Author: Oregon Aglink (page 2 of 3)

Customer Service, Smart Growth Winning Combo

by Mitch Lies

From left, John Hocket, Jeff Freeman and Bob Hockett, outside Marion Ag Service’s new 70,000-square-foot fertilizer plant, which is set to begin operating in February. The plant will increase the company’s storage capacity nearly eight-fold.

Over coffee one day in 1978, Bob Hockett agreed to buy out his four partners in Marion Ag Service.

“I had all these ideas to buy more equipment, buy this and buy that, and the rest of them didn’t,” Bob said.

Thirty-eight years later, Marion Ag Service is still expanding. And the five still meet almost daily for coffee, often joined by half-a-dozen other local farmers at Marion Ag Service headquarters, just outside of St. Paul, Oregon.

“If we’re not doing the right thing in the field, we hear about it every day,” said Bob’s son John Hockett, the company’s vice president of sales.

Indeed, Marion Ag Service is an agribusiness success story rooted in long-term relationships and smart growth.

As John put it: “Dad didn’t sit still very long.”

Jeff Freeman, left, and John Hockett, in Marion Ag Service’s new 70,000-square-foot fertilizer plant. The plant, scheduled to open in February, includes sixty 500-ton storage bins, in addition to two fully automated blending lines.

The company’s most recent expansion involves a 70,000-square-foot fertilizer plant, which includes two fully automated blending lines that will enable growers to get fertilizer blended to individual prescriptions.

Set to begin operation in February of 2017, the plant will increase the company’s storage capacity to 29,000 tons, nearly eight-fold of its existing capacity, providing opportunities for other companies to warehouse fertilizer in the facility, as well. The facility consolidates many fertilizer functions under one roof, delivering supply-chain efficiencies for the regional fertilizer marketers and users. The opportunity should help companies get product to growers in a timely fashion – something that can be at risk with the Willamette Valley’s current storage capacity.

“The windows for applying fertilizer are short sometimes,” John said. “Like this fall, it rained all October, so now (in November) everybody is going full bore.

“If everything works out perfectly, we can keep up,” John added. “But as soon as there is a hiccup in manufacturing or on the railroad, now you’re out of product. Growers aren’t fertilizing, and that’s a problem.”

The plant is among Marion Ag Service’s most aggressive expansions over its fifty year history. “This was a big step for us,” said Jeff Freeman, director of sales and marketing for Marion Ag. But it is far from Marion Ag’s only expansion.

Marion Ag Service set its roots in 1967, when Bob Hockett branched out from full-time farming, joined with Allied Chemical, and became one of the first liquid fertilizer distributors in the Willamette Valley. In 1976, Bob teamed with four other farmers to form Marion Ag Service, with a primary purpose of warehousing and marketing soft white wheat, and applying lime and dolomite.

Two years later, Bob bought out his partners and Marion Ag became the largest distributor of Ashgrove lime in Western Oregon.

In 1994, Marion Ag Service purchased St. Paul Feed and Supply and entered the dry fertilizer, seed cleaning, grain storage and feed markets. Also that year, company hired its first crop advisor. Today the company’s collective technical staff includes six full-time consultants that work with farmers and nursery professionals on a one-by-one basis, helping ensure growers get the most out of their crop productions.

Expansions continued in 1996, when Marion Ag purchased railroad access in Brooks, allowing the company to venture into warehouse agreements with key fertilizer manufacturers, such as Simplot, PCS and IRM.

In 1998, Marion Ag centralized its seed cleaning and conditioning, moving from downtown St. Paul to its headquarters, a few miles east of St. Paul. Also in 1998, the company began to develop private a label wholesale fertilizer service, which today services turf and ornamental resale professionals in eleven Western states, Hawaii and Guam.

Expansion continued in 2000, when Marion Ag purchased six acres adjacent to its new facility and constructed a prilling plant, which allows for flour lime and other nutrition components to be processed into a more easily spread form.

In 2005, the Aurora plant was expanded to accommodate growth in organic demand. The plant today is certified for handling of organic substrates.

Today Marion Ag employs roughly 100, and services growers from Albany to Portland in the agriculture, horticulture, nursery/greenhouse, turf resale and organics sectors.

Looking back, John said he believes one of the ingredients to the company’s long-term success lies in its ability to make decisions quickly.

“As opportunities came to the table, Dad and (COO) Tom (Wimmer), both being progressive, would look at each other and say, ‘This makes sense,’ and they’d do it,” John said. “And, for the most part, that continues today.

“If it makes sense and it is a win-win for the growers, as well as for us, we jump in and do it,” John said. “There is not a lot of hemming and hawing.”

