Farm Progress Show takeaways: ‘You can’t pay your bills with patriotism’

Source: By Donnelle Eller, Des Moines Register • Posted: Tuesday, September 4, 2018

BOONE, Iowa — U.S. Agriculture Secretary Sonny Perdue spent a day this week touring the Farm Progress Show, taking in some of the latest farm technology — and taking part in some political debate.

The U.S.’s growing trade war with China, the federal government’s $12 billion farm aid package and the future of renewable fuels were top of mind for many at the Central Iowa Expo grounds near Boone.

Here are three takeaways from the show:

Renewable fuel rally

About 100 farmers took a break from the show to attend an Iowa Renewable Fuels Association rally, protesting actions they say have destroyed ethanol demand.

Many wore blue hats reading, “Make the RFS Great Again,” referring to the Renewable Fuel Standard, the law setting the amount of ethanol and biodiesel that must be blended into the nation’s fuel supply each year.

Jerry Calease, a Waverly farmer, said federal waivers that excuse oil producers from using ethanol have destroyed demand for the renewable fuel and the corn used to make it.

“When you figure 2.25 billion gallons (of ethanol) are gone, that’s close to … 800 million bushels of corn gone,” he said.

That hurts corn prices and consumer prices, Calease said.

“I noticed a gallon of premium gas is $3.19 a gallon, and a bushel of corn is $2.94,” he said. “Something is really wrong, when we can take a bushel of corn and turn it into three gallons of ethanol. But one gallon of fuel costs more than that bushel of corn.”

Perdue told the crowd President Donald Trump has asked for action on year-round use of E15, gasoline with 15 percent ethanol, soon.

A long way to go

One display at the Iowa State University tent included weeds that are resistant to herbicides such as glyphosate, the active ingredient in widely used RoundUp.

Another display showed how far farmers needed to go to meet the state’s Nutrient Reduction Strategy.

The plan outlines the practices rural and urban areas can adopt to cut by 45 percent the level of nitrogen and phosphorus leaving the state and contributing to the Gulf of Mexico dead zone, an area the size of Connecticut that’s unable to support aquatic life.

Among the farm practices that will push Iowa to the goal — and progress to date — are:

  • 6.95 million of 10.5 million acres: Number of acres farmed without tillage, which builds soil health and better holds water, preventing runoff.
  • 760,000 of 12.5 million acres: Cover crops used over winter to better hold nutrients.
  • 50 of 120,000: Bioreactors and saturated buffers that help clean water coming from underground drainage tiles, which can act as a funnel that sends nutrients into waterways.

Trade war and emergency aid

Perdue, the former Georgia governor, said the president appreciates farmers’ patriotism in taking the financial brunt of the trade disruption that erupted this summer, but added: “You can’t pay your bills with patriotism.”

The federal government plans to spend up to $12 billion to help farmers hurt by trade disputes with Mexico, China, the European Union and other trade partners.

About $5 billion is slated to go to farmers in direct payments for trade losses.

Perdue said he hoped more trade deals will follow a U.S.-Mexico agreement announced last week.

Steve Shaffer, vice president of Audubon State Bank, touring the show with two farmers, said the real impact of the trade disruption hasn’t yet hit, since few farmers are selling grain into the low markets. It could be a different story at harvest.

Strong prices before the downturn should help farmers, Shaffer said, but they’re eating into reserves.

“At this point, we don’t anticipate taking any real steps,” based on concern that farmers are unable to pay their loans. “But it’s awfully early to say that with complete confidence,” he said.