Hog Management

Prevent Quitting: Keep Employees Top of Mind in 2024

Fri, 27 Sep 2024 15:57:13 GMT

As the calendar page flips to a new year, farmers are focusing on ways they can improve their operation in 2024. For many, labor – or lack thereof - sorted its way to the top of the ‘biggest headaches’ list. To help prevent this issue from reoccurring, Jorge Delgado, a training and talent development specialist at Alltech, says now is the perfect time to give your employee management plan a brief overhaul.

Before your best employee walks out the door, consider implementing the following steps to give retention and performance a needed boost.

Conduct Annual Reviews: “This is a concept many have of heard of but few people are using,” Delgado shares. However, he recommends treating annual reviews as a chance to sit down with each individual in your team to review expectations, goals, what needs to be improved and what needs to change.

“This is a good opportunity to hear feedback from your employees and share with them your appreciation in a very formal way,” he adds.

Go Over Mission Statement: Another important aspect to look over going into the new year is your farm’s mission statement. Delgado says if your operation doesn’t currently have a mission statement, this is the time to start creating one with your employees in mind.

“Let them be part of this process and include them in your mission statement,” he says.

Review and Update Protocols: Similar to looking over your farm’s mission statement, reviewing protocols is another important area to analyze.

“This is an area that often gets lost in time,” Delgado says. “People start deferring from original protocols and make decisions that may not be the best for your operation and/or animals. Get together with employees and/or your veterinarian to update information and procedures.”

Perform an Anonymous Survey: “An anonymous survey can help you find information to improve your internal culture and to discover areas of improvement,” Delgado says. “You will be surprised with the information generated from this kind of survey.”

Delgado suggests creating a questionnaire with simple questions that can help you finding opportunities about your organization.

Adjust Payroll: When was the last time you reviewed your employees’ salaries? According to Delgado, many workers might be due for a raise that was forgotten during the year.

“This is also a good time to adjust those numbers based on inflation and other costs,” he adds.

Terminate Bad Apples: While labor shortages continue to be one of the biggest issues facing agriculture, not every employee is cut out to work on our operations. Delgado agrees, adding, “There are some employees who just don’t fit in our culture or business mode. The new year can be a good time to start thinking about how to replace those individuals in our business.”

Calculate Annual Turnover Rate: Chances are you may have had a few employees leave your farm in 2023. Was this number higher than previous years? Lower? According to Delgado, it’s important to keep a pulse on your farm’s turnover rate.

“Find areas to improve on if this number is too high for your operation,” he adds.

Start Planning an Educational Calendar: As the chapter closes on 2023, Delgado says now is a good time to ask your employees what they would like to learn in 2024 and set up dates in your new calendar.

“Consider also reaching out to external resources to get them on your calendar” Delgado “They can offer free, professional training.”

Plan Social and Cultural Events for the Coming Year: Farming is a stressful occupation for both farm owners and employees. Therefore, it’s important to keep fun activities on the calendar to increase morale and engagement. Consider hosting a team dinner or

“Employees value the social aspect of any organization,” Delgado says. “This also helps with retention and motivation.”

Review Safety Guidelines: No matter the time of year, keeping employees safe should always be top of mind. Going into 2024, set intentions to review and update safety guidelines to ensure every position in your operation has a plan.

“If you don’t have a safety plan, you need one,” Delgado shares. “Review what went well and what went wrong this year. Use this information to increase safety around the farm.”

For more on labor, read:

A Strategic Advantage: Develop a Decision-Making Process

Wed, 26 Jul 2023 19:24:37 GMT

The difference between strategy and serendipity is small when you are prepared, explains Mark Faust, president of Echelon Management.

How can you be ready, willing and able to lead your farm into the future? Start by developing a specific decision-making process.

“Have you put off decisions that could be of great benefit to your company? Do you sometimes feel as though you agonize over decisions?” Faust asks. “Here are a few tools that have helped many leaders with whom we work deftly make more effective decisions.”

BETTER WITH PRACTICE

Most leaders aren’t using any objective criteria or tools to evaluate the options available, Faust says.

“Instead, far too many business owners spin their wheels and then make decisions based on intuition, when a much more helpful and objective approach could be applied,” he explains.

Don’t become overwhelmed by all the decisions you must make for your business, advises Jay Parsons, University of Nebraska agricultural economist. As you analyze a decision, articulate your objective, rely on good information and focus on the big picture.

“Understanding decisions that need to be made today and decisions that can be made later and linkages between the two reveals much about the decision context,” he says. “Permission to focus on objectives rather than analyzing alternatives frees up creative thought and generates possible solutions that result in more flexibility and an increase in ability to deal with the future uncertainties being revealed as outcomes.”