He added: “As we went to our customer base, with whether it be grass-seed cleaning or blended fertilizers, and they wanted more and it made sense to grow our business in that direction, those were easy decisions to make.”

Other keys Bob identified are good employees and good customer service.

“You don’t have to drive very far to find a fertilizer plant,” Bob said, “and if you don’t have the equipment, the product and the people to take care of this guy, he’ll go down the street. And in a year or two, he might drift away and go to some company that will take care of him.”

Then there are those morning cups of coffee with growers sitting around a table, and the fact that Bob still produces grass seed.

“Dad might tell me, ‘Your fertilizer prices are too high,’” John said. “Well, he is the owner of the company and he is telling me my prices are too high, because he also is a farmer. That kind of keeps us in check.”

Reap What You Sow: Tax Planning Opportunities

Curtis has been helping his clients with strategic tax planning, compliance and consulting services for more than 10 years.

As we look back at the last calendar year, it’s a good time to sharpen your pencil and consider some tax strategies that may help minimize your tax liabilities. Here are three areas that every agribusiness should be aware of when working with their tax advisor:

Transition of Family LLCs: In order to minimize estate taxes, farmers often transfer their land and real property into family-owned LLCs. Minority interests may be granted in these LLCs to their heirs at discounted values due to lack of control. These discounts can be up to 50% of the fair value of the LLC interest and help reduce the estate tax impact of the gift. However, if proposed changes to the IRS Code are enacted, this tax planning tool will go away.  To date, it’s not certain what the final effective date will be for these changes, if they are enacted into law.  Therefore, if you have a family owned LLC and have not evaluated the impact of these potential changes on your estate and business transition planning, we recommend that you contact your CPA or attorney immediately to evaluate the appropriate course of action for your personal situation.

Eric provides his clients assurance services which includes audit, reviews and compilations and specializes in financial consulting and employee benefit plan audits.

New Repair Regulations: IRS regulations now allow businesses to expense asset purchases of $2,500 or less, per unit (up from $500 or less). This increase alleviates the time and effort required to track, capitalize, and depreciate relatively minor purchases. It also provides an incentive to make year-end purchases as they can be expensed against income for the current year, even if they were only placed in service for a day.  Businesses should create or update their written capitalization policies to document their chosen dollar threshold to be applied consistently to all asset purchases to take advantage of this strategy.

Expanded Bonus Deprecation on Trees and Fruit Bearing Plants: A tax savings opportunity is available to those who haven’t elected out of UNICAP (i.e., the IRS rules for capitalization of inventory for cash basis tax payers). These businesses can plant trees and plants bearing fruits and nuts now and take bonus depreciation. Under the old rules, agribusinesses would have to wait until the tree or plant become commercially productive to claim the depreciation expense. This potential tax savings should be considered when you are deciding when to plant any new fields.  The available bonus depreciation is 50% in 2016, 50% in 2017, 40% in 2018, and 30% in 2019.

Don’t Forget

Here are some additional reminders for you to review with your tax advisor:

Entity Structure Planning: The PATH Act of 2015 made permanent the five year waiting period for built-in gains associated with C-Corporations that have converted to S-Corporations.  If you have been considering converting to an S-Corporation because of the tax advantages now may be the right time to convert to an S-Corporation.

Tax Filing Deadlines:  This new tax year brings a few adjusted deadlines for businesses that you should be aware of as you gather documents in preparation for your 2016 returns.  Partnership returns are now due by March 15th (previously April 15th) and C-Corporation returns are now due by April 15th (previously March 15th).

Oregon Pass-Through Tax Rate: Effective last year, Oregon taxpayers may apply a lower tax rate on active pass through income that they receive from an S-Corporation or Partnership (other than a single-member LLC). However, there is an election that must be made on the Oregon business tax return to take advantage of the reduced rate.   You should work closely with your tax advisor to ensure this election was made correctly – the tax impact for many could be as much as 2%.  If you have questions on taking this election, you may contact one of our team members at agribusiness@aldrichadvisors.com.  Unfortunately, once the initial filing deadline has past a missed election cannot be corrected with an amended return.

Many of these tax saving strategies may seem daunting, however, when you are working with your team of experts they can be easily implemented to help you reap what you sow and keep more of your hard earned dollars.

Planning Ahead

Our knowledge of the entire agri-business supply chain from grower to processor to retailer allows us to help our clients achieve their goals. Please contact either of us at Aldrich Advisors (formerly AKT) at 503-620-4489 if you’d like to review these opportunities or discuss other options for tax savings.

