It is great to be here together today for this meeting of the Agricultural Advisory Committee.  Thank you to all of the members for making the effort to come to the CFTC today.  It makes a difference to be here together to hear your thoughts.  Thank you Chairman Behnam and Brigitte Weyls for bringing us together to talk about important issues and challenges faced by our agricultural community.

When I walked around this morning to greet you, I was asked what would be the most helpful for me to hear today.  What I am most excited about is the opportunity to shine a spotlight on current issues in our agricultural markets that are central to the CFTC’s mission.  Recent market activity reminds us that the CFTC’s core obligation is to promote the proper functioning of derivatives markets.  That’s our job.  It is important that we do it well because agriculture is the lifeblood of our economy.

Our nation’s agricultural community is filled with true American heroes—hardworking families, and small—and mid-sized businesses, whose tremendous efforts put food on our tables, clothe us, and help drive our economy.  These heroes face unprecedented circumstances with the pandemic, supply chain issues, geopolitical events, extreme price volatility, and the escalating impacts of climate change.  Just one of those challenges would be tough, but together, all at once, they can feel insurmountable.  Now, more than ever, farmers, ranchers and producers need derivatives markets to work well for hedging and price discovery.  I am committed to ensuring that our markets work well for them—that the markets are resilient, transparent, and have integrity.

This summer, I had the wonderful opportunity to visit farmers and producers in Michigan and Arkansas.  On the Arkansas trip, I had the pleasure to be on the tour with Senator Boozman and Commissioner Mersinger.  We had a great time, and I very much appreciate Commissioner Mersinger’s ag background and experience.  I benefit from it.

On those visits, I heard about the difficult choices that farmers, ranchers and producers are having to make in the face of rising input costs and price volatility.  You can read about supply chain disruptions, but it takes on a much stronger meaning when you are standing on a farm hearing from a farmer about how a tractor part broke and there is no ability to get a replacement part.  Or hearing a grain producer talk about how the train company cut a major rail line to New Orleans, that the remaining trains do not always show up when scheduled, and that there are not enough truckers.  I learned that grain producers then have to store grain longer, and may not be able to accept additional grain from a farmer who then may have to drive longer distances to another producer, all at a time of rising fuel costs.  I talked to commodity traders who had become deep experts on the impact of Russia’s invasion of Ukraine, including the Black Sea blockade of Ukraine grain ships.

Universally I heard that margins are razor thin and continuing price fluctuations make the future uncertain.  This uncertainty is compounded by severe climate events, such as the drought that has lowered water levels on the Mississippi River to historic lows, disrupting the passage of barges carrying corn, soybeans and other crops downriver for export.  On my ag tours, when I asked how they were doing, farmers answered in terms of inches of rain that week.  I am sure many of you answer that question in the same way.  I want to hear from you about the challenges that you face and what you are doing to meet these challenges.

The good news is that our American farmers are resilient.  During my ag tours, I heard about new technology developed to enhance efficiency and sustainability.  I learned about research at the University of Arkansas into using drones to limit the use of fertilizer.  The drones would have thermal imaging to fly over a field to see the hot spots that needed fertilizer rather than the whole field.  This is important at a time of increased fertilizer costs.  I learned about research into microbiomes in livestock to help prevent disease.  I learned about sustainability efforts to make land more resilient to climate events.  I also learned about how distributed ledger technology is used to trace individual livestock from birth, and to limit food recalls to specific farms rather than when we used to have, for example, recalls of all romaine lettuce.  As the sponsor of the CFTC’s Technology Advisory Committee, I’m interested in understanding the applications of new and emerging technologies for our agricultural sector.

These types of initiatives reflect the ingenuity and resourcefulness of our American hero farmers, ranchers and producers, who are finding inventive, tech-forward ways to adapt to evolving conditions.  To support them during this time of challenge, the CFTC should always have top of mind how we can best ensure that agricultural derivatives markets they rely on are well functioning.

In these times of razor-thin margins and high volatility, the CFTC must make it a priority to ensure that commodity markets reflect the legitimate forces of supply and demand.  I can vividly recall being on the Crumbaugh family farm where Mr. Crumbaugh told me that he expected the CFTC to do its job to make sure that markets are free from manipulation and other distortions that could artificially raise prices.  He was not the only one.  I came back from my ag tour and recommended that the CFTC conduct deep-dive studies into trading in key commodities that have experienced significant volatility, starting with wheat, oil and natural gas.  We need to use the resources at our disposal—the authority, data, and expertise—to fulfill this core responsibility.

Conducting these studies and publishing our conclusions could bring confidence to markets and market participants that our agricultural derivatives markets have integrity, and are without manipulation or excess speculation.  We owe this to those hardworking families and small—and mid-sized businesses at the heart of our agricultural sector.  These American heroes must never lose faith that their interests are central—truly fundamental—to the CFTC’s mandate.

Thank you and I look forward to the discussions today.