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The 5 Practices of Boardroom Excellence
Why do some cooperatives flourish while others continually struggle? The factors of success are not entirely obvious when the weather is great, crops are bountiful, and prices are favorable, because all cooperatives can thrive in such conditions. However, as economic and competitive pressures mount, small difficulties in board behavior can lead to poor firm performance.

I suggest that the very best board of directors typically share five important practices. An excellent board will:
1. Represent both the members and the cooperative
2. Provide examples of personal and organizational integrity
3. Promote loyalty among board members and the members
4. Develop a culture of continual learning
5. Establish a vision and strategy to guide management
Your board’s adherence to these practices will help develop a quality of resilience that will see you through turbulent economic circumstances.

1. Represent both the members and the cooperative

An exceptional cooperative board represents the interests of the members while simultaneously protecting the assets of the cooperative.

Your cooperative was initially formed to fill an economic need of the members. Perhaps it was cost savings from economies of scale, the provision of needed market services, or to combat unfair market power. Regardless, your cooperative exists to meet the needs of the members. But it must first exist if it is to help them. Your cooperative is a business, and like any business its continued existence is based on its ability to extract economic value from its competitive advantages. In short, it must be profitable. Members need to be reminded at times that they are investors in a business, and not participants in a discount club. Investors receive a share of profits, but only when profits have been made. When a board chooses to redeem member investments without the use of current year profits, they are essentially deciding to liquidate a portion of cooperative equity. It is the responsibility of the board to represent the members’ interests as both customer and investor. The cooperative comes first in performance, and members come first in purpose.

2. Provide examples of personal and organizational integrity

An exceptional cooperative board adheres to a code of ethics that promotes a diverse culture where all can be heard without fear of punishment or retribution.

A cooperative is one-part business and one-part social group. Therefore, it is not surprising that each cooperative has a different culture or manifestation of its customs, attitudes and behaviors. At the most basic level, this culture reflects the needs and desires of the members, but it won’t flow through the company if the directors fail to define this for management and employees. In this light, the board can greatly influence the ethical behavior of employees by modeling integrity in the boardroom. Ethical behavior of board members includes standards of honesty, integrity, dependability, and confidentiality. Board conversations are not to be shared outside of the boardroom. A good rule of thumb is that when items from board meetings are shared with the public, it should be done collectively by the entire board or by the chairman speaking on behalf of the board. Additionally, a characteristic of a flourishing cooperative is diversity. The cooperative must recognize the value and importance of all its members regardless of gender, age, ethnicity, or size of operation. Differences in personalities and backgrounds provide new perspectives that will drive creativity and ultimately, better strategy. A board that is trying to grow membership among a certain type of producer, would be aided by having that group represented on the board.

3. Promote loyalty among board members and the members

An exceptional cooperative board fosters loyalty to the cooperative through accountability to one another, transparency to the members, and their personal business transactions.

Meetings of the board of directors should be focused on providing direction to management, setting policy, establishing strategy, and overseeing the proper and effective use of assets. Each meeting should add to the progress of ones that came before. A thoughtfully prepared agenda helps the board to focus their limited time on director responsibilities and avoid the temptation to spend time on managerial decisions. Meeting minutes and agendas help board members to be accountable to one another through follow up on assignments and effective use of their time.

Loyalty thrives on trust. For a board to be viewed as trustworthy to its members, it must be candid, both among board members and (to the extent possible) with the public. An exceptional board treats boardroom discussions with strict adherence to confidentiality. It is possible to be both transparent (by sharing what you are doing) and confidential (by not sharing intimate details of discussions and decisions). Members will respect the honest answer “I can’t talk about that.” Sensitive issues that need to be shared with members or the public should be done by the board as a whole or by the chairperson speaking on behalf of the board. Finally, board members themselves need to be prime examples of loyalty by doing as much business as possible with the cooperative.

4. Develop a culture of continual learning

An exceptional cooperative board is continually learning about board duties, the operation of their business, and the trends impacting their industry.

