A Pair Of Ag Worries For 2014

This week, most of the ag retail marketplace is gathered in sunny Miami, FL, for the annual Agricultural Retailers Association (ARA) meeting. Besides visiting exhibitors and attending informational sessions, attendees at this event will likely discuss some of their views on how 2013 has played out and what they expect could happen in 2014. And if the early indications are correct, 2014 could be a very interesting year for agriculture.

Which issue presents the biggest threat to ag retail in 2014?

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Right now, there are two issues front and center that could have some serious impact on how well agriculture performs during the new year. First up is the ongoing lack of a Farm Bill. It’s been over a year since a new Farm Bill should have been passed and Congress seems no closer to implementing a new one today than it did in 2012. According to ag watchers, if a new Farm Bill has passed by the end of December, several ag-related programs will be affected. This could cause commodity prices to spike and cause produce, dairy and meat prices for consumers to immediately skyrocket.

Perhaps more troubling for the ag retail marketplace is the second worry – a reduction in the government’s ethanol blend mandate. For 2014, regulators are proposing reducing ethanol use by approximately 1 billion gallons, which would go into effect at the end of June 2014. If this occurs, one of the major end-markets for the nation’s corn crop will quickly dry up. According to several market watchers, this could leave approximately 1 billion bushels of corn looking for a market, ultimately depressing commodity prices in the process. As one speaker put it: “Ethanol growth for corn is largely at an end.”

It will be interesting to hear what other ag retail industry insiders say at the ARA meeting, about these challenges and whatever other worries they have. Stay tuned . . .

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