Nebraska ag leaders define issues weighing on farmers

Source: By LORI POTTER, The Grand Island Independent • Posted: Tuesday, September 4, 2018

KEARNEY — The many issues currently affecting net farm income — low market prices, trade wars, regulatory limits on ethanol, a new farm bill — might be enough to keep crop and livestock producers up at night.

Farm bill

Hub Territory ag leaders say the House and Senate versions of a new farm bill are favorable to agriculture, but the concern is whether Congress will pass it before current farm programs expire at the end of September.

The next meeting of the 56-member Farm Bill Conference Committee is Wednesday.

“The bottom line for us is we have our crop insurance intact for both (versions,)” said Shelton farmer Deb Gangwish, who is on boards of the Nebraska and National Corn Growers associations. “… It was No. 1.”

A strong trade title also is important. “Now, more than ever, we need our folks to expand markets and maintain relationships,” Gangwish said.

Nebraska Farm Bureau President Steve Nelson, an Axtell farmer, said Farm Bureau emphasized five key farm bill points in a letter to the Nebraska congressional delegation: risk management, conservation programs that don’t involve permanent easements, growing trade promotion programs, health insurance for farmers and ranchers, and eliminating unnecessary federal regulations.

The issue holding up farm bill passage isn’t related to ag production. Gangwish said it is the work requirements for people to receive Supplemental Nutrition Assistance Program benefits.

North American Free Trade Agreement

President Trump announced last week that he will sign a free trade agreement with Mexico, but it’s still not certain if an agreement can be reached with Canada on a renegotiated NAFTA.

Nelson said Farm Bureau prefers a three-party agreement similar to the current NAFTA, although bilateral agreements with Mexico and Canada could work. “That’s a good start,” he said about the Mexico announcement. “… The most important piece now is to get the Canada part done.”

Those countries are U.S. ag producers’ closest trading partners, Nelson said, and also the largest for some commodities.

“Supply chains are so interwoven. The beauty is the unity in North America,” Gangwish said.

Tim Chancellor of Broken Bow, production supervisor for Thomas Livestock and Nebraska Pork Producers first vice president, said completing a new NAFTA will be beneficial, but it still will take a long time to manage the backlog of ag products affected by trade losses.

Tariffs and federal aid

Nelson said that because approximately 30 percent of gross revenues for Nebraska agriculture come from trade, it is important to the entire state.

He believes there are opportunities for bilateral trade agreements with the European Union and with Japan and other countries in the Trans Pacific Partnership, a now 11-country free trade agreement from which Trump withdrew the United States.

Restoring free trade with China will be more difficult and take longer than anyone would like, Nelson added.

“Every day that goes by, we run the risk of losing business and it’s very hard to get that back,” he said. “… The longer it takes, the more concern I have for our farmers and ranchers.”

Chancellor said 26 percent of U.S. pork is exported.

“If you take 10 percent out of exports, you have to consume 10 percent more here,” he said, explaining that producers are the only ones in the retail chain that can’t set their own prices.

Chancellor believes the current pain of renegotiating trade deals will result in better long-term agreements for U.S. ag producers. “It hurts when you’re losing money and trying to stay in business. It’s easy to think about today and not see tomorrow,” he said.

When asked about the $12 billion USDA aid package to help make up for tariff-related market losses, Chancellor said many in his industry will far exceed the $125,000 overall cap per producer or entity from the $8 per hog payment. Plus, only half of the benefit is available in the program’s first phase.

In a down market week, many pork producers lose more than the benefit offered. “If you lose $10 to $15 a head, it doesn’t take long to eat that up in a week,” he said.

Soybeans are the other commodity listed for a larger payment – at $1.65 per bushel.

That compares to 1 cent per bushel for corn. Gangwish said that is a “slap in the face” and the most favorable comment she’s heard from other corn growers is, “why bother?”

A University of Illinois study commissioned by the National Corn Growers Association determined tariff effects on corn prices at 44 cents per bushel, she said.

“I don’t think there is a farmer I know who wants this aid,” Gangwish said, “but there are farmers who need this aid to get through to next year. It’s not enough.”

She said the biggest positive in the aid package is $200 million to find new export markets.

Ethanol

Trade issues have had an effect on ethanol by mostly not allowing exports to be “as robust as they could be,” according to Nebraska Ethanol Board Administrator Todd Sneller of Lincoln.

Efforts to continue growing ethanol use at home have been crippled by the Environmental Protection Agency’s refusal to authorize year-round sales of E15, a fuel blend of 15 percent ethanol. Sneller said Trump supports the idea, but there has been no corresponding action.

Other roadblocks include Renewable Fuel Standard waivers former EPA Director Scott Pruitt gave 31 U.S. refineries, which reduced ethanol demand by approximately 2.5 billion gallons and the related corn use by 800 million bushels.

Sneller said a lawsuit recently filed in federal district court by the Renewable Fuels Association and Growth Energy wants EPA and the Department of Energy to make public information about the waivers, including refinery names, volume exempted and data used to meet “disproportionate economic hardship” criteria.

Sneller said that with near record refinery profits, claiming “economic harm is beyond the pale.”

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