Register for the 2021 Marketing & Distribution Convention! Sign up before Aug. 16 and save $200. See the schedule here.

by Kristi Ruggles

Our reunion in Kansas City, as sweet as it was, was incomplete.

Our Canadian members could not cross the border without quarantining. Dozens of member companies still had travel restrictions. Others simply were reluctant to elevate their risk of infection.

Since then, we’ve turned a corner in the pandemic and the industry. Business is booming, and with the boom comes questions around supply chain, labor, product pricing, and more. Your answers await.

It is time to reconnect in numbers that we knew prior to 2020. We have much to learn from one another during this extraordinary moment in the industry. This convention, which is Nov. 2 to 4 at the Omni Oklahoma City, offers you:

• A peek into the future.
• Strategies for finding employees, keeping employees, and reducing your dependence on labor.
• Opportunities to learn from your peers.
• Tips for supporting the the marketing work of your distributors and dealers.
• Networking events to meet with marketers and distributors and find new channels for sales.
• Expert insights on global trade, operational excellence, how to prevent product liability claims, and more.

Watch Shortliner for continual convention coverage, and get to know your fall convention speakers here.

Anticipating the Future

Jack Uldrich is an author and a futurist who helps businesses gain the crucial foresight they need to create a successful future. His work is based on the principles of unlearning—or breaking free from obsolete knowledge and assumptions as a strategy to survive and thrive in an era of unparalleled change.

He is a former naval intelligence officer and Defense Department official. His most recent book is Foresight 20/20: A Futurist Explores the Trends Transforming Tomorrow. His forthcoming book is Business as Unusual: How to Future-Proof Yourself Against Tomorrow’s Transformational Trends, Today.

He speaks about technology, change management and leadership. Uldrich appears frequently in major media outlets and contributes regularly to the Wall Street Journal, Forbes, Wired Magazine and BusinessWeek.

Finding Solutions to the Labor Problem

Many of you met Gene Marks in Little Rock in 2017. He is a writer, speaker and small business owner who focuses on issues relevant to small businesses. (Find a story from Marks on tax incentives for building your labor pool in this issue.)

He will discuss the labor pinch in the context of politics and the economy. He also will offer strategies he has seen his consulting clients use to find and keep employees and offer tips on lower-cost technologies that can reduce the need for labor.

A former columnist for both the New York Times and Washington Post, Marks’s work appears weekly in The Guardian, The Hill, Forbes, and Entrepreneur.

Understand What Distributors Need, Improve Sales

Get inside the minds of equipment dealers and distributors during this session focused on what marketers need to successfully sell your products.

If you joined us in Kansas City, you likely heard Bird and Baier discuss findings of a survey they conducted on farmers’ buying beliefs and behaviors. A follow-up survey in the “Farmer’s Buying Journey” series is in progress now to explore how dealers are marketing to farmers and how manufacturers can best support dealers, wholesalers, and independent representatives in their marketing and e-commerce efforts.

In Oklahoma City, John Anderson will join the stage to discuss survey results. Anderson is president of Fastline Marketing Group, an agricultural marketing agency with a 43-year history in the industry and a member company since 1995.

Bird is CEO of Spindustry, a digital agency focused on e-commerce and enterprise websites and a member company since last year. He wrote an article highlighting the findings of the earlier survey in this issue.

Baier is an audience and marketing strategist and researcher with Audience Audit. She is one of the most sought-after attitudinal segmentation researchers in the U.S.

Operational Excellence in an Industry in Flux

Steve Wilson will continue his series on operational excellence. You should have met Wilson at Supply Summit 2020 in Albuquerque for the first of his five-part series, which is designed to take members further in exploring the vast topic of operational excellence.

In the absence of in-person get-togethers in 2020, we launched the series with a webinar in March, when Wilson spoke about the state of readiness. Find that webinar at .

In Oklahoma City, Wilson will focus on operational excellence in the current context of unstable inventories, supply chain disruptions, price unpredictability, and too few workers.

He is an operational excellence consultant, coach and trainer who has worked with hundreds of companies, including Deere, Union Pacific, and Heinz. He will speak at a breakout session that runs concurrently with a session on trade.

Tips for Mastering Trade

Heather Ranck specializes in the farm equipment export business. She is based in Fargo, N.D., with the U.S. Commercial Service, which is part of the U.S. Department of Commerce.

She brings expertise on resources available to shortline manufacturers seeking to enter the trade market as well as tips for researching export markets and optimizing your website to globalize your sales. She will speak during a breakout session that runs concurrently with the session on operational excellence.

Preventing Product Liability Claims

Attorney DJ Warden, who is with Association partner Nilan Johnson Lewis, will discuss risk management, specifically field management strategies and design, manufacturing, and compliance practices.

Warden specializes in defending product liability cases and commercial litigation. He also was scheduled to be part of Supply Summit 2020.

This breakout session will run concurrently with a yet-to-be-decided discussion. Amid such instability, the Association wants to remain nimble in case a topic surfaces that is especially timely. Stay tuned for details.

Spouse/Guest Tour

Spouses and guests will tour Oklahoma City National Memorial & Museum, which honors the victims, survivors, first responders, and all who were affected by the 1995 bombing of the Alfred P. Murrah Federal Building in downtown Oklahoma City.

The group will break for lunch then board a Bricktown Water Taxi, which offers a tour of the city floating down the Bricktown Canal.

What’s your biggest challenge?

