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- Welcome to "Carolina Business Review."

We're grateful that you've chosen to spend some time with us today to learn more about what's going on in both North and South Carolina.

I'm Laura Ullrich, filling in for Chris William, and you're watching the longest running and most widely watched program on Carolina Business Policy and Public Affairs seen in North and South Carolina for over three decades.

Thank you for your support.

Today, we're gonna compare and contrast urban and rural spaces a bit.

We all know that the urban areas in both North and South Carolina are growing, but what about the more rural spots?

Well, we have a great opportunity to learn more about that today from AGSouth Farm Credit, CEO, Vance Dalton.

The conversation starts now.

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(upbeat music) On this edition of "Carolina Business Review," Carl Blackstone from the Greater Columbia Chamber of Commerce.

Vicki Lee Parker-High of the North Carolina Sustainable Business Council and special guest, Vance C. Dalton Jr. President and CEO of AGSouth Farm Credit.

(upbeat music) - Hey, Vicki Lee and Carl, so glad to have you here.

Welcome back to the show.

I know you've both been on several times.

Really happy to have you here.

- Thank you.

- Good to be back.

- Yeah.

- Good to be with both of y'all.

- So I wanna spend the beginning part of today talking about, a bit more about the urban parts of North and South Carolina, and then when Vance joins us later, maybe shift to a conversation about rural.

So Vicki Lee, I wanna start with you.

I mean, North Carolina continues to see very strong growth from a macro point of view.

Unemployment rates right now, back in December, were about 3.5%, but in rural spots, I mean urban spots like Raleigh, it's more like 2.9% or even lower.

- Yes.

- So really tight labor markets.

So I'm curious, what are you seeing the state of North Carolina do to kind of address the need for workers?

- Well, as you know, that has been an ongoing conversation, getting those skilled workers in there and now to see this labor market tighten, it comes up in every conversation.

But what, there was a recent announcement from the commerce department, 'cause they're hearing the businesses and so they just launched a program where they invested all nearly a half a million dollars to create 14 workforce boards that are gonna be strategically placed a across the state.

So it represent majority of the counties.

And what those boards are gonna do is actually partner with organizations like the North Carolina Sustainable Business Council and other groups to understand what those work needs are so that they can really pinpoint where we need to work, what areas and skills that need to be developed.

And so I really applaud them because I think this is the kind of effort where they get down on the ground, where they actually are working with businesses and business organizations to really identify what's needed, where the gaps are.

So, you know, they're hearing it, they see it's issue there.

You know, this program I'm hoping will help to make a difference to help find those skilled workers.

- That's great.

So in South Carolina, are you seeing other initiatives that are making a difference?

- Absolutely.

Out of necessity.

Right.

I mean you've, we've seen from July, 2022 to July, 2023, South Carolina per capita was the fastest growing state.

And we're seeing unbelievable growth, mainly in the urban markets.

These rural markets are important because one, the land is still cheaper.

You have some challenges as as it relates to workforce, but that's an opportunity as well.

So I think you're gonna see our state legislature, they're looking at ways to bridge that gap.

- [Laura] Right.

- And one of the biggest issues we have, and especially in the rural markets, is childcare.

- [Laura] Right.

- And we're looking at how do we fund childcare, especially from a workforce standpoint.

- [Laura] Right.

- How do we bring moms, single moms that are, have to deal with childcare all the time?

Those are important.

And looking at tax credits for those companies or vouchers for those companies.

- [Laura] Right.

- We gotta start thinking differently because the growth is not gonna be in the urban markets for long.

I mean, there are parts of South Carolina, they're just tapped out.

- [Laura] Right.

- So let's talk about that a little bit.

- Yeah.

Yeah.

- So the growth has really just been incredible.

I mean if you look, - [Vicki Lee] Yes.

- I think since Covid hit in Raleigh employment growth, like almost 13%, just really outrageous growth in some ways.

- Yes.

Yes.

- [Laura] Does it feel sustainable?

I mean it seems like what you're saying Carl, is that it doesn't feel sustainable.

- I mean we are riding that wave and I think that from the manufacturing side, you look at the growth that we've seen, 10, $11 billion worth of capital investment in our state the last few years.

Not all has gone into urban markets.

Some have gone into rural, we're seeing growth in Chester along this, now they are around interstates.

- [Laura] Yes.

- Right.

