The outlook for farm profits in 2015 is far from sunny, according to media reports, and Craig Yunker, CEO of CY Farms, sees things much like other industry experts and economists who are predicting tight and declining margins.
Yunker, who stays abreast of agricultural markets and trends in the normal course of business, just returned from trips to California and Chicago, where he met with other farm executives and farm profits were very much the focus of discussions.
"We're looking at softer prices, tighter margins and a tougher year," Yunker said. "The good news is, farmers are in pretty good shape. Dairy farmers are coming off a strong year. The guys growing grain had good years when the market was strong. A lot of them paid down debt and pre-paid expenses going into 2015. Most farmers are strong financially in terms of balance sheets and that should help them survive these tighter markets."
Yunker is a member of the Association of Agricultural Production Executives, which is a group of 150 farmers. They just met this past week in California. He's also a trustee for the Farm Foundation, which just met in Chicago.
Much of the concern about farm profits is being driven by a recent USDA report, which predicts a 25-percent decline in farm income for 2015.
Corn prices have fallen substantially from their high of two years ago.
In grains, the nation's farmers enjoyed record exports in 2014, but export revenue is expected to decline in 2015 (volume should remain roughly the same, but prices are down).
Globally, grain inventory is up, cutting demand.
The rate of economic growth in China is slowing, which cuts the demand for exports.
India has a big stockpile of wheat.
The strong U.S. dollar makes U.S. exports more expensive for other countries.
There's a glut of dairy products on the market.
While lower fuel costs will mean some savings, the cost of fertilizer hasn't caught up yet.
There's been no impact on seed prices yet.
With unemployment rates down, the labor market is tight, especially for truck drivers. Yunker expects that to push labor costs higher.
On the farm labor front and immigration, there are not as many immigrants coming to the U.S., so there are fewer available workers. As workers return to their home countries, or get arrested, or take jobs in other sectors, they're not being replaced by new workers. That will mean higher wages for the available farm workers.
A lot of vegetables grown locally go to food processors and those seasonal contracts haven't come out yet, so it's hard to predict what the prices will be, but Yunker said he's expecting prices to be softer this year.
There's a lot going on in the world that has a ripple effect on farm prices.
There was a huge worldwide onion crop last year, but the dockworkers' strike in California also means that onions that would normally be shipped to Asia are starting to flow East, so onion prices are down and dropping.
The weather has meant people are less likely to dine out, which has a big impact on cabbage prices, since a lot of the cabbage market is driven by what restaurants buy (think, for example, cole slaw).
While lower fuel prices mean consumers have more dollars to spend, they don't typically spend that extra cash on more or better food or eating out more often.
"The benefit of lower fuel prices really goes to Walmart and those places rather than farmers," Yunker said.
As for ripple effects, the turmoil in the Ukraine could have an impact on corn prices. Ukraine is typically a big corn producer, but civil war could disrupt production, but worse for Ukrainian farmers is the deflation of their country's currency. Corn seed could be prohibitively expensive, so what do they do? Yunker wondered. They could dip into their wheat bins for seed and grow a lot more wheat, which costs them nothing. Whatever Ukrainian farmers do will impact the worldwide grain market.
"Those kinds of things are going on all over the world," Yunker said.
The lack of a pipeline for shipping oil from the north into U.S. production facilities and ports has oil producers turning to rail. (Notice, there've been more oil tanker fires recently?)
Haulers moving oil on rail means there's less capacity for shipping grain by rail, Yunker said. Midwest grain growers can't move their grain, so they're forced to lower prices.
The dock strike in California is having several impacts on ag prices. Milk powder, for example, that would normally sail to Asia, is being trucked (because rail cars aren't available) to the East Coast for shipment to Asia by that route. That's leading to higher milk powder prices.
Yunker expressed some frustration with how Obama is handling the strike, or not handling it.
"I don't understand why the labor secretary goes out there," Yunker said. "He's going to be a labor guy. He (Obama) should take a stronger stand. Trade is so important to ag. Ag depends on exports. ... there's been no push for trade since Obama took office."
There was a time, Yunker said, when trade talks would be in the news all the time. The past few years, not so much.
"Generally, agriculture is disappointed in that," Yunker said. "We haven't seen any trade deals in six years. Now he's asking to fast-track trade, but the Republicans are loath to give it to him because they're mad at him for a lot of reasons."
