Last Friday, USDA’s Animal Plant Health Inspection Service (APHIS) announced that it is suspending its plan to phase-in the use of electronic ID (RFID) tags for all cattle and bison that would be moved interstate after by January1, 2023 . According information from APHIS the plan was changed in response to an executive order that President Trump issued citing the need for transparency and communication of issues “before placing any new requirements on American farmers and ranchers.” In its statement withdrawing those regulations, APHIS said it has “listened to the industry’s feedback.” R-CALF USA filed a lawsuit in federal district court in Casper, WY, in October with the intent to halt the plan. Despite the executive orders withdrawing the plan, APHIS acknowledged the continuing need for a national animal ID program.
I recently reported that organic farm production continues to grow in the U. S. Farms that were converted to organic production grew by 2% in 2018, bringing the total organic acres to 6.5 million. But converting farms from conventional production to organic isn’t easy, since farmers face several challenges before they’ll reap the rewards of higher prices for what they grow. First, they have to use organic farming practices for three years without being able to sell what they grow as organically produced crops. Second, they also often see yield declines during the conversion process because of they’re not allowed to plant many of the seed varieties that conventional farmers use, and they have limitations concerning the types of fertilizers and pesticides they apply to their crops. To help farmers negotiate these challenges, Rabo Agrifinance recently announced that they’ve developed a new loan program directed at farmers who want to make this transition. The program gives farmers the flexibility to receive the needed capital for upfront costs associated with changing production practices, while providing repayment schedules that coincide with when they will receive the additional revenue from selling certified organic products.
Sustainability in agriculture has been picking up speed in 2019. In March, General Mills announced an initiative to advance regenerative agriculture on one million acres by 2030, which was followed by organization of the Sustainable Food Policy Alliance formed by Danone North America, Mars Corporation, Nestle USA and Unilever to accelerate of federal climate legislation. Recently Bayer AG, the largest supplier of seeds, crop protection and data acquisition in the world has jumped onto the ag sustainability bandwagon. Bayer acquired Monsanto Agrochemical Company last year just in time to be pulled into suits alleging that Roundup herbicide is responsible for causing cancer in people who have applied the popular weed killer. By 2030, Bayer pledges to reduce the environmental impact of crop production by 30%, reduce field greenhouse gas emissions and empowering 100 million small holder farmers in developing countries by providing more access to sustainable agricultural solutions. Last year, Bayer invested $2.5 billion in crop science research and development, and expects to spend an additional $25 billion on research and development over the next ten years.
Hemp production for commercial sale, research or pilot programs is legal in all but three states, Idaho, South Dakota and Mississippi. While Colorado is one of the leading producers of commercial hemp, growers face uncertainty because so far, there is no consistency in regulations or standards concerning growing and processing the crop. For example, measuring the THC level in growing plants is a delicate, high-stakes task, and growers hope that the USDA will set a national testing standard. THC amounts in a crop vary due to environmental factors, including rainfall, temperature and even the growth stage when plants are tested. If a hemp crop exceeds .03 of a percent THC, the active ingredient in marijuana, the crop must be destroyed. The USDA is under pressure to rework this patchwork of state regulations, and the agency has announced that it plans to publish standards ahead of the 2020 growing season.
Many folks in the farming community are wondering if the Trump impeachment inquiry will sidetrack the U.S.-Mexico-Canada trade deal and other farm country legislation. At an Agriculture Committee hearing last Wednesday, farm groups called for speedy passage of the trade Agreement. Then on Friday, corn industry groups sent a letter to the President warning him that “frustration in the countryside is growing” over the President’s biofuel policies, which they said are intensifying the already difficult financial situation for many farmers. Some observers believe that Democratic House Speaker Nancy Pelosi must show that the House can still govern, so she’ll bring the trade deal to a vote later this year, while others think that politics will come into play, and the Democratic party will hold up the vote, rather than give the President something he wants.
