Support for Arkansas Week provided by the Arkansas Democrat-Gazette.

The Arkansas All Times and Little Rock Public Radio.

Hello again, everyone, and thanks very much for joining us.

It is a crucial component of the Arkansas economy, agriculture and enterprise, with annual revenues in the billions of dollars and with the autumn harvest fast approaching, that enterprise is troubled not just in Arkansas, but especially Arkansas, given its significance to the state's overall fiscal health.

Well, we'll go to that story in just a few moments.

First, the sea change in collegiate athletics and I'll name image, likeness, transfer portals, concepts and structures unheard of to earlier generations of college athletes, coaches and supporters.

And with the season opener only days distant, what's the impact on college sports in Arkansas?

Some play by play now, if you will, from Bo Wilcox, who writes sports when he's not writing legal briefs.

And David Basil, a.k.a.

The Bears, who put on a hog uniform a few years back and never took it off.

Gentlemen, thanks very much for coming in.

Whoever that bowl story, we're entering year two of this brave new world.

What did year one teach us?

That losing is hard.

As I was talking to you earlier about the fact that, you know, 20, 23, 24 for the Razorback football, basketball, baseball, softball, flagship programs, if you will, was tough.

And I think it was very evident that sometimes this whole concept of money coming in doesn't necessarily buy you a better results.

But I think that with the sea change you talked about, Steve, there's come a lot of progress in this state, obviously, in recent months because we've seen changes in the way and the nature of funding for some of these big programs.

Yeah.

And so, you know, it's a it is a different time year to I would assess as you know, I don't know if I would compare it to year one much because again, all of this came on very suddenly.

You were talking about those being concepts unfamiliar to prior generations.

They were unfamiliar to us until literally, you know, few years ago.

So I think we're adapting as a state where adapting as a program, if you will, and I say we because I'm a shameless hog fan, you know, But but I am I'm very encouraged.

Like I said earlier, I think that you have to go through maybe some rough patches and this has been one, but it feels like there's a lot more stability now than there was just a year ago.

Yeah.

Dave?

Yes, a mess.

I hate it.

I can't stand it.

And I'm glad the I'm glad the players are getting some money.

But the problem we saw this coming this just opened the door.

Let's go without any rules, without any regulations, without any controls.

And then you have a certified mess that everybody's trying to struggle to get a hold of.

And I knew this would probably happen and I saw it happening.

Steve, you go back.

I did.

I started the rules word back in 1996 and assistant coaches that we would bring in to honor.

We're making about 150,000 a year.

We were actually we were paying them to win and giving giving them golf clubs.

And because they weren't getting paid as much.

And then what changed?

Everything.

It's real simple.

TV, TV money changed everything.

If you look at the increase in TV revenues, it became getting became so big that all said, you're not having to pay players.

So who do you pay?

You keep paying your coaches.

You keep adding more staff.

You keep adding bigger facilities.

To the point to where I was watching.

Now the assistant coaches are getting paid 3 million a year.

Head coaches are getting paid 10 million.

It just kept going up.

So I remember thinking, this has got to stop.

Somehow.

There's just like it.

We got it made.

This CAA always had a model that this was amateurism.

And finally people in Congress said, Hey, enough's enough.

You know, you know, you guys, these guys need to be making money.

But instead of the college giving up that money, they just said, you go get yourself through in ISL.

And that model hasn't turned out to be what they thought it would be.

And so now you've just got a free for all of of of trying to figure out how to manage, how to get more money, how to pay the players, how to pay your bills.

And I think, listen, everybody in the college game is struggling to deal with this.

Well, Bo said just a second ago that that money doesn't the athletic money doesn't necessarily buy success.

You can't even take the field without more money.

You can't get on the court.

You can't get on the diamond without without more money.

And if your one taught us anything, it would I think the it was acknowledged at the trustees meeting the day the federal trustees meeting here today.

It's going to cost more.

It's expensive now and it's going to cost more.