The boom in farm revenue the past couple of years drove up the cost of farm real estate, Yunker said, which means some farmers are paying higher mortgages, and farmers who lease land are being asked to pay higher rents when those leases come up for renewal.
Predicting farm revenue with any certainty is about as trusty as predicting the weather months from now, which brings us to the weather. Another drought in the Midwest or an El Nino will impact crops and prices, thereby changing the whole outlook.
Local impacts both in WNY and everywhere there are farmers means car dealers will sell fewer pickups as cash flow for farmers tighten, and farm equipment dealers could see sales decline.
For the most part, Yunker thinks local farmers will hold on in 2015.
"There are players who will be really pinched because they don't have their house in order," Yunker said. "But for the most part, guys will be in good shape because they have good balance sheets."
I often turn to TheBatavian
I often turn to TheBatavian for news items of a local interest and find the site to be extremely valuable. However, posts such as this by Craig Yunker, leave a black cloud hanging over the operation. To donate so much space to Mr. Yunker who misstates fact after fact is irresponsible. Most blatantly, there is NO strike at the docks in California. To continuously repeat the word strike as he did, strips him of any credibility he may have had. Then he goes on to say that the deep reduction in fuel prices, benefit WalMart and not the Farmers. Mr. Yunker clearly needs to talk to some of the struggling workers in Genesee County more often as opposed to hanging out in California and Chicago. If he did, he would realize that the lower cost of fuel, has enabled workers in the area to have a few extra bucks to spend in the community, and actually go out and patronize a restaurant where they otherwise could not afford to do so in the past. Furthermore, Mr. Yunker's bellyaching about the higher cost of Labor because workers are being arrested is among the more callous statements I have ever read on here. Ironically, his not so hidden agenda of bashing Obama and his policies is made even more ridiculous when he mentions Obama's Fast Track Trade desires. To be clear, President Obama pushes the Fast Track deal (which I disagree with), but instead of giving him credit for doing so, Mr. Yunker slaps Obama and says Republicans are mad at him so it may not go through. Will Mr. Yunker pen a puff piece to TheBatavian bashing Representative Chris Collins for taking such a strong stance against Fast Track? I think we all know the answer to this. This rather long opinion piece by Mr. Yunker is full of misstatements and his no business being posted on TheBatavian as a news item.
I too, was disappointed by a
I too, was disappointed by a lot of what Yunker had to say, but I don't see how it reflects on thebatavian.com in any way.
It's news because a local farmer is pontificating on his expectations for the coming year.
Nothing Mr. Yunker is saying is being reported as fact, the only fact is that he said it.
Craig Yunker isn't saying
Craig Yunker isn't saying anything that isn't being said widely throughout the ag industry.
I turned to him for local comment on a national story because he's one of our top experts in the field. Really, one of the top experts in the country. We're fortunate to have somebody of his experience and expertise in the community.
You may disagree with his viewpoint, but you can't argue with his expertise and experience.
To publish items that are
To publish items that are opinion is fine. But to state things that are untrue and portray as fact is not right. There is no strike at the docks in California. I believe it is irresponsible to publish such nonsense. A top expert would know this.
There is a port strike in
There is a port strike in California and it has been in effect for over 9 months. It's not a 100% full strike that has shut down the docks but is has made an impact to certain areas.
http://money.cnn.com/2015/02/17/news/economy/port-shutdown-impact/
An interesting link you
An interesting link you posted, Jack.
But, after reading it, twice, I never found where it said there was a dock strike in CA.
It did say, "The Pacific Maritime Association has accused the International Longshore Workers union of creating a work slowdown ..." , but didn't say they were on strike.
Got any that says there is (currently) a strike on CA docks?
I'm not saying there isn't - just that I haven't seen any reports saying there is.
You must not have searched
You must not have searched very hard. It was also on the news this afternoon.
A strike need not be a complete stoppage of work. For example, overtime bans and work slowdowns can constitute a strike.
http://www.reuters.com/article/2015/02/16/us-usa-ports-west-asia-idUSKB…
http://www.washingtonpost.com/blogs/post-politics/wp/2015/02/14/white-h…
http://www.usatoday.com/story/money/cars/2015/02/14/asian-automakers-pa…
Ed is very much correct and
Ed is very much correct and Jack is not. While Mr. Yunker may be an expert in the Agriculture Field as Howard states, I can tell you that I am very familiar with the situation on the docks in California. In fact, I have recently returned from the Port Of Long Beach and am following the events with great interest. But rest assured, there is no strike that is taking place by the Dockworkers. It is true that there are Port Drivers who have been misclassified for many years as Independent Contractors instead of Employees and they reached out to The Teamsters Union for help. They did hold a series of relatively short strikes last July and November. But after the success of joining The Teamsters there is no strike activity. Ed, thanks for being accurate!
