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  • Management Priority #1

    Management Priority #1

    Steven Klose, Tiffany Lashmet, and Jordan Shockley

    Managing a farm or ranch is hard to say the very least.  Running your own business of any kind is difficult, but the nature of production agriculture is particularly challenging.  Long production cycles seem to magnify every decision, while the feedback loop between decision and outcome is delayed and unclear.  Operating in a competitive environment with little-to-no market power or influence, ag producers are price takers when it comes to purchasing inputs and price takers when it comes to selling commodities.  When it comes to the production process, you could say… weather takers.  Layer on top of this the pressure many producers feel of maintaining the family’s legacy, and it’s easy to get to the point of questioning “how much more can I take?”

    It is not lost on us and our team of Southern Ag Today authors that offering management advice on Monday mornings is a little like a football fan offering quarterback advice from the comfort of the recliner.  We try to keep the tips, data, tools, and other information as relevant as possible, and one of our measuring sticks for topics is whether or not our producer audience actually has the time to do anything with the information.  Because we know your job is busy and overwhelming, we can confidently say you have no choice but to make time for today’s management topic.

    Stress. It can weigh heavy, affecting your emotional, physical, and mental health. 

    Among the endless list of things to manage, the stress of it all feels like another not-so-manageable thing you have to deal with. Too often, your physical and mental well-being take a back seat to everything else that must be done.  Remember, this is very much like the oxygen mask on the airplane.  Your health, both physical and mental, must be priority number one.  You take good care of your equipment and livestock.  Don’t ignore yourself. You are the most important asset on the farm/ranch.

    Recently, I had a small leak in the seam on the side of my water heater. It was small. The problem wasn’t urgent. The drain pan & drain line were working as they should. And, of course I was busy.  For longer than I care to admit, each day/week held more important tasks than finding a plumber.  I’m sure you know how this ends.  There came a day when the water heater burst.  In that moment, I was managing the consequences of not managing my priorities.  Overwhelming stress and your health can be like that.  

    We want to encourage you. Don’t ignore your health, especially if you have been putting off some nagging mental or physical issue.  There’s no better time than now to address it.  Of course, with the extra pressures of this time of year, if the mental stress has already pushed you too far, please check out some of the immediate mental health resources available.  Farm Hope and AgriStress Helpline are two programs available in Texas.  The 988 Suicide & Crisis Lifeline is available nationwide. To find local help in your state, check out the National Agricultural Law Center’s compilation of Stress & Mental Health resources here:  https://nationalaglawcenter.org/center-publications/family/mentalhealth/

    As 2025 comes to a close, we wish you a Happy Holiday Season and the best of Health and Prosperity in 2026. 

    Klose, Steven, Tiffany Lashemt, and Jordan Shockley. “Management Priority #1.” Southern Ag Today 5(51.1). December 15, 2025. Permalink

  • California Defines Ultra-processed Foods

    California Defines Ultra-processed Foods

    This month, California Governor Gavin Newsom signed AB 1264 into law. This legislation creates the first statutory definition of ultra-processed foods (UPF) and makes California the first state in the nation to ban certain UPFs from being served in schools. This is particularly noteworthy because there is no universally accepted definition of UPF, whether in law or in science. AB 1264’s enactment is also important because it follows recent announcements from the US Department of Agriculture (USDA) and the Food and Drug Administration (FDA) that the federal agencies are collaborating to create a definition for UPFs. 

    California’s AB 1264 

    With a goal of making school meals healthier, California enacted AB 1264. This law, along with creating a legal definition for UPFs, prohibits certain foods meeting the definition from being served in California’s public schools. Specifically, the law bans “restricted school foods” and “UPFs of concern” from being served in elementary, middle, or high schools after July 1, 2035. The classification of foods as being “restricted school foods” or “UPFs of concern” depends on whether the foods meet the definition of UPFs laid out in the California law. 

