Industry Leaders Discuss Challenges and Opportunities Facing Michigan Agriculture
As we enter into the harvest season for some of Michigan's major crops, Kirk Heinze discusses the overall status of our state's agriculture with the current and past presidents of the Michigan Agri-Business Association (MABA).
Chuck Lippstreu took over the MABA helm from Jim Byrum in January. Byrum served as the MABA president for 25 years and keeps busy with the family business and several consulting engagements ranging from ag finance management to government affairs.
“The Michigan Agri-Business Association has about 400 members, and the way to think about our membership is to think about all of those businesses that are along the agriculture value chain,” says Lippstreu. “We have a couple of producers who are members, but primarily our members are businesses that work with farmers around Michigan every day to help them get the job done. Our membership highlights all the different things that come together to help agriculture be successful, and all those different segments make up portions of our membership at MABA.”
Membership ranges from agricultural retailers who provide seed, fertilizer, and crop protection products to farmers to grain handlers, food processors and ag law and accounting firms.
Byrum notes three major developments in agriculture over the past two to three decades.
“First is certainly biotechnology,” Byrum says. “Biotechnology changed the way farmers grow and make cropping decisions. Biotechnology is not just Roundup-ready technology or herbicide tolerance, but it's also, for example, improving the genome of the corn plant and soybean plant itself, and that's been substantial. The kind of yield increases we've seen in corn and soybeans in the last quarter century has been absolutely astounding, and you see it every day when you're in farm country with bigger fields and bigger grain storage facilities. And at harvest, you see it with more trucks on the roads.
“Number two is consolidation. Farms are getting bigger, particularly those that are dealing with commodity crops, corn, soybeans, wheat, dairy production, pork production, and turkey production--they're all getting larger and larger because there are cost efficiencies in those kinds of production systems. But, interestingly, we're also seeing a parallel trend towards smaller producers that might grow specialty crops, like hops and grapes or who raise specialty livestock.
“And, thirdly are the incredible, society-wide technological advancements we have made in quickly accessing, analyzing and then using data to make better management decisions and production decisions have been remarkable.”
“I think Jim nailed it in terms of major changes in the industry,” Lippstreu adds. “And another challenge is how do you make sure the consuming public understands how modern agriculture runs, what a modern farm looks like, what an agronomy facility is and what it does, and how different segments of the value chain function.
“It's a big challenge, and one of the things that we're consistently engaged in is trying to be sure that we're out there being proactive and educating not just the public, but those in Lansing and policymakers in local communities about the agricultural economy in our state. But technology remains absolutely pivotal to everything we do, and it's also the biggest challenge we have in terms of telling our story and educating those who might not be part of agriculture.”
Another major, and on-going issue in the agricultural sector is international trade—retaining and expanding markets for U.S. goods abroad. However, the volatility in trade negotiations over the past few years has created growing uncertainly and angst in the industry.
“We can’t underscore enough that Michigan agriculture has to trade and export to be successful, and we just can't afford a trade policy that's based on surprises,” Lippstreu continues. “Businesses in our industry count on certainty. They count on those established relationships that take years to establish and maintain. It's not just China that we're concerned about. We in Michigan also spend a lot of time thinking about our neighbors across the border in Canada. We send a huge amount of agricultural product to Canada, and they send quite a bit to us. There's a great two-way trade relationship there. In fact, we have MABA members who have business locations on both sides of the border. It's really difficult to understate how important it is that US trade policy be based on predictability, certainty, and a two-way trading spirit with our customers around the world.”
Sustainability has always been and remains important for those in agriculture. Agriculture has been a de facto ‘green industry’ since its beginnings, but issues related to, for example, climate change and water resource management have been especially challenging.
“The whole sustainability discussion is making sure that we're good partners with the communities we serve, and today's technology really allows us to do that,” says Lippstreu. “Not just farmers, but agriculture retailers around the state of Michigan are using imagery and modeling in ways that have really never been used before to make sure that when we use critical elements like fertilizer, pesticides, herbicides, and things that are absolutely critical to being successful, we're using those in a targeted way and in a way that's based on both sound science and also incredibly precise modeling.
“And I think one thing we don't talk enough about in agriculture is the fact that our industry holds a huge amount of solutions on climate change, and we can quantify those things like we never could before That's going to be a value proposition for agriculture in the coming years.”
“What's happening today that's critically important is that the private sector is weighing in,” Byrum notes.
“And they're not just encouraging sustainability in production agriculture and the food system and supply chain, they're demanding it. I've predicted this for some years, and it's happening very, very aggressively right now. The major food companies want sustainability. They want to reduce the carbon footprint of the products that they buy, and they're demanding it from their producers and the food processors who handle those products. We're seeing that all the way from fast food operations to retail. We're seeing it in food service. It's happening everywhere. The irony is in the past many believed that sustainability would be driven by government. No question about it, the private sector is driving sustainability initiatives.”
While the vast majority of Michiganians have been frustrated by the state’s dire infrastructure shortcomings, the issue for farmers extends beyond roads and bridges to broadband internet access. Some recent developments have been slightly encouraging, but much more investment is needed.
“We're in a crisis situation in rural America right now that’s more than the occasional dropped call. Many families don't have access to high speed broadband to do remote school and remote work,” Lippstreu says. “It's a priority for the Michigan Agri-Business Association to ensure we elevate broadband as a discussion because we need a better idea of where those shortfalls are around the countryside, and we need to figure out some way to expand rural high-speed broadband.”
“High speed, consistent, reliable broadband is crucial for modern farming,” says Byrum, who adds that the country’s supply chain has been challenged by the pandemic.
“The one thing that we don't talk about that is really impacting supply chain infrastructure is the changing dynamic that's come about in the last six months in the whole marketplace. For example, most veal and lamb is consumed in restaurants. If restaurants aren't open, guess what? Those industries are in serious trouble. So, we're seeing all sorts of things impact supply chain, including infrastructure and the availability of quick and just-in-time delivery. And for gosh sakes, the number of little gray vans driving all over the state of Michigan doing next day delivery is changing how people buy, go to the market, buy from the market, and everything that they do in daily life.
“All those infrastructure issues, all those supply chain issues are going to be with us for some time, and they need to be addressed. But we absolutely have to deal with broadband. There's no question about that.”
Byrum and Lippstreu further discuss the pandemic’s impact on agriculture and also about the “absolutely integral” role Michigan State University has played, and continues to play, in advancing Michigan’s agriculture industry.
“When all is said and done, Michigan can be really proud to have an agriculture sector that's progressive and forward looking,” Lippstreu says. “Discussions continue at the state and federal levels on how we can invest in infrastructure, how we can give farmers and agriculture retailers ways to participate in the climate change discussion and deliver solutions, and how we talk about agriculture technology and the push for rural broadband.
“I think it's important to understand and remember that people look to Michigan agriculture to lead because we have a reputation here for being progressive and forward looking. That's going to continue, and MABA will do everything we can to facilitate that as we head into 2021.”