(bright music) - Hello and welcome to Prairie Pulse.

Coming up a little bit later in the show, we'll hear the New Orleans style music from the Rusty Crayfish Brass Band.

But first, our guest joining us now is the North Dakota Farmers Union President, Matt Perdue.

Matt, thanks for joining us today.

- Thanks a lot for having me on.

Happy to be here.

- Well, as we get started, we always do, tell the folks a little bit about yourself, your background, maybe where you're from.

- Yeah, well I've been serving in this role for about six months now.

I was honored to be elected president, North Dakota Farmers Union back in December.

Farm with my family near Ray, North Dakota.

We raised Spring Wheat, Durham, canola, lentils, soybeans.

And I spent a big chunk of my career working in public policy, advocating for family farmers and ranchers.

I spent six years on the staff at North Dakota Farmers Union, spent a few years actually working out in D.C.

for National Farmers Union.

Worked on the 2018 farm bill, and have a lot of experience at the state and federal level working on a lot of the issues that we're talking about today.

- All right.

So let's start off with what is the North Dakota Farmers Union?

Give us some history on it.

- So we are a general farm organization.

We're committed to the advancement of family farm and ranch agriculture, quality of life in rural communities and for all people.

And we achieve those goals through three pillars, cooperation, education and legislation.

Earlier this week I was out at one of our farmers union camps, inviting or welcoming a group of third grade to sixth graders who are enjoying a lot of lessons about the cooperative business model, growing as leaders, meeting a lot of friends from across the state.

Our education programs are very strong.

We're obviously very strong advocates for family farmers and ranchers in the state capital and Bismarck, and out in Washington D.C.

And then we have a lot of work with farmer-owned co-ops, local cooperatives across the state of North Dakota, making sure that our cooperatives remain strong and can serve their members.

We're excited this year to be celebrating our hundredth anniversary convention.

We were founded in 1927, and you know, we have a strong, strong organization, strong traditions, strong membership.

And again, so honored to lead this organization and to create value for family farmers and ranchers across the state.

- So what is your role, I guess, you've got you as president, what's your role as president and do y'all have staff or is it just you?

- Yeah, we have an incredible staff based in Jamestown there.

As the president, I have the opportunity to lead those staff and really execute on a lot of the direction we get from our members.

Obviously spend a lot of time visiting with our members across the state.

Every corner of this state.

I told you earlier, I'm from the northwest corner of the state and tonight I'll be with some farmers down in Ledgerwood, in the southeast corner of the state.

And so, spend a lot of time visiting with our members, trying to understand their challenges and really working together to develop solutions and advance those solutions for family farmers and ranchers, for our neighbors, and for our members across the state.

- Well, with that said, we're here today to talk about some of those challenges and due to, I guess, overseas conflicts, especially in Iran, I guess for now, one of the challenges is the price increase to fertilizer, equipment and of course fuel.

Have there been reports on North Dakota farmers experiencing the impact?

- Absolutely.

I mean, I think there have been, there have been a lot of impacts from geopolitical tensions, I would say.

You know, we have the trade disputes with China and with other trading partners that has impacted demand for a lot of the commodities we grow.

Soybeans was a hot topic, remains sort of a hot topic in that arena.

And we have the Iran conflict, the Iran war, whatever you want to tag it, but the closure of the Strait of Hormuz is creating significant upward pressure on input costs, that's impacting farmers right now.

It's gonna impact farmers and ranchers in the next year, I'm afraid.

And so I think farmers and ranchers across the state are feeling these pressures.

There are some who are feeling it much more acutely than others.

- Well, you know, we think about fuel all the time, but what is the causing rise in the farm equipment?

- Well, so if we go back to 2025, this administration has been very aggressive with their tariff strategy, and that has included tariffs on steel and aluminum.

And those tariffs on steel and aluminum have restricted, constricted the supply of steel and aluminum products, which are used to make farm equipment, right.

Farm machinery.

And so that certainly has driven up the cost of machinery, driven up the cost of replacement parts.

And then you have producers across the northern tier of the state where there's a lot of equipment, a lot of purchases, a lot of business that happens across the Canadian border.

Now things with Canada and Mexico have calmed some, we're reviewing the USMCA, really right now.

But some of those restrictions, some of those tensions with our North American trading partners also have created a lot of confusion, a lot of increased costs for producers who do a lot of that cross-border trade.

- And MCA?

- USMCA.

Yeah.

