Are Farmers Getting Squeezed Out? | The Granary

00:00 When you watch this and when you and your wife watch this, now that you're in this episode, I'm wearing shorts during the summer episodes. 00:00:18 There's a certain amount of appeal because I show leg down here. Oh, my God. 00:00:23 It's- Jesus. You think it might excite you? There's entertainment- He's getting everybody- 00:00:27 There- there's entertainment value. Let's separate that from appeal. Okay? 00:00:34 Entertainment and appeal aren't the same thing. They aren't the same thing. All right, go. 00:00:39 You guys ready? Farmer bankruptcies are setting a new record in the year 2026. Crop input prices are at a record high. 00:00:48 Are we dealing with an agricultural inputs market that is completely oligopolized? And if so, what can farmers do about it? 00:00:54 It's getting spicy here at the granary. Thanks for joining us. All right, guys, you heard me talk about it right there, oligopolistic practices. 00:01:03 I've been hearing about it all the time on social media. Before I get into this topic with my friends, I'm gonna tell you who my friends 00:01:08 are. That's Galen Beer. He is with Tidal Grow AgriScience, the sponsor of this episode. There's signs over there in the background. 00:01:14 Tidal Grow takes upcycled seafood byproducts and turns them into stuff you can use. Speaking of crop inputs, it's stuff that can actually get you more 00:01:21 bang for your buck in your fields. Kelly Garrett, founder of XtremeAg, joined by our friend, attorney, and farmer from Iowa, Adam 00:01:29 Ulrich. Thank you for being here. Absolutely. I'm kind of actually bothered by this. Usually, I'm the best-looking guy at this table. Now I'm second. 00:01:35 Today, it's Kelly. No. I know. We've been on with him before. Well, you got hair at least, but okay. 00:01:44 All right, so let's talk about this thing right here. And thanks for being a sponsor, and thanks for being here, Galen. So you've been here before, and you obviously are the business guy, and it's 00:01:52 probably almost a tough situation. You work in the products markets. I'm seeing it more and more and more. 00:01:57 We're even hearing Secretary Brooke Rollins is doing hearings about this. Are we dealing with oligopolies? Farmer input prices are definitely a 00:02:05 factor in the farm financial picture right now. Farm bankruptcies are nowhere close to where they were in 1986, but we do have a spike going on right here. 00:02:14 So what's the easy beginning answer on this? Or is there one? I don't think there is an easy answer. 00:02:21 I do think that, to your point, inputs go through pretty few channels right now. But that being said, I don't think farmers are without alternative choices. 00:02:35 I think there are checks and balances that still exist out there. So I think, with local co-ops, local independent 00:02:42 retailers, I do think farmers can still find places they can go to buy inputs that keep the market in check. 00:02:49 Okay. That's at the retail level. All those retailers also don't make their own stuff. They get it from somewhere else. Are we always going to be in this situation? 00:03:00 Well, that's a great point, that the retailers, no matter how large they are, they don't all make their own stuff. 00:03:05 Mm-hmm. And the inflation that we've experienced in the economy, like with my trucking business, just the cost of trucking. Farmers talk about fuel all the time. 00:03:13 A way bigger problem for me is what the cost of goods has gone up really isn't the cost per acre. 00:03:19 That's really minuscule and negligible. Yeah. But the cost of delivery, like what I can see- I know 00:03:25 ... in my trucking business, I can't imagine what a large brand, they're not making all their own stuff, and just the deliveries of that. 00:03:33 I'm sure their margins are cut too. But as Galen says, though, there are alternatives. If a farmer wants to hit the easy button, yeah, it's pretty tight. 00:03:41 Yeah, okay. There's alternatives, but if you want to just keep doing the things the way you've always done, you're going to be beholden to this dollar for nitrogen, 00:03:48 this dollar for- Yes ... et cetera, et cetera. Yes. Making nitrogen or mining potash or mining phosphorus is capital intensive. So I don't know how you get 00:03:58 around the need for capital to do those sorts of things, and thereby, you are going to have few people that do it. 00:04:05 And I'll get into the oligopoly thing in a little bit because I use an example. So Adam, all right, you're a farmer. You're also a business guy. 00:04:11 When you look at this scenario, okay, input prices are high. Do they come back down? 00:04:17 I think it's sticky. So we want to focus on knowing what our breakeven is, right? So we want to know 00:04:27 what was our fertilizer five years ago, what was our fertilizer last year. I don't have a lot of negotiating ability to go to the co-op and 00:04:36 say, "Well, this is what I'm going to pay for anhydrous." They're going to sell it to somebody else. 00:04:41 I might have a little bit of wiggle room on volume, but for the most part, they're sticky downwards, right? 