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  • Using Cooperatives to Enhance Competitive Advantage

    Using Cooperatives to Enhance Competitive Advantage

    A cooperative is owned and controlled by its members. It can therefore negotiate on behalf of its members to increase competitive advantage by achieving efficient operational scale, negotiating better product and input prices, reducing production risk, obtaining better insurance, engaging the next generation, and handling the administrative red tape burden for its members. 

    Marketing 

    One of the most common uses of a cooperative is to aggregate farm products and collectively market these products on an efficient scale.  Many markets, such as wholesale and institutional markets, are not accessible to smaller, individual growers.  Value-added processing is another layer of risk management that newer, next-generation cooperatives employ to access markets and increase economic value to their members.  PYCO Industries is a good example: a cottonseed oil mill with over 50 cotton gin members.

    Ownership and voting details aside, other business structures, such as LLCs and S Corporations, may address many of these marketing items.  However, the Capper-Volstead Act protects cooperatives from some provisions of antitrust legislation [entire history and explanation and a shorter blog version].  One purpose of this exemption is to give farmers more bargaining power with large processors and distributors, to whom the farmers are at a competitive disadvantage.  Another purpose is to allow farmers to unite to survive economic downturns.

    Production Risk Management

    Cooperatives can manage production risk by joining farmers in various growing regions to help them survive widespread production losses.  Shoreline Fruit Cooperative is a good example.  This cherry grower cooperative mitigates the risks of total cherry crop loss by sourcing from multiple growers in separate microclimates in the Great Lakes region.  

    Bargaining for lower input costs is another production risk management technique many supply (or buying) cooperatives use.  The Southern Loggers Cooperative is a successful cooperative that helps its members get the best prices on fuel, truck parts, and other supplies. The Producers Cooperative Association, the United Ag Cooperative, and the  Southern States Cooperative are good examples of southern agricultural supply cooperatives. 

    Casualty and Liability Insurance

    Mutual insurance companies are good examples of consumer-owned cooperatives.  The first cooperative in the US was a mutual fire insurance company, the Philadelphia Contributionship, founded in 1752 by Ben Franklin. 

    Cooperatives are also helpful in obtaining better rates on liability insurance, and prescribed fire cooperatives are good examples. The Aiken Prescribed Fire Cooperative in South Carolina is working with other prescribed fire cooperatives to find better options for liability insurance products for using prescribed fire to manage privately held forest lands. 

    For cooperatives looking for insurance, it should be mentioned that Triangle Insurance, located in Oklahoma, is a cooperative that specializes in insuring other cooperatives.

    Engaging the Next Generation

    Engaging the next generation and retaining a dedicated workforce is challenging for many farm businesses. A cooperative can be an excellent tool for addressing this challenge by bringing in the next generation as cooperative owners. Shifting one’s role from “employee” to “owner” is a powerful motivation, and allows a cooperative the potential to offer a higher annual income (versus wages).  A good example is the Cape Romain Oyster Cooperative, which formed solely to bring along the next generation of employees-as-owners. For cooperatives with high equity/capitalization requirements, the cooperative may elect to have new owners buy in, over time, to meet these equity requirements. This buy-in, over time, may also provide a reasonable trial period for prospective new owners. 

    Reducing Administrative Burdens

    Ever hear the quote “if it is not documented, it didn’t happen?” Farming today involves more documentation, paperwork, and general red tape than ever. It may be worth starting a cooperative purely to share this administrative burden and reduce legal risks. Citrus grower cooperatives, such as  Florida’s Natural, are good examples. These cooperatives handle paperwork items such as Good Agricultural Practices (GAP and Harmonized GAP), pesticide application records, and traceability for their members. 

    Enhance Your Competitive Advantage!

    The fundamental difference between a cooperative and other business structures is that the farmer-owners of a cooperative have collective “skin in the game”.  If you are part of a cooperative, strive to be engaged with that cooperative by attending meetings, voting in elections, becoming a board member, and encouraging the next generation to do the same.

    If you are looking to start a cooperative, many land-grant universities have extension personnel and cooperative specialists who help cooperatives succeed by training and developing cooperative board members and staff. Also, CooperationWorks! is a cooperative that supports land-grant and non-land-grant cooperative development centers. A map of development centers can be found on their website, along with many good supporting materials. 

