Ag Tribes Report: New Economic World Order with Karl Shlagel

Vance Crowe [00:00:00] The Ag Tribes report is brought to you by Legacy Interviews, a video service that captures people as they really are, so the future knows who they really were. This Mother's Day. Honor your parents with the opportunity to tell their stories and share the wisdom they've learned along the way. Welcome to the Ag Tribes report, a breakdown of the top stories affecting the culture of agriculture with your host, Vance Crowe. The report begins in 3, 2, 1. Let's begin. Welcome to the Ag Tribes report. I'm your host, Vance Crowe. Each week I bring on a co-host that represents the perspectives of one of the many ag tribes that collectively make up US and Canadian agriculture. This week we have Carl Schlegel, a Maryland farmer who runs Schlegel Farms, LLCA family operation since 1911, growing fruits and veggies, just 30 minutes from dc, a farm bureau director. He's one of 10 nationwide in the 2024 American Farm Bureau's pals Ag, ag Seed Program. And at 42 Carl Balance's farming, community sport and policy talks from New York City to Chicago, keeping his great grandfather's legacy alive. Carl, welcome to the show.

Karl Shlagel [00:01:18] Hey, Vance, how are you? Nice to see you. Nice

Vance Crowe [00:01:20] To see you. So you have been in the PALS program, we were talking about it before the show. This is an exceptional program. Talk a little bit about what you've been doing and how it's been going.

Karl Shlagel [00:01:30] So PALS is partners in advocacy leadership. It is one of the programs that American Farm Bureau Federation puts on. It is for youngish but not oldish farmers. So like that 35 to 45 mix, it's basically takes your ability to testify, to speak, to advocate to a whole new level. It, it's not a beginner's course by any means. It's an opportunity to expand your knowledge base, pick up tricks of the trade, and they do a heck of a good job of it. It starts off, it's, it's three modules and we start with media relations up in New York City. So for me, seeing those tall, tall buildings, that was a bit of a bit of a shock. Then we're down in DC which wasn't much of a trip since it was only, you know, a 30 minute drive for me. And that's all about policy. And you really get to see the, the, the nuts and bolts and the unvarnished truth. And I think most people would be scared if they knew how many 20 somethings really are the reason for certain policies and laws that are created in this country as opposed to the lawmakers. They're the gatekeepers. And then we were out in Chicago last week and that was all about stakeholder engagement and that stakeholders for, for companies that we know and cherish and work with on a constant basis, as well as those that are not friendly to us, that are not friendly to ag and, and the missions that we have. And, you know, can we find common ground? Can we, can we move the goalpost just a little bit further ahead by, by agreeing on one point?

Karl Shlagel [00:03:01] So I know for me it's, it's been, it's been a really good program. My 10 class nine classmates from across the country. While we are all in different sectors of ag and from different sectors of the country, we all have the same concerns. It's the same things that keep us up in the middle of the night here on the, the East coast or bothering the guys on the West coast and north and south and everywhere in between.

Vance Crowe [00:03:24] Well, it is an exceptional program and I've always said that the reason that farmers are able to, to make so much happen on the policy front is they are so much better organized than every other industry. Alright, tonight we are going to talk about the new baseline tariffs that are hitting April 5th and then going up a little bit higher starting April 9th, which is gonna, has already been shaking up US markets with the worst drop since 2020. We're gonna also look at how cattle ranchers and grain farmers are responding to this because you can tell different parts of the ag industry are responding differently. We're also gonna talk about Republicans pitch to sell public lands in some of the large areas that they own. And finally we're gonna talk about Benson Hill. Their bankruptcy is going to cause some farmers to tap into Iowa's grain indemnity fund. And that's something that I think is, yeah, it's something worth taking note of all that, plus the Bitcoin land price report. We're gonna hear Carl's take on the Peter Thiel paradox and we're gonna learn who his worthy adversary is, and we're gonna do that all in just 30 minutes. But first Mother's Day is five weeks away and we've been asking guests about their favorite sayings that their mother had. We'll ask Carl at the end of the show, but as we kick off the show, I would love it if you would comment down below on some of your mother's favorite sayings in the comments. This has been cracking us up on social media here at Legacy Interviews. And if you're thinking about maybe giving your mother a wonderful gift for Legacy for Mother's Day, consider a legacy interview. Alright, let's get started. Headline number one, baseline tariffs start April 5th.