00:04:47 It's just an economic, it's where we're at. But what I can look at is, well, what else can I do, right? And so we've looked at some biologicals. 00:04:58 We've looked at plant food. We've used more hog manure, chicken litter- Mm-hmm 00:05:03 ... and alternatives to some of those commercial products, and that's been somewhat successful for us. 00:05:09 Kelly, we covered it at this table in another taping that yes, input prices are high, and it's bad for farming. 00:05:19 But also, we've probably been guilty of over-applying anyhow, so maybe the first thing to do is kind of like, all right, boy, like 00:05:28 losing weight. Well, good food's really expensive. Well, you know what's really a cheap option? Less, just doing less. So I think the first option, and I hate when you say, "Oh, you don't know. 00:05:38 You don't farm," I think the first option would be cutting back. I agree, and we're starting to do that. 00:05:43 Adam and I talked about that on the way over here today. As part of XtremeAg or just part of Garrett Landing Cattle, my farm, 00:05:50 my research is kind of changing from maybe trying to hit the high yield to see how can I maintain yields, how can I maintain my APH, 00:05:59 and how little can I get by with? I think there's going to be a bigger margin found there- 00:06:03 Mm-hmm ... than there is in going to continue to chase the high yields. Doesn't mean I'm not trying to do a good job, but there's 00:06:10 only so many hours in the day. The research time right now on our farm is being spent on cutting back. 00:06:15 Mm-hmmSo on the farmer finance side, we've been hearing this, and frankly, I got in trouble from some of our farm friends that I said this has been a little bit overblown because as a 00:06:27 percentage of businesses, more restaurants go through bankruptcy, more small businesses go through bankruptcy filing on a percentage basis 00:06:35 than farmers. But it's a hell of a headline when it can be because we all work in ag and also when The Wall Street Journal says farm bankruptcy is up 70%. 00:06:43 Well, that up 70%, as we all know, can be up from 100 to 170- Yeah 00:06:49 ... across two million farms or whatever. So I think it's a little overstated, but it also doesn't make it any less important, right? Because, and it does boil down to the 00:06:59 economics of this thing are a struggle, and it starts with inputs. It does. And I think, when you go through periods like this, 00:07:07 it does force innovation on us. I think what Kelly's talking about, about getting by with less nitrogen. If you have cheap nitrogen, you don't have to force 00:07:17 yourself to think about that. You can put the oversupply or the over inventory of nitrogen out there early. 00:07:23 What we're doing now is we're thinking about, okay, we know that we can still grow good corn. We might have to put a little more elbow grease- 00:07:32 Mm-hmm ... a little more management into that. So how do we accomplish that? And I think every farmer is facing that right now out of 00:07:39 necessity. We hit nearly a dollar a pound in nitrogen this year that does not align with $4.50 corn. So how do we still achieve 00:07:49 good yields and be profitable through that? Well, some of that input that would've gone into nitrogen has to go into management and maybe more applications throughout the season. 00:08:00 Are you going to lose yield? Are you going to lose yield using less inputs? I don't think so, based on the research that we've been doing. 