Of course, you have valuable instincts based on years of experience and data. Yet, Faust says, you could improve your decision-making success by using more tools to evaluate your options.

“Frequently, there is an objectifying tool we can pull out and use to help make the decision more rational and meas-ured and thus give confidence to CEOs that they are doing the best they can in making that decision,” he explains. “Also, bringing in an objective outsider, someone who is not burdened with the concerns surrounding the decision, can offer a unique wisdom that can accelerate success.”

If the decision is between alternatives, your first step is to ask the following questions. Mark Faust suggests:

MUSTS: What are the “musts,” or non-negotiables, we cannot sacrifice? These are mandatory, measurable and realistic. This will sometimes sift out options that are not appropriate.

WANTS: What are the “wants” we would like to gain? See which of the previous “must” options will likely meet the most of your wants. List the specific wants behind each relevant option.

RISKS: What are the potential risks we need to consider? At this point, many decisions should become more clear if not obvious. Look for the most rational decision, which equates to the maximum benefit within acceptable risk parameters.

GAINS: What are the potential gains that could be realized? List the benefits behind options and consider if an option delivers a solid return with a reasonable likelihood of success.

For larger and risker decisions, business coach Mark Faust says you might need to increase your analysis and thought process. He suggests putting your decision factors from above into a spreadsheet. For each option, you will want to weigh the negative potential of the risk or positive potential of the reward.

For example, he says, you could rank a reward from 1 to 5, with these parameters:

1 = Some minor enhancement that only you would know about.

2 = A nice improvement that people around you could benefit from and see.

3 = A benefit that is companywide and people are talking about on a regular basis.

4 = Customers flocking to your company.

5 = A game changer for the company, industry, or more.

(Farm Journal)

After rating the reward potential, do the same with the risks, considering the following ratings:

-1 = A minor annoyance

-2 = A problem you could solve

-3 = A problem for which you would have to get help and it would be made public in the company.

-4 = A huge embarrassment

-5 = A problem so bad that it could harm your company.

(Farm Journal)

To make changes, Faust says, the rewards must be a 2 or more. Otherwise, you might as well consider other potentials. If the risks are -4 or -5, then you may want to eliminate that option.

Watch Mark Faust’s Top Producer Summit presentation on how to make smart decisions.

4 Things to Do When Your Kids Come Home to Farm

Thu, 20 Jul 2023 18:56:54 GMT

Matt and Lisa Moreland hoped at least one of their sons would return to their farm based near Medford, Okla. What they didn’t anticipate was all three sons – James, Will and David – wanted to join the family business once they completed their college degrees.

“It put me back on my heels. I thought, ‘Wow, we’re going to have to find a way to grow,’” Matt recalls.

That was seven years ago. Here are four things Moreland says he has learned in the process.

1. DON’T SLICE YOUR “PIE” INTO SMALLER PIECES. Instead, make a bigger one. The Morelands have grown their operation to accommodate each son’s return.

With James, they added an Angus cowherd. Will has taken the lead on all things agronomic on the farm, which grows corn, soybeans, winter wheat and cotton. David runs the excavation/construction side of the operation.

Scaling up the faming enterprise as each son returned has enabled the Morelands to compensate them accordingly. “They also get an annual bonus and equity in the operation,” Matt says.

2. LET YOUR LEADERS LEAD. “I quickly learned as we’ve grown there’s only so much I can do. I can guide, but I can’t be a control freak,” Moreland says.

How that plays out: each son leads in their respective areas of expertise, and then he and the farm’s eight employees provide support as needed.

“We meet as a group every Monday morning to look at what needs to be done in the week ahead, make assignments and then modify them as necessary,” he says.

Don’t underestimate the value of having clearly defined roles and accountability when children return to the farm, suggests Rena Striegel, president of Transition Point Business Advisors.

“Create a template to delegate responsibility and build in accountability to develop the next generation of leaders,” she advises.

3. CARVE OUT YOUR ROLE. Moreland functions as the managing partner in the operation, overseeing the cash flow for the farm as well as the big-picture direction for the operation. He also takes the lead on lender, landlord and Farm Service Agency (FSA) relationships.

4. HARNESS HELP FROM EXPERTS TO CREATE PLANS. “The investment of good counsel is minimal compared to the cost of mistakes,” says Kitt Tovar Jensen, staff attorney at the Iowa State University Center for Agricultural Law and Taxation.

