Taking a Knee

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.

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 bu. of last year’s corn crop remains in storage even as U.S farmers begin to harvest this year’s forecasted 14.2 billion bu. That combination will keep corn prices low, around $3.20 per bu. well into next year.

–Likewise, 301 million bu. 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 bu., 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 bu. and a still thin $10.05 per bu.

–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.

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.

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 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 bu., or nearly 40 percent, of 2017/18 corn is ticketed for biofuel production.

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.

© 2017 ag comm