    Under the law, UPFs are defined as food or beverages that contain: 

    • A substance available in FDA’s Substances Added to Food database that has a FDA-defined technical effect, and 
    • Either 1) high amounts of saturated fat, sodium, or added sugar, or  2) a non-nutritive sweetener

    FDA’s Substances Added to Food is a searchable database that includes FDA regulated ingredients such as food additives, color additives, and Generally Recognized as Safe substances that are listed in FDA regulations. California’s new UPF definition applies to substances that can be found in the database and are designed with certain technical effects, such as stabilizers and thickeners or colors and coloring adjuncts. The definitions of these technical effects can be found in 21 CFR § 170.3(o). 

    To meet the UPF definition, a food or beverage must contain one of the substances with a defined technical effect and contain either 1) high amounts of saturated fats, sodium, or added sugar or 2) a nonnutritive sweeter. Specifically, the law defines a product with a high amount of saturated fat as a food or beverage deriving 10 percent or greater of its total energy from saturated fat. Similarly, high sodium food or beverages contain a ratio equal to or greater than 1:1 milligrams of sodium to calories. Finally, added sugar products meeting the definition include food or beverages with at least 10 percent of total energy derived from added sugars. Thus, under California’s UPF definition, a food containing a substance with a defined technical effect that derives 12 percent of its total energy from added sugars would be a UPF. 

    Further, California’s definition would also include a food that contains 1) a substance with a defined technical effect and 2) a non-nutritive sweetener. A non-nutritive sweetener is defined as a substance with less than 2 percent of the caloric value of sucrose per equivalent unit of sweetening capacity. 21 CFR § 170.3(o)(19). California lists several examples of a non-nutritive sweetener including sucralose, steviol glycosides, and lactitol. 

    Prohibiting specific UPFs from schools 

    Along with creating a definition for UPFs, the California law also prohibits “restricted school foods” and “UPFs of concern” from being served in schools. UPFs of concern include food that 1) meets the law’s outlined UPF definition and 2) is classified as “of concern” through regulations adopted by the California Department of Public Health (CDPH). Restricted school foods are defined very broadly by the law as a food or beverage that contains one or more of the listed substances with a defined technical effect and is also restricted from service or sale in schools via CDPH regulations. The law directs the CDPH to define both UPFs of concern and restricted school foods after considering several factors. CDPH’s consideration of the listed factors must be completed by June 1, 2028. By July 1, 2029 schools must begin to phase out both restricted school foods and UPFs of concern, and by July 1, 2032 a vendor shall not offer restricted school foods or UPFs of concern to a school. 

    Significance of California’s UPF definition

    The timing of the enactment of AB 1264 is significant because the USDA and FDA are currently collaborating to establish a definition of UPFs. On July 23, 2025, the agencies published a press release announcing a joint Request for Information to “gather information and data to help establish a federally recognized uniform definition for UPFs.” The agencies have not indicated that they plan to prohibit UPFs in school meals, as California has done, but they have stated a uniform definition will “allow for consistency in research and policy.” California’s law might influence the definition USDA and FDA create. Further, as other state legislatures begin their 2026 sessions in the upcoming months, they might model California’s law in their own UPF definitional attempts. To read more about the California UPF definition, click here to read NALC article ‘MAHA’ Movement: Defining Ultra-processed Foods. 

  • Administration Providing Economic Assistance Payments to Struggling Farmers

    Administration Providing Economic Assistance Payments to Struggling Farmers

    Joe Outlaw and Bart L. Fischer

    On Monday, December 8th, President Trump and USDA Secretary Rollins announced the creation of the Farmer Bridge Assistance (FBA) Program, a new round of economic assistance totaling $12 billion for the 2025 crop, with $11 billion for row crop farmers. While details such as individual commodity payment rates have not been made available, it was announced that the structure of FBA would be similar to the Emergency Commodity Assistance Program (ECAP) that producers received earlier this year due to low commodity prices received for the 2024 crop. Recall the ECAP program provided assistance based on a producer’s planted acres of eligible commodities and 50% of acres that were prevented from being planted. According to USDA, acres that were prevented from being planted will not be eligible for FBA.

