Author: Press Room

MSU Billings City College Students Refinish Van for Local Church

25 February 2022
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Montana State University Billings City College students in the automobile collision repair and refinishing technology program recently finished painting a van for a local church. The vehicle was presented to members of the congregation on December 13. 

Instructor Steven Wodrich was approached by John Farnes, pastor at Family Church in Laurel, about this project. Refinishing the van’s exterior would give Wodrich’s students hands-on experience and provide a great service to the church, as they did not charge for any of their work.

In the auto body lab, the students disassembled the van and sanded it down. They removed dents from the body of the vehicle before priming for the new paint. The bumpers, running boards, and wheels were all also refinished by the students during the month-long project.

Thanks to donations from Denny Menholt Chevrolet and American Auto Body toward paint, the auto body students were able to refinish the vehicle’s exterior at no additional cost. U-Pol Products also donated supplies toward the exterior changes on the vehicle. Clearview Auto Glass donated a new windshield and Northland Auto and Truck donated mud guards. As the students had not worked on custom paint jobs yet, Auto Trim Design donated their time to add the church’s logo to its exterior.

“This has been a good learning experience for our students,” says Wodrich. “It’s also given them the opportunity to give back to the community and support a local church that works hard to help those in need.”

This spring, students will take part in the third Recycled Ride project, where they will take in a wrecked vehicle, fix the damages with donated parts and materials, and present it to a local family in need. This project will be completed in April of 2022.

An old joke tells of an economist, a chemist, and a physicist who are stranded on a desert island with nothing to eat except a can of beans they cannot open. When the chemist and physicist fail to devise workable solutions, the economist says, “Assume we have a can opener.”

Montana’s Economy Continues to Amaze

25 February 2022
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Economically, Montana had a “fantastic” year in 2021, and 2022 is being forecasted to be much the same but there are challenges.

At the forefront of his forecast, Montana’s premier economist, Dr. Patrick Barkey, Director of the Bureau of Business and Economic Research at the University of Montana, is projecting a decline in the seven percent inflation rate – “a stunning number” — to something closer to 3.5 or 4 percent, which is still “a lot of inflation.”  Skyrocketing energy prices are contributing the most to the inflation rate. Some commodities have actually declined in price.

Dr. Barkey was quite cautious about his projection, noting that over the recent past a lot of economic projections have been wrong. Dr. Barkey was among the presenters recently at the Big Horn Resort in Billings for the annual Montana Economic Outlook Seminar, which is hosted by the BBER.

Economically speaking, Montana had a great year in 2021, and Dr. Barkey expects 2022 to continue that trend. He pointed to some amazing things that happened in 2021 that were unimaginable going into the COVID-19 pandemic.  “Who would have thought that coming out of a recession, to go buy a house would be considered a good idea,” said Barkey, expressing his surprise.

Equally amazing are unemployment rates that are dipping to as low at 1.7 percent, as is the case in Yellowstone County. Statewide the rate is at a record low of 2.5 percent. Montana ranks fifth among states with the lowest unemployment.

But it wasn’t a fantastic year for everyone. For example, agriculture is not wanting to relive the year, said Barkey. Because of drought, Montana agriculture producers lacked the production to take advantage of even those commodity that were high.

Despite some reports that 2020 was a bad year, it wasn’t, said Barkey— not according to non-farm labor earnings. “But the wins were not evenly spread around the state.” The first two quarters of 2021 show an increase of 17 percent in non-farm labor income.

In tallying up the earnings workers made in 2020, hardly a blip occurs to indicate a recession, which is the result of the money that flooded the state from federal rescue programs. Montana has received over $3 billion through programs such as the American Rescue Plan – an amazing amount of largess, which while halting a recession has led to inflation.

Montana registered growth of 1.6 percent inflation-corrected nonfarm earnings in the recession year of 2020, which Barkey said is testimony to how strongly Montana’s economy rebounded in the second half of the year. While numbers are still coming in, BBER is estimating that 2021 will “surge” to 4.3 percent, reflecting a very strong economy.

Indicative of Montana’s economic growth are tax revenues in 2021 that grew “by a heady $430.5 million in fiscal year 2021, led by a 23 percent gain in individual income taxes.”

