By  E. W. Lang

I today had a lengthy long-distance call with one of the finest minds in ag finance.  He and I met as freshmen at Iowa State University, where we were both in Oratorio.  I had been invited to join ISU Singers as a freshman, but my parents had the misguided notion that the rigors and possible touring and concert schedule of Singers would erode my grades, which were bound for mediocrity regardless of any college event, academic, vocal, social or otherwise. 

At any rate, he was among the relatively modest-sized class of morally degenerate drinkers who were also academic achievers.  I sang at his wedding which was nearly three U.S Presidents after his engagement and our commencement.  Today he is president of a major commodity organization, a leader in the church, devoted husband and father.  He obviously remains thankful for all the times I lied to people oh his behalf while in university.  He was in ag and dairy lending for many years, once Chairman of a bank chain and is now Chief Financial Officer of one of the largest livestock, grain and slaughter entities in this hemisphere.  He spoke to me anonymously in light of his personal and professional interests and responsibilities.

I began, “So is the value of soybeans going to bring more South American farmland in to production, even with high diesel, labour and input costs?”  “Walt,” he replied, “I don’t know.” 

That was interesting, as his farming activity is in both North and South America.  I thought he would know, but he doesn’t.  He did go on, “Maybe some new or fallow but marginal land will come into production.  However, the thing to remember is that ag cycles for corn and beans start with two really good years, then four years of medium profits, then follow with four really bad years.  We can never underestimate the ability of the American farmer to overproduce whatever commodity he or she produces.”  

He speculated that land values may continue to increase for a couple more years, but there will be a time of reckoning, as ag commodities always cycle.  For the near term, however, expensive feed for livestock producers, higher interest rates – which remain negative after inflation – and higher land prices remain on the agenda. 

He further offered a geopolitical opinion on the life and strength of nations.  This is not directly affecting milk or other commodity prices but is a sober reminder of when Spain was the strongest nation on earth, then wasn’t.  Then England was the one superpower, then wasn’t.  Now the U.S. is and…you get the picture.  He argues that in 20 years, Russia won’t have enough young people to wage war on a neighbor.  He further argues that the U.S. and China populations are aging, and the center of strength may eventually land on India, where people are having children faster than most of the rest of the world.  I thought that to be an interesting prophesy. 

Note here that it was at Iowa State University that I got to met and got to know this particular leader in ag finance.  Literally anyone can learn remotely in a lot of places as information and knowledge are largely democratized.  Tech schools and community colleges are important to our civilization, but a university environment is a body of students and faculty that are literally more universal in affecting all people, all classes and all things in the world.  And for ag students, a significant number are saving money and a couple years of their life with a lower cost education, but they’re also missing out on the benefit of a larger universe of students and faculty that will be useful and more diverse contacts for a lifetime. 

Butter at $2.85 per lb. is just eight cents off a six year high established in January 2021.  Class III Futures for July to December 2022 gained 76 cents this week.  Class IV average for those six months were up almost one dollar.  Class III Milk-Feed Indices for the rest of this year gained back all of the 50 cents they lost last week.