    Individual payment rates are expected to be announced the week of December 22nd. Payments are expected to be released by February 28, 2026. It was announced that payment limits would be different from ECAP. Payment limits will be $155,000 per person or legal entity, and the AGI limits will be $900,000. In ECAP, producers could double their limit if 75% of their AGI was from farming. The new assistance does not have this provision.

    The last two years have been terrible financial years for most crop farmers across the United States. While producers will be grateful for the assistance, their estimated losses for the 2025 crop exceed $40 billion. The previous ECAP program paid 26% of losses to producers for the 2024 crop. Based on the estimates of loss for the 2025 crop, it appears the newly announced program will likely cover a similar portion of producer losses.

    The announcement and subsequent details of the program when released will allow lenders to include the amount of the assistance in producer’s loan packages which should help those producers who are trying to secure operating loans for the 2026 crop year.

    Outlaw, Joe, and Bart L. Fischer. “Administration Providing Economic Assistance Payments to Struggling Farmers.” Southern Ag Today 5(50.4). December 11, 2025. Permalink

  • What Happened When the CME Went Down? A Look at the First Hour in Corn and Soybean Futures

    What Happened When the CME Went Down? A Look at the First Hour in Corn and Soybean Futures

    On the evening of November 27, 2025, the CME’s electronic trading system had a major outage. Trading in corn and soybean futures stopped and then came back before the market opened the next morning. Many farmers and merchandisers wondered whether the first hour after the market reopened looked normal or if it showed signs of stress.This article uses one-minute price and volume data to describe what happened during the first hour of trading on Friday, November 28, 2025.

    To understand whether the morning after the outage was unusual, I compared one-minute futures data for the first hour (after the 8:30 a.m. Central Time open) on November 28 against similar data for two simple benchmarks: (i) the previous ten trading days in 2025, and (ii) all trading days in 2025. For each comparison, I looked at how much futures contract prices moved minute-to-minute and how many contracts traded in that hour. For each day, I focused on the main contract with the most trading volume during the daytime session.

    For corn, the first hour after the CME came back was far from normal. Table1 summarizes how large the first hour was compared with a typical morning. Compared with the previous ten trading days, the amount of price movement was a little more than five times larger than usual, and the total up-and-down movement over the hour was more than three times larger. Trading volume during that first hour was almost nine times the recent ten-day norm. Even when compared with all trading days in 2025, corn still shows very large numbers: more than three times the usual price movement and about ten times the usual first-hour volume. These findings match what many people felt in real time. The market did not simply return to normal after the outage. Corn, in particular, showed the kind of price swings and volume that look more like a stress event than a routine morning. Soybeans also showed more activity than usual, but the increase was not as dramatic as in corn. Compared with the previous ten trading days, soybean price movement was a little under three times the recent median, and volume was just under three times. Against the full 2025 distribution, soybean price movement was a little more than four times the median, and volume was about five times. Soybeans were active, but they did not spike as sharply as corn.

    For farmers, merchandisers, and elevators, there are a few practical lessons when a technical problem occurs the night before the market opens. The first hour can be the most unstable time of the day when orders that could not be processed during the outage may all come in at once when trading resumes. That argues for extra caution with large orders right at or just after the open on such days. 

    Finally, this type of simple analysis, checking how big the first hour is compared with recent days and the full year, can be a useful monitoring tool. Co-ops and elevators could use similar checks to decide when to widen quotes, slow down hedging, or adjust risk limits when the market appears unusually active.

    Table 1: How Big Was the First Hour After the CME Outage?

    CornLast 10 trading daysabout 5.4×about 3.2×about 8.9×
    CornAll 2025 trading daysabout 3.5×about 2.3×about 10.1×
    SoybeansLast 10 trading daysabout 2.8×about 2.0×about 2.8×
    SoybeansAll 2025 trading daysabout 4.3×about 2.3×about 4.8×

    * “First-hour price movement” measures how much prices bounced around minute-to-minute in the first 60 minutes.
    ** “First-hour total price movement” adds up all the ups and downs during that hour.

