Farming is a business with a rewarding lifestyle that can also challenge even the best managers. We're ready to help you prepare to take on 2022 even as market and price volatility affect your business.
Predicting the future isn't easy, but we've outlined the top 11 expected issues for 2022 by talking to industry leaders and observers. Some are designed to help you fine-tune your business, while others offer a heads-up for what may be coming beyond next year. Dig into these anticipated roadblocks and opportunities to explore your options and set your path for next season.
There's nothing simple about marketing these days as commodity price volatility brings almost daily surprises. Dealing with those marketing challenges requires both focus on your goals, and a willingness to act even when your heart is telling you to wait.
Casey Mattke, Corteva Agriscience digital area business leader, remembers growing up on the farm, and listening to his grandfather. "I mean if the price moved up 25 cents in the course of a year, or 50 cents, he got excited," he recalls. "We can see those moves in a single day."
A veteran farmer responding to a survey conducted by Rabobank earlier in 2021 noted that "sometimes high prices are not necessarily our best friend."
The problem many farmers face is that balance between pulling the trigger or waiting to try to maximize returns. Market analysts constantly share that knowing costs gives farmers the freedom to decide, and price a crop. The challenge for many farmers these days, with variable weather, is the worry that if you price too much of the crop and have a failure, you lose.
But the rule of thumb is to look back on history. What's the worst crop year and yield you ever had on the farm? If it was a 50% loss, then for peace of mind, consider pricing no more than half the crop ahead of harvest when prices can bring a profit. But know that the yield curve for corn continues to rise, offering opportunities to further maximize returns.
Adds Judd O'Connor, president Corteva Agriscience, U.S. Commercial: "Obviously commodity markets look very different than they did over the last three or four years. That's a good thing as you think about the X's and O's, the blocking and tackling as farmers approach their businesses every day."
Yield potential is a solid hedge in a volatile market, because higher yields translate to more crop to sell. O'Connor recalls a time when plant breeders thought 400 bushels per acre was the top end for corn yields. But today’s higher yield potential shows that companies serving farmers continue to innovate. "We have demonstrated [farmers] have the potential to go beyond 600 bushels to the acre with current genetics," O'Connor says. Today, the current world yield record stands at 616 bushels of corn per acre.
The problem many farmers face is that balance between pulling the trigger or waiting to try to maximize returns.
Mattke notes that farmers can look into their data to better understand the productivity of each field and understand product performance. With that information, you can fine-tune choices from fertility to hybrid and variety selection. "If you look at what drives your yield, it's your fertility decisions, and those seed genetics decisions, and then the other management practices," Mattke says. "If your P and K are off, you've already put a lid on that hybrid's production."
But moving into 2022, farmers are going to do their homework to get the most out of their operation, including fine-tuning that marketing plan.
"It's a tale of two cities," says Steven Johnson, long-time extension farm management specialist with Iowa State University, now retired. "It's the best of times with crop prices, which are the highest we've seen in seven or eight years, but that inflationary pressure moving through the economy will be felt for the 2022 crop."
Input costs are a consideration in any season, but supply chain challenges in an economy recovering from a pandemic have compounded the issues considerably. Where will this go in 2022? How will the supply chain impact farmers in accessing the products they need?
When it comes to input availability, every crop protection company has seen its share of challenges, with basic chemistry supplies facing challenged supply chains, shipping demand outpacing supply, freezes in Texas and other hurdles. O'Connor explains that in Corteva's case, they met customer needs in 2021, and are lining up resources to be well positioned in 2022.
"We were in a very strong position with multiple suppliers and product sources," O'Connor says. "When we designed the supply chain for Corteva, we took a hard look at what we're doing in the U.S. versus what we're doing in other parts of the world in terms of access to [ingredients] to build in flexibility and agility."
Based on that, he's optimistic about supplies going into 2022.
When it comes to input costs, locking in as many costs up front as possible may be a solid strategy for farmers. That can reduce your upside risk if prices rise, and reduce your downside risk, since prices are not likely to decline with suppliers and transportation still recovering from the pandemic.
