Braun Eyes Fix for Rising Assessments
Rising property taxes was among the topics addressed by Indiana Gov. Mike Braun during his appearance last Tuesday at the Indiana Livestock Summit in Indianapolis.
Farmers are seeing higher property tax bills, especially on farm buildings. Braun said the increase is an "unintended consequence" caused by out-of-control government spending during COVID, resulting in inflation.
The governor believes at least part of the problem can be solved administratively, by focusing on the nuts and bolts of the assessment system.
"We've got good individuals, I think, that can address it," he said. "In the meantime, you need to appeal it. We're aware of it. If we need to change it structurally, that's the kind of stuff I feel comfortable with. We need to get it right."
If bigger changes are needed, then Braun said he may look to lawmakers.
"If it takes legislation, we'll try to galvanize that to get it done," he said. "Whatever we can do between now and the session in January, we hope we can get that fixed on a more granular basis.
"And if it gets to where you're getting nowhere, I need to hear more about it because there's a thing called executive orders," Braun said. "I'm not going to rule out anything. But in the meantime, I think some of it will be addressed through the appeal process."
During his 20-minute appearance, Braun responded to questions posed by Courtney Kingery, executive director of the Indiana Soybean Alliance and Indiana Corn Growers Assn. In the audience were 180 grain and livestock farmers, allied industry representatives and even a few state legislators.
The second question Kingery asked was about the importance of making sure the Board of Animal Health and other state agencies are properly funded to respond to animal disease threats, such as avian influenza and New World screwworm.
"If we are underresourced or we need to do something better, I'm going to understand it," he said. "I need to hear about it, and we'll act accordingly. Hopefully, something like that can be done quickly and administratively."
Kingery asked about making sure that farmers "have a seat at the table" with regulatory agencies.
Braun said one of his goals as governor is to "get our government to run more like a business." He mentioned the state's agriculture director, Don Lamb, as his point of contact with farmers.
"We're going to be on top of it," he said. "We want to hear from you. So, you've got our ear all the time, and if you're running into any deafness, tell Don or tell me, because we will catapult that."
He added that state government has a budget of $23 billion and has saved almost $1 billion through cost-cutting.
"It's getting better results with fewer resources," he said, "and that is the way you work on the farm. That's the way businesses work. That's the way state government is going to work."
Finally, Braun was asked to explain the role farmers play in his Make Indiana Healthy Again initiative, which he unveiled last year.
He said the farming industry is at a "tricky spot" right now, with the U.S. facing competition from Brazil and Argentina. Farmers in those areas can grow two crops per year, whereas U.S. farmers are limited to just one.
He explained that U.S. farmers can't rely on producing for the "same old markets" but should look for new opportunities—"like smaller acreage stuff" and maximizing revenue from wooded acreage.
"To me, I think it's smart to look at regenerative farming, look at things you can do other than just playing into the paradigm that seems to make you more tired and maybe more broke each year," he said. "I think you've got the ability to adjust that, but I do think it takes thinking outside the box."
As a woodland owner himself, Braun said that part of agriculture is "underleveraged." By leasing hunting rights, landowners can earn an impressive rate of return. However, "you've got to have patience," he said. "It only gives you income every 12 to 15 years—it's now a beautiful dividend."
Braun, who graduated from Wabash College with a degree in economics, was the founder, president and CEO of Meyer Distributing, an automotive parts company, based in Jasper, Ind. Earlier in his career, Braun said he and two partners were involved in raising turkeys. He also owned a swine finishing operation and a beef herd.
Supply Chain Collaboration Sought
Indiana's corn and soybean farmers are linked with livestock producers through the feed they produce. Last Tuesday, the entire supply chain, including feed manufacturers, gathered in Indianapolis with the intention of strengthening the farm-to-food system.
Attendance at the first annual Indiana Livestock Summit totaled 180, with over 50 organizations represented. The event was hosted by the Indiana Soybean Alliance and the Indiana Corn Growers Assn.