The Electoral College vs Popular Vote

The dirty secret about Oregon Aglink the magazine is that the deadline for my column is weeks before you’ll read it. Coming up with fresh column ideas can be challenging, especially in today’s world when a hot topic has the shelf life of a snow flake in Phoenix. Take this column, for example. While we’re not a political organization, it’s hard not to have politics at the top of mind during election week. This morning the entire conversation revolves around the protests throughout the country because Donald Trump was elected president.

While the weak minded are focused on vandalism and physical and mental intimidation, many scholars are pointing to the fact that Hillary Clinton won the popular vote. Their form of protest is to demand change away from the Electoral College that determines who wins a presidential election. They want the popular vote to determine the winner.

On the surface, I can reason with that frustration and even welcome the rational. I just whole heartedly disagree with it.

In order to appreciate the reasons for the Electoral College, it is essential to understand its historical context and the problem that the founding fathers were trying to solve. They faced the difficult question of how to elect a president in a nation that:

  • Was composed of 13 large and small states jealous of their own rights and powers while suspicious of any central national government
  • Contained only 4 million people nationwide, or basically the population of Oregon
  • Concerns were rampant that states with larger population bases would create a dictatorship

Why were these questions discussed? Let’s look a little deeper. Virginia, Pennsylvania and Massachusetts represented 41 percent of the population in 1776. Can you begin to see how founders in the other 10 colonies were a little leery of the bigger colonies? This was especially true of the largest colony, Virginia, which represented nearly 25 percent of the nation’s population. The founding fathers were determined to find a more equitable system that allowed all 13 colonies equal input.

It’s a system, by and large, that has worked well.

The popular vote, which is used in most state-wide elections? That’s up for debate. Especially in States such as Oregon that have primarily one metro area.

In 2016 Oregon surpassed 4 million people who reside in the Beaver State. Roughly the same population as the original 13 colonies combined. If we pretend that Clackamas, Multnomah and Washington Counties are the equivalent of the three highest populated “colonies,” we find that these three counties represent 44 percent of Oregon’s population. Multnomah County is our “Virginia,” representing nearly 20 percent of the population.

Dennis Richardson was just elected Secretary of State in Oregon. He is the first Republican to win a state-wide election since Jack Roberts was elected Labor Commissioner in 1994. In most cases the Democratic candidate has won with relative ease, primarily because they dominate the three counties previously noted. Democratic principles are usually stronger in metropolitan communities, whereas Republican principles are usually stronger in rural communities.

This is why rural interests are not represented well in state-wide elections. For the purposes of an example only, Hillary Clinton took 52 percent of the popular vote in Oregon and Donald Trump took 41 percent. Rightfully so, she earned the 7 electoral votes from Oregon. However, if you look at the county-by-county breakdown, Clinton took only 8 of 36 counties in Oregon.

What’s my point? Oregon has a significant urban-rural divide. Most of that anguish is built around local politics, often forced upon rural communities by their urban neighbors. What if Oregon had its own version of an electoral college where each county had a larger say in how an election turned out?

I realize this is never going to happen, and even if it was entertained it would be skewed to where the larger population base would still have a greater say. However, if such a system did exist I do believe that our state-wide officials would probably give a little more than the current lip service they give our rural communities. Stronger dialogue would occur that would create solutions rather than build larger chasms between urban and rural populaces. And, that’s something to think about.

 

 

 

Geoff Horning, Executive Director

Courtesy of the Media Circus

I am entering 2017 with a bit of apprehension and dismay, courtesy of the media circus that our election year produced.  The whole election fiasco wore me out.  There was nowhere to run and hide from pre- or post-election polls, opinions, and results.   To top it off, we had to hear about the countless number of protests happening, whether they had anything to do with the election choice or were a random march disputing the rights of the oppressed.

I would like to put all of the malicious actions, the he said/she said rhetoric, and the excuses behind. Instead, let’s focus on having more respect for others and their beliefs, cultures, and ages. All three of those played a key role in the election and what happened afterwards.  Although the presidential race was far from predictable, there were moments of sheer clarity. Apparently, we have entered a new era of generational diversity and culture clashes.  The conflict is real. The largest generation is aging and taking their “Team Player” mindset and leaving the work force. At the same time, younger cohorts are trying to validate their own importance with a tech-savvy mentality and a push for obscure cultural changes.

As a parent, I see the limit-pushing and electronic-loving temperament in my kids, but what better way to witness age variance and character contrasts than within our own family businesses?  I, for one, work with my parents from the “Traditionalist” generation, our long-time employees from the “Boomer” and “Generation X” eras, and just a few “Y” (Millennials) who round out our staff.   These four generations cover seventy-six years of knowledge and experience, each with their own strengths and weaknesses, and each aging just the same.

