five-minute summary of AAI, regulation, and industry activities for members of the largest state agribusiness association in the nation.

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April 6

AAI Board of Directors Meeting

10:00 AM | AAI Main Office Board Room

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• Right-to-repair law requests | Committee talks to US Secretary of Agriculture

• Winter weather impacted soil moisture levels this Spring

• Agriculture trade was a big topic in the Senate Finance Committee

• A bill stopping CO2 pipelines could hurt Iowa’s ethanol industry

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The FMCSA's Safe Driver Apprenticeship Pilot Program, required by the $1.2 billion infrastructure bill in 2021, created a pathway for drivers under 21 years old to enter interstate trucking, but unfortunately for smaller carriers and owner-operators, that pathway is paved with stringent monthly reporting and technological requirements. 

In theory, the program provides a leg up for carriers hobbled in recruiting efforts. No, we're not talking about the insistence of big fleets and government that there's any kind of "driver shortage." This anecdote from Overdrive's 2021 Small Fleet Champ Jason Cowan sums it up nicely. Cowan, whose Henderson, Kentucky-based Silver Creek Transportation is particularly active in schools around career day, had his own boys driving trucks by the time they were 16, and remains a huge proponent of younger drivers. 

But the program and its associated reporting and structuring requirements prove prohibitively difficult for all but the most determined fleets. To participate in the program, fleets need to become a registered apprenticeship with the Department of Labor. Even then, the trucks and drivers themselves need to be handled just so. 

The program requires carriers to use active-braking collision mitigation systems, forward-facing event recording cameras, speed limiters set at 65 mph or less and automated manual transmissions. Driver candidates are required to successfully progress through two probationary driver periods -- alongside an experienced driver -- and demonstrate competency and proficiency behind the wheel across 12 performance benchmarks. The program requires young drivers spend 240 hours supervised by an experienced driver and 400 hours driving overall before they can drive interstate unsupervised. 

The Department of Labor offers its FASTPORT resource to carriers interested in becoming registered apprenticeships, but so far only 26 carriers have expressed interest in starting a Registered Apprenticeship, and only 15 companies are approved to hire drivers for the SDAP program, according to the FMCSA. Of those 15 fleets, 13 have more than 45 trucks, one is a training school, and the lone small fleet (less-than-10-truck Tithing Transportation) said it wasn't accepting applications from young drivers to participate in the program, but declined to comment further. 



[...] Read Full Story

The outlook for agricultural retailers is generally favorable for 2023 following a year of record profits in 2022. However, the sector faces an emerging set of risks that could depress profit margins and challenge traditional business models in the years ahead. Lower levels of industry working capital, higher property insurance costs, and changing grower needs are three of the key issues that ag retailers will need to navigate over the next five years.

According to a new report from CoBank’s Knowledge Exchange, a downturn in the crop cycle—after several years of consecutive high profits—is likely during 2024 or shortly thereafter. The prospect of lower grain prices and financial pressure at the farm level, combined with the newly emerging risks, has business implications that ag retailers should begin preparing for now.

“Grain and farm supply cooperatives delivered tremendous value to their customers over the past three years of extreme volatility in prices and economic activity stemming from COVID-19,” said Kenneth Scott Zuckerberg, lead grain, farm supply and biofuels economist for CoBank. “Unfortunately, the post-pandemic world is one that features a variety of new risks. The good news is that ag retailers and farm supply co-ops can develop risk mitigation strategies before the eventual cyclical downturn occurs.”

A significant percentage of U.S. farming operations, comprised mostly of mid-sized and non-family farms, are increasingly seeking more products and services than traditional farm suppliers typically offer. This group has demonstrated a strong interest in biologicals and other specialty nutrients, as well as advice on carbon monetization and ESG compliance programs. Beyond specific product and service categories, more farmers of all types prefer to evaluate, order and mange input purchases electronically. Ag retailers that want to compete for these customers will need to adjust their business models accordingly.

[...] Read Full Story

Almost three-quarters of Americans say that not reauthorizing the farm bill in 2023 would have a significant impact on the country, according to a new poll from the American Farm Bureau Federation.

The survey explores the public’s awareness of the farm bill, its impact, and priorities for funding in the legislation. The poll, conducted by Morning Consult, showed more than half of respondents said they would be more likely to support their member of Congress if they voted to reauthorize the farm bill.

Nearly 70 percent of respondents also identified two areas of the farm bill as top priorities for government funding: risk management programs that serve as a safety net for farmers and nutrition programs that serve as a safety net for families facing hunger.

“Thanks to the farm bill, farmers and ranchers can hold on through the tough times to keep the nation’s food supply secure,” said AFBF President Zippy Duvall. “Farmers and ranchers must take the lead to share with our neighbors and lawmakers about the impact the farm bill has on every family in America. Almost nine in ten adults trust farmers, which will be important as we work to inform the 260 lawmakers who weren’t in Congress when the last farm bill was written.”

After witnessing the food system impacts of Russia’s war with Ukraine, an overwhelming majority of Americans also believe the U.S. should consider a safe and abundant food supply a matter of national security. This suggests the farm bill should be considered a part of the country’s national security strategy.

[...] Read Full Story

Some lawmakers are highlighting the importance of increasing domestic production of agricultural inputs.

Congressman Max Miller, a republican from Ohio, says ramping up production in the U.S. will help address prices and availability.

“I believe that we need to be looking for other options and other avenues within the private sector to start ensuring some of the things we don’t have,” he says. “Fertilizer is one of the main things used in order to grow crops. Why isn’t it that this country is manufacturing fertilizer within the private sector, creating that economic revenue. It’s common sense in my opinion and should be put forward and enacted into real policy.”

The House Ag Committee member says it also supports food security, which is directly linked to national security.

House Majority Leader Steve Scalise says the 2023 Farm Bill could help address the need for increased domestic production of inputs and energy.

[...] Read Full Story

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