    Richards, Steve. “Using Cooperatives to Enhance Competitive Advantage.” Southern Ag Today 5(29.5). July 18, 2025. Permalink

  • Supplemental Disaster Relief Program Sign-up Announced

    Supplemental Disaster Relief Program Sign-up Announced

    As detailed in a previous Southern Ag Today article, the American Relief Act of 2025 was signed into law in December 2024 with the following key provisions:

    • funded the government through March 14, 2025;
    • extended the 2018 Farm Bill provisions through September 30, 2025; and
    • provided the U.S. Department of Agriculture with $30.78 billion to deliver disaster recovery assistance to farmers and livestock producers.  $10 billion was designated for economic losses and the remaining $20 billion was for physical losses.

    As we noted in an article on July 3, 2025, sign-up for the economic loss program—the Emergency Commodity Assistance Program (ECAP)—is underway.  To date, nearly $8 billion has been provided to producers through ECAP.  We also noted that USDA has released approximately $1 billion in Emergency Livestock Relief Program (ELRP) payments to affected producers, and enrollment for another $1 billion in ELRP aid for flooding losses is targeted to begin in mid-August. Last week, USDA announced that signup has begun for the highly-anticipated Supplemental Disaster Relief Program (SDRP) which targets $16 billion in assistance to producers for necessary expenses due to losses of revenue, quality or production of crops due to weather related events in 2023 and 2024. The remainder of this article will focus on SDRP.

    Notably, SDRP is being rolled out to producers in two stages.  Stage 1 is providing payments to producers for eligible crop, tree, and vine losses calculated using data already on file with USDA from previously issued Federal crop insurance indemnities and Noninsured Crop Disaster Assistance Program (NAP) payments.  Stage 2 will target uncovered losses, including non-indemnified shallow losses and quality losses, and signup is estimated to begin in mid-September.

    Following are a few of the questions we have received and our responses.  While this is intended to serve as educational guidance, it is no substitute for consulting USDA’s SDRP landing page or for contacting your local FSA office as they ultimately are responsible for implementing the program.

    1. How do I know if Stage 1 applies to me?  In Stage 1, USDA is using a streamlined, pre-filled application process for eligible crop, tree and vine losses leveraging existing NAP data as well as data on file with RMA for losses covered by certain federal crop insurance policies. If you expected to receive an application but did not, you can also consult the Final Rule (Page 30572) for more details, including the list of losses that aren’t covered. Otherwise, you can consult your local FSA office.
    • If I get a pre-filled application for Stage 1, doesn’t that prove that I’m eligible?  No! In an effort to ensure no one is left out, USDA is sending pre-filled applications (as detailed above) regardless of the cause of loss. But, it is up to you to determine if your losses were due to a qualifying disaster event that Congress chose to cover under SDRP (you can find that list here under “Eligibility”). If your losses were due to a qualifying disaster event, you will simply list that event in Block 18 on the SDRP application you receive in the mail.
    • Does the loss I list on the SDRP application have to match the loss listed on my crop insurance loss records? In other words, do I need to go to my crop insurance agent to find out what losses were listed on my crop insurance loss forms? Not necessarily. You may have suffered from multiple loss events on the farm, even if all of those did not make it onto your crop insurance loss records.  If you suffered from a qualifying disaster event (see above)—regardless of the loss event listed on your crop insurance records—you can self-certify to that event in Block 18 on your SDRP application. Please note that the FSA county committee will be keeping a close eye on applications to ensure that the loss event you listed is relevant and actually occurred in the county.
    • If I had a loss on my farm but it’s not due to one of the “qualifying disaster events” covered by SDRP, shouldn’t I just pick one of the qualifying disaster events from the list and submit my application?  No! While it may be very painful for a producer who had a loss that was due to an ineligible disaster event, the fact remains that Congress chose to cover only certain disaster events. If USDA is not covering your particular disaster event, it’s because Congress did not provide the authority for them to do so.
    • What if I suffered from drought but my county did not meet the D2 and D3 thresholds established by Congress?  If you are in a county that does not meet the D2 and D3 thresholds established by Congress (see the list of eligible counties here), you are not eligible to apply for SDRP based on “qualifying drought.” With that said, if you also suffered from another qualifying disaster event (e.g., excessive heat), you can self-certify by listing that loss event in Block 18 on the SDRP application.  Again, note that the FSA county committee will be keeping a close eye on applications to ensure that the loss event you listed is relevant and actually occurred in the county.
    • What if I have an error in the pre-filled parts of my application?  Can I just mark them out and make corrections?  No!  USDA has made it clear that any handwritten changes to the pre-filled portions of the application will nullify the application.  If the pre-filled portions are in error, you need to go back to the source (i.e., either your crop insurance agent for crop insurance records or to the local FSA office for NAP records). They can correct the underlying problem and updated applications can be re-printed by your local FSA office.
    • My pre-filled application (Block 14) lists my “Estimated SDRP Payment.”  Is that the amount I should expect to see deposited into my account?  As we understand it, that is the gross payment BEFORE both the payment factor of 35% and payment limits are applied.
    • Did USDA just make up the 35% factor?  While we don’t know everything that went into determining the factor, consider the following: (1) USDA made clear that progressive factoring (i.e., applying different payment factors based on gender, race, etc—as was done in the previous Administration) would not be used in SDRP; (2) USDA presumably estimated the total expected SDRP payments relative to the total funding available and determined that 35% was appropriate; and (3) they had to ensure that funding was available for producers who have eligible losses in Stage 2.  Notably, if funding is left over after all applications have been submitted, USDA could issue another round of payments to producers.
    • Does the payment limit apply to each year separately (i.e., $125,000 for 2023 and $125,000 for 2024) or is it a combined limit?  The payment limit applies separately to both 2023 and 2024.
    1. If I receive an SDRP payment, do I have to commit to purchase crop insurance going forward?  Yes, generally, producers receiving aid must maintain crop insurance or NAP coverage for the next two years at 60% or higher, or repay the assistance with interest.
    1. Are all states eligible for SDRP?  This round of disaster assistance was somewhat different than the past.  Congress chose to provide assistance in the form of block grants to Connecticut, Hawaii, Maine, and Massachusetts. As a result, they are excluded from SDRP but will use state block grants funded by the American Relief Act of 2025 to compensate producers for losses.