Now that I’m in the Boomer category and no longer just the bosses’ daughter, I’m in denial that my “out on a limb” attitude has curved more towards the “better safe than sorry” territory. A few years ago, my sense of invincibility would allow me to gravitate to the scariest ride at the fair, to crawl onto a roof to stage the best Christmas light display, or to look risk straight in the eye and know that—no matter how this turns out—there would be someone to pick up the pieces.  Now, instead of jumping first and asking questions later, I’ve become more concerned about the bigger picture: is my choice going to affect someone else?

It’s crazy business becoming responsible, and it is quite clear that everyone does it on their own time. Maybe, though, that mix of generations and sensibilities is a good thing.  Being president of this fine organization has challenged me to think out of the box and to step out of my comfort zone to try something new.  The Oregon Aglink Board and the wonderful staff is made up of very progressive and knowledgeable people all stemming from different generations;  I see this and am excited for a coming year that promises to be one hell of a ride.

 

 

 

Lori Pavlicek, President

 

Leadership: A Family Tradition

by Mitch Lies

From left to right: Neal, Pamela, daugther Lauren Lucht

From left to right: Neal, Pamela, daugther Lauren Lucht

For Pamela Lucht, providing leadership to community and agricultural organizations is a family tradition.

Pamela, administrative manager for the family’s business, Northwest Transplants in Molalla, has served as treasurer on several boards and committees over the years, including six years as the Molalla FFA Alumni Chapter’s treasurer.

Recently, she took over as treasurer for Oregon Aglink.

“(Oregon Aglink Executive Director) Geoff Horning asked me if I would do it, and I said yes, because there was a need and I believe in what Oregon Aglink is doing,” Pamela said.

Her commitment to Oregon Aglink adds to the Lucht family’s legacy of leadership that dates back to Charlie Lucht, father of her husband, Neal.

Neal, president of the Oregon FFA Foundation and chairman of the Molalla River School District’s Board of Directors, tells a story about how he once asked Charlie why he participated in so many boards and committees.

“He looked at me incredulously and said: ‘Who else would you have do it?’ Leadership happens,” Neal said. “If the right people don’t choose to, the wrong people will. There is never an option for no leadership.’”

In addition to serving as treasurer of Oregon Aglink, Pamela and her farm participate in the organization’s popular Adopt a Farmer program.

“The Adopt a Farmer program is relatively new to us,” Pamela said, “and we are really excited about it.”

“My favorite thing is just seeing the kids get engaged and ask questions, and seeing the lightbulb come on when they start to understand the process,” said Neal and Pamela’s daughter, Lauren, who is the marketing director for Northwest Transplants.

“It is really fun to see that lightbulb come on,” added Neal, “to see that connection that somebody actually grows everything I eat.”

“I hope we are inspiring some entrepreneurship among some of those kids, too,” Pamela said.

That spirit of entrepreneurship has long been present in Northwest Transplants. The business started with just 11 greenhouses when Neal and Pamela purchased it from the Lucht family’s Crestview Farms in 1990.

Today Northwest Transplants operates 92 greenhouses, moving about 80 million seedlings a year through the operation.

The business’s origin came from the realization that the transplant technology they provide offers many benefits to producers, especially as the industry and consumer needs began to change.

“When I was growing up, we worked with transplants, but typically in old technologies,” Neal said. “We’d looked at other areas of the country and appreciated how they utilized their greenhouse plug-tray plants for field planting. But the management and production logistics had never really been thought out for the production of a variety of crops in our temperate climate.”

The farm sought advice from Oregon State Extension advisors and others, but found that no one had answers.

“They told us we really just couldn’t do it here,” Neal said. “So we spent three years working on solving the program of what combination of greenhouse management and technologies could be made into a commercial seedling production venture. We developed some of our own concepts on climate modification and greenhouse management to fit our economic resource of a seasonal climate.”

“Now we grow over 300 varieties of crops each year,” Lauren said, “including everything from medicinal herbs, such as stinging nettle, to traditional cold crops and crops that thrive in specific environments, like peppers and sweet potato.”

Although Northwest Transplants operates solely on a contract basis, its business model includes much more than simply taking orders from farmers.

“Many times we have to look at what growing trends are out there. How might we impact those crop systems for the future? What technologies can we bring with our ability to control climate to affect the outcome of that particular crop and affect its profitability?” Neal said.

“We do our research, and many times take it to our customers,” he added. ‘We are constantly managing our relationships with our customers, rather than just sitting back and waiting for a contract. We’ve always tried to stay focused on how can we grow the success of a particular grower and improve profitability on their farm.”