The Association staff has been asking members that question. Some of what they’ve heard is probably what you would say if you were asked. But, they found nuances. Labor isn’t a problem everywhere, for example. In some places, inventory is a back-burner worry.

In broad strokes, everyone wants happy customers, happy employees, and a healthy bottom line, and the things most likely to stand in their way are:

• An inability to find employees.
• A supply chain that has been turned on its head.
• Exceptional demand for equipment, aggravated by too few workers and supply chain challenges.

“In 16 years, I have never seen anything like this,” said Kenny Lee, purchasing manager for Landoll. “I have never seen lead times like this. We have seen certain products slow down before, but this is every product.”

Lee said Landoll, based in Marysville, Kan., waited for four months for a shipment to come from overseas. Its usual travel time is six weeks.

At McFarlane Manufacturing in Sauk City, Wis., parts and material inventory is not a standout challenge. Theirs is labor.

Todd Lassanske, general manager for the manufacturing division at McFarlane, said the facility has 85 employees today and has enough work to add another 20-plus—if it could find them.

“We have done creative things to get people in here and reward the incumbents,” Lassanske said. “Sign-on bonuses. Higher wages. Our most creative strategy is offering a very flexible schedule. We ask folks what hours they want to work. They tell us. Then, we hold them to that.”

The company also has capitalized on a state-funded apprenticeship program that, through partnerships with schools, brings teens into the workplace as welders, assemblers, and small equipment operators.

In North Bloomfield, Ohio, Kenny Kuhns, owner of Kuhns Mfg., is less distracted by these industry challenges but concerned about where it all might lead. The company had 37 employees in early 2020 and has 65 today. It has suspended its just-in-time inventory management philosophy to create a cushion between what’s in the warehouse and what they’ll need on the production line.

“Your losses with no inventory are much higher than your cost of high inventory, so this is the way to do it,” Kuhns said, “but how is it going to look as the market comes back into balance? ”

You can hear more from Lee, Lassanske, Kuhns and others in this issue of Ag Innovator. They are among member executives who contributed to a conversation about what’s facing the industry and how their company is responding.

Full disclosure: You will not find the solutions to your problems on these pages. You will though be reminded that you are not alone in facing them. You may also pick up a tip that could work at your plant or read a thought from a member that leads you to your next thought.

That is one of the immeasurable values of membership in this Association. We want to help one another. And, we’re smart. When we communicate—at conventions, during phone calls, through publications—we move forward collectively.

“What are we going to learn through this season,” Kuhns asked. “It is a season. We will correct it, but how are we going to come out different and better?”

It is a fantastic question. This season might lead to more plant automation. It might lead to a more robust domestic supply chain. We may emerge with models to cross train employees or more versatile production capabilities. I don’t know.

What I do know though is I can get a clearer picture of what’s ahead through conversations with you. Please engage with the Association however you can. You will find something that helps you move forward, and you will say something that moves someone else forward, too.

Matt Westendorf | Association President | Westendorf Manufacturing

Many of you serve farmers or serve dealers or distributors who serve those farmers. In either scenario, knowing how farmers think and act when researching parts and equipment could help you decide how to market your products and ultimately propel your business.

Spindustry teamed up with attitudinal researchers at Audience Audit earlier this year to learn from more than 750 farmers across the U.S. and Canada what their thoughts and preferences were during the process of shopping for farm equipment and parts. The results of the study were first unveiled at Supply Summit 2021 in Kansas City. We share key findings in this issue of Ag Innovator and offer suggestions on how to optimize your online presence.

Predictable (and Sometimes Surprising) Findings

While you can likely guess the internet plays a role in farmers’ decision-making, how different groups use the internet and when they choose to not use the internet may surprise you. If you are a manufacturer or distributor planning digital and marketing strategies, this real evidence will help you make informed decisions.

Our research identified three groups: those loyal to local businesses and services, online optimizers, and those focused on savings. While there were differences, there were also many commonalities across groups.

Here’s what we learned:

• Farmers start with search engines and websites regardless of whether they intend to buy online.
• While the Internet was No. 1, more than 50 percent of respondents reported using print catalogs and YouTube to research products. This is an interesting blend of old- and new-school methods of information-gathering. Combining the two by using QR codes in catalogs that drives people to your YouTube channel could maximize both platforms.
• Producers used social media to shop only 14 percent of the time. We believe social media is still an important tool for brand-building, but when a farmer needs a part, they are not going to social media during the research process.
• When farmers buy something from you online, 86 percent of them likely will buy from you again. While we can already make the case that Google ads and other digital methods have better ROI than trade shows or other traditional methods in many cases, this finding on repeat purchases reinforces that these methods pay off. Consider the lifetime value if someone who buys from you once is statistically almost certainly going to buy from you again.

These findings, as well as session discussion, served as a launch point for these broader insights:

Give Dealers What They Need to Market What You Sell

Dealers and distributors need manufacturers’ support for e-commerce. Just like endcap displays and catalogs helped in the past, dealers need manufacturers to support their e-commerce sites.

Our research tells us that farmers want schematics, make/model details, information about what machines fit with the product, quality photos, and technical specifications. Often the manufacturer does provide this information in an electronically importable format (An Excel file is useful; a Word document is not, because its content cannot be imported into a database). Providing this information to your dealers should be a priority.

Think about Search Terms

About 50 percent of visitors to your web site will use your search bar rather than navigate your site. Your site should have a search tool, and you should be recording both what terms the searchers entered and what results that term generated.