    We plan to update this as additional information becomes available. Importantly, as noted above, you should use the information in this article simply as educational guidance. For any questions related to your specific application/circumstances or for official guidance on the operation of SDRP, it is important to consult USDA’s SDRP landing page and/or reach out to your local FSA office.

    Outlaw, Joe, and Bart L. Fischer. “Supplemental Disaster Relief Program Sign-up Announced.” Southern Ag Today 5(29.4). July 17, 2025. Permalink

  • Winter Canola Expansion in the Southern U.S: A Renewable Fuel Opportunity

    Winter Canola Expansion in the Southern U.S: A Renewable Fuel Opportunity

    Growing demand for renewable fuel is reshaping crop decisions across the Southern United States, where farmers are rapidly expanding winter canola production. Traditionally grown in the U.S. Northern Plains, canola is now gaining traction in Southern double-crop rotations—driven largely by a strategic partnership between Bunge, Chevron, and Corteva Agriscience. Interest in winter canola production has been focused on the potential for winter oilseeds to contribute to the U.S Sustainable Aviation Fuel (SAF) Grand Challenge goal of 3 billion gallons of SAF by 2030 and 35 billion gallons by 2050.

    The partnership combines Bunge’s grain origination and processing, Chevron’s fuel distribution, and Corteva’s proprietary genetics to position winter canola as a leading feedstock for renewable fuel. Central to this strategy is a new oilseed processing facility in Destrehan, Louisiana, which is slated to begin processing canola by 2026.

    To meet projected demand by 2026, the strategic partnership launched a pilot program in the 2023–24 marketing year, contracting 5,000 acres across western Kentucky and Tennessee. By 2024–25, the initiative expanded to over 35,000 acres spanning Kentucky, Tennessee, Mississippi, Arkansas, Alabama, and Missouri (Pioneer, 2024). Reported insured acres from USDA’s Risk Management Agency (RMA) confirm this growth (Figure 1), with average increases of nearly 500% across Alabama, Kentucky, and Tennessee—highlighted by 7,500 acres in Tennessee and 25,000 in Kentucky.

    Based on the anticipated crush capacity at the Destrehan, LA facility, near-term canola demand could reach 100,000 to 150,000 acres across the Southern United States. Over the longer term, the partnering companies project demand could rise to nearly 1 million acres as infrastructure and markets scale (Heslip, 2024).

