Mark McHargue continues to diversify his farm near Central City by raising hogs, growing corn, soybeans, popcorn, and some organic crops. Because of the new and emerging tariffs, the products he grows will sell for less. But he would love to expand his popcorn acres, a niche market which provides a better profit potential.
He raises popcorn for Norm Krug who is the chief executive officer of Preferred Popcorn in Chapman, a farmer-owned and operated company that sells premium popcorn to customers in more than 65 countries around the world. McHargue understands the importance of agricultural trade and is the first vice president of Nebraska Farm Bureau. He and Norm Krug are members of Merrick County Farm Bureau.
“Popcorn is an integral part of our family farm, so as a farmer, I want to see Norm’s company grow, which allows me as farmer to grow along with him. We live in a global society that reacts very quickly to conversations and to rhetoric. With talk of tariffs continuing to disrupt the flow of goods and services between the United States and China, Norm may have to cut back on acres he contracts and we in turn would have to cut back the number of acres we grow for him,” McHargue said.
Krug founded Preferred Popcorn in 1997 in Chapman, Nebraska. The company has 70 employees and have two locations, including a certified organic processing line. Most likely, if you have been to a movie at a Marcus Theater, you have had Preferred Popcorn. China is a major purchaser of popcorn and his product is in Chinese movie theaters and homes.
“We need the export business because in Nebraska we are productive people, but we don’t have a lot of people and popcorn goes a long way. There are 1,000 servings in one 50-pound bag of popcorn. So, we learned pretty quickly that we need to think beyond Nebraska to sell our product. A few quarters of land would supply the whole state and that’s why we went to Mexico first, then to Indonesia, Asia, Japan, and China. Those countries have a lot of people and they are great partners for us,” Norm Krug said.
Trade Roller Coaster Ride
Every day, every week, Krug feels the uncertainty of trade and the talk that circles around news channels and in coffee shops.
“Just the talk of a trade war is very real. Over the past 60 days we went from half orders, to none, to double orders. It depends on how trade talks are going. They filter down to our country, to companies like ours, and certainly to individual farmers. It’s true that demand is demand and those products U.S. farmers raise will go somewhere, and it might as well be from us. I can assure you that if it is not from us it will be from other people from other countries knocking on China’s door,” Krug said.
Trade is extremely important to farmers, ranchers, and agricultural businesses. McHargue and Krug both agree that Nebraska farmers are good at what they do. If allowed to compete on a level playing field, then they are the best in the world.
“My message to U.S. leaders is that farmers can compete, given free trade. What they can’t do is compete with other governments. So, if there are import duties or tariffs, it causes an unfair competition, and no individual farmers can compete with that,” Krug said.
“We need to continue to talk with our legislators, so they know how a trade dispute would impact us on the farm or ranch. Nebraska is a great place to do business, and we need to let the buyers of our products know that we are open for business,” McHargue said.
Krug has done a tremendous job of building relationships and keeping the right communication flowing with his trading partners.
“I thought we would really need a high-powered sales person to make the connection, but it really is more about being honest and doing what you say you are going to do. Your word has to be good. This is something we have in agriculture and we take it for granted. Two farmers meet on the road and shake hands and a lot of deals are made on a napkin over coffee, because they do what they say they are going to do, that is a trait that carries through regardless of country,” Krug said.
So, as trade disputes continue, Mark McHargue will continue to diversify his farm and Norm Krug will continue to sell, promote, and market his product because as Krug said, “we aren’t the only guys in town, if I am not in line to sell that popcorn in China, there is another guy that will sell the same product, but he speaks a different language. As farmers its imperative that we get out there and tell our story.”
Why Trade Is Important!
- Nebraska’s agricultural exports equal roughly 29% of the state’s total cash commodity receipts in any given year.
- The value of agricultural commodity exports in 2016 was worth $104,000, on average, to each Nebraska farm or ranch.
- Exports from Nebraska in 2016 were worth $6.27 per bushel of soybeans produced, $1.03 per bushel of corn produced, and $2.04 per bushel of wheat produced.
- Exports of beef from Nebraska in 2016 were worth $169.22 per head; exports of pork were worth $68.00 per head.
- Soybeans are the top export commodity, in terms of value, for 42 Nebraska counties.