Dave Chatterton studies the past and present and tries to predict what will happen in the future.
“Strive to be at the forefront of figuring out what's going to happen next,” Chatterton told American Farmland Owner from his office in Champaign, Illinois.
Chatterton is Commodities Division Director for Strategic Farm Marketing and Strategic Farm Futures.
For the past quarter century, he has analyzed trends in commodity trading and price risk management.
Dave Chatterton bio
Strategic Farm Marketing & Strategic Farm Futures – Director, Commodities Division
SFM/SFF Daily Market Texts and Weekly Marketing Letter – Lead Author
Powerline Group – Managing Partner
INTL FCStone – Senior Commodities Broker
Bunge – Merchandising Manager, Commodities
As he looks ahead, he sees difficult conversations for some farmland owners and producers. “We're getting a little bit of a ‘come to Jesus meeting,’” Chatterton said. “…Hey! Where's cash flow going to come from? And how much equity am I going to have to dig into? And how am I going to operate next year?”
WATCH: Dave Chatterton joined AgDay to discuss how South America could challenge American producers in 2025. See that here.
Chatterton wants to avoid generalizations. “There are people who are very solid, have no debt on a bunch of ground and have their equipment paid for. And there are people on the opposite of that spectrum that may be just starting out or that rent most of their ground and have a high debt load and everything in between.”
“But it's going to be a challenging year here, and I think, particularly when we look at it in terms of crop insurance and the commodity pricing element that we work with every day. We're going to have to be pretty quick to act and keep a very tight pulse on what's happening in Washington.”
Chatterton talked with American Farmland Owner as members of Congress were finalizing a one-year extension of the Farm Bill in a last-minute agreement that avoided a financial apocalypse for agriculture.
That extension brings some short-term certainty. But there are longer-term questions for Chatterton as he thinks about the country’s $36.3 trillion debt.
President-elect Donald Trump -- whose previous time in office contributed to about one-quarter of the country’s overall debt -- has proposed a Department of Government Efficiency.
RELATED: The interest on the federal debt is $1.2 trillion annually. Andrew C. Johnston, a faculty research fellow at the National Bureau of Economic Research and a senior fellow at the Civitas Institute, blames some of the country’s financial mess on competing interests between members of Congress and presidents. Read his take on the matter here.
The initiative tends to be referenced by its acronym, DOGE. Wealthy businessmen Elon Musk and Vivek Ramaswamy (2024 Republican presidential candidate) currently lead the entity that could focus on cutting federal spending and regulations.
Chatterton believes that farmland owners and producers should prepare themselves for cuts if DOGE gets to work.
“I don't think anybody knows,” Chatterton said about what DOGE could do to agriculture. “There's not a good historical precedent to follow here in terms of what this might mean.”
RELATED: Here are some potential targets that do not include agriculture where DOGE could look for ways to cut federal spending. Read this Fox Business story here.
Chatterton said, “This is a pseudo government agency or advising agency to the government in terms of how things get done but still has to run through the traditional congressional or legislative purse strings and mandates. So, it's going to be really interesting to see how those things come together.”
But Chatterton has some ideas about what could happen.
“If DOGE is going to start doling out cuts…we in agriculture are not going to be immune from that,” he said. “So, probably the quicker that we can prepare for that, and insulate ourselves from that to a certain degree, or at least insulate some of our key programs, maybe like crop insurance, some others…the probably the better off we'll be.”
He remains optimistic that Republicans, who will hold majorities in both chambers of Congress in 2025, will prioritize agricultural producers. However, he points to one area that comes to mind that DOGE could look at for cost savings.
“DOGE is certainly looking at things like the budgets of the USDA or the FSA…or what the farm subsidies look like inside the Farm Bill,” Chatterton said. “And you know there's a lot of politics that certainly go into that.”
Locals could feel the impact of those decisions because of the services that FSA provides at the county level. And that will give people like Chatterton plenty to watch in 2025.
“What those…programs might mean to our cash flow or to our capital flow, and how that affects our break evens and our bottom lines.”
NOTE: What to expect in 2025 will be one of the key topics during the 18th Annual Land Investment Expo in Des Moines, Iowa, on January 14th. Find the list of VIP speakers, sessions, and registration for in-person and online options here.
(American Farmland Owner is a media sponsor for the 18th Annual Land Investment Expo.)