    Early reports from Kentucky and Tennessee suggest winter canola average yields of 40–65 bushels per acre. Contract prices for 2024 (2025 crop year) hovered around $12.00 per bushel, depending on contract timing, acres contracted, and freight costs. Gross revenue of $480-$780 per acre provides many mid-south farmers with a viable financial alternative to traditional soft red winter wheat production (Gross revenue of $420-$468; University of Kentucky and University of Tennessee 2025 Crop Budgets). Many growers report lower input costs compared to winter wheat, contributing to higher profit margins at current price levels. Currently, acreage contracts are being offered to producers for fall planting. Acreage contracts provide producers with a defined number of acres at a specified price. Production is not specified in the contract; the contract writer takes all production for the contracted acres at the set price.  Before entering a production contract, producers need to fully understand the terms and conditions, including production practices, delivery, and quality specifications.

    Figure 1: Canola Acres Insured (Net Reported) by State and Year

    Sources:

    Pioneer. 2024. “Corteva-Bunge-Chevron Winter Canola Program in the Mid-South Achieves Successful Harvest.” Accessed July 8, 2025. https://www.pioneer.com/us/news-and-events/news/media-release/corteva-bunge-chevron-winter-canola-successful-harvest.html.

    Heslip, Nicole. 2024. “Winter Canola Pilot Expanding in Mid-South.” Brownfield Ag News (blog). Accessed July 8, 2025. https://www.brownfieldagnews.com/news/winter-canola-pilot-expanding-in-mid-south/.

    Gardner, Grant, and Aaron Smith. “Winter Canola Expansion in the Southern U.S: A Renewable Fuel Opportunity.” Southern Ag Today 5(29.3). July 16, 2025. Permalink

  • Beef x Dairy Placements

    Beef x Dairy Placements

    Over the last few years, there has been a lot of discussion/questions surrounding the impact of Beef x Dairy (BxD) on the beef supply chain. Anecdotally, BxD calves have gone from day olds being worth $75/head in 2019, to well over $800/head today. Thus, BxD calves have led to increased revenue for dairy producers around the country. Given their worth, dairy producers have increased the amount of BxD offspring in their breeding program. The increase has been noticed by the beef industry and has led to the particular question, “How many head of Beef x Dairy calves are out there?”. This is a common question that has been asked at Extension meetings, and most recently, at the 2025 Beef Improvement Federation (BIF) in Amarillo, TX. While it may seem simple to answer, it is quite difficult to answer that simple question. 

    Historically (from 2001-2024), the dairy herd size has remained relatively constant at 9.2 million head. Annually, the dairy calf crop is utilized as either future replacement heifers, or they enter the beef supply chain. The ones that enter the beef supply chain are eventually harvested and marketed as fed cattle. The cattle that are straightbred dairy (majority dairy genetics) are reported by the USDA as “dairy” in the fed cattle reports. Figure 1 displays the weekly total live and dressed straightbred dairy fed cattle sales for the time frame April 2012-December 2024. The total number of straightbred dairy fed cattle peaked in May 2016.  Since then, there has been a notable decrease in the total number of both live and dressed straightbred dairy in the fed cattle markets. The January 1 reports show that the difference is not due to dairy replacements. In 2016, dairy replacements were 4.81 million head and have since steadily decreased to 3.91 million head in the 2025 January 1 report. Given that the dairy calf crop has remained stable with the dairy herd, and the number of dairy replacements has not offset the decrease in straightbred dairy fed cattle, then the change in the calf crop must be BxD bred calves. With that in mind, that creates the starting point for calculating BxD estimation.

    Figure 1. Weekly Total Live Vs Dressed Steers and Heifers Marketed as Straightbred Dairy in the U.S. From April 2012 through December 2024      

    In order to estimate the annual number of total BxD calves in a given year, we first estimate the calf crop and remove replacements by using a combination of that year and the following year’s January 1 reports. For example, to estimate the 2024 calf crop (minus replacements), we take the 2024 dairy cow inventory and subtract the 2025 dairy replacement inventory. We then adjust the calf crop estimate by subtracting the total number of cattle marketed as straightbred dairy (reported in the USDA Weekly 5 Market Area Report) for that given year (2024 in our example). This yields our estimate for the total number of BxD calves. It is important to note that we do not adjust the estimated number of possible BxD calves for calving rate and death loss. Thus, our estimate is the maximum amount of BxD calves possible. Table 1 displays BxD headcount estimates by year. 