Strike, slowdown, work
Strike, slowdown, work stoppage, call it what you like ... the point remains valid. The situation in California is hurting ag and having a ripple effect throughout the U.S. economy. To quibble over a single word rather misses the point.
Scott, while you're eager to
Scott, while you're eager to hold me and Mr. Yunker accountable, isn't some transparency on your side rather necessary?
How about sharing where you live and what you do and what your agenda is (Google tells us, but it should come from you).
Jack, The Washington Post
Jack,
The Washington Post article written by Juliet Eilperin is not accurate, especially the headlines, as there is not a strike.
The USA Today piece is accurate as it does not call the events a strike.
Reuters is about as credible as Mr. Yunker by quoting "A Leading Singapore Based Broker".
Whether you are an agriculture expert or a journalist or just a lay person, it is very important to not misuse terms as important as Strike, Lockout, or SlowDown. Each are very different.
Scott, I'm not emotionalyl
Scott, I'm not emotionalyl involved in this as you appear to be. I suggest you contact the news agencies and TV stations that for months have called this a strike and set them straight.
Thanks, Jack.
Thanks, Jack.
Howard, I am very proud to
Howard, I am very proud to have had the opportunity to assist the Port Drivers in Long Beach in their struggle to fight worker misclassification. They turned to the Teamsters for help and I gladly jumped at the chance. My last name is not like Smith or Jones, and I am proud to post on here with my real name. I do not think I can be any more transparent. I have nothing to hide.
As I said earlier, I enjoy TheBatavian and frequent it. But I do think it is very irresponsible to give Mr. Yunker free reign to write as he pleases or thinks with no regard to the truth. As the first commenter stated, it was very much a Pontification by Mr. Yunger. I believe that such pieces should at least have to hold up when fact checked.
You say to call it what you like, but I can tell you that something that you may think is minor is very important. The difference between a Strike and a Lockout could be the difference in going to jail or not. The allegations of slow downs underway at The Ports may be true. But if valid, there could be sanctions. Upon further research you may find that even the Port Authority leaders have agreed that the equipment needed to efficiently unload the cargo is not being provided in adequate numbers. It is a very complicated system out there and one that many would find fascinating to learn about.
However, as is usually the case, the mentality of Mr. Yunker and others of the same mindset, is to simply blame any problems that we in society face on the Labor Movement. To listen to Mr. Yunker, farmers may have a tough time in 2015 and it is because of a strike in California. (A strike that does not exist). I am not one to get caught up in the Political Correctness world, but I must say that for him to also say that farmers may have a tough time in 2015 because workers are going away and not returning because they are being arrested was in complete poor taste.
I would be glad to meet with you to discuss this issue in detail or any other events regarding Organized Labor. Thanks again for the work you do at TheBatavian but please consider having opinion pieces not appear to be newsworthy especially when they are factually incorrect.
You would like to educate me
You would like to educate me about labor unions. I would like to educate you about journalism.
First, Mr. Yunker did not write anything here. I wrote it. I interviewed Mr. Yunker, distilled what I thought were the most relevant and important points, and presented those assertions in (at least I hope) a logically flowing fashion.
Second, there is nothing really in this story that is my opinion, though even if there were that wouldn't make it any less a piece of news reporting and journalism. You seem to hold an inaccurate view of what constitutes professional journalism. I would suggest you read Walter Lippman's Liberty and the News, a pretty foundational text for how I report and write news.
Third, there are several reasons Mr. Yunker gets "free reign" as you put it. First, he's a respected member of our community who has earned the right to help us learn more about his industry. Further, there is nothing unjournalistic about talking to an acknowledged expert and letting him have his say. It's simply inaccurate on your part to suggest that there is something wrong with this. Finally, as you demonstrated, there is ample opportunity for others to respond to his assertions if they disagree.
Fourth, this is not an opinion piece. It is a news article. Plain and simple. Don't let your eagerness to push a pro-union agenda blind you to the truth. Mr. Yunker made statements. I reported those statements. I trust that those statements are accurate. I'm under no obligation to double check those statements because they are wholly attributable to Mr. Yunker and he is solely responsible (assuming I reported what he said accurately (and I'm subject just like anybody to human error) for his statements. I merely reported that Mr. Yunker said something, nothing more. If Mr. Smith said "the sky is falling," and I wrote a story that said, "Mr. Smith said the sky is falling," then the news report is 100-percent accurate even if Mr. Smith is wrong. It's still a news story not an opinion piece.
