By Blaine Davis Contributing Editor
Having just spent a week with my three daughters and six grandchildren on the beautiful Gulf Coast, sun, fishing, swimming, fun and games was had to the point of being nothing short of chaos. But now, Papa needs a quiet, relaxing vacation. While we steered this youngest generation to the beach and surf, it seems their electronic devices with gaming applications grabbed much of their time.
Being from a generation that barely knows where the on/off switch is on the laptop or phone, games involving those ones played with cards or on a board, like checkers or chess, is something I can understand. Searching my memory and not that of a hard drive, an opening position that requires a player to sacrifice a chess piece to gain an advantage over the opponent in the future was known as a “gambit.” Further in my recollections, that piece probably would be the lowly pawn. Ironically, when in college my fraternity brothers and I played a version, “give-away” chess with the object to lose the fastest by making nothing but sacrifices.
Arriving back in Kansas, I perused 10 days’ worth of mail to find an article in Farmers National Company’s Farm and Ranch Scene catching my eye with a title, “America’s Gambit and the Danger of Short-Termism.” Chace Daley wrote, “The price of oil had been rangebound between approximately $70 to $90 for an astounding 27 months, a ‘Goldilocks’ scenario for the oil and gas industry which led to a disciplined, but steady development with ultimately resulted in an increase of production of more than 10 percent over that time frame. The sentiment changed, however, on April 2, 2025, labeled Liberation Day. Within six days, the price of oil had dropped nearly 17 percent, below $60 per barrel. Natural gas likewise fell over 16 percent.”
Daley further wrote, “It became clear very quickly to industry participants that the Goldilocks existence of the domestic oil and gas industry was one pawn that the Trump administration was willing to sacrifice to better position the country for the long game. But what is that long game? What can it tell us about where the demand for oil and gas is going?”
As per Mr. Daley, two tenets of the long game are clearly discernible:
- A desire to onshore certain aspects of manufacturing to the United States to (a) make our economy more resilient against global risks; and (b) increase the share of our economy that is associated with producing things.
- A desire to create bilateral trade agreements that hold the U.S.’s counterparts accountable to a more level playing field to (a) protect domestic industry from unfair business practices, and (b) open international markets to more U.S.-made goods.
These two tenets highlight the danger of making decisions based on short-term reactions to a long-term strategic maneuver. Back on our farm and earlier this year, we made a decision that aligned with much of Daley’s thoughts. Our gambit was to sacrifice a pawn – in this case, significant present-year capital – to install an underground infrastructure to piggyback two irrigation wells with drastically varied outputs. Together, these wells will even the irrigation distribution across more acres for a long-game tactic.
In an era where underground water resources are depleting, and just finishing a crop-year with two back-to-back hailstorms that wrecked a promising wheat crop just weeks before harvest, making this “gambit” might appear questionable. Added to this challenge, a newly planted corn crop was necessitating planting twice, thus limiting yields and marketing opportunities. Moving forward from 2024, in this new crop year with the perennial optimism that is part of farming, we push our pawn into perilous territory as a sacrifice to the future.
The tenets Daley outlined were incontrovertibly bullish for the demand for oil and gas. Manufacturing and transportation of goods require fuel and power and, much to the chagrin of the alternative-energy zealots, it will primarily come from oil and gas. Bilateral trade agreements will further spur such demand and will likely include commitments to the export of U.S. liquefied natural gas. According to Daley, the game is afoot and the long game suggests a bright future for oil and gas. Thus, our message to our clients is simple: It continues to be a great time to own minerals in one of the few places in the world where free people can own them-right here in the United States.
Having just harvested a good wheat crop and looking forward to the same for corn with three center-pivot sprinklers running simultaneously, our gambit appears to be moving toward the long game. Aligning with Mr. Daley’s thoughts on the oil and gas industry and the long-term goals for bilateral trade agreements, can I now see a Goldilocks existence for my commodity prices?