Vance Crowe [00:04:56] Higher tariffs start on the ninth. US market slid Thursday in their steepest decline since 2020 as COVID hit in March. Investor grappled with the threat of President Trump's new tariff plan, and they're wondering if this is gonna trigger global retaliation. Major stock indexes dropped as much as 6% stocks lost $3.1 trillion in market value. The Magnificent seven index is now down over 30% from its all time highs in December. And the s and p 500 is down more than 7.5%. And if we take a closer look at some of the big companies that were hit, Nike shares extended the decline 14% on the day, falling to the lowest levels since October of 2017. Nike has over a half a million employees in Vietnam, which the US just tariffed 46%. Alternatively, the Ford Motor Company offers employee pricing to all US buyers. So people are trying new things. Companies are reacting in all different ways. And while this isn't specific to agriculture, everybody's got their money parked somewhere. So this is hurting people all across the board. Carl, when you hear about all this going on in the economy with tariffs, what do you think the long-term goal of these tariffs are? And are they accomplishing their goals?

Karl Shlagel [00:06:17] I I don't know that we're gonna see a an accomplishment today, tomorrow, next week, next month. I mean, I get the spirit in which they're being applied to making a level playing field. It could have just as easily said, okay, we're gonna go completely tar free. You know, these are the problems we deal with in a global economy. And the globalization that's occurred since the post-second World War. You know, everybody forgets that the United States opened up the sea lanes. You know, we, we provided the, the safety to move these container ships from one continent to the other so that global trade could rain. It's gonna hurt and it's gonna hurt probably the middle class more than anybody. You know, the, the person that's making over six figures or seven figures a year, he's gonna be able to buy whatever he wants whenever he wants. And it's not gonna phase him. He'll grumble, but I mean, everybody grumbles. You know, I'm hopeful that it will fix things. I feel bad if you feel like you're being targeted for this, but honestly, like majority of what I sell stays within 90 minutes of our farm. So it's, you know, we're, we're not an exporter. We're, you know, the, the things that we import, you know, Pete Moss from Canada and Potash and, and some of the fertilizers. My understanding is those are gonna be exempt from the tariffs and really shouldn't affect us too awfully bad. But, you know, it should be a level playing field, shouldn't it?

Vance Crowe [00:07:40] Yeah, I mean, I think that there's definitely things that have shown up in, in the way we do trade that I think most Americans are stunned by, you know, if you think about how much, if a Canadian sells a bottle of milk down to the US versus if we sell a bottle of milk up there, it gets marked up 200%. And meaning that we just really have no way to sell our dairy in there. On the other hand, you know, from the Canadian's perspective, they say, yeah, we know because you can produce milk so much cheaper than we can that you'll knock our entire milk system out. So I think that whatever the consequences are, we are entering a new economic era and we are never gonna go backwards even if he reversed course today, we are in a new era.

Karl Shlagel [00:08:22] Oh, a a a hundred percent. But I mean, the only, the only constant is change, right?

Vance Crowe [00:08:26] That's right. Well, let's take a closer look at what's going on with headline number two. Tariffs and Agriculture. Howard Lutnick went on international television and railed eight times during a 22 minute interview. I counted it out myself about individual countries and continents that are refusing to do things like take us beef or add huge tariffs to those or their grains. Angus cattle rancher Adam Jones took to X to say that he thinks that we're entering a golden age of cattle ranching because now the exports are gonna be fairly adjusted. Places like Australia are now pushing for MCO regulations. So there's all kinds of crazy stuff happening with cattle on the other hand, Illinois Farm Bureau President Brian Duncan said, here's what I can tell you. We have been vocal, we've been on the hill in Washington DC in the last month talking to congressional representatives and anybody that would listen about how important trade is to Illinois leaders who are out doing the same thing. We've met with Secretary of Ag Brooke Rollins and expressed to her how concerning these actions may be for us. Brooke Rollins went out a lot and made note that while people are asking if farmers are gonna get payments, and she said, we are months and months away from making any kind of decision like that. So there's all kinds of tumult in agriculture. What are you hearing from ag about the way that tariffs are impacting them?

Karl Shlagel [00:09:52] So I I, I guess from what I've seen on Twitter, it it, there's more commentary from the guys out in farm country and, and your big row crop farmers and, and what grain looks like from the export market and equipment and all the stuff that goes on there. The cattle stuff is very interesting because you, you've got a lot of different things tied up in there. First all, why don't we have country of origin labeling? We've been talking about that since I was a kid. You know, you should know where your beef comes from, where it's raised, where it's grown, where it's finished at. Well

Vance Crowe [00:10:20] I'll answer that. The reason you have that is because the beef checkoff system has packers in there and the packers are owned by other countries that they don't, that's gonna cause all sorts of challenges to their logistics. So they are arguing for one side while cattle ranchers are saying, Hey, this is hurting us. And so there's not a unified voice among the cattle ranchers so they don't get kool done