A panel discussion featured representatives from the animal feed sector. They included Charles Shinninger, president, CEO and owner of CSA Animal Nutrition; Trent Torrance, COO and executive vice president of United Animal Health; and Kristy Lowe, executive leader at Lowe's Pellets & Grain Inc., based in Greensburg, Ind.
The Hoosier state ranks in the top five for corn, soybeans, chickens, turkeys, ducks and swine. That means there is a growing demand for feed. As Lowe said, "With every barn that is built across the state, it increases the need for corn and soybeans."
Shinninger said U.S. meat production is up 50% since 1996, along with a 38% jump in egg production and a 50% hike in milk production.
"Because of the improvement in feed efficiency, U.S. feed demand is actually only up about 20%," he said. "So, it's a great dynamic, a great story in terms of environmental impact and productivity and efficiency."
The dairy industry has seen an incredible gain in efficiency, according to Shinninger.
"Cow numbers have actually increased a little bit over the last 30 years, but productivity (up 50%) has increased dramatically," he said. "It's an impressive story."
In swine, the herd has grown from 96 million pigs marketed in 1996 to 130 million pigs today. Increased production has come from heavier weights and improved efficiency. About 30% of U.S. production is exported, compared to just 5% in 1996.
Beef cattle numbers are at a historic low right now, he said, with about 28 million beef cows in the U.S. herd. That's a 20% drop from 30 years ago. However, beef production has been steady due to higher slaughter weights.
The poultry industry has also seen a dramatic increase in productivity and efficiency, Shinninger said. Chicken production, the No. 1 consumed meat, is up 85% since 1996. Egg production is up nearly 40%, even though layer numbers are flat. Turkey numbers peaked in 1996 and have come down since then.
"A mixed bag across the species," he said, "but the general trend is increased productivity and efficiency."
He cited improved genetics as a major reason why the industry is producing more with less.
Torrance said the rise in meat production is due to consumers wanting to eat healthier foods and recognizing that protein consumption is an important part of that. The GLP-1 diet, for example, focuses on nutrient-dense foods, like lean proteins, to support weight loss. Torrance pointed out that protein consumption also helps raise the standard of living for people living in China and other countries.
Those are the tailwinds, but there is also at least one headwind, higher costs, that factor into the equation.
While feed manufacturers are doing their job to increase productivity and efficiency, farmers are paying more for feed products.
Speaking from the perspective of an independent feed manufacturer, Lowe said farmers are focused on feed efficiency.
"Nobody is walking in the door and asking for the cheap feed," she said. "They want to know how to get the cheapest cost."
She said her company works with nutritionists and others to find a win-win situation for their customers.
Shinninger added that he looks at income over feed costs as the primary metric for feed costs.
"The value of what you're producing changes over time," he said. "That value, minus the feed cost, is that net number—given per day. And that's normally the driver of economic analysis that we're doing with our clients."
Torrance pointed out that "one size doesn't fit all" and that nutritionists should develop the right formulation for each producer.
In the world of livestock production, the key is maximizing output with minimal input costs. That puts downward pressure on ingredient supplies and a focus on where margins are being created.
As far as innovations are concerned, he pointed to the success of high oil corn and the value that brings to dairy production.
"That's the great thing about my friends in the dairy world," he said. "They measure value every day on the scale of how much milk (is produced). They can really be at the leading edge of technology and adapting innovation. Chickens take weeks to grow out to understand what your output will be. For pigs, months, and cattle, years."
He said it's exciting to see grain producers partnering with livestock producers to fill the supply chain.
With Indiana being at the heart of the bio-sciences movement, Torrance sees opportunities to use biologics to increase feed efficiency and monitor health. He said bacteria can also be used to increase production.
Reflecting on the topic of innovation, Shinninger said he is impressed with how animal genetics respond to feed.
"As a nutrition provider, it's important to stay in step and be as precise as we can, understanding the performance potential and not over- or under-feed. We cannot change the genetics, but we certainly can optimize it."