That is the key is transportation, infrastructure, but the fact that those dollars are looking elsewhere, we've gotta also look at long-term incentives.

How do we incentivize companies not to look in the urban markets, but to encourage them to look outside of the market?

- [Vicki Lee] Yeah.

- [Laura] Right.

- And I think we're going North Carolina's very similar in that regard.

- Yes, it is.

It is.

I've seen growth, I saw a map recently where there was really no infrastructure, but yet there was a major announcement in this area.

And so they're working with the funding that's coming down through the federal government and through the federal funding to build out the infrastructure.

So even, they're even thinking that far in advance where they're seeing where it's just land.

How can we connect it somehow, you know, to the grid?

So I starting, we're starting to see that people are thinking forward.

They're realizing, like he said, we are starting to tap out Raleigh is, but what it is.

It can only probe with so much- - [Laura] Right.

- In that particular, at that particular square of land.

But they're looking at ways that they can move beyond.

And they're seeing that.

- But I think we're also have to look at infrastructure in the larger scale.

Not only is it roads, not only is it energy, where's natural gas?

I just recently learned that not every county has natural gas.

- [Laura] Right.

- Can we find a way to access that or can we broaden the ability to spread natural gas to these rural areas?

That could actually be a huge economic boom to some of these rural areas.

But we have to start thinking long term because again, the growth around Charleston, in Greenville, Raleigh, Charlotte.

- [Vicki Lee] Right.

Right.

- Can't continue at the rate we have.

- Yeah, so let's talk about Columbia specifically for a minute.

I spent a lot of time in both North and South Carolina and Columbia has not seen the growth that those other markets that you just listed have has seen.

And whenever I ask people in Columbia why, they bring up that it's a government town, you know, big university, state capital, but so is Raleigh, so is Austin, Texas, right?

So- - The simple answers for that, but it's really deeper than that, right?

- [Laura] Yeah.

- It's poor leadership over the last 20, 30 years.

I mean, our taxes are extremely high.

And if you look at the market, we're out of whack as it relates to commercial taxes.

We're one of the highest in the country.

And so that actually is a wet blanket as you're looking at development.

That's why others have gone to other places that are cheaper.

Now we have what's gonna help us long term is we have talent, we have six colleges and that's what's been the driver of Raleigh and Charlotte.

- Yes.

- Now that we have a university, we've gotta market different what we've been doing, but we can't continue to be very high on taxes and expect businesses to come because if it doesn't work on a proforma, it's not gonna work.

- Is that a city issue, county issue, state issue, all of the above?

- A little bit of all of the above.

- Yeah.

- Primarily in our area, it's countywide.

- Okay, interesting.

Really interesting.

So Vicki Lee, let me ask you a bit about small businesses.

- Yeah.

- So much of what we've kind of been talking about so far is kind of these more larger announcements.

These companies, large companies that are coming and big, big sites that need infrastructure.

But I know Goldman Sachs just came out with some information that showed that 75% of small businesses actually have a really positive outlook on their financial side of their business going into 2024.

What's driving that?

What's driving the positive sentiment?

- That was very strong, a very strong number.

And there are a couple of things.

I mean I know we, even though you have, you hear about inflation and you hear about that.

But what's also happening, we don't have the same factors that we typically would have when we think inflation because we have consumer spending, which has still remained very strong.

And we have wage growth, which has been occurring and that has remained pretty steady.

So that has still been fueling the economy for small businesses.

So they're banking on that to continue.

And you know, there's also, I feel some optimism with the small businesses that the rates might start to creep down, which will loosen up and free up some capital that they need.

So I think they're looking, you know, it's an election year as well.

So they're looking at things might loosen up and really kind of, the wins will kind of go their way.

So I think that 75% optimism is pretty strong.

And I think also in that survey they also mentioned that over half who said they're gonna be hiring and 62% said they anticipate having a profit in 2024.

- [Laura] Wow.

- So real strong optimism coming from the the small business sector.

- Absolutely.

Do you, are you hearing the same thing from the smaller businesses in your area?

- I do.

I mean, I think we're fortunate in the Sunbelt that we are seeing such growth and I, the talk of the market softening, it's all relative, right?

I mean, they're busy.

They may not be as busy as they were maybe a year ago, but they say we needed to slow down a little bit.

- [Laura] Right.

- So I don't think it's, I think anticipating a little bit of a market correction is good, but the man is great and we're seeing just like North Carolina, the amount of new people moving in.

