Category: Agribusiness

Trade Study Shows Tariffs Cost Americans Billions

With tariffs on most of Chinese goods and retaliatory tariffs placed on American goods, billions more are paid for trade.

New data from a coalition of trade groups called Tariffs Hurt the Heartland shows Americans have paid nearly $22 billion in additional tariffs since the trade war with China began.

The data is broken down by individual tariff action and shows American businesses and consumers have paid $15 billion because of the tariffs on China. The data runs through April 2019.

A spokesperson of Tariffs Hurt the Heartland says tariffs are erasing the benefits of tax reform raising costs for businesses and families.

The data shows exports have generally decreased by 2.5% percent from April 2018.

Iowa Rep. Cindy Axne is also looking into the costs on tariffs. She sits on the House Financial and Agricultural committees and has sent two letters to the Treasury Department to provide Congress with research on the consumer cost of tariffs.

She first wrote a letter after Treasury Secretary Steve Mnuchin testified before Congress, where he said he does not agree consumers will pay more because of Chinese tariffs. The Trump Administration claims China will pay the price for tariffs.

In Axne’s letter she says, “American consumers and families deserve to review the full scope of data and information that has led you to the conclusion – which leading economists, major importers and retailers unequivocally disagree with – that consumers will not pay a price for these tariffs.”

The Trump Administration also plans to expand tariffs on China. Hearings are underway on the president’s pledge to impose tariffs on another $300 billion of Chinese goods.

U.S. Trade Representative Robert Lighthizer is holding the hearings this week as part of that process.

Many companies and trade groups giving testimony are opposed to the increased tariffs, including the National Association of State Departments of Agriculture. It says China does have restrictive economic and trade policies but there are better solutions to advancing free and fair trade with China.

U.S. Ag Export Surplus Drops

U.S. agriculture will have a smaller export surplus this year.

According to the USDA’s Economic Research Service, agriculture exports are projected to total $137 billion in 2019, while imports are expected at $129 billion. The $8 billion surplus is the lowest since 2006, when the U.S. only exported $4.6 billion more than it imported.

The decline in expected value was mainly due to lowered expectations for corn and soybeans.

Agriculture is one of the few trading areas the United States has a surplus.

2020 Presidential Campaigns Involve Agriculture

Agriculture is getting into politics this 2020 season. This week, Democrat candidates looking to be nominated for president were in Cedar Rapids for the Iowa Democrats Hall of Fame Dinner.

It featured prominent Iowa Democrats, but also 19 Democrats on the campaign trail for president.

Rural America and agriculture have already been on the docket for some candidates. Senators Elizabeth Warren and Bernie Sanders have released policies on agriculture reform. Senator Amy Klobuchar is on the Agriculture committee and advocates for strong farm policies.

The Governor of Montana Steve Bullock is also running for President and launched a “fighting for rural Iowa” tour. There is a focus on rural locations yet Rural America supported President Trump in the last election.

Bullock says when he was elected governor, 30 percent of his voters also voted Trump. And in Iowa, a third of counties voted for President Obama and then President Trump.

He says, “And I think if we as Democrats aren’t focusing on the needs of rural communities making sure no one should have to leave their school or their church or their community just to have a decent paycheck. If we’re not doing that, well, we’re falling short.”

Montana is a large agriculture state, number one in pulse crops, which are legumes, and a large cattle producer.

Bullock says constant trade wars and tariffs are costing American farmers and ranchers and ultimately affect the consumer.

He’s concerned “America First” is turning into America alone, “We’re losing market share opportunities, not just in China, but also in Japan, in India, in other places because of just thinking you can do this by the blunt instrument of tariffs. I mean, what we need to do is certainly get fair trade deals for the United States of America. But you don’t ever do this alone.”

Late Planting Leads to Crop Insurance

All corn acres in the U.S. have passed final planting days, meaning they are eligible for prevent plant acres. As of last week, there was only 67 percent of corn planted nationally and only 80 percent of corn in Iowa.