Trade has been the main attraction in agricultural news over the past week. Negotiations over the U. S. Mexico-Canada trade agreement is apparently heading down the home stretch. The nine-member USMCA working group has sent the White House a counteroffer concerning changes to the agreement that address Democrats’ concerns about labor, enforcement, drug pricing and environmental provisions. However, rank-and-file House Democrats are largely out of the loop on the trade talks with the Trump administration, and they’re starting to get restless as a potential vote comes closer.
Organic commodity farmers will harvest a record number of acres across the U. S. this year, according to the Annual Acreage Report, released by Mercaris, the nation’s largest market data and trading organization for organic and non-GMO markets. U. S. Farmers will harvest over three million acres of land certified for organic field crop production, which is a 7% increase over 2018. This increase is driven in large part by a surge in new certified organic field crop operations across the U. S. The West and High Plains regions saw the largest jump in harvested organic field crop acres this year, even though organic corn and soybean farmers have faced the same challenges to production that conventional farmers have had. Overall total organic acres of pasture, rangeland, and organic crop areas has grown to 8.3 million acres, with over 8,000 U. S. farm operations certified as compliant with the USDA National Organic Program standards in 2019.
Searching for information to include in this report over the past several weeks, I keep getting an image of an Ace Reid cartoon, where a geek in a suit is standing in Jake’s ramshackle farmyard telling him, I’m from the government and I’m here to help. Even though our quote “patriotic” farmers and ranchers have born the brunt of trade disputes around the world. They’ve been assured that they’ll soon benefit from an unprecedented demand for the crops and meat that has filled grain bins, warehouses and cold storage for over a year, while competitors have filled the void left by U.S. farmers. At this stage, with the level of surplus corn and soybeans in storage, it will take a polar vortex, cold snap to hit the corn belt this fall to offer any hope that corn and soybean prices will gain even a modest level of profitability for the next couple years, even with an immediate end to the trade wars. But the government has added to the problem by granting waivers to 31 oil refiners who don’t have to blend ethanol into their fuel, thereby cutting 300 million bushels of corn from this year’s demand. Another example of government lack of support is Dairy Management Inc., a nonprofit that’s tasked with promoting milk, cheese and other dairy products. It’s a federally mandated checkoff program supposedly overseen by the USDA. In 2017, It paid 10 executives a combined $8 million, the same year that 1,600 dairy farms closed across the country.
There is increasing evidence that farmers and ranchers are undergoing financial stress this year. For example, a Federal Reserve Bank of Kansas City survey of 181 banks revealed that 30% of the banks in its service area reported that farm repayments are lower and have they have had repayment problems with their agricultural loan portfolios. Several years of Working Capital and Carryover Debt have increased the need for Debt Restructuring. About 75% of these banks have denied new farm applications, and nearly 18% of the banks reported that they had denied 10% of Operating Loan requests. A Creighton University survey of 200 bankers in ten states revealed that 10% of 2018’s Operating Loans were not repaid and were rolled into 2019’s loans, which is significant because this practice was common before the farm debt crisis of the 1980s began.
About three months ago, farmers and ranchers in the Four Corners region were tallying the benefits and drawback of a wet winter and spring. Wet fields made it tough to plant spring grains and dry beans, and the heavy snow pack kept cattle and sheep off mountain ranges for a few weeks. But by mid-June, the Region was drought free according to the U.S. Drought monitor, with the exception of a small part of San Juan County New Mexico. Southwest Colorado and Southeast Utah were also free of abnormally dry conditions. Fast forward to the end of August, and drought is making a comeback. The whole region is registering abnormally dry on the Drought Monitor Map and Moderate drought has made a comeback along much of far western New Mexico. Even farmers with irrigation water are commenting that they could use some help through a good rainstorm. The long-range National Weather Service forecast for the next three weeks is showing higher than normal temperatures and normal precipitation for this time of year.