2025: A More Challenging Road Ahead
Mar 13, 2025
Let me start by thanking you for your business and relationship with IAS.
When executed well, I believe that the cooperative model is simply the best model for agriculture. When we get people and assets placed in the right spots working with you, you win. When the cooperative executes well, our returns go back to the members; it helps to keep great people; it helps maintain good assets. While we will always compete with other models (competition is good), we help keep margins and prices in check. Our presence is powerful in the areas in which we operate. This past year, we had meaningful patronage returns to you. As we look ahead, I am confident in our team’s execution and sincere desire to serve you.
2025 for the cooperative and many of you appears to be a more difficult financial year. Row crop margins will be challenging. While we are familiar with these cycles, navigating through them together is what we are here for. We look forward to working together through these times. In this newsletter, you will see updates on where we see opportunities and provide updates on where we see markets and prices. Our team does an excellent job of serving, and I would personally ask for more of your business when possible.
We need a good spring window to get nitrogen down. As you are aware, last fall was challenging with temperatures to apply NH3, and when we did cool down, excessive rain kept us out of our optimal application window. This situation was not just in our areas, it was in many areas of the Midwest. Another dynamic will be tariffs on ag inputs/nutrients. A significant amount of our potash comes in from Canada, as well as urea. These tariffs provide the potential for higher prices. I also anticipate that U.S. corn plantings will increase with current corn/bean ratios. This will keep ag inputs firm. Stay close with our agronomy team; it certainly has the potential of a volatile year.
One of the items I am hopeful we will get updated guidance on soon is the 45Z tax credits related to climate-smart ag practices. There is an opportunity for ethanol plants, including our plant, Pine Lake Corn Processors, to lower our carbon intensity (CI) score and receive tax benefits as a result of the corn coming in with these production traits. The U.S. Treasury guidance will help us understand what practices will be incentivized and what documentation is needed. These credits will be for grain delivered in 2025, and we are closely monitoring how ethanol plants will share these with producers. Given our ethanol plant and cooperative position, we work towards an equitable split. We believe it is important to keep you well informed and prepared for this opportunity and share how different plants work with producers. We believe that we are in a unique position to do this.
Thanks again for the opportunity to work together. We look forward to serving you.
Good days are ahead.
When executed well, I believe that the cooperative model is simply the best model for agriculture. When we get people and assets placed in the right spots working with you, you win. When the cooperative executes well, our returns go back to the members; it helps to keep great people; it helps maintain good assets. While we will always compete with other models (competition is good), we help keep margins and prices in check. Our presence is powerful in the areas in which we operate. This past year, we had meaningful patronage returns to you. As we look ahead, I am confident in our team’s execution and sincere desire to serve you.
2025 for the cooperative and many of you appears to be a more difficult financial year. Row crop margins will be challenging. While we are familiar with these cycles, navigating through them together is what we are here for. We look forward to working together through these times. In this newsletter, you will see updates on where we see opportunities and provide updates on where we see markets and prices. Our team does an excellent job of serving, and I would personally ask for more of your business when possible.
We need a good spring window to get nitrogen down. As you are aware, last fall was challenging with temperatures to apply NH3, and when we did cool down, excessive rain kept us out of our optimal application window. This situation was not just in our areas, it was in many areas of the Midwest. Another dynamic will be tariffs on ag inputs/nutrients. A significant amount of our potash comes in from Canada, as well as urea. These tariffs provide the potential for higher prices. I also anticipate that U.S. corn plantings will increase with current corn/bean ratios. This will keep ag inputs firm. Stay close with our agronomy team; it certainly has the potential of a volatile year.
One of the items I am hopeful we will get updated guidance on soon is the 45Z tax credits related to climate-smart ag practices. There is an opportunity for ethanol plants, including our plant, Pine Lake Corn Processors, to lower our carbon intensity (CI) score and receive tax benefits as a result of the corn coming in with these production traits. The U.S. Treasury guidance will help us understand what practices will be incentivized and what documentation is needed. These credits will be for grain delivered in 2025, and we are closely monitoring how ethanol plants will share these with producers. Given our ethanol plant and cooperative position, we work towards an equitable split. We believe it is important to keep you well informed and prepared for this opportunity and share how different plants work with producers. We believe that we are in a unique position to do this.
Thanks again for the opportunity to work together. We look forward to serving you.
Good days are ahead.
Ken Smith
Ken brings nearly 30 years of increasing responsibility and professional experience in the agriculture industry. Ken grew up on a farm in North Central Indiana before attending Purdue University, earning both a bachelor's and master’s degree in agriculture economics.