"When farmers order from Corteva Agriscience, there are programs we have that allow them to take discounts when paying early," says Amanda Rinehart, Pioneer marketing leader, U.S. "Or there are financing options that give farmers the flexibility to pay once they have bushels in the bin. It's good to reach out to learn what's available for 2022. "
Johnson notes that this is a year to look at cash discounts and volume discounts early. "This is a time to check out how you can maximize that investment," he says.
When it comes to input costs, locking in as many costs up front as possible may be a solid strategy for farmers.
Another key is to understand the value of each investment. "Digital tools are probably the best, regardless of which platform you use, to help you with some of the really core management decisions," Mattke says. "They can give you some insights into some things you've tried in the past that you can build around. Once you see how the 2022 season starts to shake out, is this a year to chase it or a year to be conservative? You've got the data to give you ideas to make decisions in-season as well."
Looking ahead at 2022 almost means leaving 2021 behind. But extreme weather appears to be the norm going forward. What tools are available to help manage weather risk?
The challenge of weather is irregularity. The following year may bring completely different conditions than the current season, so flexibility matters when planning.
A solid example of weather flexibility is Pioneer® brand Optimum® AQUAmax® corn hybrids. " We've had Optimum AQUAmax hybrids on the market for a number of years," says Rinehart. "These hybrids are tested in water-limited environments for multiple years so that if it does become a challenging issue for farmers, they have products that can help them mitigate the risk."
These hybrids still perform if adequate rainfall is available to the crop, Rinehart adds. And technology like this offers farmers flexibility in what has become a more climate-challenged growing environment.
When Rinehart talks about the Pioneer lineup, she points to the range of traits designed to help farmers maximize yields, while dealing with environmental issues. That goes beyond Optimum AQUAMax hybrids to include breeding corn for disease resistance, early season stresses and stronger stalks to stand up to wind. And those plants will be dealing with more in the future.
When Al Dutcher looks at the weather patterns these days, he talks troughs and ridges. Dutcher is the associate Nebraska State Climatologist. "I see an intensifying of the troughs increasing, and we see continuation of the troughs and ridges in weather patterns," he says.
For farmers, that equates to stronger storms, but also changes to the arrival of the storms. A La Niña pattern that seemed to be forming in 2020 ahead of this season, with the promise of Midwest rains, dried up last December. Dutcher explains that although shy of a strong event, rapid surface warming of the eastern Equatorial Pacific led to a pattern that flipped between northern and southern stream storms. That came instead of the expected strong northern jet stream that would bring snowfall moisture to the northern plains.
But Dutcher says there's more uncertainty going in to 2022. "The Climate Prediction Center released its La Niña Watch. He notes that CPC shows that neutral conditions are likely to persist through October, but by winter there is a 60%-plus chance for La Niña conditions to develop based on the alert issued July 8.
"My thought is that La Niña could even materialize into 2022. There were some goofy things going on when that prediction was released," Dutcher says. He points to cool water upwelling in unusual areas that can interfere with the pattern.
He does see an opportunity for the drought to break in the Midwest going into the winter but notes it will take a lot more than the occasional storm to overcome those conditions.
"My thought is that La Niña could even materialize into 2022.”
Jessica Spaccio, Department of Earth and Atmospheric Science, Cornell University, is looking at those Climate Prediction Center reports and notes that if a La Niña pattern does emerge, it can make the winter more active in northern parts of the country, bringing more moisture. "But there are other things at play," she says. "The Arctic Oscillation, large-scale pressure systems, have an effect on winter."
A more active winter can bring greater snowpack, which can help bring back soil moisture, but weather data collected so far is doing little to provide guidance for what farmers will face in 2022.
Remember that weather is global. Dutcher advises against what he calls "backyard-itis." "We're in a highly variable climate right now, and you want to figure out what your competitors are doing," he says. "You want to understand the climate of our competitors and how that can impact your marketing year."
A change in presidential administration typically changes the regulatory environment. While this may not bring immediate changes to agriculture, for various reasons including process, litigation, etc., it can impact specific regions.
Farmers may be concerned about how evolving regulations could impact their ability to access innovation, which can impact the way they farm. But often such changes to regulations aren’t seen immediately.
Farmers can consider making environmentally related changes now that won't crimp income or profits and will help them set a course for the future. For example, the rise in biologicals can help a farm reduce its environmental footprint proactively.