    Table 1. Annual Beef x Dairy (BxD) Headcount Estimates

    201620172018201920202021202220232024
    2,879,0773,239,7033,695,8634,058,4164,296,3894,824,2714,975,4055,046,5085,178,194

    In 2016, maximum BxD headcount estimates were approximately 2.9 million. This number steadily rises to 5.2 million head in 2024. How do these estimates relate to total annual placements? By calculating annual placements from monthly Cattle On Feed reports, and comparing estimates in Table 1, we can estimate the maximum percentage of BxD calves placed in the feedyard annually. Figure 2 displays total annual number of straightbred (SB, red bars) and BxD (green bars) cattle relative to total placements (dark gray bars). While BxD placements have been increasing since 2016, the total number of placements has trended downward since 2021 due to a shrinking national beef herd. This has allowed for a steady increase in the percentage of placements being BxD cattle. 

    Figure 2. Annual Headcount for Straightbred (SB), Beef x Dairy (BxD), and Total Placements (2016-2024) 

    Table 2 displays the annual percent of placements that could have been BxD cattle. Current estimates show roughly 23% of the total calf crop in 2024 was available for beef on dairy. This number has increased from 13% in 2016.

    Table 2. Annual Percent Estimates of Total Placements that are BxD Cattle

    201620172018201920202021202220232024
    13%14%16%17%19%21%22%22%23%

    Given that the national beef herd has shown no signs of rebuilding, and that the number of BxD cattle has increased each year since 2016, we can expect the percentage of placements that are BxD cattle to remain at least steady, if not to increase in the coming years. Because of this expectation, it might be beneficial for fed cattle marketing reports to indicate if marketed cattle are BxD, instead of the current reporting of them as “beef” cattle. This would also make the question posed in the introduction much easier to answer in the future. 

    Wyatt, Parker. “Beef x Dairy Placements.” Southern Ag Today 5(29.2). July 15, 2025. Permalink

  • Founding Farmer

    Founding Farmer

    In light of the recent Independence Day holiday and remembering the founding fathers, there are many attributes from them that can be appreciated. 

    It is well known that many of the founding fathers had backgrounds in agriculture. Ben Franklin and James Madison were early proponents of sustainable farming. Thomas Jefferson had a penchant for plants and scientific experimentation. George Washington dabbled in all of those but was also known to be a meticulous bookkeeper. These records were considered essential in determining the success of his enterprises. 

    Due to these records and historical preservation efforts, we catch a glimpse of Washington’s efforts in farm management. They were without the digital technologies we enjoy so the records were kept entirely by hand. Day-to-day activities often got recorded in “waste books, pocketbooks, day books or memorandum books”, not unlike a typical pocket notebook farmers may utilize today. Later, the notes from these books would make it into a more formal recording known as a “journal of accounts”. If enterprises became large or complex enough, there were ledgers of accounts and even an accountant to handle these tasks. Washington, however, recorded all the transactions himself. He did so following accounting manuals such as John Mair’s Book-Keeping Methodiz’d. 

    While referring to his records and correspondence, Washington noted that after dinner “I resolve …[to] retire to my writing table and acknowledge the letters I have received; but when the lights are brought, I feel tired, and disinclined to engage in this work, conceiving that the next night will do as well; the next comes, and with it the same causes for postponement, & effect; and so on.” A sentiment that perhaps many a farmer can understand. However, it is evident Washington did find time for these tasks as he required large desks and bookcases to accommodate all his files. 

    Washington’s records were thorough, as evidenced by the number of documents still available and the detailed entries found on the pages. The documents are being reviewed and catalogued as part of preservation efforts through George Washington’s estate, Mount Vernon. This includes the ‘Washington as Bookkeeper’ article and The George Washington Financial Papers Project used as references for this article. That Washington continued to keep his own books and records when, almost certainly later in life, he could have had someone handle these tasks indicates the level of importance Washington placed on the contents. 

    Washington made comments throughout his decorated career on desiring to return to Mount Vernon, “I had rather be on my farm than be emperor of the world”. That Washington desired to relinquish his political power and return to humbler occupations is one reason we admire him today. To think that he would spend a considerable portion of his time recording day-to-day activities at Mount Vernon seems almost unfathomable. Let us admire his dedication, and that we can benefit from his records and example in present day.   

    Burkett, Kevin. “Founding Farmer.” Southern Ag Today 5(29.1). July 14, 2025. Permalink