Today is a great day to do business in Moorhead

Who can imagine 100 years ago that we would have come this far when the prairies of the Red River Valley were first broken and seeded? Even though our local economy is becoming more diverse, agriculture remains the fundamental base. This was the topic of discussion at a recent Let’s Talk Business breakfast. Bell State Bank of Moorhead President, Bob Buth, reminded the attendees that we all are affected by the agricultural economy in many ways, some more obvious than others.

Due to better hybrids and agronomic practices, coupled with increasing commodity prices and yields, the past ten years have been profitable for Red River Valley farmers. Because of the increase in profitability, land prices have increased significantly. However, the depressed commodity prices with stable expenses over the past 18 months have hurt profitability, which has been putting pressure on their ability for a positive cash flow.

Even though North Dakota’s oil boom is bringing unmatched growth, it has also brought unanticipated problems. Because of the oil boom, the transportation of commodities has become a source of frustration with added expense for our local producers. Because roughly 60 percent of that oil travels by train, it has created a crisis for farmers because grain shipments have been delayed due to the vast movements of oil by rail. This has led to millions of dollars in agricultural losses.

Other agricultural developments include soybeans and sugar beets becoming the main crops replacing wheat as a major crop in the Valley. Many area farmers are significantly investing in drain tile that will result in improved yields.

Buth also shared that agriculture frequently cycles and that commodity prices will eventually improve, but the question is when and will it come in time for our area producers?