(upbeat music) - [Narrator] This is "Carolina Business Review," major support provided by Colonial Life, providing benefits to employees to help them protect their families, their finances, and their futures.

High Point University, the premier life skills University, focused on preparing students for the world as it is going to be.

Sonoco, a global manufacturer of consumer and industrial packaging, products, and services, with more than 300 operations in 35 countries.

- There is a stark difference between the drama of politics and the actual policy produced by the political process.

I'm Chris William, welcome to the most widely watched and the longest running program on Carolina business, policy, and public affairs, seen each week across North and South Carolina.

In a moment, we will head into election season and the hyperbolic language that goes with it, of course.

We will continue to focus on what those issues are here for this discussion, and more about policy for our business and our communities.

And later on, he represents a major player in the Carolina's agribusiness, Linwood Scott, co-owner of Scott Farms.

- [Narrator] Major funding also by BlueCross BlueShield of South Carolina, an independent licensee of the BlueCross and BlueShield association, And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

On this edition of "Carolina Business Review," Anna Beavon Gravely from NCFREE, Ronald L. Summers of the Palmetto Agribusiness Council, and special guest Linwood H. Scott III, co-owner and vice president of Tobacco & Farm Operations, Scott Farms.

(upbeat music) - Hello and welcome again to our program.

Thanks so much for watching and supporting this dialogue.

We'd like to welcome our panelists who are joining us via their offices.

Thank you, Anna Beavon.

Welcome, Ronnie.

Good to see you both looking happy and healthy.

Of course, heading into a weekend, why wouldn't you be, right?

- Exactly.

- Ronnie, thanks for joining us on the program.

I know this is first for you, and I hope it's not painful.

But Anna Beavon, I'm gonna start with you.

Let's go back to redistricting or what is technically called reapportionment.

And North Carolina and South Carolina are not the only states that have been going through this battle back and forth with whomever is controlling the State House or the General Assembly.

But in Georgia recently, Anna Beavon, there was a federal judge that struck down the redistricting and said it was "unfair for people of color."

And it's not so much about Georgia as much as it is about the dynamic that's now for you going on in North Carolina.

And South Carolina's also been going through this.

But specifically for you, Anna Beavon, does this create more scrutiny around this redistricting battle that is going on in the state of North Carolina as you see it?

- Yeah, Chris, absolutely.

North Carolina has had five different maps or five different elections with new maps.

Our five most recent have been all new, whether they're court-appointed or drawn by the legislature, all eyes are definitely looking at North Carolina, and it's clear, we feel it, yeah.

- Well, and is this gonna get worse before it gets better?

- I think so.

I definitely think it is.

I think we are definitely gonna see our most recently passed maps, which passed this week.

We're gonna see those get challenged in court, and I think that's not gonna be the end of it.

We know that, that's happening, we're anticipating it happening.

It's just a matter of who's gonna be able to run.

Will that happen before filing?

Will it happen after filing?

Will the current maps hold for this election?

And then we'll have to draw new ones for the 26th election, which has sort of been the story of North Carolina.

- And let me ask you a last question about this.

The newest congress person in North Carolina, Jeff Jackson, in the Charlotte region or the Central Piedmont region, is not running.

And his rationale was because the district is redrawn and it's going to make it harder for him to win, if win at all.

So he's decided to run for North Carolina Attorney General.

Dan Bishop, also Congress, has decided to do that.

But not my point about those two gentlemen running for the highest law enforcement position in North Carolina, but does reapportionment, does this battle around reapportionment in districts and maps, does it create those type of uncertain, are we gonna see more of those kind of people saying, "Well, I'm not gonna run but I'm going to do this now?"

- Yes, absolutely.

We've seen that happen in the past in North Carolina.

We're gonna see it happen this cycle.

But some of the unintended consequences are things that we don't really think about is not just candidate fatigue, but also voter fatigue.

Voters in many, many districts are having different elected officials every single cycle.

And that means that that's a whole nother elected official that they have to get to know.

Because ultimately candidates, yes, they're running to get elected, but they're running to get elected to represent people.

And if people can't get to know their candidate or feel like they have a good grasp on who they are and what policies they support, it's gonna make it really difficult for them to continue to stay engaged.

And I think that is one of the fears that I have is that with so much change in our districts, whether it's state legislature or congressional districts, people are feeling really left out of the process, because so much is happening, and they feel like they're not getting a say in who's representing them.

And then that's just from a mere standpoint of fatigue, and having new representation, and new candidates to get to know.

- Ronnie, we're gonna bring you in the dialogue, and lucky for you, I'm not gonna ask you about reapportionment, but I am gonna ask you about the Farm Bill, and why would that be important?

