Good morning, CFOs. Financial relief is coming for U.S. farmers who have been under severe strain due to high fuel costs and fertilizer expenses in the wake of the war in Iran.
The Trump administration is launching what is known as the Harvest Fuel Relief program, which will result in another $8 billion of direct aid to farmers, Patrick Thomas reports for The Wall Street Journal. The announcement comes two weeks before the midterm elections.
Background and context: Higher fertilizer costs and a recent drop in selling prices for corn are expected to drag on farmers' profits. Diesel prices have surged to more than $6 a gallon on average, hurting farmers running equipment such as combines and tractors.
I asked Patrick for his take on this latest round of farmer funding, and what it may mean for U.S. corporations.
What impact will this bailout have on U.S. companies and farmers?
The administration's $8 billion payments are meant to help farmers' finances at a time when they are spending money for everything, from fuel to fertilizer. America's farmers have been losing money for years because of low commodity prices and inflation. Farm debt has reached record highs, according to USDA data. The new round of government money will help farmers keep up their current spending levels for high-tech crop seeds, fertilizer, equipment and pesticides to continue growing larger crops.
What specific companies will benefit the most?
The biggest winners are the companies selling products to farmers who help them increase their harvests. Think of Bayer and Vylor, which sell novel crop seeds to farmers that can withstand various insecticides and herbicides. These companies are trying to invest more in their own research and development, and being able to pass along price increases for developing new crop seeds is key.
Fertilizer companies such as CF Industries and Nutrien are also winners. More government payments means farmers won't have to cut back on fertilizer purchases for next year's growing season.
Equipment companies such as Deere that are trying to persuade farmers to buy a new combine or planter for next year are also winners from this news.
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The Day Ahead
Earnings
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What Else Matters to CFOs
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The company said it is seeking people for both part-time and full-time roles at its core operations nationwide. Job openings will be posted weekly from October through December, the Journal's Robb M. Stewart reports.
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Earnings wrapup
-- Netflix Revenue Growth Slows as It Overhauls Programming Units
-- SpaceX Reports Profit as Revenue Doubles
-- Northrop Grumman Expects Growth to Accelerate Next Year on Defense Demand
For more earnings news, click here.
Quotable
"It's not about being nice or inclusive."Wei Cai, an associate professor at Columbia Business School and one of the authors of a study on the traits that make a good executive. The study found that executives who invite colleagues to speak on quarterly earnings calls are more likely to be promoted. Executives who regularly invited colleagues to speak on calls had a 13% promotion rate, compared with 6.7% for executives overall.
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