Moreland knew, even with professional counsel, mistakes can be made. His solution: “Vet your plans with key individuals and organizations. For financial planning, you have to consider the accounting side of things as well as the legal components, and it can be challenging to understand what might work for the FSA, as well as for your accountant and even the IRS,” he says.

Some key questions Moreland asks of experts: What do you think of our plan? How can we make it better? What else should we do?

Take Control Of Your Succession Plan at the Top Producer Summit!

Date: Monday, January 23, 2023
Time: 8:30 am - 4:30 pm
Cost: $219

Use the topics and tools included in The DIRTT Project to jump-start the succession planning process for your operation whether you are just beginning or need to get on track.

Learn how to set goals for both the transitioning owners and the operation.
Learn how to create a plan to ensure that your heirs and successors are ready to lead and work effectively together.
Learn how to address family disharmony or handle communication with successors who do not get along.
Learn how to choose your professional team and hold them accountable for the work they will be doing for you.
Network with and learn from other farmers in transition.

Learn more and register now!

If you are in the process of succession planning, be sure to check out the tools Farm Journal offers. To learn more, visit FarmJournalLegacyProject.com

Malecha Enterprises: 8 Core Values Bridge the Dynamics of Family and Business

How to Create a Short-Term Operating Plan for Your Farm

How to Make a Successful Transition to the Next Generation

Who Gets What? Take This Important Estate Planning Step

Paul Neiffer: 2022 Year-End Tax Planning Tips

Thu, 20 Jul 2023 19:11:42 GMT

Tax planning seasons is rapidly approaching for farmers. The normal process is to determine the optimum amount of taxable income to report. Then you determine how much income to defer into the next year or how much farm in-puts to prepay this year.

Rarely do we want to show no taxable income. Our goal is to show enough income to soak up the standard deduction plus pay tax in the 10% and 12% tax bracket. Higher income farmers will soak up even more income.

However, this year has some changes. Here is a brief guide.

Should we elect to defer crop insurance proceeds and Emergency Relief Program (ERP) payments? Many farmers will collect crop insurance this year. A farmer is allowed to defer their crop insurance proceeds to the following year if they meet the following requirements:

They are a cash-method farmer.
They normally report 50% or more of their crop sales in the year after harvest.
The crop insurance proceeds were for damage in 2022.

However, any part of crop insurance proceeds related to price cannot be deferred (The IRS finally updated their Publication 225 to reflect this.). A lot of crop insurance proceeds this year will include both damage and price. The crop insurance company will usually let you know how much to expect.

None of the proceeds from the ERP can be deferred. Proceeds received in 2022 relate to damage that occurred in 2020 or 2021. Even payments related to the 2022 wheat crop likely are for drought damage that occurred in 2021 and can’t be deferred.

What about expensing farm equipment purchases? Due to supply chain issues, a farmer might not be able to receive their new farm equipment before year end. If so, the deduction will need to be taken in 2023 even if you received and paid an invoice in 2022. Remember, 100% bonus depreciation will drop to 80% next year unless Congress extends it at year end.

Should I try to create a loss? A net farm loss can be carried back two years to offset income reported in 2020 and 2021. But, this applies only to the net farm loss, and you can only offset about $524,000 (singles can offset half this amount) against other income. If you still have a net taxable loss, you can carry it back two years or make the election to carry it forward to 2023. If you expect income to be higher in future years, then electing to carry it forward might make the most sense.

THE BOTTOM LINE

This year, more than ever, requires you to spend time with your tax adviser to pin down the right amount of taxable income to report. Good luck.

What do interest rate increases and bank downgrades mean for farmers?

Mon, 14 Aug 2023 21:53:43 GMT

Three recent headlines from the financial world have farmers asking how those events could affect their lending situation.

At the end of July, the Federal Reserve raised interest rates o the highest level in 22 years by increased its benchmark lending rate by a quarter point to a range of 5.25 to 5.5%.

In early August, Fitch Ratings downgraded the U.S. long-term foreign-currency issuer default rating to ‘AA+' from ‘AAA’ saying this move “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden.”

Also in early August Moody’s cut its ratings of 10 U.S. banks (Commerce Bank, BOK Financial, M&T Bank, Old National Bank, Prosperity Bank, Amarillo National Bank, Webster Financial, Fulton Financial, Pinnacle Financial and Associated Bank), and the firm put some major lenders on watch for a potential downgrade (Bank of New York Mellon, U.S. Bancorp, State Street, Truist Financial, Cullen/Frost Bankers and Northern Trust).

Alan Hoskins president at American Farm Mortgage and Financial Services points out many of the institutions being named by Moody’s are publicly traded banks and are very different than the banks many farmers work with. But he’s says, it’s time for farm business managers to pay attention to what’s happening in the larger financial space.