O'Connor points to a rising demand for the use of biologicals for farming. Naturally-derived products and biologicals are getting more attention as the food industry listens to customers. O'Connor points out Corteva has invested in this area with its advancement of Utrisha™ N nutrient efficiency optimizer and other biological products. "We continue to accelerate our crop protection discovery side, leveraging open innovation," he says. "And we've expanded our biologicals in the green chemistry options."
But environmental concerns remain top of mind for farmers and the companies that develop crop protection products, too. "I think a lot of the work for our company has to do with novel modes of action," says Reza Rasoulpour, global regulatory and stewardship leader, Corteva Agriscience. "We have an incredibly robust pipeline. Some of the common threads that we look for when we're evaluating and assessing potential opportunities are novel modes of action and incredibly low use rates."
Low use rates for crop protection products, combined with the rising use of effective biological products, provide the opportunity for farmers to show they're constantly improving how they grow food.
Keeping an eye on regulatory issues is a solid management tactic to avoid being surprised in your operation. Every crop protection product a farmer uses has to undergo reregistration. Manojit Banu, managing director of science policy, CropLife America, shares this important point.
"Our understanding of crop protection is expanding every year. We have learned through decades of safety assessment experience. Our biggest agreements, and our biggest disagreements, with the EPA are how best to support regulatory decisions with science," he says.
Kyle Kunkler, director of government affairs for the American Soybean Association, raises one issue farmers may want to watch when it comes to regulatory issues — the Endangered Species Act (ESA). For a corn and soybean farmer in the Midwest, that question may not be top of mind and may be hard to focus on when faced with other challenges. "When we talk to farmers about the Endangered Species Act, and conducting a review, their eyes sometimes glaze over quickly because it seems abstract," he says.
Low use rates for crop protection products, combined with the rising use of effective biological products, provide the opportunity for farmers to show they're constantly improving how they grow food.
For others, ESA may be too far off to be worried about just yet, but Kunkler points out that as more crop protection products go under regulatory review, those products may have to undergo a bio-evaluation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, which can add years to the regulatory framework. If that happens, it could have an impact on the accessibility of products needed to deal with pests today.
What animal could impact corn and soybean growers most if added to the ESA?
According to Kunkler, it's monarch butterflies.
"This is something that's being looked at right now," Kunkler says. "We're watching the monarch situation closely, because the migratory pattern for this insect is very large. Concerns regarding monarchs could adversely impact farms if the butterflies do fall into the critical habitat range."
Changing consumer attitudes are impacting even row crop farmers as more buyers want to know where their food comes from. What are the steps you can take now to bridge the gap between farmers and consumers?
Companies are working to be more proactive on this score, and the conversation has been changing. Doyle Karr, food and consumer acceptance, Corteva Agriscience, has been working with food companies in his role for some time.
"At first, the argument was that we should just talk to food companies and see what they want us to deliver," he recalls. "But we learned that we had to get out ahead of that, then go to food companies and show that we understand consumers, we understand these trends, and we understand what you're dealing with. Here's how we can help you with those challenges."
For 2022, a corn or soybean farmer may not be challenged directly by a consumer about practices on the farm, but industry observers do see that day coming. Telling the farm story becomes more important so consumers know the precise nature of the work being done. But how to do it?
"One of the things I think about is what we do every day as farmers and how we can relate that to non-farm people in a way they can understand," says Dave Walton, American Soybean Association board member, and soybean farmer near Wilton, Iowa. "Often we get into farmer-speak."
Walton says his city friends will sometimes just stare at him when he talks about his farm, reminding him of the jargon the industry uses. He works to make sure everyone he reaches out to better understand. "We grew up around farming so this language and what we do is almost second nature to us," he notes. "When we talk about fertilizer, we may say we're 'putting potash on,' but the consumer doesn't know what that does."
Walton is using social media to reach out to consumers. His work on Facebook and Twitter often targets ways to tell the story of what he's doing, and he recommends other farmers do the same.
Social media is a key tool for telling the farm story, but Walton has had some issues with "trolls" who have negative things to say. His answer? "Leave the comments alone and, don't engage with everyone; this might be a friend of a friend of a friend interacting," he says. "Jumping in with a strong opposing opinion might not work out."