US-Mexico-Canada Agreement, NAFTA 2.0.

- There you go.

I just want to define it for people.

Can you expand on, you know, the rise in these prices, how they affect a farmer in North Dakota or the Midwest, I guess.

- Well, this last year with the Strait of Hormuz, with that closure, which really hit in early March, you know, a lot of fertilizer, you look at the nitrogen fertilizer, urea, anhydrous ammonia, those costs have increased about 40%.

Well, your fertilizer inputs are for most farmers, a third, 40% of those input costs.

And so that 40% of your input costs are increasing by 40%.

That's a significant hit.

Now fortunately, heading into this year, there were a lot of farmers who had prepaid, who'd booked their fertilizer in advance of that, who'd locked in a price.

There's a group of farmers who certainly when they saw this conflict start and they saw fertilizer prices start to rise, they jumped on it right away, and booked their fertilizer.

I think my biggest concern is, you know, there's still a group, 10, 15, 20% of producers who did not pre-book fertilizer.

The ones who were unable to book their fertilizer in advance, in most cases, are the ones who are facing the most financial pressure, and were having trouble trying to figure out how they were gonna get together their operating capital with their lender.

And so those folks who are most vulnerable, in a lot of cases, are the ones who took the biggest hit.

That's a big challenge in 2026.

And again, I'm afraid it's gonna be a big challenge for all producers in 2027 as this supply chain gets sorted out.

- Yeah, you know, I think this question, you know, why should farmers be concerned about the rise in oil and gas prices, you know, specifically when it comes to farming operations?

- Yeah, well, you're using a lot of diesel fuel out there in the field, and then again, you know, the sort of natural gas complex, that's the feed stock for nitrogen fertilizer.

And so we're seeing the increases on the farm side.

Now we're also seeing a lot of concerns, or there's a lot of consumers who have this notion that farmers are somehow raking in these big profits because they're seeing the cost of food rise at the grocery store.

Well, the farmer is not controlling that.

Most farmers in North Dakota this year are gonna lose money.

What's driving up those food prices is the cost of fuel to ship that food across the country.

That food, that commodity, that all has to move.

A lot of it moves on truck, it moves on rail, that requires fuel.

And that's one of the big drivers of those challenges right now.

- Well, you mentioned tariffs earlier.

So you know, last year tariffs were a big topic of discussion among many businesses, including farming.

Did the tariffs have a larger impact than expected on North Dakota farmers or a smaller one?

- I think that the impact of the China trade dispute in particular had a market impact on North Dakota soybean growers.

And I think when we look at the soybean complex, you know, about 75%, about three quarters of the world's soybean crush capacity is in the United States, Argentina, Brazil and China.

Well, the three biggest producers of soybeans are the United States, Brazil, and Argentina.

And so there's a lot of competition for that Chinese market, and when we restrict access to that, that's a big hit to producers.

I think the other challenge is, most of our trade is oriented to the Pacific Northwest.

Now some of that got redirected.

There were a lot of co-op elevators around the state that were really trying to find new shipping channels and were successful in some of that.

But that ultimately led to an increase in basis, a wider gap between the futures price and the local price.

And so the soybean price, the futures price was depressed.

But then we also saw that farmers were losing more of that price off basis than typical.

We saw basis up to $1.60 in some places, and it was a very challenging year.

Now, things with China seem to have stabilized.

We've seen some improvements in soybean prices and other commodity prices, but we really need that certainty.

And we're seeing that maybe there's an agreement with China, but it doesn't seem like the US and China are fully on the same page.

People like certainty, businesses like certainty, farmers and ranchers like certainty.

And we really need to drive towards a certain stable trade relationship with that critical market.

- Can you expand on how the Strait of Hormuz closure affects farming operations?

- Well, you see, a huge chunk of the world's nitrogen fertilizer moves through the Strait of Hormuz.

Urea, anhydrous ammonia you're talking, you know, a third and 50% of those nitrogen fertilizers globally move through the Strait of Hormuz.

So the closure of the Strait caused global nitrogen fertilizer prices to rise.

Now in the United States, we actually don't get any anhydrous ammonia through the Strait of Hormuz.

We don't get.

It's 10, 15% of our urea moves through the Strait of Hormuz.

But when those global prices rise, the prices here at home rise.

And we have been spending a lot of time trying to explore solutions to that problem.

One, getting the Strait of Hormuz open is something we need to do in the short term, but we also see the level of consolidation in that industry and the opportunity for some of these really large companies to take advantage of market disruptions like that really at the cost of the producer.