“It’s important to remember banks make money by buying and selling money,” Hoskins says. “With interest rate costs doing what they’ve done in the recent months, that’s the expense side of the bank. And you’re seeing profitability pressures because the costs are going up.”

He says he’s not envious of the job Federal Reserve Chairman Powell has, “He has a difficult job on its best day.”

From Hoskins perspective, the banking system is still very sound and the changes in the credit ratings or bank ratings aren’t terribly shocking.

“Take this opportunity to be mindful that banks costs are going up,” he says. “I wouldn’t say it’s anything to be overly concerned about. And certainly, if you go back to the mid-80s and what had then, we don’t have anything like that today.”

While his warning level is low, he does advocate farmers stay aware and as such here are three things:

Be comfortable with the institutions you are doing business with.
Be diligent, and keep your finger on the pulse of what is developing.
If farmers have questions or concerns about their institution and its profitability, the publicly and privately held bank data is available at ffiec.gov .

“In any environment, we can see banks be challenged, but every bank is managed by individuals,” he says. “For farm managers, just sitting down with the folks they do business with and having a good honest conversation has value. Increased communication I don’t think has ever resulted in a bad outcome.”

One example Hoskins shares is in regard to farmer cash flow.

“Recent events have opened the dialogue to a new avenue that candidly should have been a little more present all along,” he says “There’s more of a focus on the overall cash flow than a few years ago. Because of the low interest rate environment, just saying yes was a lot easier because you get higher profitability and you have a very low interest rates.”

He shares on the perspective is weighted with looking at how much of the gross farm revenue is being spent on interest and project that figure out in the future.

“For example, if a farmer has real estate loans that many be coming up to reprice in the next three years, what would that look like if we hold prices and yields constant—what does that do to their operation? When folks are looking at expansion, it really allows us the opportunity to focus more on how we within the banking industry provide more value to the customer,” Hoskins says.

7 Essential Strategy Considerations

Mon, 08 Jan 2024 15:51:50 GMT

Mark Faust works with owners, CEOs and sales managers who want to grow their businesses.

He says strategy should be like a laser, which can become sharper, more intense, brighter and more effective. And he recommends business managers review their strategy on a quarterly basis.

“Routinely sharpening your strategy gives clarity to your vision to be intensified with greater detail,” Faust says. “What gives you competitive advantage, your points of divergence from the competitive alternatives, can be intensified as well.

How and where you invest your resources, your strategic focus, can be intensified by strategically abandoning weak markets, customers, products and practices and reallocating resources to areas with higher return.”

Faust says objectives must be set in seven key areas:
1. Marketing
2. Innovation
3. Culture
4. Resource requirements
5. Productivity
6. Community, industry and social responsibility
7. Profitability requirements

Semi-Annual Review of Role Focus

The frequency of the strategy recalibration is key, and it’s a must to involve your team.

“When recalibrating your business’s targets quarterly and setting new objectives, it should be done with your team,” he says. “The more this rhythm takes hold, the more your team will contribute innovations and improvements through new objectives.”

He suggests all managers should have one-on-one realignment meetings with each direct report semiannually.

“There are tools to help to illuminate constraints and opportunities for an organization’s management team as well as keep everyone focused on dedicating an appropriate amount of time and focus to the appropriate objectives, projects and priorities,” he says.

Accountability Tools
Faust says business leaders point to their boards, advisers and customers for input.

“We all have blind spots, and having growth advisers and some type of board sharpens your leadership, strategy and execution,” he says. “Quarterly in-depth interviews with customers are one of the most commonly missed steps involved in developing strategy. These interviews should be a requirement.”

Faust has seen how having a third-party interview a sample of customers every quarter brings innovation and new opportunities. He credits this idea to the founder of strategy, Peter Drucker, who said if you’re not listening to the customer regularly, then you’re not doing strategy.

Growth Is Relative
Not all businesses can experience exponential growth.

“But odds are you know right now what type of and how much potential growth your company could have if you execute accordingly,” Faust says. “The key is to use the best practices above and get all you can out of all you’ve got.”

He encourages farmers to see how executing strategy as a quarterly process within their teams will uncover more and more hidden opportunities that facilitate business growth.

Here more from Mark Faust at the upcoming Top Producer Summit. Click here to register.