Yellowstone County grew about $150 million in total wages in the most recent fiscal year, about the same as Flathead, second to Gallatin County which posted a growth of $300 million. Gallatin County’s population also surpassed that of Missoula last year. Yellowstone County is the most populous at 164,731, a 9 percent increase since 2010. Over 32 percent of the county’s residents held at least a bachelors degree.

BBER’s projection for growth in Yellowstone County in 2022 and 2023 is 3.1 percent. Projections for 2024 is 2.7 percent and in 2025 it’s 2.5 percent.

Average annual earnings in 2020 was $59,095.

Housing starts in Yellowstone County in 2021, based upon preliminary figures that do not include the month of December, seems to have dropped off in comparison to 2020, declining from about 1000 single family units to about 750 in 2021. The peak in housing starts for the county was 2018.

Interestingly, the increase in housing prices in Billings is less than increases in some neighboring areas from 2016-2020. Housing prices increased 14.2 percent over the four-year period, while they increased 20.7 percent in Red Lodge, 28.4 percent in Big Timber, and 37.3 percent in Livingston. The average sales price of a single family home in Yellowstone County is about $320,000. Real estate sales have dropped by about a third because the number of listings on the market is so low.

Drivers of Yellowstone County’s economy are manufacturing (19%), mining (11%), health care (10%), retail/wholesale (12%), federal government (12%), transportation (11%), and non- resident travel (6%).

“Yellowstone County has grown slower than the state average for a number of years, due to the slowdown in oil and gas production activity and the weakness in the four- state region, which it serves as the economic hub. …its retail trade and health care businesses helped propel faster growth in 2021, even as its mining support and manufacturers (primarily its three oil refineries) turned in subpar performances,” according to Barkey.

The shortage of labor was an emerging problem for the state’s economy prior to COVID, and it hides “another story,” said Barkey, that of changing demographics in the labor market, while younger age groups, such as 20 to 24 year olds are almost fully employed at 99.5 percent, for those 55 years old and older there has been a five percent decline, as they retire, taking advantage of the higher selling prices of their homes and other benefits.

Barkey noted that the high housing prices are “a mechanism of inequity” since they are keeping young people out of the market, while being a boon to older citizens who already own homes. High housing prices also “choke off” many other sectors of the economy. “People don’t have money for other essentials, including savings.” They also induce sprawl, increase commuting costs and push younger people to the “fringe” of the market. They also have an impact on the labor market and limit opportunities. “Younger people are locked out.”

The issue of rising housing prices was becoming an issue prior to the advent of COVID. Barkey said that housing prices on a national basis were growing about 6-8 percent prior to COVID, but last year the growth was 25 percent.

It is exposing the communities who have been underbuilding in relation to their growth.

In Montana, “a lot of money is being poured into real estate.” Single family housing is 170 percent (2019 figures) in some areas of Montana, relative to their capacity to pay for it or their income. Nationally it is at 55 percent. For the first time Montana has caught the attention of outside investors who have been responsible for an estimated 18 percent of the real estate sales in the state. Barkey predicted that trend will likely go down over the next year.

Montana Highlights 02-15-2022

24 February 2022
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Paleontologists have unearthed a new dinosaur species in the Hell Creek Formation of Montana, near Jordan. It has named ‘Captain Hook’ because of a unique hooked claw at the end of its arms. Dubbed Trirarchuncus prairiensis, the new dinosaur was covered with sleek feathers and had two short arms with a long claw at each end that it used to dig or break apart wood in search of insects. It had long legs, with feet that look similar to that of an ostrich and a very long, point snout. The fossilized claws are also more hooked that others found in the past and are from different growth stages, providing experts with a look at how the hook-handed dinosaur changed as it aged.

Whitefish businessman Michael Goguen donated $350,000 in the form of $10,000 checks to the remaining households living in what’s known as “The Annex” portion of the FairBridge Inn in Kalispell. More than 100 guests living in the extended-stay portion of the hotel were given notice by FairBridge on Jan. 12 that they would need to find alternative accommodations by Feb. 12.

The Kalispell Planning Board is recommending approval of Spring Creek Park, a subdivision proposed between Two Mile Drive and Three Mile Drive. Spring Creek Park would encompass 65 detached single-family dwellings, 113 townhome/rowhouse dwellings, and 464 multi-family dwelling units, along with two commercial lots, park area and open space.