Instead, he says, use the opportunities you have available to educate. If you have a Facebook page and you get comments, respond, and be open about what happens on the farm. Modern agriculture has a solid story to tell.
Telling the farm story becomes more important so consumers know the precise nature of the work being done.
Beyond showing your actual work on the farm, there are other ways to interact. "For example, we love to cook in our house," he says "We make meals with the things we raise — beef, lamb, vegetables from our garden. I'll post those things with hashtags to reach beyond the ag silo."
For example, he might use #IowaFarm or #farm, but also #farmtotable or #foodiefarmer, and that gets him interaction beyond the farm. Chefs have reached out to Walton with posts to discuss farm issues. "I've started to build up that network of chefs and dietitians as followers, and they will sometimes tag me with questions. I'll jump in to answer them."
If he sees something inaccurate, he may choose to respond. A chef may say he has free-range, hormone-free, antibiotic-free chicken. Walton will take the opportunity to explain that all chickens are raised hormone free, because it is against the law to use hormones in chicken production. "It's not entertaining the trolling, it's correcting the narrative," he says.
There are growing opportunities to talk about identity-preserved products, which can offer a premium to farmers, because those products meet emerging consumer needs.
Ten years ago, for example, Pioneer introduced Plenish® high-oleic soybeans to the market in response to consumer demand for healthier oils. It takes time for food companies to understand the value of a new tool — to change recipes and make greater use of a product such as high-oleic soybeans, which can extend shelf life for foodservice and better meet healthy oil needs for consumers. Yet today, that identity-preserved product pays a farmer a premium, and there are growing opportunities for farmers to not only offer them, but also explain what they are to both chefs and home cooks. It's a positive story for those growers to share.
Carbon markets are a burgeoning area of agriculture and one where if you don't at least try to get in on the ground floor you could be missing a major opportunity.
When Ben Gordon talks about carbon market opportunities, however, he apologizes for being a broken record when he says: "It all starts with agronomy. It starts with the farmer and arming them with the tools and the advisory support. It doesn't all come from Corteva Agriscience, but a lot of it can." Gordon is carbon and ecosystem services portfolio lead, Corteva Agriscience.
The push to add cover crops, reduce tillage, or increase nitrogen efficiency isn't something entered into lightly for any farmer. There are agronomic practices that must be considered. For example, corn following cereal rye may need a bump in nitrogen to succeed; while soybeans do well when planted into the same cover crop. Similarly, varying soil types and topography may impact tillage needs, but the agronomic practices can provide farmers significant benefits well beyond a carbon check.
Gordon points to an in-depth analysis across a wide range of soils that showed a 1-percentage point increase in organic matter in soil "resulted in roughly a 30 to 35 bushel per acre advantage for corn, especially in drought years."
But for this new approach to potential carbon markets to work, Gordon says farmers should be looking at practices that make them more resilient. If that approach offers the chance to take part in a market with some income to remove some financial risk for adopting the practice, that's a win-win.
Many agricultural companies are offering opportunities in the carbon market, and Gordon knows that initially participation is less about increasing profit and more about not missing a future opportunity. "The first step is to get involved," he says. "There is upside potential, and 2022 is a good opportunity."
And farmers will be hearing more about 'life cycle analysis' in 2022 and beyond. CropLife's Basu says the organization is looking specifically at the life-cycle analysis for crops grown in the United States. In work with the University of Arkansas, CropLife is evaluating different ag approaches including conventional, no-till, organic and regenerative ag.
He says the idea is not to bash one type over another but to have a better understanding of the carbon and soil impact of specific approaches to farming. "You can't raise cover crops in organic farming," he notes. "You can't do zero-till in every field. So what's happening to soil erosion, soil quality."
Answering these questions will be part of the carbon dialogue for agriculture, and Basu says it will help to show the value of agriculture to help capture carbon.
With rising commodity prices, many farmers are seeing improved balance sheets for their operations. What do they do next?
The key, even when prices are jumping up and dropping down fast, is to manage your farm for the future. Steve Nicholson, senior grains and oilseeds analyst for Rabobank, notes that the last time prices were good, farmers reduced debt since many remember the 1980s. That may not be the best move now – wiping out debt can leave your farm cash poor.