00:08:06 Some of this research really goes back a decade now. Yeah. And 00:08:09 we're doing some really ultra extreme, no pun intended. But we're doing some really ultra low nitrogen things like that. Taking the sap analysis, things like that. 00:08:23 Based on my experience over the last decade, really over the last four years with the sap analysis, with Evans and things like that, I don't think that 00:08:30 we will. Evans talks about what I'm trying to do. He thinks that actually, the soil's infinitely variable. He thinks the high-yielding areas of the field, the yield might 00:08:41 go up, but he thinks the low-yielding areas of the field where we don't have the organic matter, he thinks that might go down, and 00:08:50 that disparity through the field might grow. Mm-hmm. He might be right. Obviously, with his credentials, he could be right. I hope that I can find a way to 00:09:01 massage that a little bit, and I hope that the overall yield of the field at least stays the same. I would really like to see it grow a little bit. 00:09:08 Mm-hmm. Okay. On the inputs front, you can't do much about it, right? You've got to use a certain amount of stuff. And then I find this whole thing that the Secretary of Agriculture's going to have 00:09:22 hearings about this, and then the keyboard warriors on Twitter or whatever, social media, "They do something about this." And I've had some people in ag get mad at me, because I said, "Okay, well, what is it 00:09:34 you want to have done?" Okay, you know what? Damian and Adam will start running the phosphate mine. Mm-hmm. 00:09:40 And we'll just go ahead and buy it. We'll come up with the $100 million- ... and all of the infrastructure, and strike a deal with Burlington Northern Santa Fe 00:09:48 to start trucking it. The numbers are massively big, and I don't know, it's like saying, oh, airlines, 00:09:56 my cellphone, there's only three carriers that could... Every business gets to where there's four big providers. And I don't know how... I guess ag people are so close to it, they think that this is unique to ag. 00:10:07 It's every business. Go ahead. Galen had a good point. I think there are some alternatives. We've got some local co-ops. We've got things like that, and then those alternative 00:10:17 fertilizers like we've talked about might be, especially with talking about the government involvement and regulations, 00:10:25 it could be that 10 years from now, given the regulations on chemicals, fertilizers, that 00:10:33 we've seen a switch to more of a biological, more of getting away from the synthetic types of nitrogen and maybe more of a hog manure or chicken litter. 00:10:43 That's local to us. Well, I think that that's the way. You go ahead, and I'll give you my thought on that- 00:10:48 Yeah ... as a non-farmer looking in. Go ahead. I really think that we can 00:10:54 trim the fat a little bit from an inputs perspective because we're always 00:10:59 nervous about, do I have enough? Uh-huh. And the technology exists now to know if you have enough. Mm-hmm. 00:11:05 So that's where the management needs to go. Mm-hmm. Do the testing, like we're using sap testing. Do the sap testing, do the tissue testing. 00:11:12 Use some of the agronomic practices or technology that exists today to know if you have enough and really cut back. 00:11:19 I can't tell you how many times I've heard a farmer say, "Well, I think I have enough nitrogen out there, but just in case, I'm going to make this next wide drop 00:11:26 pass." Yeah. Stop doing that. Yeah. How do you manage what you don't measure? Let's start measuring it to know. I think to the degree, though, Kelly, that the point you're making is 00:11:36 correct is that we've probably over applied, and we have tools now to help us. But you and I have had this discussion. 00:11:45 The right amount of nitrogen's always going to be a hindsight answer. Right. 00:11:49 Because a plant is... We always think, okay, protein, we just use that term like there's one protein in a plant- 00:11:58 Mm-hmm ... and there's thousands of proteins, and that plant will use different proteins for different things. The second it starts entering a stress 00:12:05 phase-It needs a different protein than it is for production. And yet you can't anticipate the stress that a crop is going to 00:12:14 encounter during the year. So I think you're right. A guy has to use tools throughout the year to see where he's at with that. He also has to be evaluating, what's my crop going 00:12:24 through? Mm-hmm. And the third piece of that is what tools does he have now that he sees, okay, we're having a drought right here before the reproductive phase. 00:12:33 What can I do to manage my weights right now? I'm going to do the alligator clip thing. Before I do, though, I want to say, I'm even guilty of this overapplication thing. 00:12:42 When Lori's getting ready to go and carry the backpack sprayer around and do all the spraying around the farmstead, I said, "Three ounces per 00:12:49 gallon is enough glyphosate." But how many more times do you want to walk down that fence row and carry that? It's like 40... 