Our issue is we've got such a high number of retirees coming in.

- Yes.

- Which is they want services and they need people, but they're not wanna work.

- [Laura] Right.

- So we've gotta figure out that challenge.

And so I think reskilling some folks, reshifting what the educational services look like.

- [Laura] Right.

- But we've gotta figure out those jobs because the hospitality retail is so big for us.

And those are hard jobs are still hard to find.

- No doubt about it.

Well, let's pause right here for now and let's talk, see who's coming up in the next couple of weeks and then we'll bring on our special guest.

- [Vicki Lee] All right.

- We have Nido Qubein that'll be joining us, President of High Point University and also CEO of Santee Cooper.

So now it's time to welcome our special guest, Vance Dalton.

We're so happy to have you here today.

He's president and CEO of AGSouth Farm Credit.

Thanks for being with us.

- It's great to be here.

Thank you for having me.

- Yeah.

And welcome to the conversation.

We wanna shift a bit to conversation about rural 'cause that's most of who you serve.

And before we get started, if you just could in, you know, a quick 30 second answer, tell us about what you guys do.

What markets do you serve?

- Sure, so AGSouth Farm Credit is a ag lending cooperative.

We make loans for capital loans to farmers in North Carolina, South Carolina, and Georgia.

We also make homes in the rural markets, home loans in rural markets.

- Awesome.

Fantastic.

So the first thing I want to talk about, you know, we've been talking more about the urban parts of the Carolinas, but let's shift to rural.

I've spent a lot of time in the past couple weeks actually in rural eastern North Carolina and South Carolina.

And while there are parts of the state that are growing really rapidly.

There are also a lot of counties that are continuing to lose population and employment.

What do you see in your work and do you think there are things that that can be done to really turn that around?

- Yeah, I think we see those same trends in the rural parts of the states.

Certainly we have young people that are leaving and they're not coming back all the times to stay.

'Cause they're not getting the same level of services, they've not got the same arts, entertainment, things to see and enjoy.

So I do think that can be turned around if we can find ways to revitalize those areas, make it attractive for folks, particularly our young folks to come back and see they can make a life in those rural areas and still have access to those amenities that they enjoyed when they left home to go to college.

- [Laura] Right.

Absolutely.

Absolutely.

So let's talk about this urban development and how it is creeping out into the more rural spaces.

What does this mean for farmland?

And I'm curious about this in terms of development, but also if you could comment on the use of solar.

- [Vance] Yeah.

- Farmland for solar too.

- Yeah, so, well, you know, I think there was a recent study done by American Farmland Trust and North Carolina in particularly ranked 2nd in the nation for the potential of loss of farmland between now and 2040.

- [Laura] Wow.

- We stand to lose in North Carolina as much as one and a half to 1.6 million acres of 8 million acres total.

- [Laura] Goodness.

- So that's a huge dramatic effect.

And it's primarily centered around the counties around Charlotte and Raleigh, which is no surprise.

Those are the ones we're gonna see the most lost.

So we have all these folks that are moving into the states, both North and South Carolina, and we've gotta feed 'em and we've gotta find ways to accommodate those folks.

But they're taking the farmland away.

So it certainly is a situation where if we don't do something to preserve some farmland in our states through some type of programs, farmland preservation programs, we're gonna be faced with a big deal for farmers when they start losing and can't farm.

So that particular issue is certainly top of mind for a lot of farmers and it makes also the farmland so expensive.

- [Laura] Right.

- It's hard to farm it when the prices of being developed all around you are driving the prices high, so there's threats there.

There is a lot of solar moving in.

Has been quite a bit of solars, but that's also taking farmland out production.

- [Laura] Absolutely.

That's what I was curious about.

- And so it's a way possibly for a, an operation to diversify, maybe diversify their income stream, maybe offset some risk that they experienced in the ag - [Laura] Right.

- But it absolutely has taken away farming.

- [Laura] Absolutely.

Vicki, do you have a question?

- Well, I was gonna talk to you about the solar as well because I mean, in North Carolina we've just, in 2023, we saw like several large announcements of solar farms with multiple million dollar investments and you know, we're talking 700 acres I think that went into Nash and Pitt County recently had an announcement and that was over 700 acres.

And then we just had one in October.

So I, one of the things I was wondering is, is this what we're gonna continue to see?