The Kalispell City Council approved a conditional-use permit request to turn the FairBridge Inn & Suites and Conference Center into 250 studio apartments. Fortify Holdings, LLC, had requested the permit because their purchase of the property. 

Lone Mountain Land Company has announced it is developing a new luxury “resort and residential community” in Moonlight Basin in partnership with a global luxury resort chain. One&Only Moonlight Basin in Big Sky will be developed by Lone Mountain and Kerzner International Holdings, which owns luxury resorts around the world including in Dubai, Mexico, the Maldives and Australia. The resort will include 73 guest rooms and suites, 19 cabins, a ski lodge and several “amenity buildings,” including a spa and dining areas. There will also be 62 private residences in the resort for sale through the One&Only Private Homes brand. The resort will be connected by gondola to Big Sky Resort. Langlas and Associates is the general contractor.

Whiting is adding to its non-operated oil and gas assets in the Bakken. The two assets total 14,563 net acres, and include 32 net undrilled locations. Whiting has said that it expects to develop these undeveloped locations soon. The assets should contribute about 4,500 barrels of oil equivalent per day. This is the second Bakken purchase Whiting has made since emerging from bankruptcy declared during the pandemic. In September 2021, the company closed on an estimated $271 million in additional net acres in Mountrail County, adding 61 new drilling locations to the company’s inventory.

Montana Sen. Steve Daines, who serves on the U.S. Senate Energy & Natural Resources Committee, pressed Biden nominee Laura Daniel-Davis on the failure to restart oil and gas leasing in Montana, despite a federal judge ruling last year that the administration cannot simply suspend oil and gas lease sales while it reviews the program.

The Atlas Power Data Center has announced it’s working with FX Solutions Inc. to build a $1.9 billion cryptocurrency factory in Williston. Missoula, Montana-based FX Solutions is building the facility for Atlas. This plant will be the second such facility for Atlas Power. Its first is in Butte, Montana.

The Hilton Garden Inn located on U.S. 93 South in Kalispell has been acquired by the Veridea Group. Working from offices in Bozeman and Marquette, Michigan, Veridea Group is an commercial real estate and hospitality company. The purchase includes the 144-room hotel, the adjacent 700-capacity conference center, a restaurant, bar and casino. Veridea plans to invest approximately $8 million to undertake a comprehensive renovation of the property.

A congressional bill sponsored by Montana Sen. Steve Daines aims to bolster gateway communities overrun with tourism on federal lands by tapping into federal coffers to address visitation woes. The proposed bill would require a two-prong federal approach to address increased public lands visitation and to combat resulting strains on nearby communities. The bill would require the Interior and Agriculture departments to partner with local stakeholders on fixes using existing federal funding. The proposal secondly would require the agencies to collaborate with state and local partners, and tribes to identify and then address issues like sustainable visitation, housing shortages or troubled infrastructure.

Staack’s Motorsports, 102 E. Galena St., had been sold to Maverick Motorsports of Missoula. Staack’s has been in Uptown Butte for more than 50 years. Missoula businessman Brent Gyuricza , along with his business partner, Guy Sharp, had discussed expansion before, but when the opportunity arose, the two men felt the Butte business would be a perfect match for them.

Chick-fil-A will open at the corner of Custer and North Montana avenues in Helena.

Bozeman Yellowstone International Airport for the 12-month period ending January 31, 2022, it handled 2,020,628 passengers. This is the first time a Montana airport has surpassed 2 million passengers in any 12 consecutive month period. Bozeman Yellowstone International Airport has seen an 82% increase in passengers over the past five years.

MonDak Ag Days is scheduled for March 3-4. The event will be held at the Richland County Event Center and will run from 8 a.m.-6 p.m. on March 3 and 7 a.m.-2 p.m. on March 4. MonDak Ag Days highlights everything agriculture in this region. Educational seminars are also scattered throughout the day. Seminars are usually based on some of the hot button agriculture topics of the times.

Billings Job Service Employer’s Committee (JSEC)  is offering Montana a chance for employers and seekers to shake hands and talk about career opportunities. A Jobs Jamboree will be held on March 16 at MetraPark Pavilion in Billings from 11:30 am to 6 pm with early entrance for Veteran’s, Guard, Reserve and their families starting at 11am.

