Hart softens less-than-desirable outlook with a touch of humor

ISU Extension economist Chad Hart speaks to the audience during the ag outlook luncheon Dec. 11 at the Youth Development Center in Monticello. (Photo by Pete Temple)
Pete Temple
Express Sports/Ag Editor

     Chad Hart had a question for the 100 or so people in attendance Dec. 11 at Monticello’s annual ag economic outlook luncheon.

     “How was lunch?”

     When the audience responded “Great,” he said, “OK, that’s about as good as it’s going to get for you for the next hour.”

     For nearly 90 minutes, Hart was part prognosticator, part advisor and part stand-up comic during the event, sponsored by Ohnward Bank & Trust and held at the Citizens State Bank Youth Development Center.

     Hart, crop markets specialist for Iowa State University Extension and associate professor of economics at ISU, asked another early question.

     “Do you want the short version, or the long version of this talk?”

     When several people said “short,” Hart responded, “2019 was rough, ’20 will be rougher. All right, we’re done! See y’all later.”

     Further into his talk, Hart drew more laughs when he talked about how international demand for livestock products can lead to better lives for those consumers.

     “What’s the easiest way you can improve your life?” Hart asked. “Your diet. Case in point, look at me. When I graduated from college I weighed 98 pounds. I am now twice the man I once was!”

     He also took things seriously, warning farmers that 2020 could have the largest American corn crop in history, even while exports are falling, leading to lower prices.

     But he offered bits of advice in how farmers should take advantage when things are going their way.

     “The ag economy has struggled for the past five or six years,” he said. “But even through those bad years, we always have opportunities.

     “In history, it used to be, it was the farmer who could produce the most that did the best. That is no longer the case. Today, the person who markets the best often does the best.”

     Hart said he was concerned more about reduced global demand than he was about overproduction. That, combined with projections of a wet winter that could lead to the same planting problems farmers experienced in 2019, makes taking care of stored crop even more important.

     “One of my key things I’m going to hammer on you about is, if you’ve got crop sitting in that bin right now, watch it like a hawk,” Hart said. “Because if it’s quality-challenged, its store life is not as long as a normal crop. Don’t let it slip away from you.

     “Pretend there’s a briefcase out there filled with cash. If that were the case, how often would you check that bin?”

     Regarding soybeans, China has returned to being the top U.S. export market again. However, he said, “As China has come walking in the front door, other markets have been exiting out the back door.”

     He also said beef is down two percent, which concerns him because the past four years it had shown significant growth. Overall, however, Hart said, “Livestock still looks really good right now (for 2020), and a lot of that has been driven by international demand.”

     The market that is bucking the trend in terms of exports, Hart said, is pork, which is up 44 percent, driven largely by African Swine Fever (ASF) issues in other countries.

     Hart also branched off into other topics, including the rise of plant-based meat patties, such as those served in Burger King’s “Impossible Whopper.” Hart argued that such patties aren’t as bad for the beef industry as some might think.

     He drew another laugh telling the story of how he bought a plant-based burger at a restaurant, and said the consistency was similar to that of a fast-food burger that had come from a frozen beef patty.

     “What they’ve been able to mimic is a bad burger,” Hart said.

     Still, he said, such patties might present an opportunity.

     “Who’s buying it?” Hart asked. “It is vegetarians, vegans. These were people who weren’t eating beef in the first place. So, does that really hurt the beef market? No, it doesn’t.

     “These alternative meats don’t help the meat industry, but they don’t really hurt it either. But it could help on the crop side. Because, when you think about it, what’s the biggest ingredient in most of those alternative patties? It’s soybeans.

     “It’s a way to grow demand for crops. Don’t knock them yet.”

     Hart also talked about electric cars, and admitted he had underestimated their impact.

     “I think I dismissed it too quickly,” he said. “They have found a niche, and they are taking a bigger bite out of the fuel market than I expected.”

     This, he said, is hurting the ethanol industry.

     “(Fuel is) a market that’s shrinking,” Hart said. “We thought we were going to continue to use more and more fuel. That worked well for about the past five or six years. The problem is, I think the wheels are coming off. We’re overproducing for the market we have.”

     Hart also took questions from the audience, responding to a question about socialism as it relates to ag foreign policy to by talking about current 2020 presidential candidates.

     “On the Democratic side, none of the candidates know agriculture enough to have had a stance yet,” Hart said. “President Trump has been ‘policy by the seat of his pants.’ I would expect more of that in his next term.

     “I’m not worried about socialized agriculture. I’m more worried about – let’s call it – disorganized agriculture. Right now I don’t think we know what our federal ag foreign policy is, and I don’t think either party has an answer for us right now.”

     Toward the end of his talk, Hart offered advice relating to when to market corn products.

     “Were there times in 2019 when we could market corn profitably? Sweet Jesus, yes,” Hart said.

     Around Father’s Day last year, he said, corn prices reached 4.70 per bushel.

     “That was the best price we had seen in five years,” he said. “The last five years we have struggled. Why? We’ve been turning up our nose at good prices, because we believe better has to happen. That’s what gets us in trouble. We don’t recognize a great price when we see it.

     “Don’t let it go by again.”



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