Ag CEOs: Industry must overcome public perceptions

LOVELAND — Commodity prices are flailing. Water issues loom. And the debate over genetically modified food continues to be a hot one. But perhaps the biggest problem facing the agriculture industry, many northern Colorado ag leaders said Tuesday, is public perception.

Mark Sponsler, CEO of trade group Colorado Corn, said many Americans’ understanding or view of the ag industry is akin to the famous American Gothic painting of a pitchfork-holding farmer and his wife in front of a quaint farmhouse. Never mind the ways that technology, science and globalization have drastically changed the farming landscape.

“People are using the word agriculture in a sentence,” Sponsler said. “The problem is they don’t understand how it’s evolved in the last three to five decades.”

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Sponsler was part of a group gathered for BizWest’s CEO Roundtable on agriculture at Hub International Insurance Services in Loveland.

Sponsler cited water usage and farm subsidies as two issues where he said public perceptions are ill-informed. While it’s generally assumed that ag owns or consumes a lion’s share of water in the state, he said it’s important to point out that diversion rights for farmers aren’t the same as consumption. Only a small portion of the water diverted for irrigation purposes is actually used. The rest is returned to the stream or river from which it came via the same ditches or via aquifers and other natural means. The same water is then used in the same fashion by four or five other farmers downstream before it leaves the state.

In the case of subsidies, Sponsler contended that a farmer invests upwards of $800 to $900 per acre for every corn crop once everything from seeds to fuel to labor and land costs are factored in. “Yet we’re criticized for being subsidized for maybe $15 to $30 per acre,” he said.

The GMO debate is another area where those gathered Tuesday said they face an uphill battle in the court of public opinion. While many farmers accept the science behind GMO crops and generally believe those crops can safely help them more effectively feed an increasing population and do so in a less resource-intensive way, many activists on the other side of the issue still question the safety of GMO food.

Richard Seaworth, whose family farms 2,000 acres near Wellington and has a similar operation in southwest Nebraska, said people from Denver and other urban areas who might drive by and criticize his practices often aren’t looking at or aware of the whole picture. His farms raise a wide spectrum of crops ranging from certified organic to genetically modified. Often overlooked, he said, is the fact that his organic operations have a larger carbon footprint and use more water because of the greater field operations and increased soil tillage required. He believes in the value of both GMO crops and organic crops alike but said the arguments against GMO crops could wind up hindering the ag industry to the point that it equates to “a shortage in the food supply at some point in time.”

“Agriculture as a whole doesn’t do a very good job of promoting itself,” said Tim Naylor, planning and government relations manager for Greeley-based ag development services firm AgProfessionals. “We’re not getting (ag’s message) to the people in Denver, the people in Boulder and Fort Collins that are driving by and complaining about the way you’re farming.”

To that end, Eugene Kelly, head of the department of soil and crop sciences at Colorado State University, said the school’s ag department is working on various initiatives to help the industry reconnect the public with where its food comes from.

“I think there’s an opportunity here,” Kelly said. “I think the time to push the reset button or the button forward is now. … The idea is that we have to have better engagement and talk more frankly and openly about things. And I think that’s going to help.”

COMMODITY PRICES

While perceptions are one thing, the bottom line is what ultimately determines whether farmers can make it financially. Grain prices, sky-high just a few years ago, have sunk considerably. Corn, for one, is down roughly a dollar per bushel to the $3.50 range just since mid-June.

“I’d say it’s definitely a recession,” said Bill Markham, whose decades-old family farm near Berthoud has produced barley for Coors Brewing Co. for more than 50 years, among other crops. “Agriculture cannot stay alive with commodity prices this low.”

Jason Brancel, president and CEO of Eaton-based Agfinity Inc., said costs of production for farmers, in many cases right now, exceed the realized gains from outputs.

While ag and commodities have always gone through fluctuations, Sponsler said the pricing environment now is much more volatile than 20 or 30 years ago. Both he and Brancel agreed that global markets have some impact on that, noting in particular the speed at which information travels today.

“A couple decades ago, a big wheat crop in Russia might have accounted for a 50-cent swing in wheat, but today it might be twice that,” Sponsler said.

WATER WOES

Urbanization of the Front Range has increasingly meant that Colorado’s farmers are competing for water rights with municipalities and other interests. Or, as Markham puts it, “Water used to flow downhill. Water flows to where the money is today.”

Facing increases in the cost and availability of water is making the ag industry look at not only efficiency measures but also other sources. Naylor said one alternative being looked at is water being brought up out of old oil and gas wells.

“The price of water and the price of cleaning (water from oil and gas wells) are getting so close it’s worth it,” Naylor said.

WORKER SUPPLY

Bob Brown, chief financial officer of Dairy Specialists LLC, said dairies in the state are having a tough time finding labor for a variety of issues. One is that the increased use of technology in the industry is making it more difficult to find qualified people to run and service that technology. Another is immigration issues. “None of these guest worker programs work for dairies because they’re year-round operations,” Brown said, noting the temporary nature of the programs.

HEMP AS A COMMODITY

While traditional farmers are lamenting low commodity prices, the state’s hemp farmers would simply be happy finding an avenue through which they can legally and safely trade their seed as a commodity. Kevin Buecher, who works in sales for Colorado Hemp Co., said progress is being made slowly but surely. Enthusiasm from farmers, though, is already there, he said: “Everything’s coming in line for another crop to be regularly grown in Colorado.”

REGULATORY HURDLES

Eaton-based A-1 Organics, an organic recycling business, takes waste from a variety of sources and converts it to natural gas, as well as composts and mulches for the landscaping industry. But while none of the company’s waste sources are derived from toxic materials, CFO Travis Bahnsen said certain regulations being considered by the state could present challenges for his business. “The attempt is to try to separate us out a little bit more from the landfills. Yet there’s new regulations they want to put in place that are very expensive.”

Participants in Tuesday’s CEO Roundtable included: Jason Brancel, president/CEO, Agfinity Inc.; Travis Bahnsen, CFO, A-1 Organics; Bob Brown, CFO, Dairy Specialists LLC; Kevin Buecher, Sales, Colorado Hemp Co.; Eugene Kelly, professor/head of Department of Soil and Crop Sciences, Colorado State University; Bill Markham, owner, M&M Farms; Tim Naylor, planning and government relations manager, AgProfessionals; Richard Seaworth, owner, Seaworth Farms; Mark Sponsler, CEO, Colorado Corn. Moderator: Chris Wood, editor/publisher, BizWest. Sponsors: Chris Otto, EKS&H; Gina Cathcart, EKS&H; Russ Henninger, Hub International.