Universal Athletic, a sports equipment and apparel company that has served Montana since 1971, has joined a new national brand, Game One. Universal Athletic and seven other companies embody the Game One which is one of the largest sports equipment and apparel suppliers in the country.

Dr. Ingrid McLellan, President of The Montana Dental Association, has announced that Webb Brown is their new executive director. Brown was most recently CEO of the Montana Regional Multiple Listing Service. In 2018 he retired as CEO of the Montana Chamber of Commerce after 20 years. Brown is originally from Trout Creek. His office will be in Helena.

A Bozeman company that has been recognized by Inc. Magazine as Montana’s fastest growing business, Stone Glacier has been purchased by a large national company, Vista Outdoor. Stone Glacier is a retailer of outdoor and camping gear from apparel and back packs to tents and other supplies. Founder and owner of Stone Glacier, Jeff Sposito, who started the business in 2012, said that being part of Vista Outdoor will give his company access to more resources to keep up with its rapid growth. Vista Outdoor owns 39 different outdoor and hunting brands including CamelBak, Bell, Bushnell and Remington, and has headquarters in Minnesota.

A subsidiary of Bismarck, North Dakota-based MDU Resources Group Inc. has completed an expansion of a $260 million natural gas pipeline in western North Dakota. In addition to adding capacity, the project helps reduce gas flaring in the Bakken region. The subsidiary, WBI Energy Inc. has capacity to transport 250 million cubic feet per day (MMcf/d) of natural gas from the Bakken production area in North Dakota, with the potential to be increased up to 625 MMcf/d through additional compression if needed.

After working for the company for 28 years, Mike Anderson, is now the new owner of Amunrud’s RV Inc in Sidney. The company is the largest parts and services shop in Richland County.

Benefis Health System plans to donate land for a new nursing education building in Great Falls to be built with a portion of a $101 million investment  from philanthropists Mark and Robyn Jones, founders of Goosehead Insurance, to Montana State University.

As part of the recent $15.9 million in grants awarded by the Otto Bremer Trust (OBT) nationwide, Big Sky Care Connect (BSCC) was awarded – in collaboration with the Montana Medical Association Foundation – a $100,000 grant to initiate electronic, secure access to real-time health information to improve healthcare for elderly and low-income residents throughout Montana. BSCC feeds patient data from healthcare providers across Montana into a centralized digital network – called a Health Information Exchange (HIE) – which serves as an information portal for some 300 participating providers and payors.

PFL, a marketing technology software company based in Livingston, announced the establishment of its Founder’s Scholarship, which was created in recognition of PFL’s founder, Andrew Field, who retired earlier this month after leading the company for 25 years. Annually, the Founder’s Scholarship will award one graduating high school student from Park County, Montana $2,500 to support their pursuit of higher education. 

Butte Heart is a volunteer organization formed to help people from Afghanistan to settle in Butte. Approximately 12 emigrants will be arriving in Butte within the coming months. Butte Heart is backed financially by the Butte America Foundation

After remaining closed for 2 1/2 years, Sidney’s Bowling Alley is now open under new ownership, Dennis and Robin Trudell, Fairview.

The North Dakota Aeronautics Commission reported that the state’s eight commercial service airports ended the calendar with a statewide total of 886,809 airline passenger boardings, an increase of 314,716 passengers or a 55 percent increase from 2020. Williston Basin International Airport ended the year with  more than double – 4,892 — the number of passengers in December 2021 than the previous year. In total, XWA reported 46,330 boardings in 2021, 15,000 more than in 2020.

Lockwood Plans Phase 3 Sewer

23 February 2022
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The Lockwood Water and Sewer District will hold a public Hearing on March 9 to set boundaries for a proposed third phase of its sewer system. The project is confronted with rising material costs that could push its cost to $23 million, but district board members hope grants will help offset some costs. Several subdivision developers have expressed interest and those developments would help offset the cost for each tax code. Construction would begin in 2024, if fewer than half of the 800 property owners fail to protest it.

How Does Billings Stack Up?