If you know that people are searching for “hoses,” and your site has hoses but is not presenting those products in response to searches, it may be because the word “hoses” is not in the product name. Maybe the name is just “hose” or simply a number or branded name. Either way, you are at risk of losing a customer. If you have information about terms and results, you can add keywords or rename products to get the right results to appear.

This process also helps you learn your customers’ vocabulary, which you can use in both online and traditional marketing. Optimizing on-site search is one of the single most important tactics in continuing to prosper in the farm equipment marketplace.

Learn More

Spindustry, Audience Audit, and Fastline Marketing Group are conducting another round of research now to learn more about what dealers and distributors need from manufacturers to most effectively sell their products. We will present data at the Marketing & Distribution Convention in Oklahoma City in November.

Some of Spindustry’s clients have had as much as 50 percent of marketing and technology projects paid for by government funding. This is a grant program (no payback required!) from Trade Adjustment Assistance for Firms designed to cover digital marketing expenses. Find out more at

Michael Bird is CEO of Spindustry, which focuses on e-commerce, web application development and SharePoint/Office 365 solutions. Learn more at .  See more about the Farmer’s Buying Journey study at .

The headline for this story refers to an Old Testament passage in which the prophet Isaiah hears the Lord ask: “Whom shall I send, and who will go for us?” With what we are left to believe is a quick response, Isaiah responds “Here am I, send me!”

Those of us whose incomes are dependent on the success and longevity of American agriculture might hope some of our fellow aggies hear and respond favorably to a similar call from Washington. 

This year, we are expected to conclude a three-year period during which more federal government support has flowed to farmers than in any similar length of time in the United States’ brief history. The return of $15 soybeans and flirtation with $8 corn has us giddy—although such prices could already be down by the time you read this. Or, they could go higher. (I heard someone say he was waiting for $17!)

Power has been restored, gas is flowing again, government aid has flowed freely to families that are very likely to spend at least some of it on food, the bank’s money is cheap, and ag equipment makers are experiencing demand unlike anything in modern history. 

At the same time, workers are hard to find for everyone, supply chains remain stressed, and we can’t seem to decide if COVID is over. Some rain wouldn’t hurt (as of late May), foreign demand for commodities remains hard to predict, and there is a feeling that inflation is prowling just outside. 

It is a “best of times, worst of times” kind of feeling. 

What has any of that got to do with an Old Testament recruitment ad?  In my opinion, everything. Let me explain. 

With the exception of the weather, every circumstance mentioned above is inextricably linked to some form of current or former government intervention.

I am fond of saying that one of the primary determinants of agricultural success in the U.S. is government policy. Let’s face it. It picks winners and losers, instills mandates and decides when to waive them, dictates many of our international marketing opportunities, drives our health care and education costs, regulates what we apply and when we apply it, and is rumored to have a thing or two to say about what energy we develop, deploy, and consume.

For those who want to debate the waxing or waning of the “era of big government,” they might want to speak with an agribusiness owner first. The people who are “here to help” are everywhere. 

So, who is making the decisions? With agriculture and agribusiness being a top five industry in over half of our states, surely we are well represented in Congress? Well, it depends on whom you ask. I can argue it either way.  

The Congressional Research Service recently updated profiling the membership of the current Congress. Not surprisingly, the report points out that “the dominant professions of [Congressional Members] are public service/politics, business, and law.”

I was surprised to see in the report there are 27 farmers, ranchers, or cattle farm owners in Congress (six in the Senate, 21 in the House). With slots for 435 House members and 100 Senators, it appears that, as a percentage, farm owners make up about 5 percent of the overall elected officials class in Washington, D.C. 

Another way to count farmer noses on the Hill is to check the USDA subsidy database. In October, the Environmental Working Group reported that 33 members of Congress and their immediate family members collected farm subsidies between 1995 and 2020. This is in no way an endorsement of EWG’s data, but those numbers appear to corroborate the CRS data.

One could easily argue that farmers are overrepresented in Congress. They make up about 5 percent of the membership but constitute only slightly more than 1 percent of the total U.S. population. But before you crow about that, you should know that 5 percent figure actually marks a steep decline in farmer representation since the end of World War II.    

A progressive leaning thinktank called the Brookings Institute and a conservative leaning one called the American Enterprise Institute jointly publish a document entitled which has tracked the professions of Congressional members over the past 70 years.  In 1953, the House had 63 members whose occupation before being sworn into Congress was agriculture, while the Senate had 21. Converting the numbers for that Congress to a percentage, it was more than 15 percent agrarian. 

The clearest trendline here is that farmer participation in the Congress is in decline, even if we are still holding our own.

The shrinking number of aggies working under the dome has been felt in ways other than just the raw data. A prominent agriculture lobbyist told me earlier this year that the House Agriculture Committee had to actively recruit members to join the Committee. There are 47 slots to fill on the House committee alone, so even if all the farmers joined it, they’d have to recruit more than two dozen more.

In the Senate, members still mostly appear to jockey to join the Committee, which is why there were some raised eyebrows when the Committee welcomed its first vegan this past January. 

It is worth mentioning that this is a bi-partisan concern. Washington “think” tanks—which will absolutely never be confused with “do” tanks—on the right and the left offer one ignorant proposal after another in the agriculture space. Neither side has a monopoly on good ideas, and both often make recommendations based on misunderstandings or bumper sticker slogans.