Karl Shlagel [00:10:43] Well. And then we could talk about how people feel about the beef checkoff and what that's actually done for 'em or not. We raised still about 40 Angus cattle here on the farm. Cow calf. We finish, we we feed out and we finish. And for the longest time all that beef just went up to a packer up in Baltimore City to a, a kosher plant. And then we pivoted about, I don't know, 10 years ago and started doing sides, quarters halves and then doing retail cuts. And, and I'll be honest, you know, my dad jokes about it, but we've probably made more money selling one steak at a time and one pound of ground beef at a time than my grandfather ever did finishing out cattle. Now I know that's not realistic for every farmer, it's in its economy of scale. And I have the benefit of, I have the curse and the benefit of, I have a population center that's at my back door, but it's, it's some of that out of the box thinking that that's what's gonna put the real dollars and cents into your pocket. And that's how we have to look at things. And it's not for every farmer. Some farmers they just, they wanna finish, they wanna send 'em to, to the feedlot, they wanna be done with them, period. Well

Vance Crowe [00:11:54] It seems like there's no time better in the history of modern history for us to be able to revamp the USDA and make it so much easier to get a plant up and running to get people to be able to sell within the United States. I mean Trump was saying, you know, agriculture actually let's go ahead and play and hear what Trump said about about this. And I think what's interesting is he starts talking about how we're going to sell within the United States. We're gonna make it so people internally are buying American products. Well that becomes a lot easier if you make it easier for guys like you that are selling a few head of cattle to get them processed, to get that back to you, to be able to sell across state lines. And right now the USDA system that we have going is a total nightmare. So if Brooke Rollins wants to do something outside of the photo ops that she's doing, maybe getting that squared away would really help all of Americans, not just the ranchers themselves, but people that wanna buy that beef.

Karl Shlagel [00:13:09] I mean that's a bigger conversation right there of when who does the USDA work for? Are they working for all farmers of all sizes? Are they working from farmers of a certain size? Are they working for farmers of a certain commodity? We've had this mentality of go big or go home for so long across so many industries. I mean you can see what it's done to the dairy industry alone over the past 10 to 20 years. I mean, in our state alone, we used to have a lot of dairies when we were in PALS for Chicago, we actually had a guy there from Dairy Checkoff and he threw a fact out that was very interesting. And it was early eighties, the average dairy farmer, the milk that he produced, fed 700 families average across the country. Today the average dairy farmer milks and feeds 2,500 people. So we've gotten bigger and then we've shrunk down at the same exact time.

Vance Crowe [00:14:08] Yeah, I mean the, there's just so many things that we just keep getting bigger and bigger and bigger. And that's 'cause you're competing on a global market. And so there may be a way that these tariffs and not have, not having the anticipation that there, our goal is constantly export, export, export that it brings back down the size of family farms. I don't know, I'm kind of doubtful about that. But I think, you know, we had a lot of benefits and resilience by having small family farms and those days are gone. But who knows what happens in a new economic era.

Karl Shlagel [00:14:40] Oh, absolutely.

Vance Crowe [00:14:40] Alright, headline number three, changing gears entirely. But when I went out to my network and asked my tribe what's going on in the ag world, somebody sent me this article, Republicans Waste Selling Public Lands to pay for Trump's agenda in a bold move to fund President Trump's ambitious agenda. This is out of Politico, Republicans are proposing a controversial plan selling off America's public lands. These vast expanses of forest mountains and parks could be put on the auction block to pay for tax cuts infrastructure. And more supporters say it's a smart way to raise cash without raising taxes. And critics say that including environmentalists and outdoor enthusiasts argue that it would rob future generations of priceless treasures. Now to be totally fair, when you listen to the Republican argument, they're saying, we wanna do it around city population areas that are not well tourists, they're not actually hiking zones. These are places we could turn into cities and grow out different population areas. So they're saying we're not trying to give away Mount Zion or Grand Canyon, but they're also pointing out that the United States 640 million acres of land, which accounts for 28% of the country's total land area and the debate's heating up. So Carl, 28% of all of the land in the United States is a lot, could even a little bit be sold to, to allow some housing to be built and maybe some fund some of the government's initiatives.