That's something that we need to address here in the short term, and something that we're pushing hard for in the next farm bill.

- You mentioned certainty for farmers, but the Strait of Hormuz closure, how does that compare to the tariffs that were introduced?

- I think if you look historically, you look back to the first Trump administration, you look back to the first China trade war, the impact that we saw on our soybean market in 2025 and into 2026 was pretty similar.

You know, you asked earlier, was it more than we expected?

Well, we had a pretty good idea of what to expect because we'd seen that play before.

I think the challenge now is, we have the uncertainty, we have the instability in our trading relationships on the demand side, and then we have this pinch on the other side with our input costs.

And so, you know, input costs are really high, commodity prices are below break even.

That's really the theme of 2026, that's been a major challenge.

And that's different from the trade war we experienced before where most of that pressure was on the demand side.

Now it's hitting farmers from both sides and they're being squeezed in the middle.

- You know, is it, you know, certain crops more affected, you mentioned soybeans and corn obviously, but are those the only ones affected, or can you talk more about that?

- Well, the biggest demand shift, you know, when you look at China, the biggest demand implications are soybeans to China, of crops we grow up here in the northern plains.

When you look at nitrogen fertilizer, the biggest impacts are corn, wheat, canola, those crops that use nitrogen fertilizer as a crop nutrient.

And so again, you know, the Strait of Hormuz being blocked, the rapid and overwhelming increase that we've had in fertilizer prices, that's impacting farmers across the state of North Dakota.

That impact is most severely felt by those corn and wheat farmers who are using a lot of nitrogen fertilizer to support and grow those crops.

- Did you say, what is the amount of the world's fertilizer that's shipped through the Strait?

- Yeah, so it's 30% and 50% of our urea and ammonia move through the Strait of Hormuz.

But again, when you look at the US, we produce about 90% of our anhydrous ammonia here in the US.

We produce about two thirds of the urea here in the US.

Now in North Dakota we have a unique challenge because we are at the end of the domestic supply chain.

We're at the end of the supply chain, which means we're most vulnerable to rapid price increases.

And so another one of our focuses is growing domestic production of those nitrogen fertilizers, so we're not having to import any of that, isolating ourselves from these geopolitical events and the global market.

Doing more of that here in this state that is rich in natural gas, where we have the feedstock we need to produce nitrogen fertilizer.

- Yeah, and of course, due to the lack of fertilizer available, how would this affect crop yield.

- Yeah, I think a lot of producers this year, you know, you have to look at, this all happened early March.

So there wasn't a lot of time to plan and to change.

And so a lot of producers making those decisions on the fly.

And if you were a farmer who happened to pre-book fertilizer at a price you were comfortable with, maybe you didn't change a lot.

But there certainly were farmers there who maybe pre-booked, but it was still a pretty steep price.

We walked into this year with pretty high fertilizer prices.

Who maybe lowered their application rates and is farming for a lower yield, who maybe switched crops and worked more legumes, more soybeans, more peas and lentils into the rotation to lower that requirement, nitrogen fertilizer.

I think there are a lot of different decisions that producers made this year, but I think the levers that producers pulled most frequently was switching to a crop with a lower nitrogen fertilizer requirement, or lowering that requirement across the farm.

And then I think the other would be lowering their application rates, farming for a lower yield.

- So there you're telling me that, you know, that North Dakota Farmers Union though, how has the union responded to these challenges and how do you respond to your members?

- Yeah.

Well I look at the situation that we're in right now, and I think the situation it's going to continue into next year.

Input costs are too high.

Commodity prices are too low.

Farmers and ranchers are shouldering record debt loads, and we have far too much uncertainty in the markets that we buy from and sell to.

And so we have been advocating very strongly for policies that boost domestic demand for the commodities we produce.

We know that we're facing more competition in these global markets.

We know those global markets are more unstable.

And so we want to grow domestic demand through policies like Year-round E-15, something that's moving through Congress, by updating the RFS to have higher renewable volume obligations to grow soybean demand.

We're advocating for policies in this next farm bill that will actually address input costs, like policies that bring more transparency to our fertilizer market, that grow domestic demand.

And we are advocating for more fair and competitive markets.

We cannot, this environment where farmers are being squeezed on both sides by heavily consolidated markets, it's not a sustainable environment for us.

- Yeah.

You know, have farmers experienced challenges like this in the past or are we in unchartered waters here?