23 February 2022
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How does Billings stack up when compared to other cities in the region? During the recent Economic Outlook Seminar, Allison Corbyn of Big Sky EDA pointed out that with about a $50,000 annual average earnings,  Billings surpasses the annual earnings of Bismarck, Casper, Great Falls and Rapid City, while lagging behind Boise, Bozeman, Cheyenne, Fort Collins and Missoula. Total personal income grew by 5.7%. Billings outperformed all major cities in the state in terms of GDP, as well as Casper, Bismarck and Rapid City. Billings GDP (amount of wealth created) was $10.2 billion from 2019 to 2020, a decline of 4.6%, undoubtedly because of COVID.  When it comes to overall production Billings vies right at the top exceeded only by Boise and Fort Collins. Between 2019 and 2020 there was a 20.8% increase in the number of people moving into Billings from California. People also moved into the state primarily from Wyoming, Washington, Arizona and Colorado. 88% of the people who moved into Billings moved from other parts of the state. Billings has 82,416 jobs, an increase of 2.5% between Nov. 2019 and Nov.2021. Billings has the lowest unemployment rate in the state at 1.7%. The average home price in Billings is $350,000 which is an increase of over 20% over the past two years. Denver has the highest concentration of Billings’ graduates outside of Billings.

Hert Joins Economic Development Group

23 February 2022
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Southeastern Montana Development Corporation (SEMDC) recently hired additional staffing to assist the regional non-profit economic and community development, group. Amber Hert has joined SEMDC as the new Administrative Services Director and will be based in the Colstrip SEMDC Office. Her primary focus will be managing the day-to-day operations within the Colstrip office and directing the multiple SEMDC Revolving Loan Fund (RLF) Programs.

Jim Atchison, SEMDC Executive Director, noted that “We have been looking for the right person to lead our loan programs for the past 1.5 years.“  “We are very pleased to find Amber, who, with her experience, skills, and credibility, will certainly be an asset to SEMDC and our clients.”

Hert, a Colstrip native, brings over 10 years of financial services experience to the job and most recently managed a regional credit union. Hert will work closely with the SEMDC staff, the regional banking community, and small businesses within the nine-county RLF region. Besides working with loan clients to ensure stability, she will also market and grow the SEMDC RLF programs with the regional banking partners to strengthen collaborative efforts.

 “Even with COVID and labor shortages, we have seen a tremendous amount of interest and growth in the regional small business community in the past few years. We know that Hert will take our loan programs to the next level,” added Atchison.

SEMDC is a regional non-profit economic development group established in 1997 to stimulate and encourage economic activity in the four (4) Counties of Custer, Powder River, Rosebud, and Treasure.

Governor Tours Craft Malt

23 February 2022
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Governor Greg Gianforte and Christy Clark, director of the Montana Department of Agriculture, toured Montana Craft Malt to highlight how the operation promotes Montana’s high-quality ag products and expands value-added ag opportunities for Montana producers.  

 “As we work to strengthen our state’s number one industry, it’s critical we continue finding ways to help add value to our commodities, capture that premium, and return it to the rightful recipient – Montana producers,” Gov. Gianforte said. “Using locally-sourced ingredients, Montana Craft Malt helps add value to our commodities right here in Montana, while supporting Montana families with good-paying jobs.”

Montana Craft Malt produces 10,000 tonnes of malt annually and adds value to ag supply chains.

 Utilizing a state-of-the-art facility spanning more than 50,000 square feet on nine acres, Montana Craft Malt is strategically positioned at the intersection of two interstate highways and a railway spur to ensure the strength of their supply chain from Montana producers to consumers.

 “Montana Craft Malt is a shining example of value-added agriculture at work,” said Director Christy Clark. “By processing some of the finest Montana-grown barley into artisan malts that are then used in craft beers and spirits, Montana Craft Malt is bringing grain to glass full circle. I look forward to their continued success.”

 The Montana Department of Agriculture is focused on expanding value-added agriculture opportunities in the state. While Montana crops and livestock are already recognized for their superior quality throughout the world, and agriculture remains the backbone of Montana’s economy, the department is working to find innovative ways to add value to these raw commodities, to ensure that Montana can keep pace with a transforming agricultural industry and grow prosperity.    

Promoting value-added agriculture to strengthen the ag industry is a signature element of the governor’s Montana Comeback Plan.