Karl Shlagel [00:16:08] So you sent me this headline and I immediately looked at it and I go, do I even care? Does this, this is this even on my radar? I mean I'm in Maryland, I think the only public lands we have are Chite and Asite Island where the ponies pony swim once a year and that that and any other, you know, national parks. So I reached out to my tribe and I asked a, a farmer that I know who's out in Oregon and I know there's a lot of public lands out west. And I said, what was your thought about selling public lands? What are your thoughts? He says, all for it, all these wildfires in the west are on public ground. The feds don't manage anything and let it burn. If it was sold, there would be tax income generator from the property. The only thing that would be less public, there would be less public land to hunt. I mean, he brings 'em a point. If the federal government's not managing the property, maybe it's time to put it in hands that will manage it.

Vance Crowe [00:17:01] Well, I didn't expect that from you, Carl. I don't know what I thought, but I'm actually in total agreement. They've, they've managed it poorly. If you go out to a state like Nevada, so much of that land is owned by, by the state or by the, by the United States, the federal government. I think that oftentimes the better land managers are the state level. If they're doing things like down in Arizona where they're allowing farmers to graze it and they have agreements, I don't know, I personally don't think the government should own barely any land at all. But if you are gonna own it, I don't think it should be owned by the federal government. It's too big. They can't manage it. At least bring it down to the state level. Or maybe, maybe the best plan would be bring it all the way down to the county level and let people that are living there manage it.

Karl Shlagel [00:17:44] Yeah, I mean, I would agree with that. Listen, no one is saying we need to put Starbucks at Yosemite. Nobody's saying we need to do anything like that. It's

Vance Crowe [00:17:53] Probably already there, frankly, in the gift shops, everything percent,

Karl Shlagel [00:17:56] You know, I, the national park system, the, the forethought to dedicate that land and set it aside and, and protect it. I mean it's probably one of the best things Teddy Roosevelt ever did besides San Juan Hill. And I don't think he gets enough credit for it. I mean, you always hear about in school he was a trust buster San Juan Hill, but the National Park system, a lot of that goes to him in, in, in the time he spent out in Montana. But there's, there's a tremendous amount of land that's tied up and it's not for con conservation reasons, it's not for, you know, environmental reasons. It's just federal government had it. I mean, here's the deal. If they start selling this, do indigenous tribes have an argument that they shouldn't be able to sell it? That if they're going to get rid of it, that it should be seeded back to them? That would be an interesting court case, wouldn't it?

Vance Crowe [00:18:47] Well, that's something I had not even contemplated at all. I I, I don't think it'll actually happen, but man, I think there'd be some really good things to our tax roll and probably for caring for the land. But you're right, there's probably gonna be some wild lawsuits over that. Alright, let's head to our fourth headline. This is the last one. We'll just touch on it briefly. Benson Hill draws on Iowa's Grain Indemnity Fund. This is from the Des Moines Register. Benson Hill, a St. Louis based company and also an Iowa Grain dealer filed for chapter 11 bankruptcy. Benson Hill, if you don't know, was a company that formed close to when Bear bought monsano and they picked up a huge amount of Monsanto employees that had been given buyout packages. And then when they were searching around for what they could put out into the market, they went and they got SPAC money, meaning they, they did this special way to raise money without actually having to talk about what's internal in the company. Well, after years of searching for a product market fit, they declared bankruptcy. I feel a little justified here or that because back during COVID times, I was talking with the financial planner on the podcast and talked about how I didn't see them having a plan to, to be profitable and here they are. Now, the reason this is interesting to farmers is because they have that grain dealer license in Iowa, they are drawing on the grain indemnity fund that's gonna fund their losses to farmers up to 90% or $300,000. And this indemnity fund is a big deal in Iowa because farmers were saying, why do we have to keep putting money into this grain?

Vance Crowe [00:20:23] Elevators don't fail very often, and when they do, it's, it's because you made a mistake on who you were trusting to buy your grain from you. And yet they're being asked to refund this. So they came full circle in the last couple of years because now they are gonna have to do it, but it's likely because it was one of these companies that was basically being run from Wall Street trying to get into the grain marketing. Carl, what are your thoughts on this as a vegetable and fruit farmer from all the way out in Maryland?

Karl Shlagel [00:20:50] So the little bit of grain that we raise, most people spill more in Iowa than we, than we raise in a given year. My understanding with the grain indemnity fund and, and I got a crash course from Michael Webster, who's a grain buyer out here in Maryland. As a matter of fact, he, he posts on Twitter quite frequently. My understanding is that money does not transfer through the company, that the farmers apply for that directly. So it's not a bailout of the company per se, but it's to make sure that the farmers are made 90% of whole, it's an unfortunate situation. It sucks. More importantly, more importantly than everything is done, okay, they're bankrupt, they're gone. But do those farmers have an elevator to take their grain too? We had a sim we had a similar situation here in Maryland. So the majority of the grain raised in Maryland is raised over on the eastern shore of Maryland on the Del Marva Peninsula. And the broiler industry is what dictates the amount of grain that's raised. And and if you look at UUSD yield data, those guys on the shore, they get yields like the guys in the I states all the time and they even get a step up in basis because that grain does not leave the peninsula. It goes to, goes to Mount Air, it goes to Purdue, it goes to Tysons, and it's all for those boiler houses that are on the shore because the chicken industry is, is the economic driver over on the Del Marva. So anyways, we had an elevator here in southern Maryland, in in Lath, Lithian Maryland, which is up in the southern part of Anne Arundel County.