Northwest Transplants works with about 200 growers, both large and small, Neal said. The farm produces plugs in unique soil mixtures that are tailored for individual crops. The ingredients in their blends are sourced from all over the world. The organic mixture they produce, for example, calls for peat moss from Northeast Canada, vermiculite from South Africa or China, and another ingredient, which Neal wouldn’t reveal, from Northwest Canada.

Northwest Transplants today is in the process of completing what Neal described as the final phase of maxing out the capacity of the operation’s existing 20-acre site. The family farm recently purchased a 100-acre site across the street from its operation, which the family plans to use, at least in part, for production agriculture.

One thing certain to be in the mix for the Lucht family’s future is a continued emphasis on providing leadership to community and agricultural organizations.

“We are just really passionate about giving back,” said Lauren, who is a member of Oregon Aglink’s Adopt a Farmer Committee. “If you have the capability to lead, we believe you have the responsibility.”

 

Happy Birthday, Oregon Aglink!

Lori PavlicekIt is time to applaud one of the best organizations dedicated to growing agriculture in Oregon. Fift years in the making, Oregon Aglink began as the Agri-Business Council of Oregon, and has become the bridge between urban and rural Oregonians. Even though the term “agribusiness” worked, it didn’t describe who we are or what we want to achieve. Aglink is more defined, shares specific goals and ways to accomplish those goals with our members. Turning 50 is not easy, coming from someone who has been 49 for three years, but we plan to celebrate agriculture’s past, present, and future the best way we can…by throwing a party.

Who doesn’t enjoy cutting loose? I love throwing on a pair of boots and kicking up my heals and this “shindig” has got some real potential to be a barn burner, a figure of speech considering Victor Point Farms in Silverton has offered up their beautiful grass seed farm and straw shed to host!  Even though it is an over 21 event, the presence of farm families, ag businesses, and folks who just want to celebrate agriculture is always appreciated and a welcome sight. In addition to good food, libation, and mingling with people from all around the state, we can expect an extra helping of some down home music from local boy and Nashville recording artist, Ben Rue.

The Board of Directors wants to encourage members from all over Oregon to join us in our celebration. We periodically hold meetings in different parts of the state, such as a recent meeting we held in Baker City. With my youngest in tow, we saw beautiful fields and mountain ranges made up of shades of green, gold, blue, and brown. It was like a living quilt spread out over miles and miles of terrain. The farms and ranches encompass large swaths of land with small and larger cities dotted throughout. It truly was an enjoyable adventure. My daughter had no idea we could drive so far and still remain in Oregon, but she really enjoyed the small towns and found that each one had a different story to tell, along with a Starbucks or Dutch Brothers. I encourage everyone to take the time, and a road trip, to see what our Eastern, Central, and Southern Oregon neighbors have to offer.

In addition to seeing the beautiful countryside we met locals that shared our vision and desire to introduce our industry to the next generation of urban consumers. We are fortunate to belong to such a well preserved agricultural support group such as Oregon Aglink. It reminds us that we have come a long way in defending our way of life through education and promotion. While most people are several generations removed from the farm, you still come across many urbanites who have relatives on the farm, or have some attachment to a farm or ranch. We come across this many times with the Adopt a Farmer program when a teacher, parent, or chaperone hears or sees something that triggers a fond memory or previous experience. That memory becomes the link to their past and a better awareness of the present, just as the middle school students in the program are creating their own connection to their food and fiber.

Hopefully, you and yours will stop in and partake with family and friends from across Oregon on August 20th at Victor Point Farms to celebrate with us. Tickets must be bought ahead of time and can be purchased here or by calling 503-595-9121. Let’s honor the past 50 years and get a good start on the next!

Lori's Signature

 

 

 

Lori Pavlicek, President

 

Labels Matter. Unless They Don’t.

geoff horning oregon aglinkMy first reaction was one of relief. Then it was the fear of the unknown and then even a little bit of depression. Of course, the depression may have been a result of the lackluster performance of the Oregon Ducks on the gridiron.

My life changed forever on September 8, 2015. During the previous two weeks I had lost nearly 20 pounds of muscle mass. I felt fine, or so I thought. But, I was shrinking and it was starting to scare me. I was convinced I was dying of cancer. At the urging of friends I decided denial was the incorrect path and went to the doctor.

Good news. It wasn’t cancer. The diagnosis, however, shocked me. I was active, ate modestly healthy and certainly wasn’t obese by any definition. Still, my blood sugar was so high my doctor suspects that if I had remained in denial, they would have found me in a coma within a couple of weeks. The diagnosis: type 2 diabetes, likely triggered by an allergic reaction I had earlier in the year to an antibiotic for a sinus infection.

