By Kent Thiesse
Every year many key agriculture issues are discussed as part of the candidate forums and feature forums at Farmfest in early August. The U.S. Senate and Congressional candidate forums and other forums were held again in 2020 in a virtual format. Farmfest Virtual 2020 featured several candidates and agricultural leaders discussing many of the key issues affecting farm families and rural communities in Minnesota and the Midwest.
Following are some of the main issues that we discussed during virtual Farmfest forums:
COVID-19 Impacts and Assistance: There was considerable discussion about the financial impacts of COVID-19 on crop and livestock producers and on the ag processing and biofuels industries, as well as coronavirus impacts on rural families and communities. The Coronavirus Food Assistance Program (CFAP) was credited with providing much-needed assistance to farmers, especially small-to-medium-sized livestock producers faced with low prices and limited packing plant access. However, speakers pointed out that the current CFAP program did not provide any assistance to biofuel producers, to crop farmers who had already sold their 2019 crop production or for market price losses incurred on the 2020 crops, or to livestock producers who euthanized hogs. Only 80 percent of the current CFAP payments were paid out after sign-up; however, it now appears that USDA will make the final 20 percent of the CFAP payments in the coming weeks to crop and livestock producers. Sign-up for the CFAP program continues until August 28, 2020 at local USDA Farm Service Agency (FSA) offices or online at: https://www.farmers.gov/cfap.
Farm Financial Challenges: Continued tight margins and low profitability in farming was the big topic of discussion for U.S. Congressional candidates and forum panel members. Profit margins in crop production have been quite tight in recent years, putting many farm operations at the brink of financial disaster. Crop production expenses and land rental rates have remained relatively stable for many producers. In contrast, crop prices for corn, soybeans and wheat have remained below breakeven levels, and are now at the lowest levels in several years. For farm operators that experienced crop losses in 2019, or may have a crop loss in 2020, due to weather, the financial situation may be even more severe.
The livestock sector is not faring much better from a profitability standpoint and has seen profit levels deteriorate quite rapidly since the U.S. outbreak of COVID-19 earlier this year. Dairy farmers have been dealing with very low milk prices for the past several years, which has resulted in many dairy producers exiting the industry in the past few years. However, a large number of dairy farmers have received CFAP and dairy margin coverage (DMC) program payments in recent months, which, together with improvement milk prices recently, has helped to mitigate the financial losses earlier this year. Hog producers were able to show a slight profit margin earlier in 2020, following some optimism in the pork export markets; however, the return to lower market prices and the necessary euthanizing of hogs following the COVID-19 outbreak has created significant profit challenges for the hog industry. Cattle feedlot operators and beef cow/calf producers have also faced negative margins at most times during the past year or so.
Ag Trade Agreements – Most of the U.S. Senate and Congressional candidates that participated in the virtual Farmfest forums expressed concern about the continuing trade disputes between the United States and China, as well as the slowness in the implementation of the Phase 1 trade agreement with China. If implemented fully, the Phase 1 agreement would increase Chinese purchases of U.S. ag products, including grains and meat products; however, some panelists expressed concern that declining relations between the U.S. and China may again lead to restrictions and tariffs on U.S. ag products imported by China. In recent years, added Chinese tariffs on ag imports from the United States significantly lowered U.S. exports of soybeans, pork and other ag products to China, resulting in much lower commodity prices in the United States. The other trade issue that garnered considerable attention during the forums was the implementation of the United States-Mexico-Canada Agreement (USMCA) by the three countries, which replaced the North American Free Trade Agreement (NAFTA). Canada and Mexico, along with China, are the three largest trading partners for U.S. ag exports.
Ethanol and Renewable Energy – Many farm operators, ag and community leaders, and investors in renewable energy plants, are concerned about government policies related to the development and use of ethanol and other biofuels. Many states in the Upper Midwest, including Minnesota, have a strong and well-established corn-based ethanol industry, which utilizes over 35 percent of the corn produced each year in the United States. In the past few years, the U.S. Environmental Protection Agency (EPA) has issued numerous blending waivers to gasoline refiners, which has reduced demand for ethanol and resulted in over-supply in some areas. The ethanol industry has also been negatively impacted by reduced gasoline consumption following the COVID-19 outbreak, as well as by a slow U.S. implementation of E-15 as an ethanol fuel blend. The biodiesel industry also has been growing significantly in recent years, which has become more critical for soybean usage in the past couple of years, due to the challenges with the soybean export markets.
In addition to the direct benefits to farmers, renewable energy plants have become cornerstones in rural communities for jobs, the local tax base, and resulting enhancements to economic vitality. Even with all the economic, environmental, and community benefits of renewable energy, many special interest groups call for reductions or elimination of the Federal renewable fuel standards (RFS), and other measures that would hurt the renewable fuels industry. There is also concern about how climate change legislative proposals, such as the “Green New Deal” or further implementation of the “California Fuel Standards”, might impact the biofuels industry’s future development.
The candidates and ag leaders who participated in the Farmfest Virtual 2020 forums discussed numerous other issues, such as: Programs and activities that affect rural businesses, farm families, and ag communities in a variety of ways. Discussions included dealing with the economic challenges currently being experienced by rural businesses and local governments, family health care access and costs, expansion of broadband coverage in Greater Minnesota, infrastructure needs, and other issues affecting agriculture and rural communities. View the candidate forums and other Farmfest Virtual 2020 forums at: https://www.ideaggroup.com/farmfest.
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