Karl Shlagel [00:22:22] And it was run by Purdue, well it was run by southern states. Purdue bought it, I don't know, 20 years ago. It's where we took the, a little bit of grain that we raised, but there was a lot of grain that was raised in Southern Anne, AOR County, Northern per Georges County, Calvert County that went into that elevator. Purdue came out two years ago and was like, yeah, you guys aren't raising enough grain anymore. The infrastructure doesn't make sense. You know, we're walking away from this. And there was a big push to, to really find a merchandiser that could step in and fill that void. Somebody did and things didn't go as well as maybe they should have. And there were some concerns were were farmers gonna get left holding the bag. And that's, Michael gave me that crash course on what that grain indemnity fund looks like and how that works. And I mean obviously it's, it's taken a little bit of money outta your pocket, but it's what, a half of a penny, a half of a, a 10th of a percent or something like that. It's, it's such a small amount of money over the long, off the long term. But it seems like it's obviously in case of emergency break open glass. Yeah,

Vance Crowe [00:23:29] I mean to have that you definitely don't ever want to have to call on it. I to your point, I mean farmers that get stuck in a situation where the co-ops keep merging together, they keep getting bought out and then somebody closes down those elevators to centralize and, and save on costs. I know Jared McDaniel down in Oklahoma fought really hard to keep his co-op open because that keeps options up. And then if you start noticing, 'cause people have told me before, you know, a grain elevator's going down well before they go down, but maybe you're stuck because the cost of of delivering so much further away makes it so you're not being profitable. People take chances. And so that grain indemnity fund, it's just interesting that I was having to face this because it was not long ago where I was talking with some farmers that said, this is dumb, nobody's gonna call on that. It's gonna be a long time before an elevator fails. And it wasn't an elevator, it was one of these Wall Street fueled SPACs. Alright, that's gonna do it for our headlines. If you have headlines you think we should do, you can always send them to me on x at Vance Crow or Vance at Legacy Interviews dot com. Moving on to the Bitcoin land price report. Woo. This week Bitcoin is also feeling the volatility from tariffs. Last week Bitcoin was at $87,475 and today we are sitting at a cool $82,297, which means it is on sale 6% down from last week. So now let's go ahead and compare it to the price of farmland where Carl's at. How much is an acre of high quality farmland where you are Carl?

Karl Shlagel [00:25:00] So that's a hard question to answer. The majority of the time farmland where I'm at does not transfer from farmer to farmer because of where we are in, where I'm at in Charles County and and being the proximity to Washington DC we're, we're a bedroom community for the federal government. And when you see farmland change hands, it is the developers that are driving the price. So farmland that is within the development district or borders, the development district where they think they can get water and sewer over to very easily. You can see that go a hundred thousand dollars an acre.

Vance Crowe [00:25:40] Yeah, I mean you are facing the thing that people talk about all the time that it's not, you're not usually, you're not selling out to farmers, you're selling out to somebody that's gonna build a house on it. But I like that a hundred thousand dollars figure. So what that means is one Bitcoin right now, or I'm sorry, one acre is worth 1.215 Bitcoin or one Bitcoin would purchase you 0.8 acres where you're at. How does that sit with you, Carl?

Karl Shlagel [00:26:07] You know, it, it's two different ways of looking at this. It sucks to see farmland go 'cause it never comes back. But we're also in the business of feeding people. So more homes is more mouths and more mouths is more food. So it, it's, it's one of those things that we just, we, where I'm at, we have to deal with, yeah, where my farm is, we share property lines with a subdivision, 115 people and as a result, we're their farm. So we get a lot of the, we get a lot of that traffic that comes, comes over and they buy fruits, they buy veggies, they buy meat, they buy strawberries. When we're picking strawberries, you know, it, it, it is just, it's, it's the hand that we're dealt, it, it, you know, if my great-grandfather could have gone back, maybe he would've gone somewhere else. I, I don't know. But you know, German immigrant, when it was presented to him, it was cheap farmland in southern Maryland and that's why they came this way.