Profitability is found through sustained competitive advantage. Competitive advantage is found by individuals who are constantly improving their understanding of their business and the industry in which it operates. The very bestcooperative boards make it a high priority to receive continuing education to stay current with business skills, strategies, and industry trends. A board can set itself apart from others by devoting time for training at each board meeting. Outside experts can offer a few minutes of thought-provoking discussion that may lead to breakthrough strategies. The review of internal documents like employee handbooks, bylaws, and corporate policies may lead to best practices that protect the cooperative from legal liabilities. Continual efforts focused on board education will demonstrate to members and legal authorities that the board is striving to fulfill its fiduciary duties.

5. Establish a vision and strategy to guide management

An exceptional board of directors provides vision and strategy while letting the manager manage.

Sometimes, the most difficult task for directors is to step aside and let management do their job. It is the duty of a director to establish the vision and mission of the firm, to determine strategy to achieve that mission, to set objectives and goals dictated by that strategy, to oversee the acquisition and use of assets, and to monitor the performance of the firm.

To do this, the board hires a general manager or CEO and contracts professional services (like auditors and lawyers) related to the monitoring and administration of the firm. That is where the operational duties of the board stop. Managers have the responsibility to establish budgets, use the firm’s assets to achieve stated objectives, monitor day-to-day operations, set short-term goals, hire and fire employees, and establish levels of pay and bonuses. In other words, decisions on the operation of the cooperative or the use of its employees are the sole responsibility of the manager. If the board is making these decisions for the manager, they not only put the cooperative at risk by ignoring the hired expertise, but they also take time away from their fiduciary and strategic responsibilities.

Directors, then, have the responsibility to establish strategy. An exceptional board of directors will discuss strategic issues in every board meeting and periodically dedicate themselves to more intense strategic planning.

Representation, integrity, loyalty, education, and vision are the hallmarks of an excellent cooperative board. By adhering to these qualities and being true to the role of directors, a truly exceptional board will be poised to lead their cooperative to achieve sustained competitive advantages and new heights of profitability.

Park, John. “The 5 Practices of Boardroom Excellence.” Southern Ag Today 5(47.5). November 21, 2025. Permalink
November 21, 2025
Disaster Assistance for 2025: Is it Coming or Not?

We think we can all agree on one thing: we’re all sick of talking about the state of the farm economy. After 8 years of ad hoc disaster assistance propping up the farm economy, most producers we know are desperate for market prices to return to levels that will at least cover their costs of production which have exploded over the last several years. They want to move on from ad hoc assistance, in part, because there are growing concerns that much of that assistance is simply finding its way into even higher land values (or higher cash rents) or higher input costs. Further, while the One Big Beautiful Billmade a significant down payment on improving the standing farm safety net beginning with the 2025 crop year, most of that assistance will not arrive until October 2026. Even then, once that assistance arrives, it will still fall far short of the losses currently facing producers. The trade discussion has injected even more uncertainty into the markets, although the recent agreement with China has provided somewhat of a reprieve (even if it’s not yet clear how and when China will fulfill the commitments they’ve made).

While all of these issues were reaching a fever pitch earlier this fall, the government shutdown over the past 2 months sucked most of the oxygen from the room. Congress recently reached an agreement to open the government, including passing a few of the appropriations bills, but that deal did not address impending losses for the 2025 crop year or uncertainty going into the 2026 crop year.

We are growing increasingly concerned that too little attention is being paid to the challenges growers continue to face. Yes, there is some talk about trade aid, but that is just one element of the challenges facing growers. Last year, Congress provided $30.78 billion for economic ($10 billion) and natural disaster ($20.78 billion) losses. As noted in Figure 1, the losses facing producers (on prices and costs of production alone) in 2025 eclipse those from 2024—yet Washington has been eerily quiet on the topic, having committed $0 at this point for 2025 losses.