Because it seems like every five or six years the Federal Farm Bill sunsets.

But then does it, and couple questions here, Ronnie.

Does it automatically reset based on the election cycle and will it reset this time?

And I'm sorry, a third question.

Is there risk for those in the agribusiness, not just in South Carolina, but in the Carolinas in general if it doesn't reset?

- Yes.

Challenging time for the Farm Bill.

People don't understand just how broad the Farm Bill is and the impact it makes on ag, forestry, and rural communities in particular.

It's a bipartisan bill for the most part.

So people want to see support for food and fiber in our country.

Unfortunately, it's an easy bill for tack-ons if you will, additional detail being added in, which makes it more and more difficult to move the bill forward.

Fortunately, we'll operate under the existing bill for the most part until which time a new bill is considered.

And frankly, the changing leadership in Washington has slowed that process down somewhat also.

I think the goal would've been to get the bill dealt with in 2023, but all indications are now, it will probably roll over into '24.

- And do you think, does it, and Ronnie, this is an ignorant question on my part, but does it always happen during an election season, or it just happened to coincide this way?

- Well, with a five-year cycle, it doesn't always end up in a major election cycle, but yes, it can.

- Okay.

Putting on the hat that you used to wear in banking, if you will, the agricredit business.

Is there, you know, we got inflation, and we're gonna ask our guest this obviously, because he's squarely in the cross hairs of this one, but the rise in the cost of what bankers call the rise in the cost of money or interest rates, inflation, on challenging political times.

Is this tough to be in the agribusiness or has it never been better?

- No, no, I think there are significant challenges in agribusiness right now.

The idea of higher interest cost is definitely impacting agribusiness.

Agribusiness is very capital intensive.

Credit is a major component of agribusiness.

And as we see interest rates increase, that's a major challenge.

But also, the revenue side has been pretty good as far as commodity prices.

But the expenses of operating a farm operation right now are substantial.

And, of course, that in and of itself reduces the margin of profit for a farm.

So that's a concern.

- Okay, all right, Ronnie, stay with us.

Anna Beavon, stay with us.

We're gonna bring our guest in here and this would be important, since we are talking about farming and the agribusiness.

We'll have in just a second here, the opportunity to meet him, between North Carolina and South Carolina specifically, in farming and the agribusiness.

It represents not just a substantial, but the largest piece of economic impact annually.

And this is not overblown, this is probably actually a low number, $150 billion of economic impact annually between just two states, North and South Carolina.

It's hundreds of thousands of job, affecting all of us on some level.

And in the farms and the operators are the ones that drive it.

So joining us now is the VP of Tobacco & Farming Operations and the co-owner at Scott Farms.

Linwood Scott joins us from his office down east, about 40 miles east of Raleigh.

Linwood, welcome to the program.

- Thanks for having me on.

Glad to be here.

- Linwood, you heard some of the conversation, and again, I'm not gonna ask you about politics or redistricting.

But I am gonna ask you about the capital intensive business of farming.

Has it ever been so capital intensive?

Has it ever been so expensive?

And these aren't meant to be leading, Linwood.

But is there revenue growth that goes with that?

Or is this a tough time to be a farmer?

- Yes, Ronnie touched on it.

I don't like to be always down, and I enjoy what I do, and a farmer is an eternal optimist, but right now, times are tough in farming, food prices have gone up.

But with interest rates our input costs are up, our labor cost is up.

And as Ronnie said, you know, our business is very capital intensive and so our margins are razor thin.

We really have to watch everything that we do, manage everything closely.

And right now it's been tough the last few years.

- Is it because of the dramatic increase in interest rates or is it inflation or, I mean, is there one thing, Linwood, that you would say has been undercut, how you just described your business?

- No, both of those things have affected it.

It's not just one thing.

It's several things.

You know, some of the prices have been up.

Potato market in itself has been down, way too many potatoes have been produced the last few years.

Prices have been down.

But the interest rate, as well as our input costs and labor costs, all those things have just, they've all kind of hit us at the same time.

- Anna Beavon, question for Linwood.

- Yeah, one, I'm also from Eastern North Carolina, and know very well where you're from, so it's good to have another Eastern North Carolinian on the phone or on the screen.

- It's good to be here.

- So with these challenges that you're facing, are you having difficulty with employee recruitment and pipeline?

- Yes, in some areas.

Fortunately, on our farm we use migrant labor, seasonal labor.

But on our packing facility, we're using local people, and we have a difficult time finding people, getting people to come in.

You hire people and they stay a few days and they don't show up.

And by the time you get somebody trained, they're off and gone.

It's been a real challenge from that aspect of keeping our packing facility going.

- Ronnie, question?