- Well, family farmers and ranchers are a resilient bunch.

And certainly we have faced challenges in the past.

I think every sort of cycle, the challenge is a little bit different.

Again, I think one of the things that differentiates the challenges we're facing today is that we have the uncertainty on both the input side and on the crop price side.

I think that's unique from some of the challenges we've seen in recent memory.

But certainly there's a lot of producers out there who started farming during the 1980s farm crisis.

High debt loads, not as high as we have today, and that's an important point, but really tough solvency situations.

We're gonna get through this and we're gonna support each other.

We're gonna make sure that we have each other's backs, and we're gonna make sure that we have policies that reflect modern agriculture, the challenges that we face today, instead of outdated policies that reflect the way agriculture operated 25 years ago.

- You know, how do obstacles like this affect newer farmers?

Does it disincentivize people from looking into even going into agriculture?

- You know, agriculture is a dynamic industry.

I don't think we give ourselves enough credit for, you know, the technology, and a lot of the exciting developments happening in agriculture.

But if you're a young farmer, if you're a young rancher, certainly you want stability in that industry.

Certainly you don't wanna have overwhelming debt loads hanging over your head your entire career.

And so, I think that there are a lot of young producers who are still trying to make it work.

They're still trying to enter the industry.

You know, we haven't talked a lot about the cattle side, but cattle prices are really high right now, which creates a challenge for young producers actually getting in and building their herd, 'cause it costs a lot to buy those replacement heifers.

I think the bottom line is, we need to have policies that support those producers for the long term, policies that are oriented to the current and future environment in agriculture.

And I hope that this is an exciting industry full of a bunch of wonderful great people.

I hope that a lot of young producers recognize that and embrace that.

- Yeah.

Are there solutions to offset the financial impact?

I know farmers take out insurance, but the farm bills out there always, are there solutions to it?

- Well, certainly we have the farm safety net.

So we have our countercyclical programs, ARC and PLC.

We have a pretty robust crop insurance program now, and that takes a, you know, really manages a lot of the yield risk and helps protect producers, or helps producers protect themselves from a lot of that yield risk.

There are farm loan programs that need to be updated in this next farm bill.

So are there programs that support producers?

Yes.

I think one of our concerns is long term, we have shifted to a much heavier reliance on Ad-hoc or emergency programs.

We have updates to the farm safety net that were advanced in the reconciliation package last summer.

We advocated for those.

But ultimately I think we've recognized it's not enough and there's a Farmer Bridge assistance program.

Congress is talking about needing to provide more relief.

The uncertainty and the unsustainability of our approach to those Ad-hoc programs creates a lot of challenges.

We need a stronger, more stable safety net that they can rely on long term.

- We are out of time, but if people want more information about North Dakota Farmers Union or farming in general, where can they go?

- Well, folks can find out about all the work that we're doing at NDFU at www.ndfu.org and really appreciate the opportunity to visit with you about these important issues.

- Matt, thanks for joining us today.

- Thanks a lot.

- Stay tuned for more.

(bright music) The Rusty Crayfish Brass Bound is all about having fun and connecting with audiences through their New Orleans style music.

The history of the music is what inspired members from the Brainerd Minnesota area to compose their own original tunes.

Their lively get up and dance performance is a must see.

("On Our Way") ("On Our Way" continues) ("On Our Way" continues) ("On Our Way" continues) ("On Our Way" continues) ("On Our Way" continues) ("On Our Way" continues) ("On Our Way" continues) ♪ Rusty Crayfish ♪ ♪ We're working our way to your town ♪ ♪ Rust Crayfish ♪ ♪ We're on our way on our way ♪ ♪ Rusty Crayfish ♪ ♪ We're working our way to your town ♪ ♪ Rust Crayfish ♪ ♪ We're on our way on our way ♪ ♪ Rusty Crayfish ♪ ♪ We're working our way to your town ♪ ♪ Rust Crayfish ♪ ♪ We're on our way on our way ♪ ♪ Rusty Crayfish ♪ ♪ We're working our way to your town ♪ ♪ Rust Crayfish ♪ ♪ We're on our way on our way ♪ ("On Our Way") - Well, that's all we have for Prairie Pulse this week, and as always, thanks for watching.

(bright music) - [Announcer] Funded by the Minnesota Arts and Cultural Heritage Fund, with money from the vote of the people of Minnesota on November 4th, 2008.

And by the members of Prairie Public.