Vance Crowe [00:27:03] Well, that's what I always think, that it is cheap Bitcoin right now, and I always do a little bit of like a, a quick session on Bitcoin. So right now everybody's focused on the tariff war. That's likely gonna come down to a war of attrition on who can handle all the tariffs that other countries are putting on us and do our farmers make money and, you know, who needs to be bailed out. And eventually, if this goes on long enough, the government is going to print money and send out checks to make people whole. And we don't know how much that'll be. We don't know when it'll be, but we do know that every time they turn on the money printer, it inflates our money. And with Bitcoin, the system is inflating every 10 minutes, 3.125 Bitcoin are being added to the system. But, and that's gonna go on for the next three years until that's cut in half. But the interesting thing is that unlike us inflation, we know exactly what this is. We know exactly how much is coming out, how much it's being inflated by. And so it's, it this is gonna change the relationship that you can have with your money in the future because right now we don't have any idea what bailouts will look like. We don't have any idea how much money is gonna get put into the system or what's gonna happen when the Fed has to drop interest rates. So that's why if you are have ever considered Bitcoin, I highly recommend it. And if you're interested, use the show code from river.com who's been a sponsor of the show. And if you buy Bitcoin using my affiliate link, you will support the show. So Carl, you got any Bitcoin?

Karl Shlagel [00:28:33] I have dabbled from time to time with Bitcoin. I would not, I would not call myself a true enthusiast, but it's, it's a store of value. It's, you know, it's one of those you can, sometimes you can take a little bit, you know, feed your Roth first and then if you wanna put a little bit over here to the side, you know, it's, hey, buy the dip, right? Vance, buy the dip,

Vance Crowe [00:28:55] Buy the dip. And now you can even buy the dip with your Roth IRA into an ETF. Alright, moving on to the Peter Teel paradox. Carl, what is one thing that you believe that almost no one you know, agrees with you on?

Karl Shlagel [00:29:11] So I forgot, I forgot this was, this is the way this was structured. I thought it was your hot take and I got tons of hot takes, but I'll throw one out there. And I don't think a lot of people agree with this. We make a big deal about legacy in farming and in agriculture and about, I'm this many generations and any, you go to any conversation or any professional talk and so and so is a third generation, fourth generation, fifth, hell you hear, even hear 10th generation farmers and it's celebrated. We celebrate it as an industry. Don't you think we ought to celebrate the first generation more? Shouldn't we celebrate the new and beginning farmer? The guy that really pulls himself up by his bootstraps and just sheer will and luck and hard work is making something out of himself and making something out of it and doing what our forebearers did. That's, that, that would be mine. I think we should celebrate the first generation guy a little bit more than we do.

Vance Crowe [00:30:08] You know, I, I mean, I have to say I agree with you right on the face of it. I like what you're saying and I've, I've had the good fortune of being several first generation farmers doing the ag tribes report. I think the way that we know that we celebrate them is are our banking institutions, our, our farm credits are our insurance institutions, are they actually doing the things, taking the risks that they need to take? Are the co-ops, the grain elevators, giving people the chances that you need to have to get into agriculture Doing so many Legacy Interviews. I can't tell you how many people have told me, thank goodness for the guy that took a chance on me. Thank God for the landowner that gave me a shot to farm his ground. Thank goodness for the banker that let me run that loan when I didn't have enough assets to cover it. That's what real celebration is all about.

Karl Shlagel [00:30:54] Oh absolutely. A hundred, a hundred, 110%. And you know, especially with the economy being what it is and, and, and if, if things go bad, which they've got the chance to really go bad for a while, are these banking institutions gonna tighten up? Are they gonna be afraid to put money out there? Are they gonna be afraid to take that chance? Or are they gonna just continue to hedge with the guy that's gotta borrow for an operating loan every year regardless,

Vance Crowe [00:31:21] You

Karl Shlagel [00:31:21] Know, what's the better bet for them?

Vance Crowe [00:31:22] We are gonna find out what the banks are made of. And I think there's benefits to having local banks. I think there's benefits to having banks where you elect the board members and those board members set the direction and they tell, you know, they make the decision, Hey, how much risk should we take here? Because these new farmers, they are a risk. And then you're taking money that could go to the, the long-term holders and you're saying, Hey, we're gonna put a little bit more of this at risk. But if you wanna see people move from first generation to second generation, you gotta take those risks. So I I on, on my face, on its face, agree with it. But I think you brought up a good point. I'm gonna give you just a straight five oh for your Peter Teel paradox. Alright, we're the adversaries. This is the segment where I ask Carl, who is one person that you respect but you strongly disagree with on social media.

