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  • When the River Runs Low, Southern Grain Farmers Pay the Most

    When the River Runs Low, Southern Grain Farmers Pay the Most

    Authors: Yuan Zhang, Andrew Anderson, and Ryan Loy

    When drought pushed the Mississippi River level to historic lows in late 2022, barge freight rates jumped far above their usual levels. However, those costs do not stop at the river. They are disseminated throughout the grain marketing system and show up at the farmgate as weaker basis.

    For corn and soybeans moving from interior elevators to Gulf export terminals, barge transportation helps determine the grain’s local value. When barge rates rise, the cost of moving grain to export markets also rises. Elevators then face a wider gap between what they can pay farmers and the grain’s value at the Gulf. Part of that transportation shock is passed back to producers in the form of lower cash bids.

    The size of that pass-through depends heavily on where farmers sell their grain. River transportation conditions, local grain demand, and competition among buyers all influence how much of a change in barge freight costs reaches the farmgate. Low river levels can restrict navigation and raise transportation costs, while differences in local marketing opportunities can either amplify or reduce the resulting impact on basis. As a result, the impact of higher barge rates varies considerably across regions and crops.

    Recent research by Zhang et al. (2026) finds evidence that barge freight shocks are passed back to farmers through weaker local corn and soybean basis. Higher barge rates weaken basis for both crops, but the effect is not uniform. Figures 1 and 2 identify areas where barge rate increases had the most severe impact on local basis. Lighter yellow areas indicate larger basis declines from the same increase in barge rates. The strongest impacts are concentrated in southern river states, especially along the lower Mississippi and Ohio River corridors. In the most exposed corn counties, including parts of Louisiana, Arkansas, Kentucky, and Tennessee, more than half of a barge rate increase reaches the farmgate as weaker basis. In the most exposed counties, a $1.00 per bushel increase in barge rates reduced corn basis by roughly 60 to 71 cents and soybean basis by roughly 49 to 53 cents. The crop differences reflect different marketing channels. For corn, the smallest basis impacts tend to occur in areas with more local buying competition and nearby processing alternatives. For soybeans, the smallest impacts tend to occur farther from river ports, reflecting soybeans’ stronger connection to export-oriented barge movement. For southern river states, however, the main result is the same for both crops: higher barge rates lead to substantially weaker local basis.

    Figure 1. Estimated Effects of Barge Freight Rate Increases on Local Corn Basis.

    Source: Estimates are from Zhang et al. (2026), using weekly elevator cash bids from DTN ProphetX, futures prices from Barchart cmdtyView

    Figure 2. Estimated Effects of Barge Freight Rate Increases on Local Soybean Basis.

    Source: Estimates are from Zhang et al. (2026), using weekly elevator cash bids from DTN ProphetX, futures prices from Barchart cmdtyView.

    Futures and options can protect farmers against changes in broad commodity prices, but they do not hedge local basis risk. Farmers in highly exposed areas have fewer tools when river disruptions weaken local cash bids, making reliable river navigation especially important for farm profitability. Investments that reduce navigation disruptions can help protect farm revenues, particularly in counties along the lower Mississippi River, where transportation shocks are strongly passed through. Local competition also matters. When farms have fewer elevator options, more of the transportation shock is reflected in their cash bids. Practical responses include diversifying buyers, selling to nearby processors when possible, and using owned or leased storage to wait out short-term navigation problems. Together, these findings highlight how transportation infrastructure and local marketing opportunities influence the extent to which farmers absorb river-related transportation shocks.

    References

    Zhang, Y., A. E. Anderson, N. J. Pates, and E. Park. 2026. “When the River Runs Low: Heterogeneous Impacts of Transportation Disruptions on Local Grain Basis.” Agribusiness. doi: 10.1002/agr.70108.