In examining Figure 1, soybeans is the only crop to see an improvement in projected losses from 2024 to 2025, owing largely to the announced agreement with China and the projected $0.50 per bushel rebound in prices in USDA’s latest World Agricultural Supply and Demand Estimates. Even then, soybean producers are still projected to lose in excess of $100 per acre this year. In fact, all of the major commodities for which USDA reports costs of production are expected to face losses in excess of $100 per acre, with some crops like rice seeing losses double the amount of last year. And, Figure 1 is only covering losses for those crops for which USDA tracks cost of production. Other crops—for example, sugar—are also facing enormous losses. In virtually all cases, chronically low commodity prices—exacerbated by trade uncertainty—coupled with stubbornly high costs of production are the main culprits.

With news of thawing tensions on trade, the hope is that policymakers in Washington will be able to turn their attention to the huge issues facing row crop producers as they work to wrap up 2025 and prepare for the 2026 crop year. And, while growers may be growing wary of ad hoc assistance, we see little alternative in the short run. Ideally, efforts to craft a Farm Bill 2.0 will eventually make additional needed improvements to the farm safety net so we can close this nearly decade-long chapter on ad hoc assistance.

Fischer, Bart L., and Joe Outlaw. “Disaster Assistance for 2025: Is it Coming or Not?” Southern Ag Today 5(47.4). November 20, 2025. Permalink

November 20, 2025
November 2025 WASDE Report is Relatively Quiet Despite Surprises in Production and Exports

The November 2025 WASDE report is the first since September to be released due to the government shutdown taking place from October 1, 2025, to November 12, 2025. This month’s report was a relatively quiet one with few significant changes to the balance sheets for southern crops. Season-average farm prices for corn and soybeans were revised upward from the September report, while the prices for rice and cotton were revised downward. Despite the increases in corn and soybeans, futures markets responded with sharp declines in the nearby futures contracts. This was likely driven by production being higher than industry expectations for corn and soybean exports falling short of expectations. We provide a detailed breakdown of the changes to each crop’s respective balance sheet below.

Long-Grain Rice:

This month’s 2025/26 outlook for U.S. long-grain rice includes lower supplies, unchanged domestic use and exports, and decreased ending stocks. Long-grain production was reduced by 1 million hundredweight (cwt.) this month to 152.7 million.  Yields were lowered in all Midsouth states, with Louisiana, Mississippi, and Missouri all seeing average yields reduced by 100 pounds per acre this month.  Arkansas’ average yield was lowered by 50 pounds per acre.  With no adjustments to demand, long-grain ending stocks were lowered by 1.1 million to 36 million cwt., down 3.5 percent from last year. The 2025/26 season-average farm price (SAFP) was lowered by 23 cents per bushel this month to $5.18 per bushel—the lowest since 2018.  This further increases the outlook for sizeable 2025/26 PLC payments, with the current projected payment rate for long-grain at $2.44 per bushel—up 23 cents from September.

Cotton:

The November outlook for 2025/26 U.S. cotton supply and demand included higher production, exports, and ending stocks compared to September. There were no changes to domestic mill use and imports. USDA projected the 2025/26 U.S. crop to reach 14.12 million bales, up roughly 897,000 bales from the September report. The national average yield per acre increased by 58 pounds this month to 919 pounds. This would be the second-highest yield on record, behind 2022’s 953 pounds.

U.S. exports were raised 200,000 bales to 12.2 million bales while mill use was unchanged from September at 1.70 million bales. This generates a total 2025/26 offtake of 13.90 million bales. Ending stocks for 2025/26 are projected at 4.30 million bales for an ending stocks-to-use ratio of 30.9%. This month’s projected average farm price for 2025/26 is 62.00 cents/lb, down 2 cents/lb from September.

Corn:

The November report for 2025/26 U.S. corn showed an increase in total supply, exports, and carryover. Production was revised downward 62 million bushels from 16.814 to 16.752 billion bushels based on a reduction of 0.7 bushels per acre in the national yield. On the demand side of the balance sheet, total use is increased 100 million bushels based on an increase in exports of the same amount. Beginning stocks were increased by 207 million bushels from 1.325 to 1.532 billion bushels. Taken together, these changes represent an increase in total supply of 144 million bushels, which is larger than the 44 million bushel increase in total use. Interestingly, this results in a 10-cent increase in the 2025/26 projected season-average price to $4.00/bushel, likely driven by the reduction in national yield and a record large export forecast of 3.075 billion bushels.