00:12:58 Actually, that's why I don't do it. It's just too heavy. So that's why Lori does it. It's like 40 pounds you've got to carry around a 00:13:04 backpack. So I say, "Let's just go ahead and put five ounces in there because what the hell?" So we can go over, if we have 14 00:13:11 extra ounces of glyphosate that gets used per month around here, it's not the end of the world. But if we're doing this on thousands of acres, which I don't know if 00:13:17 she could walk that far, but it's a real concern. She can. She can. 00:13:23 All right. So about the- We've trained her ... about the pricing situation, when I hear the calls for it, I always kind of then want to ask these other folks. 00:13:29 I get it, they're emotional, and they're going broke, but then they... Or they're not making any money, and they say, "We need to break up these big crop 00:13:37 input companies." Well, how would that happen? Okay, we broke up Ma Bell. You and I will always remember that. There was one company that controlled all the telephones in the United States. 00:13:47 Ma Bell. That was it. If you had a line went down your road, and if you wanted to call someone, you used them. Broke it up. 00:13:54 Well, what the hell difference does it make? Nobody even has a landline anymore now, and instead now it's three companies that control all the cell phones. Break up Mosaic and Nutrient and the others. 00:14:03 What do you think this is going to do? Do you think all of a sudden we're going to have 100 and they're going to just all of a sudden... You're going to call the guy at the phosphate plant and say, "Hey, 00:14:11 I'm Kelly Garrett. I think I'd like you to give me a bid on a truckload of phosphorus, and you've got to beat these other 116 companies." 00:14:18 I don't think it's going to happen. It... No. It's... A lot of scales- It's not impractical. 00:14:22 No. A lot of scales of efficiency will be lost and I don't know that at the retail level, I don't know that the price changes. 00:14:28 Right. They're still going to probably charge- Right ... what they can charge. Right. Yeah. 00:14:33 Well, and one guy doing it himself can't do it as efficiently as someone doing it on a large scale. 00:14:39 Exactly. And that's the tightrope that we walk is letting a few people do it efficiently. Or do you let a... 00:14:46 Do you hope that innovation takes over if you let 100 different people do it? Yeah. I get the theory of competition that all of a sudden, if it's just me 00:14:53 and you, and I say- Yeah ... "Yeah, what do you want to charge?" And then we kind of fix price. I get that whole thing, but I also think there's a certain amount of 00:15:01 more fervor than fact when it comes to the profit margins on this, because they're not making that big of margins. The market has to work, right? 00:15:08 Yeah. They're making margins right now. They are making margins right now, but historically, they've not. Like my buddy that worked for Cargill, he's like, "They get after the big four meat 00:15:15 companies." He's like, "I worked for Cargill for 13 years. You know what? Many of those years, Todd," he's like, "Their actual margin ends up 00:15:24 being barely double digit, 11% or something." Yeah. Nine to 11%. He's like, "So you're telling me the companies that want to have literally 00:15:34 hundreds of billions of dollars deployed globally in infrastructure and ongoing operations to make 00:15:41 a billion?" Yeah. You know what I'm saying? Yeah. So they always talk about how much money they make, and it's a large number, but if you talk about a percentage relative to what they've got tied up- 00:15:49 Yeah. It's not much ... their return is small. It's barely respectable. Sure. So the workaround, I think, if I were a farmer, would be all the ways, like you're 00:15:56 talking about and you're talking about, is just get to where you're not as dependent on that. If you can... I b***h about the airlines because I fly a 00:16:03 lot, and it's not lost on me, if I wanted to do that, I could buy my own plane like Galen has, or I could just drive, or I could get a Madden Cruiser 00:16:11 bus and have somebody haul me around. In other words, I think if I'm a farmer, there's certain stuff that I'm just going to say, "I'm going to try to not play the game. 00:16:18 I'm going to try and not play their game. If I want to worry about my finances, how can I not play their game?" And that's where I would start looking at all the alternatives. 00:16:25 That is how you... To the airplane example, there's a place for a private airplane, and there's a place for the airlines. Why? 00:16:32 Because there's just places the airlines can take you more efficiently than a private airplane can. Now, you've got to factor in time and things like 00:16:39 that. Mm-hmm. But that factors into our discussion, too, because there's a lot of things you can do to make your inputs go farther. 