    Recommended citation format: Zhang, Yuan, Andrew Anderson, and Ryan Loy. “When the River Runs Low, Southern Grain Farmers Pay the Most.” Southern Ag Today 6(26.3). June 24, 2026. Permalink

  • Feedlot Placements and Marketings Drop Sharply

    Feedlot Placements and Marketings Drop Sharply

    The latest USDA Cattle on Feed report was released on Thursday, June 18th.  While there weren’t any big surprises in the report, it highlighted several interesting trends that will be worth watching over the next few months.

    May feedlot marketings, those cattle sold by feedlots to packers, were down 11.8 percent compared to last May.  Part of that decline was due to one less operating day in May 2026 compared to May 2025, which cut about 5 percentage points off marketings.  But, marketings remained low regardless of the number of days.  More days on feed, reduced packing plant schedules, and fewer cattle have slowed marketings.  

    Placements of cattle into feedyards were down 9.7 percent compared to last May.  Normally, close to 200,000 more feeders are placed in May than in April each year.  The larger May placements are often driven by cattle coming off wheat pasture that has been grazed out or other winter grazing programs reaching the end of cool season grass pastures.  This year, May placements were only 2,000 head more than April.  May placements were almost smaller than April for the first time.  It’s likely that some cattle that would have been placed in May were pulled forward into April given the drought status of many areas.  One of the other interesting trends in placements this year is the small month to month differences.  Monthly placements in 2026 have ranged from a low of 1.611 million head in February to a high of 1.741 million head in January.  Normally, there is a range of about 300,000 head.  This dampening of seasonal placements may have some interesting effects on marketings and beef supplies late in the year.

    The combination of 1.551 million head marketed and 1.704 million head placed left the total number of cattle on feed larger than last year by 2.1 percent on June 1.  That is the second consecutive month with more cattle on feed than the prior year and it continued the unusual trend of growing numbers on feed in the first half of the year.  What does this mean for the rest of the year?  More cattle on feed may mean more cattle ready for slaughter late in the year compared to last year.  That should pressure prices later in 2026.  The reduced placements might suggest fewer heifers being sent to feedlots but there is little evidence to support that idea.  The July cattle on feed report will include the quarterly estimate of the number of heifers on feed and that will shed some light on heifer retention.

    Recommended citation format: Anderson, David. “Feedlot Placements and Marketings Drop Sharply.” Southern Ag Today 6(26.2). June 23, 2026. Permalink

  • H-2A Labor: An Opportunity for Beef Cattle and Dairy Farms?

    H-2A Labor: An Opportunity for Beef Cattle and Dairy Farms?

    Authors: Jingyuan Zhang, Sushil Paudyal and Grace Melo

    Finding reliable workers has become increasingly difficult for U.S. farmers, especially for physically demanding agricultural jobs (U.S. Department of Agriculture, 2023). The pool of domestic workers willing to take these jobs continues to shrink, even as wages have increased. In response, many farms have turned to the H-2A program. 

    Between 2015 and 2024, the number of certified H-2A workers more than doubled, reaching 350,000 or more (Figure 1). These workers now represent a significant share of the agricultural labor force and play an important role in supporting food production.

    Figure 1. Number of H-2A Workers Certified, 2015–2024

    Source: U.S. Department of Labor, Performance Data 2015-2024

    The program has been, and remains, heavily concentrated on crop agriculture (Escalante, 2023). More than 80% of H-2A workers are employed in crop production, while animal farms make limited use of the program (Figure 2). Although the number of H-2A workers in animal agriculture increased from about 7,500 to over 17,500 since 2015 (Figure 1), they accounted for only 4.7% of total H-2A employment in 2024 (Figure 2). This raises an important question: why is adoption so low among livestock farmers, and how could the program better serve their needs?