Truck rates staying hot despite more equipment, seasonal decrease in shipments

Fri, 23 Sep 2022 19:59:07 GMT

OVERVIEW:

Per-mile rates for refrigerated trucks are up 52%;
The industry outlook on truck rates for the remainder of 2022 shows that rates will head even higher;
DAT’s long-term forecast for spot-refrigerated truck rates predicts rates will increase in a range from 5 cents to 30 cents a mile higher by the end of the year;
As deliveries are rushed to retailers, shippers had a preference to be “on time” rather than “in full.” That meant less-than-full truckloads were delivered in order to keep product moving;
As compared to the previous, pre-pandemic times, spot market accounted for approx. 10% of freight. In November, spot market rates were sitting at about 25%;
If fuel costs approach 30% of truckers’ revenue, there is expected to be a rise in bankruptcies and exodus from the industry;
Tight freight conditions are expected to persist through much of the year.

Putting upward pressure on delivered produce prices, refrigerated truck rates have soared to nearly $5 per mile in early February, according to a survey by the USDA.

The $4.97 per-mile rate in early February for refrigerated trucks is up 52% from $3.27 per mile the same time last year and up nearly 70% compared with $2.93 per mile two years ago, according to the USDA.

Put another way, truck rates from Washington’s Yakima Valley to New York in early February were in a range from $11,000 to $13,000 per truck, up from $7,600 to $8,600 the same time a year ago, according to the USDA. For each 40-pound carton of apples shipped from Washington to New York, the freight cost per carton rose from $8.10 per carton a year ago to $12 per carton now.

The higher transportation costs were reflected in apple pricing. Size 72s Washington red delicious apples were trading at New York’s Hunts Point Wholesale Market at $42 to $45 per carton on Feb. 8, up from $40 per carton the same time a year ago.

OUTLOOK

The industry outlook on truck rates for the balance of 2022 reflects the belief by most that rates will head even higher.

According to a poll in the LinkedIn Fresh Produce Industry Discussion Group, nearly 80 people voting answered the questions:

Nearly half of those voting predicted truck prices would increase 16% or more in 2022 compared with last year.

ROLLER COASTER

Since the pandemic began, it has been a wild ride for refrigerated truck rates.

Influential factors in the temperature-controlled market are the highly fragmented, temperature-controlled capacity base and the fact that temperature-controlled commodities are less shelf-stable than their dry counterparts, said Mark Petersen, vice president of transportation for C.H. Robinson, Eden Prairie, Minn.

“Delays and disruptions, which are more common in a disrupted market, lead to an immediate next-shipment impact, creating a wave of potential waste and inefficiency,” Petersen said. “Compounding this issue, temperature-control carriers generally have lower trailer-to-tractor ratios than traditional dry fleets due to the higher cost of equipment.” That means that any waste, such as detention or dwell time causes a direct impact to supply-and-demand imbalance, forcing an increase in market price, he said.

Read related: New CDL requirements could cost you up to $8,500 and weeks of training

“This is, in part, why it’s so important to have a partner with access to a broad network of carriers,” Petersen said.

Elevated dry van rates are also a factor in refrigerated truck prices. “As dry van rates have increased, the market has drawn some temp-controlled carriers to shift to dry, reinforcing the higher rates to keep carriers hauling temp-controlled freight,” he said.

Petersen said that, while challenges with temperature-control commodities will likely continue, C.H. Robinson sees a growing potential for a return to more traditional seasonal supply-and-demand cycles.

“As always in the produce supply chain, weather-related disruptions challenge supply chains, particularly when they line up with higher consumer demand around events like the summer grilling season,” he said.
In general, market disruptions have supported a shorter contract cycle and spikes in the spot market.

Read related: Supply chain gridlock causes $2.1B loss to California agriculture

“For retailers who find themselves in the spot market more often these days, we launched new technology called Market Rate IQ that’s the first of its kind in the industry,” he said. “ It gives them the ability to see the patterns in their spot freight and show them what changes they could make to save money.”

Petersen said using technology to gain visibility into real-time risks is essential to limit waste and control costs.

TRENDING UP

Refrigerated truck rates typically plunge in January because of seasonally lower fruit and vegetable volume in the U.S., said Dean Croke, principal analyst for truckload freight marketplace DAT Solutions.

This year, refrigerated truck rates have been flat in January, and spot rates for refrigerated loads, excluding fuel, were $3.07 per mile at the end of the month. That is 82 cents per mile higher than the same week last year.

Contract rates have also risen, increasing 39 cents a mile compared with a year ago, he said.

Anything above $3 per mile is considered “new territory” for refrigerated truck rates, and Croke said the current seven-day rolling spot market average of $3.07 (excluding fuel) was about $1.22 per mile higher than the five-year average for that week.