The point here is that much is said of big agriculture and its grip on Washington. And farmers have, in recent history, punched above their weight. But the forecast is not promising. With aggies making up a smaller and smaller portion of the American electorate, a similar fate likely awaits their participation percentage in elected office.

But it doesn’t have to be that way. Farmers are generally highly regarded, known in their communities, and are probably owed a few favors by all the folks they’ve pulled from ditches or given hayrides over the years. Our farmer and agribusiness associations should offer resources for agriculturalists willing to explore public office, and those of us with checkbooks should step up to support them when they do. 

To come full circle, in the passage referenced at the outset, Isaiah was ultimately called into some serious duty. With the support of those across our profession, hopefully we can find folks willing to answer the “whom shall I send?” call. The future of ag policy depends on it. 

Ray Starling has been the general counsel for a state department of agriculture, a staffer on the U.S. Senate Ag Committee, and Chief of Staff to a U.S. senator. He joined the White House in 2017 as special assistant to the president for agricultural policy. In 2018, he became chief of staff for USDA’s Sonny Perdue. He returned to his home state of North Carolina as general counsel to the state’s Chamber of Commerce. He spoke at the Supply Summit in Kansas City this year.

It’s been a season of harrowing news for U.S. cybersecurity. In December, we learned that a group of hackers—almost certainly Russian agents—infiltrated SolarWinds, a Texas-based IT firm, granting it access to nine federal agencies and a growing list of private companies. Then, in March, another breach: this time it was Microsoft, which announced that Chinese hackers had exploited vulnerabilities in their Exchange email servers, compromising hundreds of thousands of organizations’ data. Add to this the ransomware attack in May that caused the disruption of the largest energy-pipeline system serving the East Coast.

These cyberattacks have unnerved experts because of their size and scope, but also because the first two were launched from within the United States itself—on servers run by Amazon and GoDaddy, among others—allowing the hackers to bypass the government’s warning systems, which are legally prohibited from surveilling domestic networks. (It was FireEye, a private firm, and not the U.S. government cybersecurity organizations tasked with the defense of networks or identifying the activities of cyber actors—like the DHS, FBI, NSA, or U.S. Cyber Command—that discovered the breach at SolarWinds.)

The attacks have led some to reconsider the relationship between government and industry when it comes to protecting against future attacks.

“What this shows is that you can’t build a strategy around ‘the government will take care of itself, and the private sector will take care of itself, with some level of collaboration between the two,’” says , a retired four-star admiral who led U.S. Cyber Command and the National Security Agency. “That has largely been the strategy to date, but that approach isn’t optimal, and our adversaries are taking advantage. They’re adapting, and we’re not keeping up.”

President Biden recently announced an  mandating that any software vendor that serves government agencies must adopt a range of security measures, including data encryption and multifactor authentication. They must also immediately notify the federal government of any breaches.

For Rogers, a senior fellow at Kellogg, this is a good start, but there’s still plenty that could be done to bolster cybersecurity across the public and private sectors. “It’s not about collaboration,” he says. “It’s about integration. The only way to defend ourselves in real time is to work together 24/7. That way, as either party comes up with potential cyber activity, we can respond in real time, not weeks or months later.” In the case of SolarWinds, the hackers were in the networks for nine months before they were detected.

So what should businesses leaders understand about their role in this new era of enhanced cyber-vulnerability?

Here are four lessons they can draw in light of the recent threats.

1. Create a culture of proactivity and accountability.

Having served as a commander in charge of the Department of Defense’s cybersecurity operations, Rogers sees a number of lessons business leaders might draw from the military’s experience. But ultimately, they boil down to this: be proactive.

“Don’t assume that a nation state has no interest in targeting you—they’ll target anyone they believe has something of value to them, and you may also become an unintended victim,” Rogers says.

Given the amount of risk involved, it’s critical for organizations to deliberately and methodically think through how they can protect themselves and how they’ll respond if they believe they have been targeted. “In the military, we would invest time, resources, and personnel to anticipate potential threats. We’d perform regular exercises, simulating a state actor penetrating our networks, testing for vulnerabilities. Our motto was ‘plans are nothing, planning is everything,’” he says.

Exactly what such exercises or simulations might look like will differ from one organization to the next. But a good step for all companies is to create a culture of accountability.

“It’s amazing how accountability can influence people’s behavior,” he says. “And since cybersecurity is everyone’s issue, it’s important that leaders and organizations hold themselves accountable for protecting critical networks.”

In part, this means that all leaders—even those who are not tech savvy—need to take responsibility for guarding against significant hacks.

“I sometimes hear my peers say, ‘I just don’t know much about cyber.’ But you’d never hear a CEO or a Board member say that about finance—even if that they had never been a CFO. Nobody would ever say, ‘Hey, I’m not a money guy.’ It’s the same way with cybersecurity,” he says. “Its fundamental to the way every company works.”

2. Know your digital supply chains.

A key part of being proactive is knowing your digital supply chains. Just as a toxic product can make its way through a physical supply chain, corrupted code can have an enormous ripple effect.

It’s important to recognize that hackers are “using the very structure of the internet against itself,” says Rogers.

Consider the regular software update, which is what hackers exploited in the SolarWinds breach. By corrupting the code of SolarWinds’ software update, the hackers were able to spy on client companies like FireEye as well as large swathes of the U.S. government, including the Department of Homeland Security.

“We created this whole system with the idea that downloading software was a good thing—it increases functionality, security. Our ability to download software whenever and wherever we want is central to our economy. The problem is that also means that everyone’s potentially at increased risk—and business leaders should recognize that.”