And I think that, you know, as you and I had discussed before we came on camera, the the nature of this beast is that it really is a beast now.

It's so much bigger than any of us could have thought about athletic departments at the magnitude of the University of Arkansas and other programs.

They're just massive and, you know, having to have all the staffing, administration facilities, everything is a challenge now and it is an arms race.

And so those with the arms, you know, prevail.

And so you got to buy it.

And so this will be an interesting period, too.

I think year three, you'll have to look at things a little differently because it's a little bit like watching a player develop from a freshman to a senior or used to be that they would stick around that long.

But you would you would see those early struggles and then you would see them come into their own, you know, as they got to be upperclassmen.

And that's kind of the same, you know, analogy here is let's see how the university, the foundation, the benefactors all line up with this because this I think this will be a critical year.

Yes.

You want to have the wins and you want to have success as a program.

But I think it's just as critical to show and demonstrate, especially in a league like the SCC, you know, especially now that it's expanded, you have to pay money to make money.

And I think that in this state we finally are coming around to this idea of we have a lot of very wealthy people and entities in this state that can help this program get to a different level.

And so year three, I do think will be interesting.

Yeah.

David Basil, the go ahead.

I just think what's going to happen both to you're going to have donor fatigue.

I sat next to a guy yesterday who basically is helping to pay for particular player at a particular college because that's what coaches are having to ask now.

They're having to ask their donors, Hey, I need this receiver.

Can you give me $500,000?

And I will tell you that will last for a little while.

But after a few years of doing that, there will be a fatigue set in.

But beyond the the foundation asking for money to give to the university, I just think at some point what's going to have to happen is they're going to have to become employees of the university.

I don't think there's any other way for control standpoint.

Lane Kiffin is the best guy to measure this.

He coached in the NFL.

He's coaching for Ole Miss.

He said this system does not work.

He said in the NFL, we have control.

We have rules.

There are none here.

And it will not sustain this this kind of growth without some type of control.

Yeah, in this new paradigm, anywhere in collegiate athletic, does the word amateur or even fit anyone, does the word student athletes, nobody cares.

No, they don't.

They don't care.

And you're right.

That's why why are we even doing this?

This is really this is really about professional.

What we're seeing on Saturday is turning it to the professional business or professional sport.

There's no amateur feel, you know, Do you hear anybody talking about grades or school anymore now and you're moving from school to schools?

You know, some players are in four different schools and four years and just the world we live in now.

Yeah, his teeth have been.

Yeah.

Yeah.

And so that leads to this lawless atmosphere.

Leadership.

Yeah.

And so I do think that that wants the you know because we you know, there's always these we all have these tales of things we've heard you've experienced as a player of things that happened about, you know, the NCAA coming in and just handpicking programs and there was a mississippi state quarterback years ago that got suspended for a game because of boost.

He had a flat or a blowout on the interstate and he called a booster.

And the booster, you know, sent him 100 bucks for a tire and they suspended it.

That would never happen again.

In fact, you know, probably there's somebody out there that's going to have a tire company as a result of their performance on the field.

And so it's a completely different atmosphere.

And as David said, the fatigue factor will set in and that's going to be, again, something we'll see down the road.

But I also think there hopefully will be some level of regulation by then that might ebb that fatigue somewhat.

The counter argument on that, gentlemen, though, is that it is the players.

I mean, we're talking about billion dollar enterprises here, but it was the players out on the field or on the court risking injury, risking brain damage, whatever.

And it was their talent.

They're they're taking the risk and they're getting, you know, free tuition.

But it stops there.

Is that is there not an argument for equity to be made in the sharing the revenue?

Well, listen, I was one of those ones and now there goes the amateur.

That's right.

But well, I was excited to have a college scholarship and to be able get my education paid for now.

But again, what changed everything is that, as you mentioned, the billions that are being generated through television.

And so what do you do with all that money?