You're free to disagree with Mr. Yunker's viewpoint, obviously, but don't misrepresent the truth along the way.
So Howard, since this is a
So Howard, since this is a news article and not an opinion piece, do you believe you have an obligation to make a correction to his report and state "In a news piece reported by Mr. Yunker, it was incorrectly reported that there is a strike taking place at the Ports in California. No such event is taking place at the Ports and we regret reporting inaccurate information". Walter Lippman would certainly expect nothing less. To give someone a free forum to speak to the public and report information that is not true is not properly serving your readers. TheBatavian needs to be a trusted source of information. At least this is how I have always viewed it to be. On a side note, even though this may surprise Mr. Yunker, I just returned from the -5 degree temperature and ate a fish fry with cole slaw. People do eat at restaurants when it is cold. And you would be happy because the establishment is an advertiser to TheBatavian!
Scott i do agree with you
Scott i do agree with you this does come across an opinion piece..Mr.Yunkers opinion on what and why things are what they are in the agriculture world is his view....Not necessarily all facts. .
http://www.businessinsider.co
http://www.businessinsider.com/west-coast-port-strike-hurts-gdp-2015-2
Why would a correction be needed?
There's no correction needed.
There's no correction needed. The Batavian stands by its factually accurate news reporting. Just because you hold an opinion -- and that's all it is, is an opinion -- doesn't make it any less accurate.
Scott feelings and your
Scott feelings and your opinions are not facts.
http://www.reuters.com/article/2015/02/16/us-usa-ports-west-asia-idUSKB…
It only takes a few seconds to pull up the news on the Dock strike. Mayors and City leaders begging for a conclusion to whats going on there.
As for what the Batavian is or isnt, thats something we the readers and participants that are local to decide. You deciding how trusted the Batavian is is about as valid as a 7th grader deciding how trusted the Military Times is.
If you don't like it.....don't read it. I agree 100% with Howard, there is nothing that need clarifying or correcting.
Thanks Mark. And it is truly
Thanks Mark. And it is truly unfortunate that TheBatavian would choose to stand by and not clarify the fact that there was never a STRIKE by the Dockworkers at The Ports as stated by Mr. Yunker. To knowingly let what Howard calls a "News Piece" stand factually incorrect is irresponsible, in my opinion. By the way, there was a deal that was reached late last night to end the "Strike" that never began in the first place.
No longer being able to blame Farmers woes on Organized Labor, maybe Mr. Yunker can now pen a news piece about how immigrants need to be smarter and not get arrested so that they may return to their jobs in the fields.
Well I'm going to jump in
Well I'm going to jump in with my two cents worth.
First off I would like to clarify that neither Howard, nor any other news journalist, should be held accountable for what others state to him in an interview, nor is it their responsibility to investigate the facts.
That being said, I do find much of what Mr. Yunker states as questionable as far as accuracy of the facts is concerned.
I will give Mr. Chismar credit that there wasn't a full blown strike of the International Longshoremen and Warehouse Union in CA., due to the lack of media coverage that would have surrounded such an event, which ultimately would have had a trickle down effect on prices at retailing outlets. There has; however, been coverage, though not as widespread, of the labor dispute between the ILWU and their employers, which did rise to the level to involve the U.S. Labor Secretary to intervene and force an agreement, though tentative at this point, between both sides to resolve their issues.
Another part of Mr. Yunker's interview, which I fail to see the correlation between what Mr. Yunker is stating, is how Walmart stands to benefit more than other industry retailers, from lower fuel costs. I worked in the restaurant industry for a little over 35 years, and one of my responsibilities was cost control, and part of that was tracking food prices across the market. Though fuel costs have decreased significantly over the past 4 or 5 months, that doesn't necessarily mean the retail cost to consumers will decrease either. Mr. Yunker must realize that out of what Walmart, and other food retailers, charges for food products, they have to cover their overhead costs of labor, property rental(as no Walmart location owns the property but leases it), utilities, maintenance, etc. Stating that a retailer would benefit more from lower fuel costs than other industries is not based on any fact or reliable data.