- Anna asked the question I actually had relative to labor, but let's move to another question.

Supply chain, it's not just the cost of items, Linwood.

Talk to me about actually being able to get the necessary products on the farm.

- Yes, that has certainly been a challenge.

Every aspect, I mean, in our packing house, getting supplies, getting boxes, we've had to move up our ordering time where we could order boxes maybe a few weeks out.

Now, it's several months out we're ordering boxes.

We've seen it so far as getting chemicals and supplies on the farm.

I see it every day with equipment.

John Deere, before, John Deere any parts you needed, you could have it.

You know, if you order today, you have it tomorrow.

Now, parts are getting several days out.

We're having to go to other dealerships, other states to find parts.

That aspect of our business has been a nightmare as well.

- Linwood, let me follow up on something that Ronnie and Anna Beavon both talked about, but this is back to your point about your turnover.

Jay Jandrain was on this program, and Jay's the CEO of Butterball, and it's also in Eastern North Carolina, not far east from Raleigh, but still east of Raleigh.

And he talked about his turnover being about, and this was eye popping, 95% per year.

He has that kind of turnover in the workers on the farm with the birds.

And so, does 95% surprise you?

What is the number that you face and how do you really backfill, so you're not missing an opportunity to make sure that your revenue doesn't go down?

- I don't know if our turnover has been that great in our packing facility, but I would say it's probably 50 to 60%.

Our HR people are constantly putting out ads.

We've had incentive programs with our current employees that if they can get employees to come in, they'd stay for a certain period of time, we'd give them a bonus.

And it's been a real challenge.

You know, you get people hired, their work ethic is not that great.

They show up late for work.

It's been a real challenge, but we're just constantly looking people, calling our local temporary labor people.

We're staying very active looking for people all the time.

- [Chris] Yeah, Anna Beavon.

- Yeah, so I am interested in finding out ways that you guys are partnering with the community.

How are you seeing the community rally around you, rally around farming.

Eastern North Carolina that's a really big thing, you know that, I know that.

But I'd love to hear ways that you're seeing that lived out.

- Well, certainly the community is great.

And I think a lot of times maybe we're disrupting the community, you know, with our big tractors riding down the road, and late hours, and stuff.

And the community has been great.

The temporary people have been great to work with to try to help find us labor.

They've worked well with us.

Friends and neighbors putting out word, passing out word to people that we're looking to help, and so on.

The community's been really good to us, really good to us.

- Ronnie?

- You mentioned movement of equipment, which makes me think, a challenge in South Carolina and I would think maybe in North Carolina, both states are growing so fast.

How about the loss of crop land and timber land?

- Yes, sir.

Exactly where we're located, we're right on the edge of Wilson-Johnston County line, the Smithfield-Selma area.

We farm in that area and that area has grown up a lot because of its closeness to Raleigh.

I tell people that Raleigh's getting closer to us every day.

We have lost several farms to housing, and that is getting to be a real challenge.

And when you get back to moving equipment, and you're applying pesticides and things, and the more houses around, the more potential problems that you could have.

- You know, let me follow up on this as well too, Linwood, because I didn't say this at the top of the program when we introduced you, but I think this would be important to know, and especially given what you just talked about with the loss of some of the farmland capabilities.

So Scott Farm started with 60 acres and now you have over 14,000 acres.

You're on your- - Yeah, we're actually up around 20,000 total.

- Okay, well, even better.

So you've got six generations and I mean, this is not without the wind at your back.

I mean, you've got some momentum going here.

Do you feel like when you talk to, not just to the team internally, but some of your colleagues in farming around the state and around the Southeast, are they more pessimistic about farming even in the near term, or is this just one of those things where you have in the back of your head, they're short-term challenges.

We know they're more expensive, it's harder, we've got some headwind, but we'll get through it.

How do you come down on that?

- I'm always excited.

Like I said earlier, a farmer is an eternal optimist.

"Tomorrow's gonna be a better day," it's what I always say.

I'm excited.

I farm with my brother.

I have a son that's gonna come back to the farm.

I have two nephews gonna come back to the farm.

My son-in-law and daughter are involved in the farm.

And so I'm excited, we're moving forward.

I think the overall atmosphere in the farming industry is, they're a little dejected.

Average age of a farmer is well in the 50s, probably up close to 60.

A lot of guys are getting tired, probably not gonna do it.

There's not another generation coming along to take over their operation.

So you're gonna continue to see farmers get out.

But for me in my standpoint, times are hard.

It's tough right now, but better times ahead.

Just keep plying forward, keep working hard.

- And I'm sorry to interrupt you, sir, but was that- - It's all right.

- And I promise just a quick follow up.

Anna Beavon, I'll let you back in here.