I think if you could go back in time, which some coaches talked, Steve Spurrier talked about, hey, man, let's let's do a pull or two or 3 million and let's give every player 30,000, 50,000 a year.

But we're past that now.

And so we now we've got guys are getting paid a million, 2 million a year.

And so I don't think you can ever go back now once a school if they were to hire them as employee Steve, you might get back to that model where you say we're going to pay every offensive lineman 100,000 or 200,000, but yeah, you know, amateurism is done in.

And whose fault is that?

The NCAA probably thought they could hold on amateurism and they couldn't.

But yeah, I'll echo what David said there, especially that last point about, you know, the amateurism and how it's a lost concept, of course.

But, you know, I think your counterargument is a good one.

You know, I mean, this is they are the players they deserve, I think, to be compensated.

And I don't think anybody is still of the, you know, old school mentality where they're not they're they just say, no, no, don't pay them.

You know, I don't think that attitude is prevalent anymore.

But the reality is, is that there's not a model, there's not a playbook literally for how to do this.

And so everything is an on the fly experience and it's all trial and error.

And so, you know, I think the work so far has been good.

There's been measured progress there that that hopefully can be sustained.

But yeah, it's a it's a it's just an interesting time in so many in so many ways.

And I can't imagine, you know, being a student athlete at this point.

Our our conversation thus far has centered around obviously around the Fayetteville program, the Razorback program.

What is the impact of this new paradigm and the and the added expense in college as like what impact this is going to have on smaller institutions the bears, the Bisons, the mule riders, the the red wolves.

I think you see a little bit of the trickle down.

Now I've heard in Division two where you have a little bit of where some of those Division two players would like to have some of that in Ireland, those small for example, you take a school like Arkansas Tech and Russellville, their businesses in there that that now that they can pay players I'm sure are doing endorsement deals with them.

And it's not on the level of what you may see like in the SEC but it has trickle down there.

And then that's where that that's the last amateurism area in in our in sports are the division three.

The in a level where they don't have the money they're playing for the love of the game.

They're playing to the chance to go to school.

I don't think it will affect them.

They can't afford that.

I think it's those middle of the range where even the non-power five, for example, the non-power five like up say like an Arkansas state or a Charlotte or whatever.

That's where the really tough ones because they cannot compete with with the big boys.

So what do they do how do they how do they put on a program they just in it's almost you're going to have a super conference with, you know, probably 60 schools that have all this money and the rest are going to just try to do the best they can with their academics in this new arena.

This new this new paradigm.

Are academics under stress?

I mean, is this is it inevitable that academics will be devalued in this new system?

I mean, I think that culturally education is, you know, been scaled down a little bit and that's that's fine.

You know, it's a transitional time.

And we obviously have more people out there doing vocational programs and just going straight to work, you know, And so colleges may be lost that that luster to some, but it's still a proving ground, a training ground for these athletes.

And so I don't think that, you know, there's exceptions.

Obviously, there's some there's little LeBron James is the world that are just so talented.

The college is they're going to bypass it or whatever.

But, you know, as David was talking about, those those second tier programs kind of having to struggle, It's interesting because I don't feel like they are struggling in the sense that there's plenty of mid-majors, if you will, that are winning games and important games.

And so I don't know if, you know, we talk about parity a lot and this feels more like haves and have nots again.

And that's what I think all of our concern would be is is that gulf between those power programs and the non-power programs is just going to widen.

So I don't think anybody really wants that to happen.

I like the idea of 120 or whatever the number is now in Division one programs.

You're never going to have it all on a similar level.

But yeah, give them all shots at competing with each other at times.

I mean, let's see what Intel has done truthfully by having things like Arkansas play APB is not going to probably be a lopsided game this year.

Sure.

Is it probably going to be in future years?

Absolutely.

But you never know.

Push, push for time.

But I got to get this in here.

What kind of season?

Now, you got an odd chemistry experiment up here.

Pittman and Petrino.

Yeah, that was the best move he could make in the off season.