This makes it increasingly important for companies to be cognizant of which vendors they are partnering with, and what products they are downloading.

“Supply chains take on a whole different meaning in this hyperconnected digital world,” Rogers says. “You want to be sure controls are in place to avoid corruptions or viruses all along the chain. Where are you getting your software? Who’s writing it? Who’s verifying it? Where is it coming from? We don’t tend to think about software when we think about supply chains, but it’s clear we’re going to have to.”

It would also behoove companies to spend more time assessing threats to their operational technology. With more firms automating parts of their manufacturing process and expanding their ability to remotely access parts of their infrastructure and production lines, there’s a growing dependence on having to secure this from exploitation.

Last year,  was blindsided by a major ransomware attack that disrupted internal computer networks and shut down global production lines. And there’s growing concern that criminals or state actors will continue to threaten factories and power grids or energy distribution.

“The more functionality you automate, the more risk you take on,” Rogers says.

3. Build cyber-resilience.

In the past, cybersecurity was designed as if to protect a castle. The goal was to keep the network safe behind high walls and deep moats—in other words, to “secure” the perimeter.

Today this is nearly impossible, in part because of the sheer number of devices connected to each network, and in part because, after COVID, we have all grown more comfortable with accessing work data from home.

“We’ve blown up the perimeter,” Rogers says, “and our digital footprint is now a blur between business and personal life. This is further exacerbated by the ‘internet of things’ and the drive towards more connectivity.”

Given there’s now a better chance that an adversary will “get inside” an organization’s network, companies should focus more on building “cyber-resilience”: processes and mechanisms that allow them to keep functioning in the event of an intrusion.

For example, companies should make updates to their networks randomly and quietly, making it more difficult for adversaries to anticipate their cybersecurity activities. Other steps for increasing resiliency include having a current and accurate understanding of the network topology; aggressively monitoring activity on the network; building backups and redundancy for critical infrastructure; and minimizing the connections between the business segment and operational segments within the company’s IT structure.

And, of course, companies will also need to have a detailed process in place that allows people—including the leadership team—to respond quickly if confronted with a cyber event.

“The Defense Department can’t shut down for a week to secure its network, and most businesses can’t either,” Rogers says. “So a good strategy will involve not just walls and moats, but a nimble defense in the event someone gains unauthorized access.”

4. Prepare to cooperate (yes, even with your competition).

One of the major challenges with improving cybersecurity is that companies often don’t want to admit they’ve been compromised. But cooperation across industries is essential for protecting against attacks.

“Even as they compete with each other, companies need to partner in areas that represent a major risk to their industry as a whole,” Rogers says, pointing to the example of banks in the wake of the financial crisis.

Here is where the government might be able to play an important role in managing cybersecurity risks, just as it has for many years in managing aviation safety. As a nation, we’ve decided that the risk of injury or loss of life from aviation accidents justifies the existence of a government agency, the NTSB, whose job it is to investigate the cause of any aviation accident to determine what caused the accident and then identify the actions necessary to ensure it never happens again. After a crash, an airline or the aircraft manufacturer can’t pretend it didn’t happen or not acknowledge the event, citing proprietary information, or chalk it up to bad luck. In each case, all the parties involved must share company data, training and personnel records, and the maintenance history of the plane. Regulators must also be granted access to the crash site.

“There’s a reason why aviation mishaps don’t tend to recur,” Rogers says. “They tend to be unique incidents, and that’s because there are constant changes and updates to safety protocols, manufacturing standards, software configurations, training requirements, and maintenance protocols.”

In this sense, the NTSB is one potential model for future cybersecurity efforts. But businesses will need to accept the trade-off between protecting their networks and sharing information. The price of corporate reticence is that industries don’t learn the details of how exactly a hack was conducted, which means the same nefarious actors can keep using the same techniques.

“How many major cyber events will it take before we decide to make fundamental change?” Rogers says. “We have to overcome this challenge, or we’ll keep having these major events.”

in Kellogg Insight. Reprinted with permission of the Kellogg School of Management.

Andrew Warren is a writer based in Los Angeles. Michael S. Rogers is an adjunct professor with the Kellogg Public Private Initiative; Senior Fellow.

Editor’s note: This article was written before the cyberattack on meat processing plant JBS.

Thanks to the CARES Act—and subsequent stimulus programs—there are still a few great opportunities for you to get the government’s help to find, pay and provide perks for both new and established employees.

Here’s the bonus: you can go for this funding even if you didn’t have such a bad year in 2020.

Help Employees Pay Down Student Loans

Prior to the pandemic, employers have been allowed to deduct as much as $5,250 per employee per year to pay for their education expenses, regardless of whether that education was training for your business. Not only that, but those same employees wouldn’t have to declare this benefit as income—so it is tax free to them and a tax deduction for you, the employer.

That has changed due to the recent stimulus legislation. Through 2025, you can use that same amount to help pay down your employees’ student loans.

Why is this a big deal? Because if there’s one thing many of these younger workers have in common, it is that they’re shouldering a massive amount of student debt from their college loans—as much as $1.6 trillion according to . Younger workers (the millennial generation is now the largest generation in our workforce) are desperately in need of help to pay down this debt. Including this kind of assistance as a benefit simply makes your company more competitive to job seekers.

Another Big Help: the Work Opportunity Tax Credit

This credit, which is an amount you take against the taxes you owe, has also been extended through 2025 and, if used the right way, will not only save you big money on hiring new workers but also help you provide a hiring bonus to entice that skilled person away from a competitor.