Prevented planting is a crop insurance farmers use to protect from delays. After a certain time of year some crops lose a lot of yield because of few remaining growing days.

Farmers can try to keep planting after final planting dates, but they face a reduction in coverage of 1% per day for 25 days.

Farmers typically don’t use many prevent plant acres per year and do not like to leave land idle.

Duane Voy with the USDA Risk Management Agency, says farmers should talk to their crop insurance agent to see their options, “Some will likely be looking at putting some kind of crop, maybe a cover crop, possibly a forage crop, if feed is something they need. But again, I would encourage them to talk to their agent because some of these decisions impact the prevented planting payment you would get from crop insurance and it might reduce the amount you get.”

One of the options for farmers is planting cover crops, it can hold the soil in place if no other crops can get planted. In Iowa there are programs available to help offset the costs of planting cover crops, which can be found at the Iowa Department of Agriculture.

Voy says farmers don’t have to put anything on their field, “But it is encouraged that you not let the land sit bare due to wind erosion or water erosion. Also having a living crop, can help with the soil quality and soil health. So that is encouraged but it is not required.”

Voy adds, again, to talk to a crop insurance agent if you plan to use cover crops for grazing because that may reduce prevent plant payments.

Corteva Agriscience Added to New York Stock Exchange

Corteva Agriscience officially rang the bell at the New York Stock Exchange.

The timing of Corteva is on track with estimates, when the name of the spin-off company was announced by DowDuPont in February of 2018.

Corteva brought together DuPont Crop Protection, DuPont Pioneer, and Dow AgroSciences to create a standalone agriculture company.

DowDuPont agreed to split off into three separate companies when Dow and DuPont announced they would merge in 2015.

Corteva says it will keep investing in its premium brands like Pioneer. Adding it will also invest in crop protection products.

Iowa Lawmakers Respond to New Trump Tariff

IOWA — President Donald Trump is threatening a five percent tariff on all of Mexico’s goods saying they need to stop illegal immigration.

In a tweet, President Trump says, “On June 10th, the United States will impose a Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the illegal Immigration problem is remedied.”

The timing comes as the U.S. Mexico Canada Trade agreement (USMCA) looks to be ratified. Mexico is Iowa’s biggest trading partner.

And Iowa has three members of Congress on agriculture committees, all released statements in response to the proposed tariffs.

Representative Cindy Axne says, “Tariffs will not secure our border, but they will place a significant financial burden on Iowa farmers, businesses and families. We need to look at serious ways to strengthen our border security.”

Senator Joni Ernst says, “While I support the need for comprehensive border security and a permanent fix to illegal immigration, this isn’t the right path forward. I’m asking the president to reconsider.”

Senator Chuck Grassley says, “Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA.”

Governor Kim Reynolds also asks the president to rethink the tariffs, “We need to secure the border and address our nation’s broken immigration system, but it cannot be done on the backs of Iowa farmers.”

Veterans Interested in Farming Have Many Options

IOWA — About 8 percent of Iowa’s farmers have served in the military, nearly 13,000. That is a little under the national average of 10 percent. According to the U.S. Census of Agriculture, the vast majority of them are above the age of 65.

Michael Simester, a Muscatine County farmer and veteran, says, “There are all kinds of programs for people who are first-time farmers in Iowa. And if you’re a veteran first-time farmer, there’s even more options for you.”

Simester is medically retired from the Army and owns Serendipity Farms. They raise garden vegetables, chickens and goats.

Circumstance with his injuries made it necessary to move out to the countryside, so he got some land and tried something new.

“I really didn’t feel like doing much and I just kind of wanted to sit there and not do anything. But I knew that wasn’t good so I had to do something.” Simester says, “Since I had the land and the opportunity out here, maybe I should talk with the Easterseals folks and the Vocational Rehab with the VA about maybe trying to make something more out of my property than just a big yard to mow a couple of times a week.”