    Figure 2. Number of H-2A Workers Certified by Sector, 2024

    Source: U.S. Department of Labor, Performance Data, 2024

    A survey conducted with 133 livestock producers in Texas—including 99 beef cattle producers (Zhang and Melo, 2026) and 34 dairy farmers—provides insight into these questions. Farmers in both sectors reported persistent labor challenges, with 81% of beef cattle producers and 71% of dairy producers struggling with labor hiring, turnover, training, and retention. Although both sectors demand substantial labor, beef cattle operations often have more flexible and varied labor needs, while dairy farms tend to focus more on traditional agricultural tasks such as cow care, milking, and farm maintenance. Dairy farms also tend to hire more workers, require more hours per worker, and have a relatively higher share of farms paying higher wages. These trends align with Escalante and Gutierrez-Li (2025). However, producers in both sectors similarly reported four main barriers that limit H-2A use in cattle operations:

    • The program is limited to temporary or seasonal work, whereas livestock production typically requires year-round labor, making many operations ineligible. This is particularly true for dairy farms, where milking and animal care are continuous.
    • H-2A requires employers to guarantee at least 35 hours of work per week. Livestock labor needs, however, are often variable. For example, beef operations may require fewer hours during some periods and more intensive labor during others, making it difficult for many farms to commit to and reliably meet the required minimum (U.S. Department of Labor, 2023).
    • The Adverse Effect Wage Rate (AEWR) is often viewed as too high for livestock farmers. During our survey period in Texas, the AEWR was $15.55 per hour. In contrast, 67% of beef producers and 29% of dairy producers reported paying $13 per hour or less, and only a negligible share paid above $16. While the AEWR is intended to protect domestic workers, the required wage, combined with housing and transportation costs, can be difficult for livestock farms operating on tight margins.
    • The program lacks flexibility in job duties. Employers must specify H-2A tasks in advance, and some routine livestock activities, such as hauling cattle or transporting feed and milk, may fall outside the program’s definition of agricultural work (Congressional Research Service, 2021). This creates uncertainty and potential legal risks for producers whose labor needs often shift with weather, emergencies, and animal conditions.

    Despite these challenges, interest in the program remains strong. About 85% of dairy farmers and 78% of beef cattle producers in the survey indicated they would benefit from a more flexible H-2A program. Farmers broadly support reforms that would allow year-round employment, introduce more flexible scheduling and job duties, and simplify and speed up the application process. Targeted policy reforms that relax seasonality restrictions, increase flexibility in hours and job duties, and streamline administrative requirements would directly address the binding constraints identified by producers and are likely to facilitate broader adoption of the H-2A program in livestock operations, thereby alleviating persistent labor shortages and supporting the stability of U.S. animal agriculture.

    References

    Congressional Research Service. (2021). The H-2A temporary agricultural worker program (R44849). https://crsreports.congress.gov/product/pdf/R/R44849

    Escalante, Cesar L. “Sectoral and Regional Concentration of H-2A Patronage.” Southern Ag Today 3(42.3). October 18, 2023. https://southernagtoday.org/2023/10/18/sectoral-and-regional-concentration-of-h-2a-patronage/

    Escalante, Cesar L., and Alejandro Gutierrez-Li. “Relating Crop and Livestock H-2A Labor Decisions to AEWR and Sectoral Wage Gaps.” Southern Ag Today 5(18.1). April 28, 2025. https://southernagtoday.org/2025/04/28/relating-crop-and-livestock-h-2a-labor-decisions-to-aewr-and-sectoral-wage-gaps/

    U.S. Department of Agriculture. (2023). Farm labor report. Economic Research Service. https://www.ers.usda.gov/topics/farm-economy/farm-labor/

    U.S. Department of Labor. (2024). Office of Foreign Labor Certification performance data. https://www.dol.gov/agencies/eta/foreign-labor/performance

    U.S. Department of Labor. (2023). H-2A temporary agricultural program: Employer requirements. https://www.dol.gov/agencies/whd/agriculture/h2a

    Zhang, Jingyuan, and Grace Melo. Does Administration Mode Affect Survey Outcomes Among Hard-to-Reach Populations? An Intercept Survey with Beef Cattle Farmers. Journal of Agricultural and Applied Economics, 2026, 1-20. https://doi.org/10.1017/aae.2026.10040

    Recommended citation format: Zhang, Jingyuan. “H-2A Labor: An Opportunity for Beef Cattle and Dairy Farms?” Southern Ag Today 6(26.1). June 22, 2026. Permalink