Before you hire that new worker, get together with your accountant, do the math, and fill out the to notify the federal government and your state. If that worker is a veteran, coming off welfare, coming out of prison or—most relevant today—returning to work after long-term unemployment (defined as six months or more), you can get a credit of up to $9,600 per hew hire. If you don’t use it, you can carry it forward.

This is a great hiring tool to help you pay for those new people. It takes a little planning, but if you’re on top of it, you’ll see a big benefit.

Potentially Huge Cash Payment: the Employee Retention Tax Credit

To take advantage of the ERTC, you need to show that you were affected by COVID in any quarter of 2020 or 2021. What does that mean? It means that if you were shut down, or even partially shut down (like sending your employees home) during that time because the government required it, you’re eligible. Or, if your revenue decreased more than 50 percent in any quarter of 2020 compared to 2019, or 20 percent in any quarter of 2021 compared to 2019, you’re also eligible.

If you’re eligible, you can claim up to $10,000 of wages per quarter (in 2021) per employee as a credit against the payroll taxes you owe or paid during that quarter. The credit is smaller for 2020, but you can still go back and apply for it.

Best yet: It’s refundable! That means that if the credit is more than the taxes you owe, the government will give you a check back. The credit is available through the end of the year.

I realize that many farm equipment manufacturers held their own through the pandemic, but even so, you may be in the running. If you are, this is potentially big money to help fund your business, or perhaps return the savings to your employees in the form of higher perks or compensation to retain them during this tight labor market.

A Giant Forgiveness Program from the SBA (No, It’s Not PPP)

Forget about the Paycheck Protection Program. Instead, ask your about Section 7A or 504 loans. Yes, you have to go through an approval process with your bank, but these loans can be up to $5 million and range in maturities up to 15 years. Interest rates are competitive.

And, there’s a big benefit, thanks to the CARES Act: If you get one of these loans, your first three months of principal and interest are forgiven—wiped away. 

You don’t have to prove that you were affected by COVID, either. You just need to get an approval from your banker, whom the federal government offered an incentive to encourage distribution of these loans.

Here’s the people tie-in: you can use the proceeds for working capital, like hiring, compensation and operations. One other thing: if you have an existing 7A or 504 loan, you’re also entitled to three months of forgiveness, so talk to your banker now.

The program expires in late September.

The Government Wants to Help You Set Up a Retirement Plan

Prior to the pandemic, a new law went into effect that got overshadowed, but it’s important you know it.

It’s called the SECURE Act, and it has four big things in it that will help you provide benefits for your employees.

The first is that the government will pay you in the form of tax credits (if you have fewer than 100 people) up to $5,000 to set up a new 401K retirement plan for your business. The second is that if you have an existing 401K, you’ll get another $500 per year back in tax credits from the government for three years, simply by making employees automatically enroll in it. (They can still opt out).

Employees are not forced to withdraw their retirement savings until the age of 72 (previously it was 70 1/2), which may give some of your senior people more time on the payroll. Finally, you can join with other companies to form a multi-employer retirement plan to cut costs.

These changes are big. Why? Because, according to many studies, retirement plans are among the top three most requested benefits, so you’ve got to offer something.

Plus, the country is in a retirement crisis. According to research from , households approaching retirement had average savings of just $144,000 in 2019, an amount that would provide a couple with only $570 per month in retirement.  The Center also found that about half of workers participate in either a defined benefit plan or 401(k) plan, a percentage that has remained constant for decades.

Offering a retirement plan not only makes you competitive, but it relieves a potential long-term financial issue by helping your employees when they reach retirement. It’s just good business.

Labor is tight this year, we all know that. There’s no silver bullet to finding and keeping good people. But my smartest clients are using a combination of benefits and compensation strategies to deal with this problem. And many of them are taking advantage of these government programs while they last. You should too.

Gene Marks writes about small business, public policy, and technology for several publications, including The Hill, Forbes, Entrepreneur, and the Washington Times. He will speak at our Marketing & Distribution Convention in November.

When an employee requests time off because of an illness or injury, various laws and employer policies may be implicated. Setting aside state leave laws (if any), three laws represent the primary considerations for management administering requested leave: the Family Medical Leave Act; the Americans with Disabilities Act; and workers’ compensation.

The Family Medical Leave Act (FMLA) is designed to permit qualifying employees up to 12 weeks of unpaid leave per year in various situations, including the birth or adoption of a child, the serious health condition of the employee, and the serious health condition of a family member of an employee.

During FMLA leave, employees must be permitted to continue benefits coverage on the same terms as working employees, and employees must be reinstated to the same position upon their return from leave. The FMLA permits various forms of leave, ranging from an uninterrupted period of time (e.g., two months), periodic leave (e.g., every other Monday) and, most frustratingly for employers, intermittent leave (e.g., unpredictable days for impairments with flare-ups, such as migraines). With very few exceptions, the FMLA does not permit employers to consider the business impact of a requested leave of absence; therefore, if an employee qualifies, the employer generally must provide the leave.

The Americans with Disabilities Act (ADA) requires employers to accommodate employees with disabilities. The definition of a “disability” is expansive and includes most physical and mental conditions that are not inherently temporary, such as a flu or a broken arm expected to heal. The ADA requires various forms of accommodations, one of one which is an unpaid leave of absence.

