If the U.S. Department of Agriculture’s (USDA) current forecasts are even close to being right and the nation’s politicians continue their year-long blood feud, football players won’t be the only ones on their knees in protest.
Commodity lows
Indeed, almost every piece of news out of USDA these days arrives wrapped in black crepe. For example:
- U.S. cotton production is up 23 percent over a year ago and global cotton production is up 10 percent. The bumper crop, USDA estimates, will deflate this year’s 83-cents-per-pound average price to 69 cents next year.
- Successful Farming’s just-released, annual Pork Powerhouses report carries this foreboding headline, “Expansion spells trouble,” and this gloomy explanation why: “The last time the Pork Powerhouses list grew by this much was in 2006. That growth led to a market collapse and cutbacks in sow numbers by 2008.”
- On Sept. 29, USDA estimated that 2.3 billion bushels of last year’s corn crop remains in storage even as U.S farmers begin to harvest this year’s forecasted 14.2 billion bushels. That combination will keep corn prices low, around $3.20 per bushel well into next year.
- Likewise, 301 million bushels of 2016’s soybeans remain, a 53 percent increase in carryover from the year before, and a record 2017 soybean crop, about 4.4 billion bushels, is in the offing. The huge supply, says USDA, means the coming year’s price range will drop between a very skinny $8.35 per bushel and a still thin $10.05 per bushel.
- Dairy farmers and cattle ranchers will fare little better. USDA predicts next year’s milk and cattle prices will hover near 2017’s low levels.
Food policy
All that said, America’s food growers are still having a better year than America’s food policy makers.
The only team with a worse passing record than Congressional Republicans in 2017 is the Chicago Bears. And it’s not going to get any easier.
Congress’s newest Hail Mary — the White House’s broad but incomplete tax reform plan — contains enough hot potatoes that few GOP members want to handle it anytime soon.
The longer they wait, though, the longer they give Hill Democrats to pick it apart.
If GOP leaders really want to polish their badly tarnished, 2017 record, maybe they should go small rather than large.
It could serve them, the nation, and — what a coincidence — farmers and ranchers far better.
NAFTA
For example, rather than bring up any form of Obamacare repeal again, experienced trade hands in Congress should give firm, clear direction to the White House on its puffed-chest “renegotiation” of the North American Free Trade Agreement.
Everyone in the negotiating room — except the White House, that is — knows direction is badly needed.
Ethanol
Ethanol backers in Congress might do the same on the Trump Administration’s quiet undermining of the nation’s biofuel program.
On Sept. 26, the Environmental Protection Agency (EPA) proposed “lower obligations” for 2018 and 2019 under the Renewable Fuel Standard program.
EPA is also examining changes to its complex RIN, or Renewable Identification Number, program.
That idea, pushed by oil refiners, could hammer already-low corn prices because 5.5 billion bushels, or nearly 40 percent, of 2017/2018 corn is ticketed for biofuel production.
Conservation
If Congress tires of being reactive, here’s something proactive it can do that would have an enormous impact on U.S. farm income in the coming years: its ag committees can work together to significantly expand the Conservation Reserve Program, or CRP.
The current, 24-million-acre CRP, its cap under the 2014 Farm Bill, is the lowest amount since 1988. What’s the right amount?
Last spring, South Dakota’s John Thune, the third-ranking Republican in the Senate, suggested 30 million acres while conservation groups have argued that CRP should include 40 million acres of U.S. marginal farmland.
Whatever is agreed upon, everyone first needs to agree that doing nothing is the worst possible route to take. We are, after all, already doing that.
As usual, the author is ignoring the TRUE reason for the financial distress inflicted upon farmers and blaming politicians. Weather related highs and lows of crop/animal product production has SOME reason for price fluctuations, however, the REAL cause of agricultural financial distress stems from a chain reaction that started from another happening. Agricultural products have become extremely regulated which has resulted in vast increase of processors who have become extremely monopolized in recent years, resulting in price fixation and restricted markets for the sale of agricultural products. This results in farmers not being able to make their own price for their products and having to take what these restrictive markets pay. The low price that farmers receive for their products forces farmers either to quit or ‘get larger’ to produce more to get income to survive-thus the great exodus of farmers over the past few years. The cycle continues as the monopolization of retail sales fuels it-stores know that consumers want food as cheap as possible and pressure the monopolized processors to drop prices to farm-killing levels. Walmart is currently selling milk and eggs far under production costs. Price control is not the only problem the regulations and monopolizing of processors cause-the whole cycle contributes farmers turning on each other as small farmers are left with no possible way to make a living from farming. Yes, the government could help by reducing regulations and stopping the monopolizing of markets, but people have become so accustomed to the extremely low price of food they would riot if they had to pay fair value for it. They have taken food for granted-American farmers have been pressured into providing the most abundant, safest and cheapest food in the history of mankind-and have killed themselves in doing so…