  • Three Tools for Better Cooperative Board Meetings

    Cooperatives are member governed organizations, and the member’s major vehicle of control is through their elected board representatives. Helping those board members to be more effective as they meet and work together, therefore, is in the best interest of the cooperative. The board meeting is a key process that helps cooperative boards to achieve their goals. It is an essential means for helping your cooperative to thrive. It is the primary mechanism that we use to allocate resources to their intended use. It is how we oversee the cooperative and protect it from risk. But the phrase “board meeting” can stir up all sorts of feelings and thoughts. Have you ever been to a board meeting where you felt like you’d rather be anywhere else? 

    Board meetings often face challenges related to time management, preparation, director engagement, and personal interactions. Perhaps you have experienced some of these situations at your cooperative:

    • Meetings take too long
    • A lot of information is given with no discussion
    • Board members are not engaged in the discussion
    • Remote participants seem distracted
    • Your role and responsibility are not clear
    • Discussions are dominated by one individual

    The frustrations from a lack of purpose, poor communication, and misunderstood expectations can be overwhelming. Here are three tools that can help make any board meeting even better. 

    Tool #1: the agenda

    The primary tool for making board meetings better is the meeting agenda. Your agenda can set clear expectations for the meeting and guide directors in the task at hand. It can be a real asset when used properly. If your agenda doesn’t seem effective, consider some of the suggestions below. 

    • Label items according to their purpose (e.g. for information, for discussion, for decision).
    • Set time limits for each agenda item and stick to the schedule. 
    • If board members tend to draw the meeting out with social interactions, consider scheduling social time as an official part of your agenda.
    • Don’t read out loud items that were sent to directors in preparation. Reinforce the need to come prepared.
    • Schedule time for training and education.
    • Schedule time for open discussion or the introduction of new business.

    Your agenda will reflect the focus of the board. Leveraging the power of the board happens when it is looking forward and focused on outcomes. Take a look at your agenda and take note. Does it mostly look backwards (approving reports) or forwards (making decision on future operations)? Is it focused on executing programs, or achieving outcomes? A main duty of the board is to support the mission of the cooperative. Do your agenda items support your mission?

    Tool #2: your personal influence

    Influence is your ability to change someone or something in an indirect but usually important way. It does not rely on position or authority. We all have an inherent ability to influence the world around us, and especially the people we work with. Developed properly, your influence will build trust, commitment, and loyalty in your organization. Your peers have seen qualities of influence in you that has resulted in your election to the board. They trust you and need your leadership. “The key to successful leadership today” says noted author Ken Blanchard, “is influence, not authority.” 

    Proper influence begins within yourself. It is based on a foundation of self-awareness and self-regulation. This means that you are able to focus on the needs of the cooperative above your own when making board decision. Your influence builds through cultivating personal relationships and a careful consideration of personal interactions during board meetings. It is rounded out with concerted efforts toward inclusion of all those you serve and empathy for their needs. Although you may be elected from a specific region, your duty as a board member is to represent the needs of all members and make decisions that are in the best interest of the entire membership. Your ability to influence your board meeting will be developed as you consciously apply these concepts. 

    Tool #3: the bylaws

    The third tool is to establish expectations for board member conduct. While some legal expectations or requirements may already be outlined in the cooperative’s bylaws, it’s equally crucial to describe the behaviors and ideals that will contribute to your board’s effectiveness. Your board’s expectations toward due diligence might include a set number of hours dedicated to board education, statements on confidentiality, and policies for attendance. A regular review of your bylaws can help put board members in the proper frame of mind for meetings. This is especially important for orienting new directors. Your bylaws can serve as an agreement between board members, outlining appropriate behaviors and aspirations both within and outside the boardroom.

    Recommended citation format: Park, John. “Three Tools for Better Cooperative Board Meetings.” Southern Ag Today 6(25.5). June 19, 2026. Permalink

  • A Narrowing Agricultural Trade Deficit in 2026 – But Are We Better Off?