And I know there are some economists who say, well, it's a great initial investment, but it is unlike other development where you're creating more jobs and ecosystem around it that I don't know if that's occurring when we see these big investments like that.

And is that prohibiting other development that typically goes with that type of investment?

- Yeah, I think that's the key, is the solar you can put the infrastructure in place and it provides some income stream to the farmer, but it doesn't create jobs.

There's not a lot of upkeep that has to be done.

And a lot of that can be done even with animals if you need to.

So I don't think that from an economic development perspective, bringing solar in is adding a lot to the communities other than I'm certainly, it adds energy to our grid.

I'm sure that's helpful to the folks that need it there.

But from a farmer perspective, you know, the loss of that farmland, I think long term concerns me more on a long term basis.

- Right, right.

Really interesting.

And are there communities that have figured out ways to try to stop that or to at least maybe give farmers an incentive to not go that route?

Because financially sometimes I understand it could make more sense for them to do that.

- I'm not aware of anywhere that they've intentionally tried to stop it from happening.

But I think the farmers that I know that we've worked with that have installed those in their operations are pretty mindful of it's just a piece of what we do and they're limiting to that so that it offsets some risk, it brings some income in, but it doesn't, you know, disrupt the total farming operation.

- [Laura] Right.

Right.

- That they can operate under.

- So I did wanna ask you too about climate change and extreme weather.

I was out in Wayne County, North Carolina earlier last week actually, and I was asking there about economic development and it was really interesting because when I was asking people about it, multiple times, floods came up.

- Yeah.

- And multiple people, and I was just asking people that worked in the community and multiple times people said, "Well, you know, we had multiple 100 year floods in a 5 year period."

And when that happened it forced some businesses and people out.

And so we hear more and more about these climate effects.

What are you guys seeing?

How are you planning for that?

How are you trying to mitigate those impacts?

- Yeah, it continues to be a rising issue, particularly in the eastern parts of both North and South Carolina.

And the reality though is it's an issue when it floods down there, but that's not where the often it originates.

That's not where the problem originates.

It's a statewide issue.

It's, you know, if it's flooding in Wayne County, that water's coming either from the coast or possibly from, you know, metropolitan areas in Raleigh.

So I think it's important that we take that, we tackle that issue as a statewide issue and not let it be limited to a geographic area because that's not where the problem originates.

So it's important that we look at that in a holistic view.

From a farming perspective, it's really important for us to have and our farmers to have access to good crop insurance program.

There's so much risk, you know, farming is such a capital invested opportunity there.

You've got to have something to mitigate your risk.

Without crop insurance, you know, that farmer, you know, can't make money if something like that happens.

You know, they're so capital intensive, a big flood like that could totally wipe the business out.

- [Carl] Right.

- [Laura] Absolutely.

- So we need a strong crop insurance program by the federal government to make, help those farmers mitigate that risk and plan for their future.

- Carl, do you have a question?

- Sure, thanks.

Jumping a little bit to workforce, if I talk to any employer in my area, much like real estate, it's location, location, location.

If I talk to an employer, it's all about workforce, workforce, workforce.

Farming, one of the oldest professions known.

What does tomorrow's workforce look like within the ag community?

Obviously it's driven a lot these days by technology, but what do you look for?

What do you see down the line as far as, how do you recruit new farmers?

- Well that's a huge challenge for agriculture in general.

And that's one reason that we invest a lot into young people.

We put a lot of investment in our young people, even at the high school age 4H and FFA programs, then we do, work through all through the college years to try and invest in those folks to encourage them that say, you can have a life in agriculture and you can live a great life.

Maybe you don't get rich, but you have a wonderful opportunity to raise a wonderful family in an environment.

So we start investing early and young.

Also, it's important that we're investing in those young people around teaching them how to be leaders.

- [Vicki Lee] Yes.

- You know, we need 'em to go back to these communities in rural areas and lead and be leader.

Step up, be a, you know, run for county commission, run for the state house, because they, you know, they need a voice.

And you know, we've learned in agriculture for a long time that if you're not telling your story, somebody else is telling it and it's usually not right when they're telling.

(all laughing) So we wanna find ways to help encourage those folks to do that.

And so we start young, the labor market in agriculture is tough right now.

We need an immigration policy that's not out there.

Our leaders have not stepped up and put together an immigration policy that's good, so that the farmers can plan for the future.