    [1] Eunchun Park is an Assistant Professor in the Department of Agricultural Economics and Agribusiness / Fryar Price Risk Management Center of Excellence at the University of Arkansas

  • When Plants Stop, Spreads Change: Processing Shocks and the Beef Live-to-Cutout Price Spread

    When Plants Stop, Spreads Change: Processing Shocks and the Beef Live-to-Cutout Price Spread

    Eunchun Park, Christopher N. Boyer, and Clinton L. Neill[1]

    The live-to-cutout beef price spread is the difference between the value of boxed beef and the price paid for live cattle and is a commonly used metric in the industry. This article summarizes a recent paper by Park et al. (2025) that used this metric to explore what happens to the differences in these prices when beef packers process capacity changes. Specifically, this paper explores what happens to the price spread when a processing plant goes offline temporarily or permanently. 

    The key distinction between a temporary and or permanent closure is temporary closures are often unexpected, with short notice, while permanent closures might be more telegraphed or planned. Temporary outages—such as the Tyson Holcomb fire in August 2019 or the COVID-19 disruptions in spring 2020—remove effective capacity without warning. In those periods, the study found the price spread tends to move to a higher level with greater week-to-week volatility, and that wide-band behavior often persists for several weeks before normalizing. By contrast, permanent closures are generally announced in advance, allowing time to adjust cattle flows, freight, and line schedules. Because the industry can prepare, the spread before and after a permanent closure typically resembles normal trading conditions.

    Figure 1 illustrates these patterns. The black line shows the weekly live-to-cutout spread. Blue vertical lines denote permanent closures (ConAgra 2000; Tyson 2008; Cargill 2013), while red lines denote temporary outages (Tyson fire 2019; COVID-19 2020). Around permanent closures, the spread looks normal. Around temporary outages, it jumps and stays jumpy for several weeks. The temporary events align with sharp run-ups and a bumpier path in the weeks that follow.

    The implications of this study differ by audience. For producers and feedyards, treat the first two to four weeks after an unexpected outage as a high-variance window. Expect a higher average spread and larger week-to-week swings at the same time. Maintain an additional working-capital cushion, widen basis and grid bands in cash-flow plans, and be conservative on marginal pens. If marketing on the grid, expect greater dispersion and review terms that are usually taken for granted when capacity is tight. For lenders and risk managers, stress tests should raise both the level and the variance of the spread, with horizons long enough to cover the typical persistence of the high-regime window.

    Permanent closures call for a different approach. When changes are announced and phased in, the market usually adapts without dramatic swings in the spread. The task is primarily logistical—update cattle routing, confirm shackle space, and revise freight and plant schedules—while keeping standard cash-flow settings.

    Why rely on the spread? It is public, timely, and can reflect packer margins and producer net prices. When capacity tightens, harvest slows, boxed beef firms, and the spread widens—often before other indicators move. No complex model is required; it is enough to know the usual range for your region and when to widen operating bands.

    In short, temporary, unexpected outages create brief intervals when the spread runs higher and volatility increases; plan the first month around that reality. Permanent, telegraphed closures generally allow the industry to adjust with less disruption. Match the playbook to the shock type to reduce hurried decisions when plants stop.

    Figure 1. Weekly live-to-cutout beef price spread ($/cwt), 1992–2024. Vertical lines mark processing-capacity shocks: blue = permanent closures (ConAgra 2000; Tyson 2008; Cargill 2013) and red = temporary outages (Tyson Holcomb fire 2019; COVID-19 2020). Temporary shocks coincide with short-lived regime shifts—higher levels and choppier volatility—while permanent closures show little persistent change in the spread.

    References

    Park, E., Boyer, C. N., and Neill, C. L. (2025). A Markov regime-switching event response model: beef price spread response to processing capacity shocks. Empirical Economics, 68:1039–107.

    [1] Eunchun Park is an Assistant Professor in the Department of Agricultural Economics and Agribusiness / Fryar Price Risk Management Center of Excellence at the University of Arkansas, Christopher N. Boyer is a professor in the Department of Agricultural and Resource Economics at the University of Tennessee, and Clinton L. Neill is an adjunct assistant professor Department of Population Medicine and Diagnostic Sciences at Cornell University.