00:16:47 Can you make nitrogen go farther? Yeah. It usually involves time- Mm-hmm 00:16:51 ... which is more applications or more management. And so it kind of plays into the example that you used there with getting where you want to go via air. Can you do it privately, or are there times 00:17:02 you're just going to let the airline do it because they're better at it? And that's the struggle that we face, and you can 00:17:08 make the same argument in the airlines. There's three or four airlines that almost every passenger... But yet they do that because they can do it more efficiently. 00:17:17 Yeah. I hate them. I'm an executive- You've made that clear. I'm an executive pilot. Well, then let's go through the media take on this, 00:17:25 because I first found out about Kelly Garrett reading a cover story in The Wall Street Journal. And so I read articles across different media 00:17:33 outlets, and the big story has been these poor farmers aren't going to be able to... And they profiled a 75-year-old guy who's going to do, "Well, here's what I do every year." 00:17:44 And then the media never says, "Well, why don't you change what you do?" It's always the same story of, "I always apply this every 00:17:51 fall. I put on my fertility." I'm like, "Okay, so half of it goes in the drainage ditch. There you go. There's an idea." So it's interesting that they just 00:17:59 keep harping the same story and never, "What are your alternatives?" And alternative, they think alternative, find another seller, as 00:18:07 opposed to alternative means completely just not participate in that type of production.Or that same half 00:18:14 I agree. He's right. Nitrogen is hindsight at the end of the year. But we don't have to make that decision in October- 00:18:22 That's right ... for the next October- Yeah ... to harvest. The technology exists now, product 00:18:28 exists now, that we can kick that decision down the road as far as possible. There's less interest spent, the 00:18:36 application isn't made, and we can really dial in on the amount that we put in, just nitrogen as an example. 00:18:42 I'm going to go away from nitrogen because I think we talk about that too much. I'm going to go to the whole other entire categories of 00:18:48 products. Top five years ago, I predicted there would be no more ag retail. It would all just be a matter of I got on my phone, just like Amazon, and I just 00:18:55 ordered it, whatever. And if I had to prove that I was licensed to handle something, then maybe there was a go-between there, or maybe somebody at the 00:19:02 local retailer that has to touch it, whatever. And that hasn't happened. There's more ag retailers than there used to be. You've got an ag retailer. 00:19:09 Well, yes, but the ag retail that we have is somewhat a function of what you're talking about. And so you're partially right. 00:19:16 Where you're partially wrong is not everybody wants to do that. They still want to hit the easy button. 00:19:22 Or we talk about the most expensive words in agriculture are, "This is the way I've always done it." 00:19:26 Yeah. Some people make that work. And so not everybody has the mindset. It isn't locked, it doesn't change- 00:19:32 I guess what I'm going with it is, I think there's more alternatives right now. I get it, there's a high price 00:19:38 environment, just like everything, diesel, et cetera. But you've got more... I thought five years ago there would be no ag retail. 00:19:44 Now there's as many ag retailers as there used to be. Maybe not, probably not as many. But the point is, there are many more than I thought there would be- 00:19:51 Yeah ... given that we live in an Amazon world. And then the array of products. There's more stuff. Some of it's confusing. And we've covered it in other episodes, that there's some of this stuff that I 00:20:01 don't even know what the hell it is or how it works. But there's more of that stuff than there's ever been. It used to be traditional chemistry, and then NPK, like when I was 00:20:10 at DuPont, interned in 1991. Traditional chemistry from, well, six companies. 00:20:15 Yeah. And that's what you used. And that's it. I think one thing that always survives difficult economies, and I think a little bit to what Kelly and 00:20:26 Adam have alluded to, is intellectual capital still carries weight and can level the playing field. So if you want to talk about the product of nitrogen, 00:20:38 okay, how much does it cost per pound? Mm. And guys can go shop that. If your model of Amazon were there, that's how everyone would be buying it. But 00:20:47 in today's world, that pound has different value depending on how it's used and how it's placed. And so that's where someone that understands the value of 00:20:58 putting it out there correctly, that makes that affordable for the farmer. So I think to the oligopoly, I think the 00:21:06 independent guy, or the guy that really understands the aspects of production and can help a farmer navigate these expensive 00:21:13 prices, I think there's a place for that guy out here in the market. Well, the first thing they should be doing is figuring out how to use less, right? 