Though I knew a few people with diabetes, I really didn’t know anything about the disease other than “don’t eat sweets.” Oh, how simplistic and incorrect that statement is.

I’ll be honest. I’d never paid attention to labels before. To me they were all just a marketing ploy. Now, before I purchase anything I’m looking for specific things such as carbohydrates, fiber and sodium. Is it really whole grain, or has it been processed and simply labeled as a wheat product? What’s the serving size? Does it have good fat or bad fat?

I’m lucky. In a very short amount of time I was able to get my diabetes under control through diet and exercise. Still, every single time I eat or drink something I have to pay attention and know these answers. My life literally depends upon it. EVERY. SINGLE. TIME.

I’m not alone. There are hundreds of legitimate health reasons why people need to pay attention to the food they consume. The label is an important tool that helps us live healthy and productive lives.

Labels matter. Unless they don’t.

Millions upon millions of dollars are being spent throughout the United States in an effort to ensure our food is labeled if GMO technology is being used. Huh? What? I’m perplexed. Other than fear of not understanding, am I missing something?

In fact, I’m insulted. I need accurate food labels to maintain my health. Telling me it’s a Genetically Modified Organism literally tells me nothing at all. GMO is a term used for a process and not a specific product. It has multiple applications. If I wasn’t informed, I would think that it’s a specific product that I need to watch for. An unscientific study on my Facebook page indicated exactly that. Or worse.

Consumers who don’t want to eat genetically modified foods can already buy non-GMO food, which is clearly labeled and has become a thriving niche industry. Heck, on a recent trip through my local Fred Meyer garden center I stumbled across their marketing of GMO free herbs. Seriously? But a growing chorus says that’s not enough: Critics of GMOs want all food that uses genetically modified ingredients to be labeled as well, despite the lack of scientific evidence that the distinction carries any difference.

In recent weeks, in order to comply with a Vermont law that requires labeling by July 1, major food manufacturers like ConAgra Foods, General Mills and Kellogg’s amongst others announced plans to label food items that have GMOs, despite being opposed to the Vermont legislation. They argue that a federal standard, not a patchwork of state laws, should be the norm.

While I can understand their decision, I disagree wholeheartedly. As somebody who now understands the importance of knowing what’s in his food, a GMO label of any kind is not providing me with any beneficial information and is simply creating an atmosphere of fear at a time when we’re going to need science more than ever to feed the world. The epidemic of scaring people about their food may have larger consequences than the diabetes epidemic sweeping across America.

geoff horning signature

 

 

 

Geoff Horning, Executive Director

Oregon Agriculture Needs to Be More Proactive

geoff horningWhen it comes to being a fan of sports, I’m a pessimist. After 44 years of second place finishes, I expect my heart to be broken. I tend to live the rest of my life, though, as an optimist. A belief that common sense will rule the day. Listening to the political debates and testimony on the 400+ bills in Salem’s “short” session, I’m starting to think that common sense is being thrown out with the baby and the bath water.

Many of the issues have no impact on your ability to produce the food and fiber that are basic needs of everybody, but so many of them have unintended consequences that I fear we’re driving the family farmer out of business.

Oregon Aglink has taken great strides over the past several years to tell your story. Others, such as Oregon Women for Ag, Oregon Ag Fest, Farmers Ending Hunger, to name just a few, are doing a magnificent job of telling your story as well. It’s not hard to find positive publicity for an industry that is still the very foundation of this State.

Are we making progress? Absolutely. If you sit down and have a conversation with the majority of Oregonians I think you’ll find most are very respectful, almost reverent about the lifestyle and important role of local producers.

But (there’s always a but), those same Oregonians typically shrug their shoulders at the issues and challenges facing our industry. It’s not because they are mean spirited or even ignorant. They truly do trust you to feed their family. It has much more to do with the fact that they are so consumed with their busy lives that they don’t take the time to know what’s going on outside of their small community. They don’t care about the things that impact your ability to produce their food and fiber.

What they do learn comes from sound bites and social media. And, guess who has the funding resources and the loudest megaphone to dictate that message in Oregon? It’s definitely not the natural resources community. That leads to poor legislation and a constituency that thinks good things are happening because “it feels like the right thing to do.”

Research conducted by Oregon Aglink is very clear. The general public trusts the farmer more than anybody in the food chain. If I’m out telling your story by myself, you might as well hire a used car salesman to do my job. My credibility with the general public isn’t much better. Why? Because it’s perceived that I’m a hired gun only out for a paycheck. That’s not true, but perception is reality.

The good news is that Oregon Aglink is focused on making you the face of Oregon agriculture. Throughout 2016 we’ll be running a series of television commercials in Portland, Eugene and Medford. The entire focus of the “I am Oregon Agriculture” campaign will be about making a connection with Oregonians that local agriculture is made up of 98 percent family farms. With farm families telling that story.