Lowe said feed manufacturers have more performance data today compared to 30 years ago. That helps feed companies lock in on what works and what doesn't.
"When you get into artificial intelligence—the other AI that we have in this room—that's going to be something that we're going to see an increased use of," she said. "The companies that can embrace that and take the data" will see the greatest advancement.
With all the change coming their way, panelists said the grain and livestock industries should work together for long-term success.
"The most successful grain farmers, feed manufacturers and livestock producers are the ones that recognize that we are not separate industries," she said. "Grain producers will produce the raw material, the feed manufacturers will pick up that raw material and turn it into nutrition, and then the livestock producers pick up that nutrition and turn it into a food source for human consumption."
She emphasized that all three sectors share the same fate.
"We're all part of the same value chain," she said. "Whenever one segment suffers, eventually we are all going to feel it in some capacity. I think we get through this and our ag industry remains successful if we can ... make that commitment to help the next link in that supply line."
Shinninger echoed that same sentiment.
"We're all part of this food supply chain that's serving the world market," he said. "We're serving just over 8 billion people today. The next 30 to 60 years, we're going to go over 10 billion people, and collaboration across those different segments—grain, animal production and feed—is going to be critical to continue to improve food production and efficiency and feed the world. As consolidation occurs, there is more opportunity that I see for custom solutions from the grain farmer to the producer and feed manufacturer for a specific item."
Torrance said the future holds tremendous potential.
"We all know we're going to have to produce more and more food with the same or fewer resources to feed a growing population," Torrance said. "How are we going to do that? It's got to be with innovation and technology—to use feedstuffs more efficiently to get more gain."
Farmer Perspective
An Indiana dairy farmer, Brian Rexing, stepped to the podium to discuss the importance of technology and having a strong relationship across the supply chain.
"More than ever, success in agriculture depends on collaboration," he said. "When I look around this room, I don't see dairy producers over here and grain farmers over there. I don't see beef, pork, poultry, agribusiness and technology companies operating separately. I see people more connected than ever, and that's what it's going to take."
As the owner of New Generation Dairy in Owensville, Rexing and his wife Ranelle have created a business with future opportunities for their four children.
"This family is what drives me to do what I do," he said, referring to a family photo.
In addition to the grain and dairy farm, the Rexings also operate their own butcher shop.
"I saw an opportunity to take what we produce all the way to the consumer," he said. "And I thought it would provide an opportunity for my children someday."
His biggest worries include weather, input costs, labor, market regulations and passing along the family farm to the next generation.
"Every morning, our dairy starts with the cows," he said. "But before the cows, (the day) starts with the feed, and before the feed, it starts with the crops. That's why I have never viewed grain farming and livestock farming as separate. The success of one depends on the success of the other."
Rexing touted the role dairy products play in providing essential nutrients for the human body. Consumers are on fire for cottage cheese, and whole milk is back in schools. Milk and other dairy products are also packed with protein, making them ideal for the GLP-1 diet.
Regarding his philosophy for encouraging the next generation to take over the family farm, Rexing said it takes a soft approach.
"I want them to be drawn back," he said. "I don't want to pull them."
The southern Indiana dairy farmer pointed out that labor is one of the biggest concerns facing agriculture.
"Dairy is a 24-hours-a-day, 365-days-a-year business, and finding good people, and keeping good people, is becoming increasingly difficult," he said. "We're all seeing that reality across the whole agriculture supply chain."
Dairy farmers have responded to the labor challenge by adopting robotic milking and feeding systems, along with other forms of automation.
"Not only does it take technology, it takes good people to implement that technology. I always come back to the same thought: Technology does not replace good people; it helps good people do more."
He said the farms that will be successful in the future won't necessarily be the biggest. Rather, they will be the ones that adapt the fastest to new technology while continuing to invest in people.
He discussed the importance of animal nutrition.
"A bushel of corn isn't a commodity to a dairy farmer," he said. "It's milk production, animal health and, ultimately, food on someone's table. That's why the relationship between grain farmers and livestock farmers is so important."