That gave the fanbase hope, not much hope.

After that, they're going to be better.

Steve The problem is the schedule that they play is really, really difficult.

So how many more wins does better get?

You just don't know.

They probably could be anywhere from as low as five wins to as high as eight.

So somewhere in there we're going to see the magic of Bobby Petrino and what he can do on the offensive side of the ball.

Bo Wilcock I have said for months now that Sam Pittman's job is obviously at stake here this season.

I don't think there's any doubt about that.

But I've said for months that six and six and possibly a bowl win keeps him around, generates enough enthusiasm going into the next year.

Right now, the recruiting classes for 25 and 26 are looking strong, but we all know that will change.

But I think a seven in five season is probably the ceiling.

You win a bowl game, you go eight and five.

And I know that doesn't sound like much, but Ray's going away.

But, but, but, well, well, well.

That's another take it another subject that it may be maybe throwing races around isn't the thing to do yet, but I think seven and five would be good.

I'm going to say six and six with a bowl win in Memphis.

Bo in the bars.

You will be back here.

Thanks for coming.

Thanks, David.

Appreciate it.

And we'll be right back.

We are back.

And now to the economics of agriculture.

In a year of unease in relation interest rates, supply chain disruptions, crop prices that aren't where the farm community and its suppliers wish them to be.

The rate of return for commodities, livestock and poultry this year is low and could easily go lower.

It's a bit better on the protein side than on the road crop side, but we're about to get into that.

Joining us now, farm economist Ryan Lloyd, Dr. Ryan Loy of the UAE's division of Agriculture.

Dr. Loy, thanks very much for coming in.

It isn't a happy situation, particularly, as we noted, on the road crop side.

How deep is the peril?

Well, that's very interesting question, Steve, and thank you so much for having me.

I really appreciate it.

You know, a few things that we're looking at on the road crop side is we have a lot of carryover from the year before and meaning we have high supplies and we with record year years of production, year over year, the last few years, we just continue to have that high supply and we're looking for ways to use that supply such that we don't have just acres that have not been harvested yet that are going to end up in the same storage facilities that the last year's crop was at.

And so that's a big issue.

That's putting a lot of downward pressure on prices.

So you have that one side of it.

The supply side economics of it is we have too much supply and it's pushing down that price.

The other side of it is that this is historically one of the highest production costs a few years in a row that we've had in agriculture.

And so you're both of these farmers are getting price squeeze from both sides on this, dealing with a low price when they go to the market, as well as paying, you know, highest input costs they have in probably the last decade.

And so that's what we're dealing with on this side and especially on the interest side of things.

Money is not cheap right now and farmers require capital to harvest and to plant.

And so these are the things we're looking at right now.

Well, the reports from the government, anyway, on inflation are a little optimistic over the last two or three months.

And the last one just Wednesday.

I think if inflation continues to slow, that cool is the term there.

Is it cooling too late to have much impact this year?

I would say yes, because much of the operating loans, the operating notes and ownership notes have been set in place before.

This optimism in the marketplace has come through.

Now, I think we're going to start seeing a little bit more of the benefit.

And I really I want to put benefit in quotes because we're not going to get back to those pre levels of our pre-COVID levels of interest where we had 0% Fed funds rate.

You know, over the next five years, we're only expecting to get at the best case to get down to 2% in the Fed funds, meaning we're still going to have high interest rate environment for this year.

It may be too late next year.

I think we're going to start seeing those kind of reprieves come through in the interest side of things.

So I think I hear you saying that consumers at least over the next several years that had best brace themselves.

I mean, they're not the prices may they may get some break, but not a big break.

That's right.

And one thing to think about is, you know, when when we talk about inflation coming down, when we talk about a cooling and a soft landing, the prices that are here are here to stay.

It's just how much are they going to change year over year.

And I think that that's something we really need to consider going into the year.

You know, I think a lot of places are expecting a lower Christmas purchasing season because of those things.