Karl Shlagel [00:32:12] So I told you before, this is a hard one for me because that's not the game I play. You know, I, there's plenty of people that are just like, I'm just not even paying attention to you because you're just noise or you're just so off, off and left field. But I would say right now, and it it all, it all hinges on the conversation we had about H two a a couple weeks ago and I, I I, I hope we move the needle a little bit with you to get you to understand a little bit more about what that process looks like. And that's a longer conversation. But probably Mr. Vance Crowe in regards to the foreign guest worker program will be my worthy adversary currently.

Vance Crowe [00:32:48] Well, I love it. I mean, the fact that you wanted to push around and argue with me was totally down. I'm totally down. That's why I'm like, Hey Carl, come on the podcast. Why don't you give a quick rundown of your position on the H two A and, and its role in American agriculture.

Karl Shlagel [00:33:04] It's kind of like Winston Churchill used to say, you know, democracy is the worst form of government except for all the others. It's, it's the program we have. It's not perfect by any means. It is not a cookie cutter approach. There's a lot of people that would like it to change so they could take better advantage of it. There's a lot of outside organizations that beat it down as it's nothing more than indentured servitude, which is completely a falsehood. We've utilized the program on our farm for 25 years. We've never had a, a, a national worker, an American that has applied for the job that we have provided. There's, we need to get the crops in, we need to be able to harvest. And in fruit and vegetable farming, you know, it's, it's always been an entry level position. It's always been, you know, a bottom rung position. And the, the people always throw out, well, there's Americans that would do that job. No sir. We got what, 7 million unemployed right now that aren't looking for jobs and aren't trying to work. We've got, I was just listening to Mike Rowe and he was talking about, you know, the trades for every five tradesmen that are retiring right now, only two young people are filling their place. It's not just a skill cap skill gap, it's a will gap. And to a certain extent, we did it to ourselves. I mean, when I was in high school, I graduated back in the late nineties and the push was college, college, college, college. You weren't worth, you weren't worth nothing if you didn't go to college. Well, that wasn't the case. And I've struggled to get my degree finished, still struggling to get my degree finished, but there are opportunities for everyone out there.

Karl Shlagel [00:34:41] But the fact of the matter is no one raises their child. No American raises their child to pick cucumbers in 90 degree heat.

Vance Crowe [00:34:49] Well, that, that may be, I, I agree that, that we don't have people that are looking for those jobs. But I do think the H two A program leverages the idea that if you get, let's say $20 an hour in, in, and you're a South African, that money is going to buy a lot more for you in South Africa than it is going to buy for you in the United States. So what we are doing is, is by making it so the, you're bringing in people with a much lower cost of living. They're willing to work here 'cause they know the money they're shipping back is gonna benefit their family and it's gonna benefit themselves way more than what an American does. If they work at the same rate, the what they're taking home and what they can buy with it is less. And unless you make it so that, that those prices have to change, right? I think that it certainly would do exactly what tariffs are doing. It would radically increase the price of our food if we, if we didn't allow those H two A workers in, because you, you could find a price that people would say, Hey son, maybe it's better for you to go pick apples and cucumbers than it is for you to go to college. It just might not be a price. We're comfortable paying for food right now.

Karl Shlagel [00:35:59] You know, department of Labor has the A EWR, the adverse effect wage rate, and that whole gimmick has been set up so that it's supposed to protect the wages for Americans. And you've seen every state in the union has increased their, their aor, their base rate of what we are legally have to pay these H two A workers year over year over year. I mean, I remember close to high school where I think we were paying guys, you know, 10, 11, $12 an hour. Now we're up to 1886 up from 1746 last year. I mean, it's literally gone up, gone up, gone up. But there's still no Americans applying for these jobs. I, I mean, I don't know what the price point would need to be and as far as food costs anymore, I don't think so. I'm a fan of history. I love history bread and circuses. The government is never gonna let food get to a point where people riot in the streets. It's not gonna happen. And at the end of the day, I, I, I'm a price taker. I'm not a price maker. You know, I'm selling tomatoes and squash for basically the same prices we did five years ago and 10 years ago. The only way we can leverage our business is to one, cut back a little bit on wholesale and try to capture retail dollars. That's the only way this, this works for us is to make it work that way.