Read related: 2022 brings big challenges in supply chain, logistics, trucking

Spot rates for refrigerated loads typically climb between March the peak domestic shipping season in the summer. This year, rates may stay elevated throughout the year, Croke said.

DAT’s long-term forecast for spot-refrigerated truck rates predicts rates will increase in a range from 5 cents to 30 cents a mile higher by the end of the year.

Higher freight rates in the past year have attracted more equipment and drivers to the industry, but Croke said that other constraints are keeping rates elevated.

The truck industry has added something like 230,000 power units in the last year, according to federal statistics of new carrier authorizations. As of November, the U.S. had a total of about 4.5 million trucks for hire in private fleets, Croke said.

“We’ve added capacity, but I think what’s happened is the volume of freight moving in the spot market has doubled in the last year,” he said. For 2021, the total number of loads moved was essentially flat, but the loads moving under contract dropped 14% and the loads moving on the spot market increased 14%.

The COVID-19 pandemic of 2020 created supply chain shortages that also contributed a massive shift to the spot freight market, rather than contracts, Croke said.

Demand was increasing but supplies were limited by the pandemic bottlenecks, creating an imbalance in some shipping lanes and creating an urgency to acquire transportation through the spot market.

“What that meant was that capacity wasn’t where it should be, or predicted to be, and shippers had to go to the spot market,” he said.

As they rushed to deliver orders to retailers, shippers had a preference to be “on time” rather than “in full.” That meant less-than-full truckloads were delivered in order to keep product moving.

In pre-pandemic times, Croke said about 10% of all freight moved on the spot market, and last November, it was 25% spot market and 75% contract. Now, he said, that ratio may be about 20% spot market and 80% contract.

“You could safely say the volumes moving on the spot market have doubled during the pandemic,” he said.

The driver shortage for trucks is misleading, he said. Instead of looking at truck capacity alone, Croke said the labor shortages at the grower-shippers and warehouses have held back deliveries.

“Every grower and every warehouse have struggled to get labor,” he said.

Even though there are thousands more trucks in the market, truck velocity has slowed.

When growers or distributors have fewer dock doors open and fewer warehouse workers available, trucks will spend longer times loading and unloading.

“I’ve been saying for six months that we don’t have a driver shortage, we have a driver velocity/throughput issue,” he said. More trucks are entering the market, but they’re cycling through markets at a slower speed, he said. “I think we have plenty of trucks, but they are not moving fast enough; they are spending more time loading and unloading. There is capacity, it’s just not burning through markets quick enough because of all of the imbalance we’ve got because of the pandemic labor shortages and supply chain disruptions, all those things that are still persisting.”

Read related: USDA announces partnership to ease port congestion and restore disrupted shipping services to U.S. grown agricultural commodities

The spot market typically declines over time as elevated contract rates draw volume out of the spot market. “That’s why spot market rates should cool as contract rates remain elevated year over year,” Croke said.

Demand will eventually readjust and there will be more equilibrium in the market, but Croke said tight freight conditions are expected to persist through much of the year.

Even though fuel costs are high for truckers, they only represent about 25% of their revenue, which is a fairly standard ratio. If fuel costs approach 30% of truckers’ revenue, there is expected to be a rise in bankruptcies and exodus from the industry.

Croke said the truck protests in Canada about the vaccine mandate are increasing rates for some north-south lanes. “Of the 160,000 cross-border drives, about three quarters are Canadian,” he said, noting that “because of the protests up there in Canada, you’ve got fewer trucks coming across the border, and it has meant there’s been a tightening of capacity in those northbound lanes.”

Freight rates appear to be quite strong, despite increasing numbers of trucks and drivers coming on to the market, said Dale Watkins, regulatory affairs manager at the Owner-Operator Independent Drivers Association, or OOIDA.

“I think, on the economic side, I think (drivers) are in a good place,” he said, but the OOIDA does not believe there is a driver shortage.

“There’s a record number of commercial driver’s license holders,” he said. “There are people available, you just need to pay them better; most of the ones that are complaining the loudest are the bigger carriers with the highest turnover.”

Watkins said there are some reports that the disruptive protests in Canada, linked to vaccination requirements for drivers moving cross-border commerce, could spread to the U.S.

“As to whether that will really happen, who knows?” Watkins said. “It depends on what our president will do and if he will pull back on these mandates or not.”

There may not be any quick relief to high freight rates for refrigerated trucks, said Seth Konkle, general manager at the Indianapolis, Ind.-based transportation provider Scotlynn Group.

“We’re hoping that (the rates) at least stabilize and stop the upward trend,” he said, noting that the amount of equipment available is slowly coming back.