However, unlike the FMLA, the ADA only requires accommodations that are “reasonable.” Thus, an accommodation analysis considers not only the employee’s need but also the employer’s capacity for providing the accommodation. Past practice frequently is part of the analysis, so be cautious about allowing leaves to one employee if you would not want to provide that leave to the employee’s peer.

Workers’ compensation is designed to pay employees who are injured on the job. In this sense, it is narrower than the FMLA and ADA, which apply to impairments and illnesses that go beyond the workplace. Furthermore, workers’ compensation, as its name suggests, is focused primarily on compensating employees for lost wages and the “value” of their injury, not returning them to the workplace.

Consequently, workers’ compensation does not mandate leave as much as it implicitly encourages employers to return employees to work, even in a reduced capacity, to minimize the income loss and insurance premium spike associated with the claim.

While these laws have different goals and impose different obligations, they occasionally overlap. The starting point of a leave analysis should always be the FMLA. If an employee qualifies for FMLA leave, it does not matter whether the leave is reasonable (ADA) or whether we would prefer the employee return to work in some capacity to reduce income loss (workers’ compensation); we must permit the leave.

If an employee does not qualify for FMLA leave, we must still consider whether the need for leave stems from a disability, and if so, whether the leave of absence would be a reasonable accommodation under the ADA. This analysis often arises when:

• An employee has not worked for the company long enough to qualify for FMLA leave (12 months and 1,250 hours in the past year),
• The employer is not large enough (50 employees) to be covered by the FMLA, or
• The employee has exhausted his 12-week FMLA entitlement but still cannot return to work. (Yes, that means that the ADA sometimes requires a leave of absence beyond three months.)

If the employee’s absence is caused by a workplace injury triggering workers’ comp, we might also consider whether we would be best served by offering a light-duty position to minimize his wage loss. If an employee is out on workers’ comp and is also eligible for FMLA leave, ensure that the employee completes FMLA paperwork so that the time off counts against the employee’s 12-week entitlement. If we offer the employee a light-duty position and he accepts, the FMLA clock stops, as he is no longer on FMLA leave. If the employee declines light duty, your workers’ comp exposure (or premium hike) may be reduced.

Navigating these three laws can be tricky, but this analysis is made easier by starting with the FMLA before reaching the ADA and workers’ comp. Please feel free to contact us to walk through any thorny questions about leave.

David James and Joe Schmitt are shareholders in the labor and employment group at Nilan Johnson Lewis. Association members are entitled to no-cost, 60-minute, confidential consultations with James and Schmitt. The benefit renews with each question.

The drumbeat of challenges facing shortline manufacturers has intensified these past weeks: stalled shipments, rising prices, impatient customers, and a bonus federal unemployment payment that may create an incentive for workers to stay home.

Executives from member companies took time in late May to talk to Ag Innovator about their biggest battles and how they’re faring in the fight. These summaries of our conversations blend a few direct comments with paraphrased content.

Kenny Lee, Purchasing/Engineering Manager, Landoll Company

What’s your biggest problem?

Our biggest headache right now is logistics—trucks, container shortages, getting containers on ships to get them from overseas. The whole freight system is a mess. We had a shipment that was on the water for more than four months. It normally would have taken six weeks. It is tough to plan for something like that.

Suppliers continue to push out lead times, and it seems like price increases come with each purchase you send them. And then there’s raw steel. The price just keeps going up.

In 16 years, I have never seen anything like this. I have never seen lead times as a whole look like this. I have seen maybe a certain product in the past, but this is every product.

What do you think is driving it?

I think part of it is related to the pandemic, but I don’t believe that’s all of it. The economy is growing. There is a lot of stuff being produced and sold worldwide right now. That is going to cause huge supply restrictions across industries and of course across product lines in this industry. We are certainly seeing it in all our product groups.

I think the missed forecasts we’ve seen on steel are a good indication that economists and analysts don’t have a complete grasp on all the forces driving this situation. There was a widespread belief that steel was going to go down in April, and here we are.

Do you have any supply chain tricks to ride out this volatility?

No, the rabbit in the hat is dead. There are no tricks.

We saw this coming in August and started to broaden who we were buying from. That has probably saved us from stopping production on any of our lines. We’ve had a lot of stressful days in our department, and we are not near done with them. In fact, I am not sure we are to the peak of them. We have had to think creatively and stay on top of it.

Do you have the employees you need?

We would hire another 100 people today if we could. The labor situation is horrendous. In fact, when I’m talking to suppliers, I don’t hear COVID so much as I hear labor shortage.

Steve Sukup, President and CEO, Sukup Manufacturing

What is most on your mind?

Our biggest concern is inflation. It is coming. When steel prices double, when rubber prices double, when energy goes up 30 percent … There is not a sector that is not getting hit with double-digit increases. When inflation shows up, and the Fed has to raise interest rates, that’s going to influence things.

What are you seeing in the supply chain?

Last year, we were concerned when the lockdowns started, but if suppliers said it was coming, it arrived. Since February, delays have become a bigger problem.

We’ve gotten letters from suppliers that say “If we haven’t shipped your order within the next 10 days, we will be instituting a surcharge, even if you have it on order.” They are paying new prices, and even when they say we are going to increase in 10 days, they don’t know by how much.

The Section 232 on steel tariffs is hurting us. We have always bought U.S.-made steel, but when the tariffs happened, U.S. companies raised their steel prices. This is the most extreme I have seen.  Back in 2006, we saw that steel mills started to run out of their supplies. The difference this time is that they are not running out of supplies, they are restricting capacity. They’ve decided to produce less to sustain the pricing.