00:21:20 How to- That's right. Deduction and reduction. And sort through all the products you were talking about- Yeah 00:21:26 ... that's out there. So what's your answer? I want to circumvent or to circumcise? Circumvent. I want to circumvent. 00:21:34 I want to circumcise the oligopoly or circumvent the oligopoly? You want to circumvent. 00:21:38 Okay. I think one of the ways that we've seen that is some of the innovation that's occurred in ag. It's kind of exciting. 00:21:46 Five years ago, I didn't do any sap samples. Kelly was kind of starting, and one of the things that we've seen is pretty exciting. You guys are looking at saying, "Well, hey, we look at 00:21:57 nitrogen on the back end. We can't do it now, but we're a lot closer than we used to be." 00:22:01 Mm. Yeah. We're going to do sap samples today. I just talked to Mike Evans here yesterday about what fields do we want to get lined 00:22:10 up for now, for later. And the whole reason this is exciting is because maybe I don't need to go put 200 pounds of nitrogen on because my dad did- 00:22:20 Yeah ... and my grandpa did. Yeah. And we kind of joke about that. That's hard. It's hard to go away from that because you don't really want to be the guy in the 00:22:29 area that failed at something new, but you also realize something's got to change, something's got to give. And I know we're kind of talking about the inputs. 00:22:39 Nitrogen's a huge part of that. Look at what we do with seed. Our seed cost hasn't gone down. It's gone up. 00:22:46 It was up 4% over last year. But we've been able to place that seed, right? Right. 00:22:52 With some of the prescription planning. Mm-hmm. And you say, "Well, up there I'm spending more money again." You have to look at that return. 00:22:59 Right. So yeah, we bought into the prescription planning. I never in a million years thought we'd do that on beans. 00:23:06 One of the better things we did. We saved a ton there. And we've learned quite a bit along the way. So maybe long-winded a little bit, but I think you want to look 00:23:16 at some of the innovation, some of the intellectual capital that's out there, and make sure that you're aware of what things 00:23:24 do I have options on. I might not be able to get that anhydrous price down much. I might get a little bit. But then what? 00:23:31 That's not going to save a farm. And the guy behind that, that says, "On this part of the field, you need 70,000 population on your soybeans. 00:23:40 Over here you need 120," or, "Over here you need 200 pounds of nitrogen. Over here you need 140," that's where the intellectual capital, I think, starts- 00:23:49 Right ... bridging that gap. Because as a farmer, you can't know everything about everything. Someone has to work in the background and help you pull 00:24:00 that through. And I think there is more value to that side of it now than there is sometimes when you just can afford to throw extra out there. 00:24:09 I agree. I think more value and probably quite a bit more opportunity. So I pointed out in another episode that, let's face it, I hear the cries, and 00:24:17 I see the media, and again, it makes for good media. Farm bankers are up, and input costs are putting farmers below break even. When just last summer, 00:24:29 I'm in August, Wisconsin, working for a client, and I'm visiting with one of their ag retail agronomists, and he said, "I love your commentary about the economics." Says, 00:24:41 "I've got a 78-year-old customer. I like the guy. He wills me on my price every single transaction." 00:24:49 And he said, "And every recommendation I give him on fertility, he uses exactly double what I tell him is absolutely necessary." So you can b***h 00:24:57 about this input pricing, but then what are you really doing to help yourself, right? And that's where I think that there's still a lot of room, and 00:25:04 that's where I always say I believe some of the younger people in this business are going to help that. Virg's going to be much more cognizant of 00:25:12 changing up the thing for input prices than your dad would. I agree. And I think sometimes, when you're talking about 00:25:20 the news media, or we're talking about stories like this, we're talking about too many averages. 