Business Inflation Worries Highest since 1981

22 February 2022
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According to the latest bellwether measurement of the nation’s Main Street economy inflation is rapidly muscling employee- shortages and supply chain disruptions aside, as a top worry of small-business owners.

The Small Business Economic Trends report (aka the Optimism Index), released monthly by the National Federation of Independent Business (NFIB), found 22 percent of small-business owners reporting inflation as their single most important business problem, unchanged from December when it reached the highest level since 1981. The net percent of owners raising average selling prices increased four points to a net 61 percent, the highest reading since the fourth quarter of 1974.

“Our Optimism Index is a national snapshot not broken down by state,” said Ronda Wiggers, Montana state director for NFIB. “While worries of inflation, supply chain disruptions, and in some cases, retail theft, seem evenly spread throughout the nation, states do have some differences and ours now is skewed more toward worker shortages, especially in the restaurant and hospitality industries. As the Economy at a Glance report for December, put out by Montana Department of Labor & Industry, ‘Long-term demographic shifts have reduced growth in the labor supply for over a decade, while short-term disruptions from the pandemic have temporarily reduced hours and availability for some worker groups.’ How we deal with that will be quite a policy accomplishment.”

NFIB Chief Economist Bill Dunkelberg said, “More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs. In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions.”

Key findings include:

* One of the Index components improved, seven declined, and two were unchanged.

 * Owners expecting better business conditions over the next six months increased two points to a net negative 33 percent. Small business owners remain pessimistic about future economic conditions as this indicator has declined 13 points over the past six months.

* Forty-seven percent of owners reported job openings that could not be filled, a decrease of two points from December.

 * Inventory accumulation plans fell five percentage points.

As reported in NFIB’s monthly jobs report, a net 50 percent reported raising compensation, a 48-year record high reading. A net 27 percent plan to raise compensation in the next three months. Eleven percent of owners cited labor costs as their top business problem and 23 percent said that labor quality was their top business problem.

Owners’ plans to fill open positions remain at record high levels, with a net 26 percent planning to create new jobs in the next three months, down two points from December and just six points below the highest reading in the 48-year history of the survey set in August.

Fifty-eight percent of small business owners reported capital outlays in the last six months, up one point from December. Of those owners making expenditures, 40 percent reported spending on new equipment, 22 percent acquired vehicles, 15 percent improved or expanded facilities, 8 percent acquired new buildings or land for expansion, and 15 percent spent money for new fixtures and furniture.

Seasonally adjusted, 2 percent of all owners reported higher nominal sales in the past three months. The net percent of owners expecting higher real sales volumes decreased by six points to a net negative 3 percent.

The net percent of owners reporting inventory change increased two points to a net 9 percent. Eighteen percent reported increases in stocks while 15 percent reported reductions. Thirty-six percent of owners report that supply chain disruptions have had a significant impact on their business. Only 9 percent report no impact from recent supply chain disruptions.

The net percent of owners raising average selling prices increased four points to a net 61 percent, the highest reading since the fourth quarter of 1974. Price raising activity over the past 12 months has continued to escalate, reaching levels not seen since the early 1980s.

Five percent of owners reported lower average selling prices and 62 percent reported higher average prices.

The frequency of reports of positive profit trends decreased three points to a net negative 17 percent.

Three percent of owners reported that all their borrowing needs were not satisfied. Twenty-five percent reported all credit needs met and 62 percent said they were not interested in a loan.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership, who actually own a business.

Ag Hoping for Better Year

22 February 2022
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By Brad Cook, WIPFLI Agribusiness Practice Leader

From the Northern Ag Network

In 2021, agricultural producers took a double whammy: pandemic-related relief programs dried up, and about half of the contiguous U.S. experienced moderate to extreme drought. A lack of government relief programs in 2021 (compared to 2020), created uncertainty for growers and food processors.

Government programs, crop insurance and indemnity payments will help companies get through the year – but they’re not life-saving measures, and won’t provide big enough boosts for farmers to invest in technologies or processes that could make them more resilient to future challenges.

Labor is a common concern for the industry; it’s difficult to get enough workers every season. But this year, limitations on international travel intensified the issue, as did uncertainty surrounding immigration policy. A severe shortage of workers also drove wages.