However, long loading and unloading times have slowed trucks, he said.

Another industry leader said that the firm rate outlook shows no sign of backing down.

“We are forecasting refrigerated truck rates will remain elevated throughout the remainder of 2022,” said John Tonsil Jr., co-owner of Avondale, Pa.-based Gorilla Logistics. “Shippers have become accustomed to it and overall market conditions show no sign of letting up.”

As the U.S. loosens its COVID-19 restrictions, he said he foresees additional increases in consumer spending resulting in continued high refrigerated truck rates to shippers.

“Working with committed transportation partners will offer the best chance to mitigate some of the increases but the booming demand for products will continue to reflect in refrigerated truck rates,” Tonsil said.

Related: PODCAST: Shay Myers on freight issues, retail updates, social media

“I think a lot of shippers and receivers have gotten a lot better about being flexible and being quicker,” he said. However, because of labor shortages, some suppliers and receivers are still not able to load and unload trucks, and drivers are having to wait as much as a day to get unloaded.

“(Delays) are definitely restricting capacity even more than it already is,” Konkle said.

Some shippers want to increase contract pricing, but Konkle said that the carrier is reluctant to do year-long commitments because of the potential volatility of the market.

“We’re a little bit more willing to do three to three- or six-month commitments, which ultimately is going to benefit the shippers because, at some point, there’s going to be some relief in capacity and the rates will soften up,” he said. “Really, until COVID is completely behind us, we’re trying to avoid long-term commitments as much as possible.”

Productive Days on the Farm Start with a Morning Meeting

Thu, 22 Sep 2022 00:55:16 GMT

It’s early. You haven’t had enough coffee. Everyone already knows what needs to be done. You don’t have time. The list of excuses goes on about why you don’t need to hold a morning meeting for your team.

But some leaders suggest rethinking that choice.

“You always have time to plan and get your staff ready for the day. If you don’t decide to plan your day out or how you’re going to use your resources, you are doomed to fail,” said Benjamin Stajkowski of Grand View Farms during the Carthage Veterinary Service Swine Health and Production Conference.

He believes morning meetings set the tone each day on the farm to be productive and just busy. Here are five things to consider doing at your next morning meeting, Stajkowski said.

1. Take attendance.
Who’s here? Who’s missing? Find ways you can lift and shift to cover for anyone who is not present.

2. Go over daily or routine tasks and assignments.
Discuss what you are going to do – it could be someone’s first day or their 10th year, reinforce key tasks. Don’t assume your employees know what to do.

3. Discuss weekly tasks.
We all know the weekly tasks, but when will they happen? Is today the day for a weekly task or is it only a priority if there is extra time in the day? Stajkowski said that’s why it’s so important to share the priorities of the weekly tasks.

4. Talk about the non-routine items that will happen.
What are special jobs we need to do this week? Things that aren’t routine? Keep repeating them, he added. You may think employees know, but the more who know, the better.

5. Keep the team informed about what’s going on.
Go over safety issues. We want to keep our people safe because they are the best asset on our farm, he said. Discuss production numbers. Are you winning or losing? Is there more work to be done? Provide positive feedback for an individual or a group, but only share constructive feedback as a group.

“All the plans in the world are great, but we all know something’s going to go wrong in the first 30 minutes in the day,” Stajkowski laughed.

That’s another reason why morning meetings can be so beneficial. They allow leaders to reconfigure how the day will go more easily because everyone has been informed about the bigger picture.

To keep things moving all day, he recommended conducting a mid-day check-in at lunch or at a mid-day break to see how progress is coming along.

At the end of the day, encourage all staff or at least farm leadership to review what was accomplished throughout the day, he said. Determine what still needs to be completed tomorrow and start planning other tasks and chores for the week ahead.

“Then ask yourselves the most important question, ‘What can we do better tomorrow?’” Stajkowski said. “There’s always opportunities every day for improvement, regardless of whether it’s the most perfect day on the farm or not.”

In the end, it comes down to planning, he said. Planning is the key to success in any endeavor.

“Are you going to use your most important asset to your advantage and get the most out of it?” Stajkowski said. “Having everyone on the same plan is even more critical when lacking labor, time or resources.”

More from Farm Journal’s PORK:

Proof That People Make All the Difference on Successful Pig Farms

It’s Time to Up Your Game

Don’t Let Pork Industry Careers Become Undesirable

Technology Is… Considering A CTO

Thu, 27 Jul 2023 16:00:00 GMT

Is now the time to expand your tech expertise?

As you look at your farm’s capital expenditures, how many are related to technology? Think broadly. The numbers probably climb pretty fast.