Soybeans:

The November report for 2025/26 U.S. soybeans showed decreases across the board. Production was revised downward 48 million bushels from 4.301 to 4.253 billion bushels based on a reduction of 0.5 bushels per acre in the national yield. On the demand side of the balance sheet, total use decreased by 51 million bushels based on a decrease in exports of the same amount, driven by lower domestic supplies and increased exports by Brazil and Argentina. While a trade deal between the U.S. and China has been announced, which guarantees soybean purchases through 2028, the announcement also increased the price of U.S. soybeans by 90 cents since October 30th, making the relative price of soybeans lower for Brazil. Beginning stocks decreased by 14 million bushels from 330 to 316 million bushels. Taken together, these changes represent a decrease in total supply of 61 million bushels, which is larger than the 51 million bushel decrease in total use. This 10-million-bushel net reduction in ending stocks results in a 50-cent increase in the 2025/26 projected season-average price to $10.50/bushel.

Thoughts on USDA’s November Reporting

Ahead of USDA’s November WASDE and Crop Production reports, concerns arose that NASS might not have sufficient time to conduct an adequate survey of fields and producers, given the recent government shutdown. The November 2025 Crop Production survey had 6,692 participants compared to 5,838 last year. Regarding the field surveys, NASS enumerators visited the fields in October and early November, despite the shutdown. NASS provided the objective corn and soy yield data for November. One might argue there is no reason to believe that the November yield estimates are any less (or more) reliable than in previous years.

However, USDA did note “some U.S. data sources that are typically used were not available for the November 2025 WASDE.”  Further noting, USDA mentioned changes to the U.S. balance sheets reflected all U.S. government data available at the time of publication.  Over the past month, information such as the weekly Export Sales and daily export “flash” reporting was unavailable, as well as government reporting on ethanol production and consumption.

The next WASDE is scheduled for December 9th.  USDA normally makes no crop production adjustments until the NASS Crop Production Annual Summary is released in January.  In the near term, the major crop markets will be focused on actual Chinese demand for US soybeans and cotton as well as South American weather. These will be primary drivers of price discovery for the balance of 2025.

Biram, Hunter D., and H. Scott Stiles. “November 2025 WASDE Report is Relatively Quiet Despite Surprises in Production and Exports.” Southern Ag Today 5(47.3). November 19, 2025. Permalink

November 19, 2025
Cull Cows Defy Seasonality

All the talk of relaxing tariffs on imported beef, knowing that the majority of our beef imports are lean beef trimmings to go into ground beef competing with cull cow beef, suggested it might be time to take a quick look at the cull cow market.

Most will remember that cull cow prices tend to hit their seasonal lows in the Fall.  The most important reason for the price decline is that more cows are culled from the herd in the Fall.  For beef cattle, the largest proportion of cows are culled in the Fall following calf weaning.  On the dairy side, cow culling increases from summertime lows.  The increase in supplies of cows for sale results in lower prices.  Another contributor to lower prices is the end of grilling season, with consumers shifting over to more Fall and Winter consumption patterns.

So far this Fall, the cull cow market has defied normal seasonality.  Southern Plains cull cow auction prices hit about $165 per cwt back in June and have remained there since then.  A couple weeks of declines were followed by rebounds back to about $165 per cwt.  National average cutter quality cows have declined recently, slipping about $9 per cwt to $126.

While the live cow market has not declined much, the same cannot be said for the cow beef market.  The boxed cow beef cutout climbed to $340 per cwt but has declined to $317 over the last two months.  Wholesale 90 percent lean beef has declined from $436 to $404 per cwt over the same period.  Both the boxed beef cutout and wholesale 90 percent lean have followed the normal season pattern, declining into the Fall.