We work through it the best we can.

Technology is really important.

We're using a lot of technology in some of our large operations.

There's a lot of robotics going in, lots of robotics in greenhouses today on dairy farms.

You're gonna see a lot of more technology.

Certainly the equipment we're running out in the fields are running off satellite imagery.

And so rural broadband is important to us as well.

But labor's always been a challenge for agriculture and probably always will be.

But I think the key to it is a strong immigration policy and investing in our young people.

- I was actually gonna applaud you.

I did see on your website where you're offering, you know, scholarships to a number of students at different colleges.

- [Vance] Yes.

- And I think over several states.

- [Vance] Yes ma'am.

- And you don't always see that on the website.

So I really do applaud you guys.

You are really are investing in our future and building those leaders.

The other thing that I was curious about, because you still hear, I hear all these announcements about I guess regenerative agriculture and that, you know, how it's still growing in the states and I think I saw an announcement where we've reached over a hundred billion dollar, you know, industry.

So you hear this good news, but then I hear you talk about the farmers.

Can you kind of, you know, help us understand.

So what are we hearing when we hear about, you know, the regenerative ag and all of the funding that's going there?

Is that not helping with farmers, our traditional farmers?

- It is helping.

I think, you know, North Carolina, South Carolina are very, very diverse in agriculture.

I mean, we set probably 2nd to California and Texas, we're one of the most diverse areas in the country for crops that can be grown in different ways to do things.

And agriculture, the space is, it's a big space that a lot of people can play in.

So there's a lots of sizes and scale that works.

Regenerative is certainly an area that has gained a lot of popularity in the last few years and I think it has a place to fit in.

There's a place where it can grow.

However, we still have to feed and clothe a lot of people in this country and in, you know, quite frankly the world out of the United States.

So North Carolina and South Carolina, 155, probably, total billion dollar industry, it's largest industry in both states.

We just hit that 103 mark in North Carolina in the last year or so.

And we're excited to hit that part.

So we've seen, we're seeing agriculture grow and the industries around agriculture grow and that's creating jobs and opportunities for folks.

However, we've got some headwinds in front of us.

You know, we're seeing obviously the farmland is an issue.

We're seeing commodity prices start to drop.

Our input prices went sky high in the last few years and they're not moving.

So, you know, the outlook for the next couple years is looking pretty tight for our farmers to make it through.

- Can I ask a quick question, I mean?

- Yeah, absolutely.

We've got about two minutes left so.

- So your farmland is shrinking overall, but the, and it's number one obviously in both states, but you're seeing higher growth.

So is that the yield that's growing?

- It's efficiency, yes.

We're doing more with less, the technology's allowing us, science, I mean, we lean hard on our land grant universities and to bring that science to the farmers.

They're taking it, they're adopting it, they're being, they're able to produce more and get higher yields on less ground.

And that efficiency is allowing us to grow even in a shrinking area of space.

- Wow, that's awesome.

- That's really, I'm so glad you brought this up because I'm not sure most people realize that the total value of agriculture's growing in the states.

I think people would know that the farmland is probably shrinking because of all the reasons we talk about.

But I'm not sure it's widely known that actually agriculture's growing in both states.

- One in six jobs in North Carolina - [Vicki Lee] Yes.

- Are tied to ag, about one or 11-ish, one in 11 in South Carolina.

So it's a huge part of our state's economic infrastructure.

And I think we'll continue to see it be a very important part going forward.

- So we've got just a a few seconds left actually, but just really quickly.

Can you just tell us what's the thing you're most excited about that you guys are doing this year, in 2024?

- Oh, I think the investments we're making into young leadership excites me.

Anytime I get around young people and get to invest in young people, it's awesome.

We do that with our young farmers.

- [Laura] Yeah.

- We bring young farmers in and provide them opportunities to learn how to be leaders and grow their operations and get prepared to take over as we see a transfer of ownership as the older generation moves forward.

So working with our young people always excites me and gets me excited to go to work every day.

- Absolutely.

That's fantastic.

Well, thanks to all of you for joining us today, - Thank you.

- Vicki Lee and Carl, it was so nice to meet you - Thank you.

- And welcome to the show for the first time.

- Yeah.

- And it's great to talk about both the urban and rural parts of the state.

- Yes.

- And we hope you'll join us next time here on "Carolina Business Review."

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For more information, visit Carolina Business Review.org.

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