Was that, and not to talk about family dynamics, Linwood, but I can't not help, but was that a hard conversation to convince your son or your in-laws, your in-law children to wanna be part of this process?

- No, we've got a good size operation.

We've got a lot of different areas.

It's not all just about driving a tractor and planting seed.

We've got a lot of different areas.

My son-in-law is, he's got a degree from NC State in accounting.

He looks after our books.

My son's a senior in high school.

I got a nephew senior in high school.

They're planning to go into, take ag, or some kind of business courses, and come back to the farm.

But again, the size of our operation, there are many different areas that's involved in our operation.

There's something for 'em all, Something fine that will take their interest.

It's not all just about driving a tractor.

- [Chris] Yeah, okay, I suspected as much.

Anna Beavon.

- Yeah, it is so fun to hear about how your family is involved.

I have a very large family, and we also like to do a lot of the same stuff together.

And so that's really good to hear.

Outside of generational fatigue, and aging farmers, and fewer people getting involved in farming, when you look down the road, five or 10 years from now, what do you see as the greatest challenge that maybe might be unexpected or completely, like, predictable?

- I think the biggest challenge moving forward is a lot of the same things we've just talked on, losing farmland, continuing to be working around people where they live, and the equipment, and the people, and the pesticides.

Certainly we have to think that our costs are going to go down, this interest rate is gonna go down.

Certainly we hope those things do.

There's always challenges and we see 'em every year.

Seems like there's a different challenge every year, but we just sort of deal with it and work through it and that's what we continue to do.

- [Chris] Ronnie, we have about two minutes left.

- You know, during COVID agribusiness was critical and essential.

Everybody agrees on that.

But do you feel like folks really understand and communicate what you as farmers go through?

I mean, it seems like sometimes we hear more about, from the perception more than fact.

- No, I really don't think people understand what we go through.

You hear comments, you see things on social media that comment of, about farmers or farmers throughout the state, and a lot of people just really don't understand.

I think probably this younger generation who don't know.

We have a lot of older people that grew up on a farm.

I don't mean to say older, but maybe more seasoned people that grew up on a farm and they understand and often look at us.

And like you said earlier, you know, grow five, 10 extra back, or now the volume in the back and different things we have, it's like, "Wow, how do you get all this done?"

And they have some understanding.

But there's a lot of people out there that really don't understand what we go through, especially input costs, and our labor situation, and how the interest rate is affecting us, and so many things.

So many people ride by and see all those tractors and all those buildings say, "Oh, they're doing great.

It's easy.

Anybody can do it."

But they really don't understand.

- Linwood, we have about a minute left.

But I do have to ask you, over your left shoulder is a shadow box of the golden leaf, obviously.

And if anybody been in the South at all, you know what a tobacco leaf looks like.

And I have to ask you, you're still farming tobacco and is that a growth industry?

Even given all the health challenges around that over the last few decades?

- Yes, it is a growing market internationally.

Domestic market is still continuing to shrink.

China's a big player in tobacco purchasing, but that too is a challenging business.

It's up and down.

But we've been growing tobacco on this farm before I was born.

It was our bread and butter at one time.

It's still profitable for us, margins are a lot thinner.

A lot of times I still refer to myself as a tobacco farmer.

- Yeah.

- Because it is what put our farm on the map and got us going.

- And you did about 20 years ago, you figured out the codex around growing sweet potatoes and exporting that.

Is there anything else?

And literally in 30 seconds, is there anything else you have high hopes for in a product?

- Not specifically.

You know, we want to continue to expand our sweet potato operation.

More shipping options, more options to put on a grocery store shelf, and I continue to see that as a growing market.

- Yeah, okay.

Linwood, thank you for joining us.

And I know that's your passion and I know it's been your family's passion for six decades, or six generations, and we're certainly glad for it.

It's been great success for you.

But please careful on the farm and continued success.

Thanks for joining us.

Don't jump off the call yet, but thanks for joining us sir.

- Thank you.

- Ronnie, nice to see you.

Please come back.

Hope this was not a painful process for you, but we'd love to have you back.

- Enjoyed it.

- And Anna Beavon, as always, nice to see you.

Thanks for jumping on the call.

- Thanks so much.

- Thank you for joining our program.

If you'd like, comments or suggestions, CarolinaBusinessReview.org.

Happy weekend.

Until next week, goodnight.

(upbeat music) - [Narrator] Gratefully acknowledging support by Martin Marietta, BlueCross BlueShield of South Carolina, Sonoco, High Point University, Colonial Life, and by viewers like you.

Thank you.

For more information, visit CarolinaBusinessReview.org.

(upbeat music) (upbeat music continues) (upbeat music continues)