Episode Transcript
[00:00:00] Speaker A: Welcome to Missouri Corn Talk, your go to weekly agriculture podcast, delivering fast, reliable updates on market development efforts, ethanol demand, and the issues shaping today's corn industry. I'm your host, David Geiger. U.S. corn growers are among the most productive and efficient farmers in the world. But higher input costs can eat into that advantage. The National Corn Growers association recently released the second installment of its research comparing input prices paid by US And Brazilian farmers. This report takes a closer look at what farmers are paying for individual inputs and what those differences mean for U.S. corn competitiveness. Joining us again is Krista Swanson, NCGA's chief economist for part two of this conversation. Krista, thank you so much for your time. We spoke about the second installment of your report about the differences of input prices between the US And Brazilian farmers. Do we have a general amount or specific number? We know it's higher by.
[00:00:54] Speaker B: Yeah. So Brazilian growers often are using more fertilizer and crop protection products. Like I mentioned, there's publicly available data from FAO on that. That is what we highlighted in this recent part two study. And the reason for that is they, they farm in a very different production system. There's a different climate, they have greater and different types of pest pressures, and in some areas, a large part of the nation and their crop growing area, they're producing multiple crops.
[00:01:25] Speaker A: So, Krista, let's talk about global competitiveness as we approach this strategy to international corn sales. What are you looking at now from an economic standpoint when approaching this topic, considering there's so many factors involved in creating the situation we find ourselves in?
[00:01:40] Speaker B: Yeah, definitely a lot of factors driving this, and it makes it difficult to dive into this type of research. And it's also hard to find the data to, to support it, which is, which is why that study that we published this summer was so important. But, you know, if you are a Missouri corn grower and you're selling your corn to a nearby elevator or livestock operation, you may be thinking, you know, why does this global competitiveness matter so much to, to me and my farm? But the price that you're receiving, even at your local elevator or a nearby livestock operation, for instance, is still shaped and influenced by what's happening in the global market. And Brazil is a major corn producer and they're a major global exporter. And so the cost structure in Brazil affects how aggressively it can compete for the same customers around the world. That is part of our, the U.S. corn complex as well. And so, you know, even if, even if one person's corn is staying local it's still part of this broader demand complex that really is a global, global picture. And so the problem here is if we have another supplier who can keep putting corn into the market at a lower cost, they become the low cost supplier in the global market. And that pressure, you know, it makes its way all the way back to the local cash price. And so, you know, in short, a Missouri farmer can sell locally but still compete globally.
[00:03:13] Speaker A: Krista, transparency in competition is part of the strategy as we move forward, knowing what we know now, let's go over that. What is the transparency in competition?
[00:03:23] Speaker B: Yeah, that is a really good question and it's something that we are talking about right now because one of the things that has come up, you know, this, all of this work was really driven by our growers, this input price situation. The, you know, why are we paying high input prices? How did the cost that, how the prices that we pay for inputs here in the US Compare? Hearing from our growers those messages is really what drove this research. And of course our inputs task force, which is comprised of you national staff members, a few state staff members from across the country and several grower leaders from across the country. And this research came from the discussions in that task force and the broader audience. And one of the things that we keep talking about is it's really difficult to find data and information on what price farmers are paying, which is what drove us to work with Kinetic to, to get the research for the study that we put out this summer. And one of the things that we're talking about is this transparency word. And what does that mean? And, and what, what do we want when we say we want more transparency? I think we want a clearer picture of how prices are determined and what all factors play into prices. We know that, that there is a lot of different things. We want safe products and we certainly don't want to weaken safety standards or regulatory standards. But we also need effective products and we understand that bringing those to market takes research, development and regulatory. But when, when we have such large price differences persisting, think it's reasonable to ask what's driving them and where there are barriers that limit competition. And so these studies that we're doing, this is the first step towards being able to ask better questions and ultimately seek better outcomes for farmers as we
[00:05:14] Speaker A: try to get stronger farm returns while dealing with price inputs and the challenges that come with that. What is the best approach you think farmers ought to know about when working with local competition and transparency within their own states and trying to navigate this complex global Market we have. What's your best piece of advice for a farmer?
[00:05:33] Speaker B: Yeah, that's a really good question. I think that, you know, asking questions and comparing prices, I know farmers don't have a whole lot of options with, with input suppliers or retailers in a, in a given area. You know, some farmers might only have one, two or three. But if you do have a few, I think asking questions about the prices, being sure that you're reviewing those, those bills. My husband and I farm as well and I know sometimes when we review those bills, we find things that are incorrect, that if you didn't take a moment to review those, you could find, find those. And when we're in a tough, tight margin environment, being able to compare prices and ask questions and review our bills is really, really important. And you know, ultimately to getting involved in your local organizations like Missouri Corn Growers and other ag groups is really important.
You know, as we look at this, the prices we can raise, some of these concerns like we are doing through this research and we can have conversations, but ultimately the prices for the products that we buy, you know, hopefully we can make a difference on that space. But that may not happen in time for tomorrow or this, this crop year or the coming crop years. And so I think what's important here is also getting engaged in these organizations to stand up for your voice on these things. But also a big thing is if we want to keep being productive and efficient as, as we have been and, and that decades of investment into our, you know, behind agricultural innovations for our growers, if we're looking at continuing to produce more into the future, then we also need more uses. And so the demand piece and the demand side of this equation and ensuring that we have markets for the future is a other side of the equation that is really important too.
[00:07:22] Speaker A: Krista Swanson is the chief economist for the National Corn Growers Association. Krista, thank you so much for joining us.
[00:07:27] Speaker B: Yeah, thanks for having me on.
[00:07:29] Speaker A: The bottom line is pretty simple. Us corn growers have built a tremendous advantage through productivity and efficiency. But those gains only go so far when farmers are paying significantly more for some of the inputs needed to produce that crop. Understanding where those differences come from is an important first step towards finding ways to improve competition and, and ultimately profitability for corn farmers. This week's corn talk is made possible by the Missouri Corn Merchandising Council and the Missouri Corn Growers Association. To learn more about Missouri corn's efforts to build demand for corn at home and around the world, visit mocorn.org or follow on our social channels.