Because of supply chain issues, pricing and availability are in flux for everything from feed to chemical treatments and machinery. Energy prices are also up, and inflation is squeezing margins. Agriculture companies are paying more for everything they need – which will eventually trickle down to the price tags in grocery stores.

So, what can agriculture companies do to stay afloat – or even get ahead?

Obviously, they can’t control the weather. But they can manage aspects of their business to help build resiliency. As we enter 2022, here are eight issues agriculture businesses should pay attention to:

—Consumer preferences 

Some food fads, like organic and gluten-free are likely to stick around for the long haul. Growers and producers who ignore trends – or buyer preferences in general – may be disadvantaged down the road. As shopping behavior shifts locally, farmers and producers need a better sense of what consumers want.

—“Smart” food production 

Blood, sweat and tears can’t solve all of today’s food production issues. Every farm and production company will need technology to produce food more efficiently, stay competitive and connect with potential buyers. For some farms, the first step is moving to a cloud-based system to manage financial information. Others can use farm information systems to accumulate data in the field, automate processes and decisions, or meet growing demands for food traceability and origin labeling.

—Adopting a business mindset

New tools can help producers understand their costs better, which leads to better decisions when they’re marketing and selling products. With more insight into the whole production cycle, producers can predict yields more accurately and see how different decisions affect their margins. Information allows growers and producers to look beyond the current growing season and create long-term, strategic plans for the business. If agriculture companies focus more time and money on planning now, they can build more stable and sustainable businesses overall.

—Cybersecurity

Farmers and producers are a big target in the cybersecurity “food chain.” In addition to keeping the world’s food safe from weather, insects and predatory animals, the industry now has to protect against cybercriminals. Agriculture companies have to employ data to overcome labor challenges and produce food more efficiently – but they have to protect their information systems, data and technology, too, which will require new partnerships and skills.

—Barriers to entry

Most farmers are nearing retirement age. Once they hang up their hats, they’ll leave an enormous talent gap in the career field. Land that’s needed to start farming is too expensive for most families or professionals. And it’s a demanding career. Family-run companies in particular need to create long-term and succession plans for the business to ensure continuity. The industry needs more programs and incentives to recruit younger generations. In the meantime, agriculture companies may need to diversify or try different business models to attract younger generations.

—Regulation, policy and advocacy

Agriculture and natural resource companies rely on the environment and bring an important perspective to conversations about climate, water usage, protected species – and other matters that are being decided on, sometimes without their input. Growers and producers need to advocate for the industry and become more involved at the local and national levels. Local farm bureaus and state programs can teach agriculture companies how to get involved, advocate for and influence policy. Staying on the sidelines is a huge potential risk for natural resource professionals. A number of proposed changes could affect agricultural operations and timing related to potential transfers of ownership. Many farmers don’t contemplate retirement as other professionals do, but they should be considering it or at the very least, how they will transfer ownership to the next generation or maximize value for a potential sale.

—Innovation

Farming may be an age-old profession, but that doesn’t mean it’s protected from change. Farmers and producers should pay attention to new farming and sustainability practices that could create alternative sources of income. From hemp to carbon offsets, hydroponics and aeroponics, there’s no telling what will take off. We do know the world’s population is increasing, and we need innovative ways to address food needs. Farmers and producers can influence how the world navigates potential food insecurities and eliminates food waste.

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Brad Cook is a partner at WIPFLI with experience in tax planning, tax compliance, and transition planning for family businesses primarily in the agriculture industry. He also serves as leader of the firm’s agriculture industry practice.

Warmer Named to CBC Board

9 February 2022
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George Warmer, CCIM, managing broker of Coldwell Banker Commercial CBS, Billings, has been named to the 2022-2024 Coldwell Banker Commercial Advisory Board. The board is comprised of a select group of CBC affiliate owners nationwide and was created to provide a forum for the exchange of ideas between CBC franchisees and the brand’s corporate leadership.

The CBC Advisory Board has proved to be a successful means of driving innovation and gaining critical insight into the evolving needs of overall CBC strategies. Each member of the Advisory Board serves as a liaison for their respective region, providing updates on the latest developments, policies, and services, as well as reporting and proposing actions to resolve any issues.