If trouble strikes, that can put you in a situation of adding debt back. Instead, some debt financing to keep a healthy cash position for flexibility is a solid approach, Nicholson says. This is a good time to rebalance your debt, and with interest rates staying relatively low, prepping for 2022 may mean refinancing some parts of the farm.
Johnson concurs and points out the tendency of farmers to work to avoid income tax. "It's the farmer's nature, but I think we have to move beyond that income tax strategy," he says. "Cash is king, and you have to be able to harbor cash and that working capital cushion."
The key, even when prices are jumping up and dropping down fast, is to manage your farm for the future.
The key word for 2022 may be uncertainty. "Too many things in production agriculture have occurred in the last three or four years: China trade issues, the changing demand picture, and weather problems," Johnson says.
Back when crop prices were high around 2012 and 2013, a lot of farmers paid off their debts, but left themselves in a weaker cash position. As markets softened into 2014 and 2015, they found themselves running low on working capital. "The lesson learned is to hold back some cash, which we call the working capital cushion, which might be $250 to $300 per tillable acre, to have that cash on hand," Johnson advises.
That cushion can help you take advantage of input deals and give you breathing room if prices weaken to keep farming in this volatile business.
Ask any farmer these days, and they can tell you a story about a weed that wouldn't die in their field, despite multiple attempts. The need to layer modes of action and understand sites of action will be with farmers for some time. Rasoulpour notes that part of that is based on the success of a single product — glyphosate.
"One of the realities is that glyphosate was so popular, it was so monolithic in how it was used, it basically stopped incentivizing a lot of companies to do herbicide mode of action work. How would they recoup their investment?" he says.
Managing the crop protection science farmers have available is important, because new modes of action for weed control are not increasing. In fact, sales for a number of active ingredients have stopped.
While this doesn't immediately impact 2022, it's a management sign that monitoring the modes of action you have and stewarding them to maintain effectiveness matters.
It takes at least 10 years for a product to move through the regulatory stages needed to come to market, and it costs millions in the process. And the success of a single product, glyphosate, set back that product development process.
For 2022, and the near future, that means focusing on multiple modes of action tactics that have served farmers well. And crop protection companies are formulating new premixes that aim to make that process easier.
For example, Resicore XL® corn herbicide, aiming to be labeled in 2022, pending regulatory approval, builds on the success and proven, powerful weed control that farmers have come to expect from Resicore® herbicide, with key enhancements, like a wider application window, increased crop safety and greater tank-mix compatibility. The product can be used preplant, preemergence and postemergence on corn greater than 11 inches tall. It's one example of a tool that brings multiple modes of action and ease of use.
Rasoulpour adds that there are some products in early development, showing promise of new modes of action for the future.
As for the here-and-now, farmers know they need to make the most of the tools they have available. The base message remains: use multiple, effective modes of action to help prevent weed resistance. But David Shaw, Mississippi State University, extension weed specialist, says weed scientists are changing the conversation.
"We're beginning to listen rather than talking," he says. "What are the drivers behind the decisions farmers have been making, and what are the drivers that will result in different decisions made in the future?"
Shaw notes it's easy for a weed scientist who doesn't farm to suggest new approaches, but on the farm, buying new equipment or switching specific management approaches isn't always easy. "We want to understand the context of the constraints the farmer is working under," he says. "It's very easy for us to say you need to incorporate more non-chemical means of [weed] control."
Monitoring the modes of action you have and stewarding them to maintain effectiveness matters.
But that approach may not work in an area where USDA's Natural Resources Conservation Service doesn't allow tillage. "What we prescribed is then not doable," Shaw says. "Or we may suggest a rotation to a crop that is not commercially viable."
How to overcome these challenges? Shaw details work being done to increase local engagement in solutions. He points to an example in Iowa where several growers are working together to manage a weed problem in an effective way. The practice can work with challenging weeds including waterhemp, Palmer amaranth and resistant kochia.
Shaw points to the Pacific Northwest where resistant kochia is a serious issue, but in a three-state area growers are working to find ways to beat that weed together. "We have to find ways to work at the federal and local level to find solutions to the problem," he says.