We are managing inventories. At the end of the season, we don’t want to get caught with expensive inventories, either. We need to balance what we are bringing in with what we manufacture and sell, and we need to do that in a way that we can sell it to our customers for a fair price while we get a fair price for it. That is something the team has to manage, and we have a handle on that.

Is the labor problem at Sukup the same as it is in most places?

Yes. If we could hire 70 people, we would put them in place today. We have some frustrated customers out there, because they are used to getting what they want on time. We are focused on putting the right people in the right places to keep things moving.

Kenny Kuhns, owner, Kuhns Manufacturing

What is most on your mind?

We are a young company experiencing growth and expansion. This is our fourth year of 30 percent growth. The expansion has been in our physical space, our inventory, and our workforce. We had 37 employees at the beginning of COVID and have 65 now. I am asking at what point might we be expanding into a bubble.

That is an extraordinary increase in labor. How did you do that?

We do not have an issue with people, which I know is rare in this time. We have a good labor force and good reputation in the community as an employer.

What are your strategies for navigating supply chain?

There’s no strategy, really. This is a time when loyalty to vendors has been valuable. Someone who had six vendors for one part may also have had some advantages.

We have learned we have to communicate with vendors much more frequently than we did in the past. They are losing people because of the stress, and so their tribal knowledge is diminished. Our regular reliance on software to trigger purchase orders does not work anymore.

We have had disruptions for sure, but it has not been horrible.

It has certainly challenged our use of lean principles. We have done the whole lean experience—we have kept a low inventory and lined up our suppliers to bring things just in time. Obviously, that’s not working right now. With steel, we used to keep a low inventory, and we actually probably have six to eight times as much steel in house as we usually do. Your losses with no inventory are much higher than your cost of high inventory, so this is the way to do it, but how is it going to look as the market comes back into balance?

What’s your take on the state of the industry?

Well, commodity prices are going to drive much of what happens next. We’re all watching that. In agriculture, we have had such a contraction these past years that it created a vacuum. That led us to this market and questions about inflation: How much I can bear, and how much can my customers bear?

The problem with shipping containers coming to the United States empty is complex, too.  I would love to see us bring more manufacturing to the United States, but we have a labor problem that limits that. Suppliers do not see it happening.

Maybe we have been caught flat-footed as manufacturers. Maybe we needed more automation. Even with automation though, you need people, of course. Maybe the work opportunities become better with automation.

What are we going to learn through this season? It is a season, we will correct it, but how are we going to come out different and better?

Todd Lassanske, General Manager, McFarlane Manufacturing

What’s your biggest challenge?

For us, it is labor.  Our backlogs are more than 10 times what they were a year ago. We are at a point where we are turning away orders for our structural steel customers so we can direct more effort to ag orders. Our inventory is not our most significant issue. Our problem is too few people.

Our workforce was fairly stable throughout the pandemic. When orders started picking up, we put together a plan to add people. It is plus one, minus two, plus one … When people can make more money sitting at home, it’s tough.

Any lessons learned on how to find and retain employees?

The labor challenge isn’t new for any of us, but the pandemic certainly escalated it. You can’t just flip a switch and solve the problem; you have to build a culture. I’d love to say we have it all figured out, but we are working on it. It is a collective cultural effort with–and for–a great team.

We have done a lot of things to recruit good people while also taking care of our current team. The challenges our existing workforce is up against are real. We are typically busy in the spring and fall, and usually get a break in the summer. Unfortunately, we are asking a lot more of our team members this summer, and I am concerned about their well-being, burnout and related fallout.

We have used sign-on bonuses, introduced higher wages, and promoted our referral bonus. Our most creative strategy has been to offer a flexible schedule. We asked our team members what hours they wanted to work. They told us, and we held them to that.

They picked their 40 hours between 5 a.m. and 4:30 p.m. Monday through Friday.

As our orders have increased, we have gone back to them and said, “How would you orchestrate a 50-hour week, and can we introduce those hours?” 

As a result, we are adjusting schedules as preferred by our team. It hasn’t solved all of our labor problems, but we’re being transparent with the challenges we face, and it keeps our whole team engaged in finding solutions.

We have also had a promising response from a youth apprentice (YA) program. Numerous team members this summer are high school youth apprentices or college interns.

The YA program is supported by the (Wisconsin) government and operates through school partnerships. It allows a 16-year-old to come in and operate everything outside of a crane or forklift. They contribute significantly as they weld, assemble, and operate smaller equipment.  Since implementing the YA program, a majority of youth apprentices have become regular team members following graduation.

Three of our apprentices are graduating this summer, and we’re offering to pay for their next level of education. Two are welders going through an associate’s program. One is in construction management, which is a four-year program, and we are paying not quite half of those tuition costs.

How have you avoided some of the bigger headaches in the supply chain?

Relationships are key. We have had a few potential hiccups and continue to be proactive by working closely with our suppliers. We secured a significant percent of our steel inventory six months ago. Our steel supplier agreed to sell to us at our current price and hold it for us. 

Because of our vertical orientation, most of everything we do–outside of hydraulics, wheels, and ground engaging components–we do here. We are in control of our own destiny that way.

We are getting pinched in the middle as our material prices continue to escalate, and our wages are escalating, we are not finding it reasonable to pass along those costs. We are trying to protect our customers as much as we can. They are facing their own levels of uncertainty and challenges.