“An important part of our business is to try new things,” says Brian Watkins, Ohio farmer and CEO of CropZilla, a farm software provider. “Even if you’re not an early adopter, you still have to have an intentional innovation strategy.”

Your farm’s strategy should span management information, agronomic technology and equipment technology, Watkins says. To make sure your farm is ahead of the pack (or at least in the race) you need someone to own this part of the business.

A Strategic Move

A recent Farm Journal technology survey shows 68% of farmers say they don’t see their farm needing a chief technology officer or similar positions in the future. Yet, 58% of those same farmers say their data collection practices are adequate for now but probably not good enough for tomorrow.

(Farm Journal)

Don’t be intimidated by the title of chief technology officer, Watkins encourages. The job label isn’t important. Your goal is to have someone on the team at least spending part of their time evaluating technology options, determining what to buy into and chucking out products or services that are not a fit.

“The point is you don’t want to let other people lead you around in terms of technology,” he says.

Assess your technology needs to determine if you should have an in-house expertise or if you should hire an external person, suggests John Fulton, precision agriculture specialist for Ohio State University Extension.

“You need someone who at least spends time keeping up with the technology,” Fulton says. “This can include attending conferences, talking to neighbors, reviewing information online and reading articles — this person is responsible for the farm’s digital strategy.”

Fill the Need

Look around your family and team, suggests Peter Gredig, an Ontario grain farmer and technology developer with mobile app development company AgNitrion. Is there a child, sibling or new employee who geeks out on technology, is internet savvy or is a gamer?

“There are a lot of diamonds in the rough on farms,” he says. “We are hiring young people who may not be ag savvy, so we are teaching them the ag stuff. But we’re not letting them teach us what they know on the tech side.”

Technology will continue to change how you farm — make sure you’re ready to capitalize on it.

“I always say a successful tech strategy has nothing to do with what tech you’re using; it has to do with diligences and know what’s available and if it fits on your farm,” Gredig says.

What Does a CTO Do?

The responsibilities of a chief technology officer (CTO) can vary depending on the type of farm operation. Peter Gredig, an Ontario grain farmer and technology developer, says the job description can include the following tasks:

Develop a technology strategy aligned with the company’s business goals.
Discover and implement new technologies that create a competitive advantage.
Help staff use the technology profitably by cutting costs, boosting productivity or improving efficiency.
Ensure proper use and efficiency creation of new and existing technologies.
Make adjustments based on feedback from staff and clients to improve the use of technology.
Communicate the technology strategy to partners and investors.

Technology is… different for every farmer. Find resources on how to make smart technology investments.

John Phipps: You'll Have to See This to Believe What Artificial Intelligence Can Now Do

Wed, 21 Sep 2022 14:02:24 GMT

Fair season is winding down, with its images of earnest young men and women leading impeccably groomed animals in a show ring. At least that’s what pops to mind for many of us in agriculture. But other stuff goes on at the fairs, and this year at the Colorado State Fair, there was a bombshell event seemingly unconnected to agriculture.

View this post on Instagram A post shared by Colorado State Fair (@colostatefair)

This is the first-place entry in the digital art division. The title is “Space Opera Theater,” only in French, which I would only mangle hopelessly. I know, it looks like a slick science fiction book cover, but the uproar is over how it came to be.

Using an artificial Intelligence program called Midjourney, artist Jason Allen of Pueblo, Colorado created this image without a brushstroke or pencil line – he entered some carefully chosen text into the program and then took the image to be printed on canvas.

While the picture may not be your preferred type of art, such AI programs can tackle styles and subjects from impressionism to portraiture. In fact, they are doing so with rapidly increasing skill, originality, and acclaim. Using a process called diffusion, the program somehow matches the text with millions of online images into a mashup that has the art world flummoxed and artists terrified.

One reason is while we could kind of imagine AI taking over sophisticated automation and even complex management tasks like hiring decisions, we have considered the mystical skills of creative work like art of music as beyond the reach of computers. This picture is early proof that assumption may not be completely true.

While AI works essentially by trial-and-error on a massive scale, it can learn to pick out those very few results that people connect with, just like it sorts resumes with remarkable success to find the right people to hire. AI is also muscling into creative fields like writing – you have probably already read a computer-generated newspaper story, especially on the sports or financial pages. AI is even being used to write humor – a troubling development for me.

As the programs keep improving, which they do on their own, the output is slipping unnoticed into more and more creative fields, such as fashion design, for example. I’ll talk more about how AI might surprise us in agriculture, but we probably won’t believe it until, like Colorado fair-goers, we see it with our own eyes on our own farms.