Shaw adds that this collaborative approach has been done in the past to eradicate other pests including the boll weevil and the pink bollworm. "There was nothing easy about that, and it goes against a farmer's independent nature, but weed resistance is really a prime example that I can deal with this more effectively if I'm working with someone else."
Making the right management decisions to help optimize profits is a continual challenge of farming. And with input costs high, choosing the right inputs at the right rates is more important than ever. There are many new tools on the market that offer to help you optimize management, but how does a farmer work to maximize those in new ways? This is a hot topic, because the technology challenge goes beyond data tracking.
Technology farmers have today can help in 2022 by providing a better handle on scope of control. "I asked a younger farmer what keeps him up at night, and he couldn't name something," says Casey Mattke, Corteva Agriscience digital area business leader. But he adds that in conversation, the farmer explained that he's thinking about what's happening in one field, or some practice he's trying in another.
"It's about scope of control, scope of influence and scope of awareness," Mattke says. "They are aware of a lot of things, but their scope of concern narrows in on things they can control like management decisions."
Yet that’s where digital tools come in. "In most cases, what I would expect out of a digital farming tool is to inspire a better conversation between a farmer and trusted advisers," Mattke says. "Digital tools actually help manage challenges by providing farmers and trusted advisers with what's essentially an unbiased third party to look at the story the field is telling."
And that conversation will be more informed, Mattke explains. Farmers have acquired a lot of data over time. Working with a trusted adviser to review past practices and determine what works and what doesn't is a core value of capturing that information from the farm.
The key is improving the quality of the data you collect, and taking time to look at the data. Quality data is useless unless you make time to activate and learn from it. As-planted maps should include all hybrid or variety information in the file, especially if you do split planting trials for your farm. As-applied sprayer maps need to be layered in so you can know how specific herbicides, insecticides and fungicides are being used. And finally the yield map provides a report card of how you did, but that should also be as accurate as possible, making calibration important too.
“Digital tools actually help manage challenges by providing farmers and trusted advisers with what's essentially an unbiased third party to look at the story the field is telling."
More farmers are finding that the value of their data is important to decision making, more efficient scouting, and improved crop input management. The more information you add, the more valuable the tool will be at developing profit maps for each field.
"We realize that this year won't be like last year, but that's the freshest information in our minds," Mattke says. "You want to be able to ask 'what is the data telling us?' And be able to compare it to previous years for our crops."
As farming gets more complicated, the data gathered in season, and in previous years, can help a farmer better tune his roadmap for success.
The 2021 season saw increased discussion of crop injury in soybeans, making it more important than ever for farmers to carefully consider and choose the right trait system for their operation in 2022.
Farmers have a lot of factors to consider when choosing a soybean weed control system, including control of their problematic weeds, spray cutoff dates, drift potential, tank-mix options and yield stability. It's important for farmers to identify the weeds they're dealing with and do their homework to understand which products control which weeds.
When Rasoulpour talks about the need to monitor modes of action and steward them to maintain effectiveness, he points to tools available today, like the Enlist® weed control system, which is designed to stay where it's applied and control weeds in crops with the Enlist trait.
With Enlist E3® soybeans, growers have more freedom and flexibility and can spray upwind of any other soybean. Enlist® herbicides, including Enlist One® and Enlist Duo®, offer near-zero volatility and 90% less drift potential than traditional 2,4-D products, when used with labeled nozzles, and when applied according to label instructions.
And while 'traited' options as a phrase often means looking at herbicide tolerance or built-in insect resistance, it can also mean opening a new market like high-oleic oil soybeans. The traited choice is about having options for your whole farm business. But it's also important to look at the base genetics of the seed. Is it a solid performer?
"In the last couple of years, soybeans with Pioneer have just been phenomenal," says Rinehart. "Our customers have seen those soybeans perform in the field, and those bushels in the bin every fall. And we're really excited to bring more Enlist E3 soybean varieties to market for those farmers."
The Enlist E3® soybean option is key to managing tough-to-control weeds and is a strong choice for 2022. "This is a fantastic system; the soybeans perform, and the weed control performs," she adds.
