“A Reality Check”

Matt Herb, PresidentOSTA, OSC, OSGL

October 23, 2009

General economic conditions• Uncertainty of future• Unemployment• Lower housing starts• Different priorities

Higher input costs for consumers•Fuel•Fertilizer•Chemicals•Labor

Lower tax revenues - lower spending on schools, parks, roadsides

Lower golf rounds

Lower beef cattle numbers, milk prices

Stronger dollar against foreign currencies

Higher• Fuel• Fertilizer• Chemicals• Labor (Oregon is #2 for minimum wage)

More Legislation that increases cost• Burn ban• Bio-fuels• Taxes• User fees• Licenses

5 year average usage 253 million lbs.

‘08/’09 usage 228 million ‘09/’10 est. usage 228 million

July 1, 2009 carryover 50 million’09 est. crop 216 millionJuly 1 2010 carryover 38 million

14 month supply

5 year average usage 213 million lbs.

‘08/’09 usage 146 million ‘09/’10 est. usage 166 million (20 mill less for MN & CAN)

July 1, 2009 carryover 100 million’09 est. crop 154 millionJuly 1 2010 carryover 88 million

18 month supply

5 year average usage 228 million lbs.

‘08/’09 usage 228 million ‘09/’10 est. usage 198 million (30 mill add MO K-31)

July 1, 2009 carryover 120 million’09 est. crop 210 millionJuly 1 2010 carryover 138 million

20 month supply

5 year average usage 15 million lbs.

‘08/’09 usage 10 million ‘09/’10 est. usage 10 million

July 1, 2009 carryover 3 million’09 est. crop 13 millionJuly 1 2010 carryover 6 million

19 month supply

4 year average usage 5.5 million lbs.

‘08/’09 usage 3.5 million ‘09/’10 est. usage 3.5 million

July 1, 2009 carryover 2 million’09 est. crop 5 millionJuly 1 2010 carryover 3.5 million

24 month supply

4 year average usage 2.8 million lbs.

‘08/’09 usage 1.9 million ‘09/’10 est. usage 1.9 million

July 1, 2009 carryover 1 million’09 est. crop 4.5 millionJuly 1 2010 carryover 3.5 million

34 month supply

Reduce acres to match current demandAlternative cropsReduce inputs and input costReduce laborExplore programs- FSA, NCRS, ODA, etc.Develop a cropping planDevelop a marketing plan

Decide to be profitable!

Decide to think outside the box!Decide to control fear and greed!Decide to think “industry” instead of “self”!