The Adopt a Farmer Program, now in 47 schools and reaching almost 5,000 middle school students throughout Oregon, was specifically designed with the idea of connecting those students with one particular farmer throughout the school year. An emphasis of the program is putting a focus on the people and families who make up the farm.

Will these programs have instant impact? Probably not. We’ve got to play the long game, but to do that we need all of you to become more proactive. Get involved. Tell your story through us, or through one of the other great organizations that represents you. We have to make you the face of our industry before the family farm becomes extinct.

Growing and Developing Adopt a Farmer in the Classroom

Sprouts, buds, blossoms and baby animals – it’s that time of year again for growth and development. This is also true for the Adopt a Farmer program. Looking to wrap up its fifth school year, Adopt a Farmer classroom activities are the most varied and thought-provoking ever.

While this reflects the variety of Oregon agriculture represented in Adopt a Farmer, it also is a testament to our farmers’ creativity, flexibility and excitement about participating in the program.

rancher keith nantz in the classroom

Rancher Keith at Scott School in North Portland

One of the most popular activities is the Farming Simulation game where groups of students allocate wheat, perennial ryegrass, sweet corn, green beans and strawberries across 1,000 acres and then calculate their projected income. Next, students roll the dice and their farmer reads the outcomes of their crops based on their dice roll so they can calculate their actual profit or loss. Students discuss risk and reward, local and global economics, and realize the importance of diversification in farming. One of our adopted farmers modified the crops in this simulation to include hazelnuts, canola, wine grapes, while another even made a new version for nurseries. One to reflect a cow-calf operation and decision-making is in the works!

STEM agriculture graphing

Students work on graphing milk production at Beach School in North Portland

“What’s wrong with that cow?” exclaimed a student in Marcela Zivcovik’s sixth grade classroom at Beach School in North Portland. Chris Eggert of Mayfield Dairy in Aurora was leading a graphing activity based on milk production. Students compared their four graphs and noticed one cow’s production had declined significantly over a 7-day period. Farmer Chris then helped students brainstorm reasons why her milk production may have declined. They thought she may be a smaller animal, sick or stressed. Farmer Chris talked about how he uses technology to help keep a tab on animal health.

turf buddies in the classroom

Farmer Denver makes turf buddies with St. Paul School students

During the initial years of the program, most farm-school pairs made Turf Buddies and played the Farm Simulation. This school year alone, we have had more than 16 different activities done in more than 40 classrooms across the state! Ranging from energy, physical versus chemical change and soil health to farm-to-table webs and Oregon ag smell tests, students are connecting what they are reading about in textbooks with the real world, on the farm.

helle ruddenklau adopt a farmer

Farmer Helle visits with students at Yamhill-Carlton Intermediate School

Flexibility is one of the biggest strengths of the Adopt a Farmer program. Combining the needs of the classroom with the resources of the farm and farmer is allowing the program to grow and develop to accommodate the great diversity of Oregon agriculture with the variety of grade and achievement levels in schools across the state.

The Weather, The Economy and Economic Espionage

By Mitch Lies

Photos by Mallory Phelan

andres bergero bank of the westHigh consumer confidence supported by high home values and cheap oil provide an opportune time for agribusinesses to expand, according to a Bank of the West vice president to speak at Oregon Aglink’s annual meeting, Jan. 21 in Woodburn.

Andres Bergero, vice president and foreign exchange sales manager of Bank of the West’s Capital Markets Division, added that he expects the elements favoring expansion to remain in place for at least the next two years.

“These are the times to think about expansion, because right now, you can ride that wave of consumer confidence,” Bergero said. “You can expand because you’ll know the consumers will be there.

myron miles annual meeting“With oil prices down, American consumers are spending more, and that it not going to stop,” he said. “This parade has two to three years to go before it changes. That is how long a major change in the economy would take to deflect the consumer direction.

“The U.S. is poised to have a really good year in 2016 and 2017, as well,” he said.

Bergero’s presentation was part of a slate that included a look at how El Nino is influencing weather and insights into economic espionage.

In addition to propping up consumer confidence, Bergero said low oil prices also are lowering transportation costs for farmers, providing another good opportunity for farm expansion.

Bergero added that with Iran coming into the market, with Saudi Arabia maintaining production levels and with declining demand, he believes oil prices will stay low.

“Your cost, your margins for delivering and receiving goods are as low as they’ve been in a long, long time,” he said. “It’s time to think about what else can you do? What more can you do? What more markets can you reach?”

