COLUMBUS — After another year of tight margins, grain farmers could use some good news. And there’s a chance they will get some, if the U.S. can work out trade deals with other nations.
Trade was a hot topic at this year’s Ohio Grain Farmer Symposium, held Dec. 19 at the Ohio Farm Bureau and 4-H Center in Columbus.
The U.S. is currently re-negotiating the North American Free Trade Agreement with Canada and Mexico, and there is fear in the industry that President Donald Trump may pull the U.S. out of the deal.
Days after Trump took office in January, he pulled the U.S. out of the Trans-Pacific Partnership, a trade deal that would have boosted U.S. ag exports to Asian countries, including Japan.
“It’s hard to overstate the importance of exports for the people in this room,” said Kirk Merritt, executive director of the Ohio Soybean Association and Council.
Trade matters
“It’s (NAFTA) been a huge benefit for Ohio corn and soybean farmers and livestock producers as well,” he said. “Our advocacy, at both the state and national level, has been to keep what’s good, as you’re moving forward.”
Merritt said that in 2016, 62 percent of the U.S. soybean crop, and about 30 percent of U.S. corn, was exported, along with a large portion of the wheat crop.
Related: Traders blame Trump for lower grain prices.
Tadd Nicholson, executive director of Ohio Corn & Wheat Growers Association, said when the U.S. pulled out of the Trans-Pacific deal, other countries continued to negotiate with Japan, without the U.S.
“We’re sitting on the outside looking in on that, and that really gives me a great deal of fear,” said Nicholson.
He also said there have been positive gains with U.S. ethanol exports, and that the Marion, Ohio, ethanol plant expanded this year, in anticipation of a strong export market.
Preserving trade
Jon Doggett, executive vice president of the National Corn Growers Association, traveled from Washington to talk about the importance of trade, and to encourage individual farmers to reach out to their state and national leaders.
Doggett said he is concerned about the future of NAFTA.
“I’m very worried,” he said. “Mexico is our biggest customer and we need to have that customer there buying our corn products.”
Doggett said the Trump administration seems receptive to NCGA members, but he said there has to be a “reconciliation” between the administration and the President’s goals.
“They give us a lot of assurances, but then you have the president’s rhetoric on the other hand,” he said.
Related: Pa. Farm Bureau talks NAFTA concerns.
Doggett said trade negotiators need to have a give-and-take approach, and not expect to take without giving.
“You can’t have a one-sided trade agreement,” he said. “NAFTA has been tremendous for agriculture and we’re hoping to hang onto it.”
Farm bill
During a talk on the 2018 farm bill, OSU Professor Emeritus Carl Zulauf shared his expertise and opinions about what the new bill might look like.
He said the new farm bill will be similar in many ways to the 2014 farm bill, with some important differences.
Two of the biggest commodity concerns are with cotton and dairy, he said, with dairy farmers feeling like the past farm bill and its margin protection program was not sufficient.
He said the dairy protection program in the 2014 farm bill was mostly unused, and therefore there is no baseline data for the next bill.
The big challenge with dairy, he said, is that production costs vary widely, based on the size and scale of the operation, and it’s hard to form a policy that protects everyone.
Other concerns deal with conservation and a potential expansion of the Conservation Reserve Program, and crop insurance and crop protection.
Zulauf said there is a lot of discussion about raising the CRP acreage cap from 24 million acres, to roughly 30 million acres.
Because CRP takes land out of crop production, commodity prices would likely increase, but that couple potentially negatively impact agribusinesses and the export market.
One possible compromise to increasing CRP land, he said, is if the additional acres would be tied to specific water quality goals across the nation.
“I think the next farm bill will get really serious about the water quality issues in this country,” he said.
Crop insurance
As for crop insurance, he said farmers should be prepared to defend their 62 percent federal subsidy, if they want to keep it in place. While he doesn’t expect a significant cut, he said it’s possible, especially in future farm bills.
He said farmers also need to make sure they’re enrolling in the correct price loss program. The Agricultural Risk Coverage program, or ARC, protects against revenue declines or low revenue situations, while the Price Loss Coverage is a price-only protection program.
“These are not the same program and if you pick the wrong program and the other program makes lots of payments, you will get nothing,” he said.
He also reminded farmers that they need to be advocating for both crop insurance and ARC or PLC, because the ARC and PLC deal with multi-year price declines, while crop insurance deals only with single-year protection.