    A Narrowing Agricultural Trade Deficit in 2026 – But Are We Better Off?

    Prior to 2019, the United States consistently recorded an agricultural trade surplus, meaning exports exceeded imports in value terms. For example, in fiscal year (FY) 2014, U.S. agricultural exports totaled about $152 billion, while imports were roughly $109 billion, yielding a surplus of $43 billion. This surplus steadily narrowed in subsequent years, falling to less than $5 billion by 2019. Since then, the trend has reversed, with the United States posting agricultural trade deficits over the past three years, culminating in a record deficit of approximately $44 billion in FY 2025, a stark contrast to the surplus observed a decade earlier (USDA-ERS, 2020; 2026).

    Given the current White House Administration’s emphasis on bilateral trade imbalances, leadership at the U.S. Department of Agriculture has followed suit, increasingly framing the reduction of the agricultural trade deficit as a key policy objective. However, focusing on the agricultural trade deficit as a target can be misleading, as it obscures the broader economic forces shaping trade flows—a point discussed in previous Southern Ag Today articles. For instance, rising U.S. imports of agricultural goods may reflect not declining competitiveness, but stronger consumer demand for a more diverse set of products, including off-season fruits and vegetables as well as higher-value items such as beer, wine, and spirits. Moreover, a narrow emphasis on the trade deficit ignores the highly integrated nature of modern agricultural supply chains. For instance, the recent import ban on Mexican feeder cattle may contribute to a reduction in the agricultural trade deficit, but it would be difficult to argue that the U.S. beef sector is necessarily better off as a result.

    That said, it is still useful to examine the agricultural trade deficit more closely. Recent year-to-date trade data (January–April) suggest a narrowing of the deficit compared to the same period last year. As of April 2026, the agricultural trade deficit stood at $7.5 billion, down 62% from $19.7 billion over the same period in 2025. On the surface, this could be interpreted as evidence of improvement, or even as an indication that current trade policies are working. However, caution is warranted in drawing such conclusions. 

    Figure 1 presents year-to-date percentage changes in U.S. agricultural exports and imports, both in aggregate and across major export destinations and import suppliers. The data indicate that the narrowing of the deficit is driven more by declining imports than by strong export growth. Total U.S. exports increased modestly (+5.5%), while imports fell sharply (−11.5%), with particularly large declines in imports from the EU (−27.1%), Brazil (−24.6%), and Southeast Asia (−23.8%). What is driving these changes? The increase in exports is mostly China (+35.2%) due to a strong recovery in soybean and sorghum exports, both of which dropped to negligible levels in 2025. The decline in imports also appears to be concentrated in specific products, including beer, wine, spirits, and essential oils from the EU; coffee and beef fat from Brazil; and beverage sweeteners and cocoa products from Southeast Asia (USDA-FAS, 2026).

    This raises an important question: are we truly better off if the narrowing deficit is driven primarily by declining imports rather than broad-based export growth across markets and products?

    Figure 1. 2026 Year-To-Date (January–April) Percentage Changes in U.S. Agricultural Exports and Imports, Total and Major Partners

    Note: The changes in this figure are based on nominal dollar values. U.S. imports from China and exports to Brazil are not shown due to their small contribution. 
    Source: U.S. Department of Agriculture, Foreign Agricultural Service (2026)

    For more information:

    U.S. Department of Agriculture (USDA-ERS) (2020). Outlook for U.S. Agricultural Trade. Economic Research Service. https://www.ers.usda.gov/media/10231/aes-111.pdf?v=93939

    U.S. Department of Agriculture (USDA-ERS) (2026). Outlook for U.S. Agricultural Trade. Economic Research Service. https://www.ers.usda.gov/media/20882/aes-136.pdf?v=85005

    U.S. Department of Agriculture (USDA-FAS) (2026). Global Agricultural Trade System. Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

    Recommended citation format: Muhammad, Andrew. “A Narrowing Agricultural Trade Deficit in 2026 – But Are We Better Off?” Southern Ag Today 6(25.4). June 18, 2026. Permalink