One element hampering economic prosperity in the farm sector is the strong U.S. dollar, Bergero said. Coupled with high unemployment in much of Europe, a relatively weak Chinese yuan and a volatile Chinese stock market, exporters “are not in the driver’s seat,” Bergero said.

Bergero added that the economic situation in China may trend lower, and that further Bank of China monitory actions may occur, including further rate cuts and even additional Yuan devaluations.molly mccarger annual meeting

“They are struggling,” he said, “and that chaos and lack of confidence in the market will continue to erode.

“I think the situation is much dire than they are predicting, and the yuan will continue to go down,” he said. “In fact, China is talking about another 5 to 10 percent devaluation of their currency.”

In Europe, Spain is experienced an unemployment rate of 25 percent, he said, and that’s not counting young adults from the age of 19 to 26. “Add that, and unemployment is closer to 40 percent,” he said, “and it is not that much different in Portugal.

“The only good light in the Eurozone is Germany,” he said. “They continue to export and to build.”

Bergero closed his presentation by advising participants to “look for low-hanging fruit to help fix whatever short-comings you may have. You should think about what can I do differently now, knowing that the consumers will be there in the next 12 to 24 months, knowing that interest rates will be low, knowing that oil will be low and knowing that the dollar is strong,” he said.

IMGJon Sorenson, a special agent with the FBI in Portland, followed Bergero’s presentation with tips for farm businesses to avoid economic espionage.

“You might think you won’t be targeted,” Sorenson said, “but you should realize you are a target.”

Intellectual property theft can result in lost revenue, lost jobs and damaged reputations, Sorenson said.

Among best practices Sorenson shared with meeting participants was to recognize your business’ vulnerability and to fix those risks.

“Make sure you have virus-scanning software,” Sorenson said. “Make sure you have firewalls. Make sure you destroy or wipe out any information on a hard drive before giving it back to a vendor or donating it.”

He advised businesses to conduct annual training to educate employees about risks.

“Have periodic training to remind employees of security threats that are out there,” Sorenson said. “And establish a reporting program, so that if someone has a suspicious contact or they click on an email and are afraid they got a virus on their computer, they have a path they can take to report it.”

When traveling to a foreign country, Sorenson advised participants to be careful about leaving items in hotel rooms that contain sensitive information.

“I have heard stories where people have left computers in their rooms, and people have accessed their computers by entering their rooms,” he said. “When traveling, make sure you keep computers and cellphones with you.”

When hosting a tour group, be aware that surreptitious individuals can access offices, plug a thumb drive into a computer, and download sensitive information.

Sorenson urged participants to call the FBI with any problems or questions.

“So many countries like to cut corners and steal what we have manufactured just to keep up with us,” he said. “Our job with the FBI is to try to help producers – whether it is ranchers, businesses, farmers – stop that economic espionage from happening.

“If you have problems or questions, please don’t hesitate to call the FBI and we’ll work with you to try to figure the whole situation out,” he said.

Sorenson was followed by Andy Bryant, a hydrologist with the National Oceanic and Atmospheric Administration in Portland.andy bryant NOAA hydrologist

Bryant said that as of mid-January, snowpack in most of Oregon was about 10 percent higher than average, and in some areas, 80 percent higher.

That is in stark contrast to last year, when snowpack was at record low levels in much of Oregon, primarily due to high temperatures.

“Starting in December and January of last winter, all the way through the summer, we had very high temperatures,” Bryant said. “Typically, we were four to ten degrees above average on a monthly basis for much of the state.”

Between June 1 and Aug. 31 of last year, Bryant said the city of Portland broke the previous record for average daily high temperature by more than two degrees.

“Typically, when we break a record like that over the course of two or three months, we maybe break it by a tenth or two of a degree,” he said. “So it was a very significant period of hot weather.”

Bryant said to expect precipitation to slow in the spring, given that Oregon typically experiences warmer and drier than average spring conditions during El Nino.

“I know we’ve been wet, but we’ll see what things look like once we go all the way through March and April,” Bryant said.

“We’re not expecting a lot of precipitation, based on previous El Ninos,” he said.

He added that the outlook is for above-average temperatures continuing into the summer months.

“What we had last summer was really extreme, so we’re not expecting a repeat of that, but the overall trend is for above-average temperatures,” he said.

As for the water-supply forecast, he said to expect ample supplies in much of the state. The Willamette River at Salem, for example, is looking at about 90 percent of average, he said. “That is slightly below average, but for our needs here in the Willamette Valley, it would be plenty of water.”

Looking further out, Bryant said that forecasters are expecting a La Nina event to take place next year, which typically brings cooler and wetter temperatures in the Pacific Northwest.

 

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