There’s an initiative to get more veterans into agriculture. Easterseals Iowa is one group that helps connect and support military members pursue farming.

But in Iowa, the support doesn’t stop there according to Simester, “What I would tell anybody who has, particularly someone in my situation who has never done any type of agriculture until you were ready to take the leap, with agriculture there are a wealth of individuals, particularly in the state of Iowa that are willing to help and are willing to provide assistance to you.”

Simester called up his local National Resource Conservation Service office as well as the Farm Service Agency, “Because when I was out here doing what I was doing for the first three or four years, there was no way on earth I thought I was a farmer. I thought I was some guy who had some dirt and occasionally showed up at the local farmers market to get rid of the stuff you couldn’t eat. But the NRCS guys and the farm service guys talked to me like I was a 1,200 acre sharecropper that was producing food for the whole country.”

Simester says he was not treated like just a veteran farmer, but like someone they wanted to see succeed; someone who mattered.

“Most of us just want to be doing something useful. And with agriculture, it’s even better, because not only are you doing something useful but doing something that means something, it has a purpose. And that’s the best work you can have.” Simester says, “Out here at my place, a handshake deal still matters. And I think that’s a big bonus for guys like me. Between that and being able to be outside on a daily basis. At least when the weather cooperates. You can’t ask for a better job.”

USDA Asks For Farmers to Begin Conservation Field Planning

IOWA  — Iowa’s USDA staff are encouraging landowners interested in the Conservation Reserve Program (CRP) to visit local service centers soon. Saying it is important to plan before crop growth makes it difficult to examine the field.

The USDA is accepting new CRP applications beginning June 3rd.

The Farm Service Agency (FSA) announced a limited continuous CRP signup in the 2018 Farm Bill, prioritizing water-quality practices.

That includes grassed waterways, filter strips, saturated buffers, and wetland restoration.

Iowa’s State Director of the FSA Amanda De Jong says, “Producers new to the program and those with expiring CRP contracts need to visit our offices to enroll or reenroll. Visiting our offices early will ensure timely processing of CRP applications.”

Continuous signup enrollment contracts last 10 to 15 years.

Japan Ends U.S. Beef Restrictions

Japan has fully opened its borders to U.S. beef eliminating long-standing restrictions.

U.S. Secretary of Agriculture Sonny Perdue announced the expansion, which takes effect immediately and allows products from all cattle, regardless of age, to enter Japan for the first time since a cattle disease in 2003. Before only cattle fewer than 30 months of age could be imported.

Perdue calls it great news for American ranchers and exporters, estimating it will increase exports to Japan by up to $200 million annually, “We are hopeful that Japan’s decision will help lead other markets around the world toward science-based policies.”

The change aligns Japan’s import requirements with international standards.

However, Japan still has a tariff rate of 38.5% on U.S. beef products. Countries like Australia after signing the new Trans-Pacific Partnership, have tariff rates in the low 30%, set to be cut to around 20% percent after 18 years.

Wet Weather Hinders Planting

Fewer than two full days of fieldwork last week limited planting according to the Iowa Crop Progress report.

Statewide, 48 percent of the corn crop is planted. Four days behind last year and over a week behind the five-year average and five percent of the crop has emerged. This is the fifth time in 40 years that less than half the expected corn crop was planted by May 12.

Thirteen percent of the expected soybean crop is planted, six days behind last year and the average with just one percent emerged.

State Climatologist Justin Glisan says temperatures the last two weeks have been way below average from six to eight degrees in parts of the state. And when it comes to field conditions, it has been 27 weeks since the last abnormal dry condition, leading to surplus water in the soil.

Glisan says, “Third wettest fall, third wettest winter, so our subsoil moisture is adequate to surplus. So that really delayed getting farmers out in the field and then that delays, of course, getting planted. And then we’ve had periods of wetness over parts of the state that haven’t allowed any drying.”