We are likely to see some increased culling from the dairy side of the beef industry in the coming months.  USDA’s latest milk production report indicated the nation’s dairy cow herd at 9.85 million head.  That is the largest herd since at least 1993.  Milk production in September was 4 percent larger than the year before.  Milk prices are beginning to decline sharply with increased production.  There is no doubt that the increased returns from using beef bull instead of dairy breed semen to produce cross bred calves is boosting profits and aiding in the dairy herd expansion.  Beef cow culling is likely to remain low due to the historically small cow herd and incentives to expand.  More dairy cow culling and less beef cow culling will continue to leave cull cow prices high.

November 18, 2025
Consider the Risks When Taking a Residual Fertility Deduction
Consider the Risks When Taking a Residual Fertility Deduction

There’s been much recent discussion about a “residual fertility” deduction for farm and ranchland. It’s been common practice among farmers for many years to take a tax deduction for the value of unexhausted fertilizer remaining in soil purchased with land. In recent years, however, this practice has expanded to include large deductions for the value of all soil nutrients, not necessarily those linked to prior fertilization. Questions about the legal basis for these deductions have increased as the value of these deductions have risen.

Fertilizer Expenditures and Section 180

To understand this issue, it is important to understand the basis for deducting fertilizer in the first place. Years ago, the IRS required farmers to capitalize and deduct fertilizer costs over the useful life of the fertilizer. Because the fertilizer would not be used up in one year, the deductions had to be spread out. In 1960, Congress changed course, recognizing that farmers would benefit from deducting fertilizer expenses in the year paid. Section 180 thus allows farmers to elect to deduct in the year of application the cost of fertilizer, lime, and similar materials applied to land used in farming.

Residual Fertilizer Supply

When farmland is purchased, a buyer may allocate part of the price to depreciable assets such as fencing or tile. Many farmers have also assigned a portion of the purchase price to the value of unexhausted fertilizer and deducted that expense accordingly. Although there is no statute, court case, or regulation specifically endorsing this practice, a 1991 IRS memorandum suggests this deduction is appropriate if properly proved.

In TAM 9211067, the IRS denied a claimed deduction for unexhausted fertilizer purchased with the land, but outlined requirements to support a possible deduction. The taxpayer must: (1) prove the presence and extent of fertilizer attributable to the prior owner, (2) show that the fertilizer is being exhausted, and (3) be the beneficial owner of the fertilizer, meaning it is inseparable from land the taxpayer owns.

If a farmer who purchases land can meet these three conditions, it appears they can elect under §180 to expense the value of the unexhausted fertilizer in the year of purchase, much like other purchased fertilizer, provided the land is used in farming and the taxpayer is engaged in the business of farming.

A Caution

In recent years, land purchasers have ventured beyond these parameters to take very large deductions based on the total nutrient content of the soil, not based upon the value of unexhausted fertilizer. These deductions are risky. Courts have stated that land alone, including the nutrients that comprise that soil, are not depreciable. Likewise, courts have not allowed depletion deductions for the decline of soil nutrients. Section 180 applies only to fertilizer applied to enrich the soil, and by extension, to unexhausted fertilizer in the soil.

Expansive claims based on general soil nutrients or inflated valuations may invite IRS scrutiny and penalties. Taxpayers bear the burden of proving they are entitled to any deductions they take. Deductions tied to land purchased many years ago or to unfertilized pastureland are especially vulnerable. Until Congress, the courts, or the IRS provide clear guidance, farmers and land purchasers should seek trusted counsel and weigh the risks of asserting a deduction for residual fertility.

Additional Resources

There are a number of additional resources related to the Section 180 tax deduction.
Many of your local Land Grant institutions offer annual tax workshops for tax professionals. For locations around the country: Land Grant Tax Workshops

And specifically for workshops in our two states: Texas and Iowa

Tidgren, Kristine, and Tiffany Lashmet. “Consider the Risks When Taking a Residual Fertility Deduction.” Southern Ag Today 5(47.1). November 17, 2025. Permalink
November 17, 2025