Growers should think through all of their needs and talk to their seed dealer about the benefits and drawbacks of each system to make a decision for 2022.
Trade is another important component of farmer income but one that brings volatility and can hurt farmer access to new products. For example, Mexico has not approved a new biotech trait since 2018. And in December 2020, the country published a decree to phase out biotech corn imports by 2024. That's a problem, because Mexico has traditionally been the largest foreign market for U.S. corn products.
"We work very closely with the grower groups — NCGA, ASA, Farm Bureau, and others around what's going on with USMCA in Mexico right now," says O'Connor.
Does this issue show there's more pressure today on biotech products and crop protection? O'Connor says he doesn't think that he sees more pressure. "But certainly I think it's more important than ever that we've got science-based global markets and grower access to innovation to solve the multiple challenges faced by growers today."
Trade is a significant issue for every farmer, and the 2021 market has been made more volatile by a changing global situation including the pandemic, but also the Phase One agreement with China. "There's a lot going on with trade," says Paul Spencer, global trade policy advocacy leader, Corteva Agriscience. "The rising role of China, which didn't buy much U.S. corn two years ago, but today is by far the largest export corn market this year."
The question there, with a large single customer, is whether they will continue to buy at that level. The Phase One agreement had some significant trade targets for 2021 but those end in January 2022, and market observers do not know if China buying will continue at current levels. This could weigh heavily on prices.
“It's more important than ever that we've got science-based global markets and grower access to innovation to solve the multiple challenges faced by growers today."
Another area of concern is the European Union's Farm-to-Fork program. "The European Union has had most of the voice in this area, and we can do better in terms of making new production technologies part of the conversation," he notes.
Under that deal, the EU may tax incoming goods that have a 'carbon impact' or require sustainability certification, so being part of that conversation is important to keeping trade flows moving. And Spencer notes Corteva works closely with commodity and trade groups to be part of the conversation.
But input costs can also be impacted by trade actions the U.S. takes. For example, the U.S. International Trade Commission plans to issue countervailing duties on urea ammonia nitrogen imported from two countries — Russia and Trinidad and Tobago, two key import sources for these crop nutrients.
Fertilizer accounts for about 36% of the operating costs for major field crops for 2022, according to Veronica Nigh, acting chief economist, American Farm Bureau Federation. "We've already seen fertilizer prices go up considerably," she observes. "And that action could add more."
She also notes a potential provision in a transportation bill in Congress that has a superfund tax that could add to the cost of fertilizer that's domestically produced. This is a kind of double-whammy for the price of fertilizer with a countervailing duty on imports and a potential superfund tax on the locally made product.
Trade and regulatory issues can have wide-reaching impacts that could hit your wallet. Stay up to date by following grower advocacy groups working on trade issues.
Farming is the most complex and rewarding industry on earth, with constant challenges to navigate and opportunities to capitalize on. Consult with your business advisors, seed dealer, ag retailer and/or crop consultant to talk through these potential issues for 2022. With a solid plan, you can make the most of these opportunities and enjoy a great season next year.
This content produced by Farm Progress for Corteva Agriscience.
Resicore® XL has not yet received regulatory approvals; approvals are pending. The information presented here is not an offer for sale. The transgenic soybean event in Enlist E3® soybeans is jointly developed and owned by Corteva Agriscience and M.S. Technologies L.L.C. Enlist One® herbicide, Enlist Duo® herbicide, Resicore® herbicide and Utrisha™ N nutrient efficiency optimizer are not registered for sale or use in all states or counties. Resicore is not available for sale, distribution or use in Nassau and Suffolk counties in the state of New York. Contact your state pesticide regulatory agency to determine if a product is registered for sale or use in your state. Enlist Duo and Enlist One herbicides are the only 2,4-D products authorized for use with Enlist crops. Consult Enlist herbicide labels for weed species controlled. Always read and follow label directions.
Plenish® high oleic soybeans have an enhanced oil profile and are produced and channeled under contract to specific grain markets. Growers should refer to the Product Use Guide on www.corteva.us/resources/trait‑stewardship.html for more information.
Pioneer® brand products are provided subject to the terms and conditions of purchase which are part of the labeling and purchase documents.