Oil has been shipped by rail for decades and I fail to see any profound effect it has on shipping other commodities such as grain, corn, or other items produced in the agriculture industry.
As far as the trucking/transportation industry goes, there are more than enough drivers for that industry, and there more entering it everyday. Again, there is no factual data to support his belief of a substantial lack of drivers to operate trucks for shipping farm commodities.
"Ag depends on exports. ..."
Really? Maybe that's the problem with ag is it's too dependent on exports instead of keeping it local.
Did the farm crisis of the 1980s not teach ag a lesson to not depend on exporting their goods? What is ag planning to do if our Government, or more specifically, the POTUS, decides to place an trade restriction or ban on exports to any foreign country for political reasons? That was part of the cause of the farm crisis in the 80s. The plan was to feed the world with our grains, corn, etc. and then trade restrictions and bans to certain countries were put in place, and the farmers had no market to make a profit from and thus many of them took a big loss. The FHA went into panic mode and began trying to recoup all that they could on 30 year notes, by foreclosing on the farms they encouraged to borrow from the FHA, who was over-assessing the value of farm land to sell the loans to the farmers.
Now I will agree that should there be a full blown strike of the ILWU, and the Teamsters causing a shutdown of dock operations it would have a profound effect on retail prices nationwide, I don't think it's as dire as Mr. Yunker would have us believe. Is he being reactionary? Perhaps.
My final comment on this, jumping all over Howard, who is a very respected local journalist, and wanting to hold him to a responsibility, that the media industry doesn't even follow, is really unwarranted IMHO. He reported this story from the views of Mr. Yunker and it doesn't appear as though Howard put any personal opinion of his own, nor did he inject any kind of media slant to the story either. Why not write to Mr. Yunker and and inquire of him as to the source of his information he based his statements on? The media doesn't make the news, but merely reports it based on information provided them.
It might be useful to review
It might be useful to review the definitions of the various labor/management actions employed to leverage negotiations. Special consideration should be given to terms: strike, work stoppage, work to rule, picket and lockout. These terms are neither synonymous nor interchangeable. http://teamster.org/content/definitions-common-labor-terms A strike is initiated by labor; a lockout is initiated by management.
As much as the article was written in the third person, it is evident that Craig Yunker (and his opinions on agricultural issues et al) was subject but not author. For the sake of clarity, it might have been mentioned at the outset that "Mr. Yunker has just returned from two national conferences where the current status and outlook of the economy and agriculture were discussed. He was interviewed by The Batavian as to his analysis of these two conferences and projection on the local economy." ...Or some variation thereof.
For the sake of balance, contrary opinions might have been interspersed, however by qualifying from the outset that the article represented Yunker's opinions or views is sufficient.
It would be valuable to know something of the two conferences: who sponsored them, who spoke at them, what is the background of the speakers. The fact that AAPEX is sponsored by Monsanto is a telling detail. One should be curious to know how much influence Monsanto and others like Syngenta, Dow AgroSciences, DuPont, Bayer, and BASF had.
"Why would a correction be
"Why would a correction be needed?"
A contradictory reporting, title says "The West Coast port strike could shave 1% off US GDP", but in the story itself, no mention of a strike but a slow down that could lead to a shutdown.
"Work has slowed down and ports have become congested amid a nine-month contract dispute between the International Longshore and Warehouse Union, which represents 20,000 workers, and the Pacific Maritime Association."
Again, no mention in the story of a strike but a slow down of work.
I think you are all missing
I think you are all missing the main point. This was an interview with one of the larger local farm owners who was giving his opinion on farm prices for the coming year.
The problems on the west coast docks was just one part of his interview.
The main point was not the strike/work slow down on the docks, but that over all, farmers might not make as much this year as last. That was what this was about.
Calling it a strike or a
Calling it a strike or a slowdown or green eggs and ham doesn't change the fact that events in California are having a ripple effect across the national economy. That's the real point.
People's ability to strain at gnats is always amazing.
If the Teamsters don't like it being called a strike -- which it's been called in countless media reports -- perhaps they should spend less time attacking reporters and more time at the negotiation table, if not for the sake of their own families, then perhaps for the sake of the nation.
Yeah lets worry about
Yeah lets worry about sweeping the front steps while the house is slowly sliding into the sinkhole.
And people wonder why things are the way they are nowadays.
The two articles I read from
The two articles I read from reuters had HEADLINES calling it a strike. In the stories however, they never used the word strike, instead they reported it as a work stoppage, or a work slowdown. Hmmmm.