Vance Crowe [00:37:20] I have, I have absolutely no doubt that you're a price taker and that the government is not going to let the food prices go to the point where if they were right, if, if they did let those prices, I mean, look what they did with eggs. Finally, egg producers are, are commanding a price that they could start, you know, really building a big future on, make big changes, make investment. And they're like, oh, you know what we're gonna do? We're gonna bring in eggs from South Korea and Canada and Turkey, and we're gonna undercut this price benefit. So I'm with you, the government doesn't want this, but I just don't buy the argument that Americans won't do that work. I think what they get at the end of the day after working that many hours, they're, they're just not taking home what the guy from South Africa, the benefit he can bring to his family for working at those hours for that price versus the American is just, it's too big. But I take your point, there's a lot about this, like the adverse wage I don't even know anything about. So I'm, I'm glad to hear you talk about it.

Karl Shlagel [00:38:14] Well, if there's anything, you know, my biggest takeaway with with the H two a program is 1986, that's when it was created. That's when it was made law. Think about the technologies and the things that we had in 1986. Think about how much things have changed. We went from typewriters to word processors to computers, to iPads, to cell phones too. They haven't enacted another law since 1986. Congress needs to get off their asses and do something we've been crying about. There needs to be things fixed for a long time. Hell Chevron last year told 'em, you need to do something, you need to make laws to, to fix these things. And still nothing, it, it's just, they're gonna do what they wanna do and then get reelected again.

Vance Crowe [00:38:58] Well, it's just great to, to have a good conversation with the worthy adversary. I have to respect that you're the guy getting fruits and vegetables taken to a real market. I'm just a guy that has a, has a theoretical understanding of economics. So I wanna thank you so much for coming on today, Carl. I have been asking each of the guests each week, what is, because Mother's Day, it's only five weeks away. Do you have a, a saying or a phrase or a turn, something your mom used to say growing up that sticks with your head now?

Karl Shlagel [00:39:28] Yeah, I was thinking about this because, and I, and I love that you're doing it. So I'm the oldest of five. My mom had five of us. My mom was a stereotypical, she was a nurse and married a farmer. So, you know, you can chalk that up to another, another one. I don't know what he, sometimes stereotypes are just true. It's just the way they are. Mom has always been and still is to this day. You don't talk bad about your brother. You don't talk bad about your sister with them not being in the room. That was, that was kind of something that she always was, you know, and, and that's as a family, you know. And my wife, my wife's an only child and she came into this family of, of four boys and one girl and would see us working in the mornings and then go to lunch and, you know, we would tell each other to go f themselves at 11 o'clock, but at lunchtime it's all smiles and pass this and pass that at the kitchen table. No, my, my mom it's your mom man. Mom's are good people. They're the best

Vance Crowe [00:40:23] Man. That's really a heartwarming and endearing one. I was gonna give another one that my mom said when she, you know, when we, when I'm one of seven, when we'd get her all riled up. But you know, when I think about some of the lessons my mom taught me, one of the things she used to always say is, you know, when you go to some sad event, when you go to something that's really important, people are never gonna remember what you said. They're just gonna remember that you were there. So you should show up. And I know that many, many, many times I've been sitting somewhere being like, I don't want to go. And then you're like, nah, mom's right, we gotta go. So. Well, Carl, you have been a great sport here. If people wanted to learn more about your farm or connect with you about advocacy, where would you send them?

Karl Shlagel [00:41:04] So social media. I'm on Facebook, I'm on Twitter. Twitter's probably the best way. K Slagel, I had to, we had to make a website for pal. So there is a web, there is a carl slagel.com out there. I've read it. Still working on that one. But as far as for our farm, you know, we're in the state of Maryland, but we have a large Facebook following Slagel farms on Facebook. We're hopefully 25 days away from picking strawberries. So that will be joyful and start putting money back in our pockets. That's, we joke, we started raising strawberries because we really love strawberries, but it was, let's find a crop that we can start harvesting earlier and start, you know, making money coming outta the wintertime.

Vance Crowe [00:41:46] Oh, that's fascinating. I would never have thought in that way, but that makes total sense. And gosh, once the strawberries start coming in our house, we start, we've our, we're buying Florida strawberries right now, so I'd, I'd be more than happy to buy Marilyn Strawberries.

Karl Shlagel [00:41:59] Absolutely. But hey, thanks for having me on Vance, I appreciate it.

Vance Crowe [00:42:02] Well, if you have been thinking about getting your mother a Mother's Day gift, I would highly recommend going to Legacy Interviews dot com. This last week, we had many, many people call us. This has been a wonderful week and it's a great gift. We will send you a gift package you can give to your mother on Mother's Day. And after she wipes away her tears and says how much she loves this, you can, you will schedule it with her and get it set up so you can watch it as a family. All right, that's gonna do it for this week's show. As always, feel free to disagree.