00:25:23 Mm-hmm. There's a certain amount of producers, like you want to talk about my dad or the older generation, their land cost is potentially paid for. 00:25:30 Mm-hmm. Think about that. That could be a $300 or $400 per acre swing. Mm-hmm. 00:25:34 That guy that has his land paid for is probably still going to the big co-op- 00:25:41 Yep ... and to the big brand, and he's doing that, and he's still making a heck of a living. 00:25:45 But at the age he's at and the places in his life, he's still making a really nice living there, and he's doing it easy. 00:25:51 Yeah. It is easy. Yeah. And part of it is because he wants to. Part of it is because he can, because of his land is there. 00:25:57 So like, when we talk about the average land cost to put in corn, there's a lot of top to bottom- 00:26:02 Not land cost, you mean average cost to put in. Well, average cost to put in corn- Yeah 00:26:07 ... but then when you break out the land cost there- Yeah, yeah ... think about an older producer that has his land paid for. 00:26:12 Maybe he has his machinery paid for. Sure, right. Now you might be talking about a $500 per acre swing. Sure. 00:26:17 That guy can go, and that guy's doing just fine paying $1,200 for anhydrous. 00:26:22 And that's true. However, there's still the environmental cost- I agree 00:26:25 ... because if you're putting on twice as much as need be or- But we're not talking about that- 00:26:28 I know ... with the higher input prices. But wait- That guy's still doing fine ... but you know what? As an industry, we're going to 00:26:34 force talk about it. Mm-hmm. We're going to be from the environmental point of view. Oh, we will. 00:26:37 But you say that 78-year-old man, we love him to death, and he says, "Ah, my stuff's all paid for. I'll just blow more money- 00:26:42 But- ... on fertilizer." Well, it's in the stream, it's in the- Well, and here's the- 00:26:46 ... it's in the Raccoon River in Des Moines. And here's a challenge to Kelly's thinking there, and you're 100% right, but this is what we do in ag is we 00:26:54 use our land rent to fund inputs. And- I'm not saying it's a good idea. I'm just saying it happens a lot. It does happen, but that's where the difference is, is if a farmer owns his 00:27:05 own land, he can choose not to pay himself rent that year. Right. 00:27:08 He might choose to put it towards the nitrogen dollar. Right. But in reality, if there is someone else that 00:27:15 owns that land, you still got to pay that land rent. And I always say you should do your economics based on paying yourself rent, because at the end of the day, you've invested in that 00:27:25 land, and that land owes you something back in return. Do you guys ignore that in times of difficulty? We argue all the time over if the land payment is profit or expense. 00:27:35 Yeah. All the time. All the time. Okay, but if you look at cash flow from what- I agree 00:27:40 ... what you do versus cash flow from investments, land's an investment, and to that extent, it owes you rent back. 00:27:46 Right. And so that's where it does level the playing field if everyone is actually paying them what their land is worth. 00:27:52 From an economic standpoint- Yes ... yeah, absolutely. It is. Yes. 00:27:56 But the 78-year-old guy probably could put his corn in- Sure ... maybe $400 an acre cheaper than I can. 00:28:04 You bet. Yep. And he's probably spending $200 of that 400 on fertilizer, which is what you're talking about, yes. 00:28:08 And much of it unnecessarily, and that's where- Potentially unnecessary, yes ... and again, I've gotten in trouble. I got in trouble. 00:28:13 I got some older people gripe at me saying, "You're hard on the old people. They have a right to do this. Should we exterminate them?" Nobody said that. 00:28:20 I'm just saying they're probably not doing things the way his 26-year-old kid from Iowa State who is like, "Oh, no, we're going to come at this." And there's an 00:28:28 environmental cost to that, as well as an economic cost to that. Rapid fire. We're going to go around here, rapid fire. 00:28:33 Do input prices on fertilizer, do they go down between, we're recording this in spring of 2026, by fall of 2026 or spring of '27, 00:28:41 are they lower? No. Lower? Higher. We're a game show. Lower? Higher. I say higher. 00:28:48 I say fertility- I don't think that... I think it's going to be the same. Staying flatline? 