Eroding markets front and center at roundtable event08/29/2019 | Policy, Economics
By Bethany Baratta, ISA senior writer
Frustrations have mounted in farm country, and uncertainty in biofuels and trade is only adding to the gloominess, farmers and ag industry representatives told U.S. Senator Charles Grassley and Under Secretary for Farm Production and Conservation in the United States Department of Agriculture (USDA) Bill Northey yesterday in Cedar Falls.
“September is a big month for leasing agreements for me; it’s going to be difficult to hang on to acres that have been in my family for decades in this current environment,” ISA At-Large Director Brent Renner told Grassley and Northey. “It (Farming) is becoming more and more difficult every day.”
Grassley said they understand the frustrations, and they continue to push for the U.S.-Mexico-Canada Agreement (USMCA), a resolution to the trade dispute with China and a closer look at President Donald Trump’s granting 31 new small refinery exemption waivers from the obligations of the Renewable Fuel Standard (RFS).
ISA District 3 Director Rick Juchems said the granting of the waivers affects farmers.
“It affects what the ethanol plants pay us. If they can’t sell their product, they can’t buy our corn,” he said.
Eroding biodiesel market
It also affects the biodiesel market, he said.
University of Illinois economist Scott Irwin has found virtually all of the demand destruction from small refinery waivers is falling on the biodiesel industry, according to Biodiesel Magazine. As the Environmental Protection Agency (EPA) continues to distribute small refinery waivers, the damage to the U.S. biodiesel and renewable diesel industry could reach $7.7 billion or 2.54 billion gallons, according to Irwin.
The refinery’s annual RFS obligation would create demand for nearly 20 million gallons of biodiesel or renewable diesel, according to Irwin.
“We all feel like the system in place for granting waivers was abused at some level. It’s changed significantly from the way it was initially interpreted by Congress when it passed the law,” Renner said. “This feels like it’s a direct assault on farmers when we’re about as low as we can be right now.”
During the discussion, Agri-Pulse reported from the Farm Progress Show in Illinois that U.S. Secretary of Agriculture Sonny Perdue said Trump would announce changes to how the government would grant waivers.
Northey said he wasn’t privy to the details of what those changes could entail, but said it sounds promising.
“I think he (Perdue) and the team are understanding the challenges the waivers create, both the uncertainty and the real market loss,” Northey said. “I think the Secretary saying that there’s gong to be adjustments is a real recognition that they (EPA) weren’t hitting the tune just right.”
Market Facilitation Program 2.0
Northey said 250,000 farmers have signed up for Market Facilitation Program (MFP) payments since sign-up began July 29. The Farm Service Agency (FSA) started making payments to farmers last week.
“In the last week FSA has made about $1.5 billion in payments,” Northey said.
Juchems said sign-up was easy and he’s received his check.
Northey said the program shows there’s an acknowledgement of the pain caused by the ongoing trade war.
“It should tell folks that there’s an awareness about how much trade impacts agriculture. The loss of trade impacts agriculture,” Northey said. “This is really designed to bridge from here to a better trade environment.”
Northey highlighted the status of other programs which fall in the USDA’s purview:
- Dairy Margin Coverage program sign-up ends on Sept. 20
- Sign-up for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs are expected to start within a few weeks.
- Conservation Reserve Program (CRP) sign-up will likely begin around December.
- No final details are available yet regarding the federal disaster program, which will also provide funding for prevent plant acres in Iowa. Northey said he’s hoping the program will be finalized by the Office of Management and Budget (OMB) and available for sign-up within weeks.
At the conclusion of the roundtable event, Grassley exited to the parking lot for a call he scheduled with the White House regarding a topic that farmers at the roundtable “would be very interested in,” a Grassley staffer said. She wouldn’t elaborate.
Contact Bethany Baratta at firstname.lastname@example.org.
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