Ag industry: Over regulated or not regulated enough?

Editor’s note: This report was edited to correct the year of the U.S. Farm Bill.

WINDSOR — Farmers face too much governmental regulation — or not enough — depending on the segment of the industry in which they operate.

Executives of agricultural companies met Tuesday morning at BizWest’s CEO Roundtable held at the Windsor headquarters of the Better Business Bureau Serving Northern Colorado and Wyoming. They were in agreement on most issues, but when it came to regulation, it depended on the circumstances.

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Richard Seaworth, CEO of Seaworth Farms with operations in Colorado, Nebraska and Kansas, told the group that his company built a processing plant for popcorn south of Sutherland, Nebraska, and would have built it in Larimer County where the company is headquartered. “It would have been in Larimer County if you could do things in Larimer County,” he said.

Meanwhile, Morris Beegle, president of We Are For Better Alternatives, along with other hemp-related companies, said the lack of regulation from the U.S. Food and Drug Administration is hampering the development of the hemp industry. 

A University of Colorado report, not cited at the roundtable but distributed by Leeds School of Business at the University of Colorado, noted that only 214 hemp grow operations were licensed in the state in 2022, compared with 2,532 in 2019. Uncertainty in the industry, Beegle said, is causing those farmers who might want to develop hemp-based textiles and construction materials from entering the industry.

“Cannabinoids have had to be regulated by the FDA according to the (2018) Farm Bill, and the FDA has kicked the can down the road. … The FDA is a compromised agency, and there’s a lot of political theater. There has to be a regulatory process for hemp to be grown where farmers aren’t criminalized,” he said. “Farmers growing hemp for fiber and grain should not have to be FBI checked,” he said.

Tim Gordon, partner in GPS Global, concurred. “The realities are that governments’ lack of initiative will stifle the industry for the next three to five years. We want regulation so we can develop markets,” he said.

Beegle said the U.S. can learn a lot from Canada and Europe, where he is personally engaging now with the creation of events similar to the NoCo Hemp Expo, the largest hemp expo in the United States. 

Hemp has been legal in Europe since the mid-1990s, he said, where the industry is fiber driven. In Canada, the industry is food driven, unlike in the U.S. where it is driven by the CBD industry.

“Farmers in Europe know their crop will be going to BMW” or industries that have embraced use of the fiber for purposes other than its oil.

“We (U.S. hemp farmers) just want to grow food, food ingredients or industrial products,” Beegle said. 

Water

While there may not have been concurrence on government regulation, the group found universal agreement about water issues affecting agriculture.

Bill Markham, a third-generation barley and beet farmer in the Berthoud area, said “we’ve been fighting, fighting never harder, to keep our ditch water” away from developers and cities. “Municipalities are buying every bit they can get and, as both he and Seaworth noted, “water flows toward money.”

Seaworth also said that once cities buy water, “it’ll never be on the market again,” which results in an exponential increase in the price of the water that’s left. Soon, it becomes economically impossible to farm.

Tom Haren, CEO of AgProfessionals, an ag service company that provides real estate, development, expertise and other services to farm operations, said it is likely possible for cities to take water through eminent domain. He was not able to cite any cases in Colorado.

“They haven’t done it yet because it would start a war,” he said. “Anywhere where there’s high growth and a rural/urban interface, eventually the population centers will win.”

Haren said that he was surprised in the recent legislative debates over affordable housing that the topic of water cost in the equation was not brought up. He said it now costs $110,000 to $120,000 for a water tap for a single home, and that’s a factor in making homes unaffordable. “Eventually, agriculture will lose,” he said.

Seaworth said that regulations and not-in-my-backyard thinking has limited construction of reservoirs and limited how those who own water shares can use them.

In reference to the attempt by Thornton to transport by pipeline its water from Larimer County to the growing metropolitan suburb — an effort blocked by Larimer County — Seaworth said, “If I were Thornton, I would have bought 500 trucks and started trucking the water down Douglas Road every day. Within 30 days, those folks would have wanted that pipeline,” he said. 

Bruce Johnson of A. Bruce Johnson & Associates, who has operations over a wide area of Colorado and Wyoming, said the best reservoirs are underground, “because you don’t have evaporation.” 

Haren said that his company advises dairies to “buy as much water as you can afford” because it isn’t getting any cheaper. Water has priced new dairies out of the business in Colorado and, after their 25-year life spans, many dairies will be tempted to sell out because their water portfolios will be worth triple or more than what they paid.

Technology

Technology — precision farming, laser weed extraction, satellite-enabled farm implements — are accomplishing two major things: Tech is bringing younger people back into agriculture, and tech is enabling farmers to be more productive and feed more people with less land or water.

“Are we going to have a food shortage? No, because we’re going into areas where there are fewer (water) pressures and we’re designing” production facilities to accomplish more. He said at one time, a dairy was designed to produce 70 pounds of milk per cow per day. Now, it’s 100 pounds, he said.

Scott Wiley, CEO of Growcentia, said innovation is keeping farmers in business and improving crop yields necessary to feed growing populations. 

Growcentia has been developing plant and soil biologicals using plant oils and chemicals. Additional resources for farmers have helped generate more dollars of revenue per acre or per animal. A project involving improving soil conditions for peanut farmers in California resulted in a return on investment — $10 more cost, $45 more revenue, he said.

Matthew Wallenstein, chief soil scientist at Syngenta, said that his company is seeing an increased demand for biological solutions that work. “Precision technology is important to keeping ag profitable,” he said.

He also said ag tech companies have been established in Northern Colorado, instead of other places in the country, because the technology talent is here. Farm companies also have found home in the Silicon Valley for the same reason.

Connection with the land

Johnson said agriculture suffers when people lose their connection to the land and don’t understand where food comes from. He complained of a “lot of outdated information” around cholesterol from meat consumption and use of nitrogen fertilizers. 

Wallenstein posed the question “what is lost” when the connection with the land is severed or distant.

“A lot of cultural fights come from that lack of understanding, a lack of being able to relate to farmers. Preserving agriculture is both an environmental imperative and a cultural imperative,” he said.

BizWest’s CEO Roundtables in Northern Colorado are sponsored by accounting firm Plante Moran, represented Tuesday by Mike Grell; Elevations Credit Union and law firm Berg Hill Greenleaf Ruscitti.