00:28:51 Yeah. Lower, higher, or same? I say slightly lower going into fall. Traditional chemistry. Higher, lower, stays the same? 00:28:59 It's steady to higher. Steady to higher. I say steady to a little lower. A little bit lower. So is that because you think that these companies start looking 00:29:08 at the situation, and they say, "We just can't get any more juice out of this?" 00:29:14 And I'm basing that on, look, if we see $8 corn in the fall, then I'm going to change my answer. 00:29:19 But if we're at $4.50 corn, it's going to be a little lower. Because let's face it, they charge what they think they can get away with, right? 00:29:25 I think there's some of that. I think there's some of that, but I also think that like all of these prices, it's such tied to oil. 00:29:31 Yeah. Because of the way the products are made, and then the delivery, and the mining, and all that. Tell me what the crude oil market's going to do- 00:29:38 Sure ... and I'll make predictions. If it gets- Oligopolies. Will Secretary of Agriculture, will there be political pressure? 00:29:45 Will the commodity groups get it done? Will there be a breakup of any of these large companies in the industry? I believe that's noise. I believe that's noise. 00:29:51 Noise. 100% noise. It will not happen. We all four think that that's noise, right? And then, okay, rapid fire, last thought. 00:29:59 Any last thing on inputs that someone might not thinking of that you're like, "Here's what I think is going to happen on this input situation?" 00:30:04 I think you need to focus on what's out there, rapid fire, for reducing some of those costs in an innovative wayI think that the mindset of the farmer 00:30:16 needs to change. Mm-hmm. And you need to continue to do this sort of testing when margins are good, so when margins are tough, you're prepared. 00:30:24 Instead, we're always forced into doing this at a painful time, and you really don't know what you can get away with. 00:30:29 I think that you need to continue to research all the time- And- 00:30:33 ... so you're ready for things like this ... either advice or a prediction. Yeah, I think advice is, it takes higher management and 00:30:41 higher thinking input to manage your way through this than just going out there and buying inputs. 00:30:46 Okay, I'll do prediction for my last rapid fire before we wrap. And sometimes people think I'm negative. I'm not negative. 00:30:53 I believe that this economic strain is going to remain, and the 78-year-olds are going to burn through equity or not make money because they haven't had to get efficient or more 00:31:05 progressive. The younger, more progressive people, like our viewers and listeners, are going to up their game, and three years from now, they're going to 00:31:12 be just like the hog producers or the beef producers that over-medicated all the time just because that's what they always did. 00:31:18 When it got more scrutiny and you had to yank more antibiotics out of your business, they realized, "Holy hell, we used to spend $60 per animal 00:31:26 out here on antibiotics unnecessarily. Our animals are still healthy." I saw it with the pigs. We saw it with the chickens. I think it's going to happen on the row crop. 00:31:34 The smarter, progressive people are going to say, "We've yanked a bunch of this cost out of there, and we didn't have any burn," and that's the prediction I have. 00:31:42 I think you may be right. I hope I am right. All right, till next time, he's Adam Vahlris joined by Kelly and Garrett, and our sponsor, Galen Beer, here with Tidal Grow AgriScience. 00:31:50 You don't know about Tidal Grow, go to their website. Tidal like a big wave of water, Grow like what your kids do, ag. Tidalgrowag.com. That's their sign right there, and they're doing a plot at my farm. 00:31:59 They're going to do some cool research out here. They take stinky seafood byproducts and turn them into stuff that your crops can use. 00:32:06 Anyways, until next time, thanks for being here. And again, they thought that I was being crazy when I said that the best-looking guy's sitting here. I will say you got good hair. 00:32:14 I had to go to Great Clips yesterday because my normal gal at my normal place wasn't there. 00:32:19 Misnamed. Average Clips. Average Clips at best is what I'm going with. Anyway- 00:32:24 I would agree with that. Yes, thank you. Says the guy with no follicles. Anyway, until next time, thanks for joining us here at The Granary. 00:32:30 All right, there you go. Your first episode. Very good. Yeah. Very good. 00:32:34 What do you think? Luke, how'd he do? He did good. Yeah, do you like that? Yeah. 00:32:38 Good. Your hair is an example of an oligopoly cutting your hair. That's exactly right. 00:32:42 No choices. God, it was terrible. And the fools get me... I hope Galen's right on the zoom. 00:32:47 Yes. I'm- 00:32:48.424 --> 00:32:50.934