And so I think what we're going to see here is that these high prices are at least going to stick around and be sticky for a while.

And it's just a question of how much are they going to change year over year in multiple month into the future.

Well, well, with the Christmas retail season coming up, is, is and the harvest about to begin for so much of the royal crop.

Who is it even possible to?

Would it be responsible to speculate on the potential loss of farm income in this in this cycle?

Absolutely.

You know, I think speculations about the best we can do, considering we what we usually see in a marketing year, is that right around harvest, the price the spot price for crops is going to be the lowest rate, highest supply in the marketplace at that time.

But as we move away from harvest, that supply dwindles.

And so the price raises up.

Writing about that February, March, right around up until about June.

And so what we're going to see here is I think that the verdict is still out on how much that upside price potential is going to show itself into this marketing year, specially considering I know anecdotally that there is so much carryover from last year in storage that some farmers are going to be forced to have to take that spot price.

And when you're looking at a $4 corn for December delivery, you know, based on some of the stuff we did on our budget, it's the break even.

And this is just break even.

Not even making a profit.

Breaking even on corn is $6 at 615.

And so you think about that disparity and that's really going to be the issue.

Well, that's more than two bucks, more than two bucks underwater there on a bushel.

Yes, sir.

Well, are these these supply being out of sync?

Much row crop, whether it's corn, wheat, soybeans, cotton, even, and too little too little animal protein is certainly beef.

Anyway, a miscalculation on the part of the ag community here in terms of of planning for the season.

You know, I'd hate to to to point the finger one way or the other.

I think it's kind of a perfect storm of a lot of of events that have happened in the last few years.

There is some overcorrection.

Right.

And so there is a saying, as US economist have, that the cured at high prices is high supply or is.

You know and then the cure to low prices.

Right.

Is high prices because if they see that low price to be having a high supply, if folks are going to plant a lot during that high price period, they're going to drive that price low.

So what we saw during Russia and Ukraine's early stages of that war, crop prices skyrocketed.

But at the same time, input cost, too.

But what we saw is that a lot of people adjusted that to catch that high price.

But by doing so, the price went down.

You have that.

And then you also have Brazil, who can come onto the marketplace much earlier and it is my opinion that I believe that we underestimated how quickly Brazil can switch their acreage from pasture to cropland and they can get to the market earlier and they're more attractive on the marketplace, especially to China, when they have a cheaper corn crop than we do.

And soybeans, especially with our high interest rates that make our dollar more expensive on the marketplace.

Well, you mentioned China, Brazil, the war in the in the Ukraine.

You didn't mention Cuba, but I just did.

It seems that with every passing year, foreign policy and foreign affairs have a greater impact on ag ag in the United States, but particularly in Arkansas, simply because it's so important to Arkansas.

That's right.

It is.

It's, you know, especially when our major road crops are corn, soybeans and rice, we are definitely going to be impacted by these foreign markets.

And I really think that there's it's it's really just a perfect storm right now.

And I wish there was a silver, silver bullet for marketing or grain storage that we can point to and say, hey, this is how you can mitigate your risk.

But the best way to mitigate your risk is the combination of a lot of these marketing tools, these risk management tools such as crop insurance.

But still, even with all of that, you're not going to be getting the price that you expected when you had planted that crop.

And that is a big problem, especially when if you if you didn't book your fuel in the lowest price environment that's already eating into your margin.

And so I always think about this on a break even basis.

And a lot of these all of these aspects just put upward pressure on your break even price, meaning every time that something like this happens, your break even price is going to follow and have to get higher and higher and got it.

And that's it.

Got to end it.

Thanks very much because we're simply out of time.

We thank you for yours.

And please come back soon.

Yes, absolutely.

Thank you so much, Mr. Barnes.

And that does it for us for this week.

As always, we thank you for watching and we'll see you next week.

Support for Arkansas Week provided by the Arkansas Democrat-Gazette.

The Arkansas All Times and Little Rock Public Radio.