National and state agricultural leaders and policymakers, including U.S. Secretary of Agriculture Sonny Perdue, attended Farmfest Aug. 6-8 in Redwood County and discussed many of the current issues affecting farm families and rural communities across Minnesota and the Midwest.
Whether it was comments by Farmfest forum panel members or the farmers attending the event, the tight margins and low profitability in farming was on everyone’s mind.
Profit margins in crop production have been tight in recent years and many producers are in the negative this year. Crop production expenses and land rental rates have remained relatively high, while prices for corn, soybeans and wheat have remained below break-even levels. For farmers who may have below average crop yields because of this year's weather issues, the financial situation may be even more severe.
The livestock sector is not faring much better.
Dairy farmers have been dealing with very low milk prices for the past several years, which has resulted in many leaving the industry. Cattle feedlot operators also have faced negative margins during the past year or so. Hog producers were able to show a small profit margin earlier this year, but market prices have dropped and they too are facing profit challenges.
Most farmers attending Farmfest expressed concern about the continuing trade war” between the United States and China, as well as the associated tariffs. Shortly before Farmfest, the Trump administration announced added tariffs on a wide range of Chinese goods being imported into the U.S. China countered by announcing that they were restricting all U.S. ag imports. In the past year, added Chinese tariffs on ag imports from the U.S. has greatly lowered U.S. exports of soybeans, pork and other ag products to China, resulting in much lower commodity prices in the U.S.
The other trade issue that garnered considerable attention at Farmfest was passage of the United States-Mexico-Canada Agreement (USMCA) by the U.S. Congress. USMCA was agreed to by the leaders of the three nations earlier this year and has been approved by Mexico.
USMCA would replace the North American Free Trade Agreement, which has been beneficial for many agricultural products. Canada and Mexico, along with China, are the three largest buyers of U.S. ag products.
Many ag leaders hope Congress will approve the USMCA pact later this year.
Because of the ongoing trade issues, USDA has announced another round of market facilitation program (MFP) payments in 2019.
The first round of MFP payments was made in 2018, based on actual farm-level crop production levels and a set price for various commodities.
This year, the MFP payments will be based on planted crop acres, regardless of the crop that was planted, with a set payment rate per acre. There is a minimal MFP payment per acre for acres that were prevented planted due to weather, provided that an approved cover crop was planted.
Producers should contact their local Farm Service Agency office for more details or to enroll in the 2019 MFP program.
Crop conditions and yield potential were a frequent topic at Farmfest. Many areas of Minnesota and the Upper Midwest had corn and soybeans planted much later than normal this spring. Even though more favorable weather conditions in late July and early August have improved crop prospects, many concerns remain.
Most experts agree that the Upper Midwest will need to avoid a frost until October and have some favorable growing conditions late in the growing season in order for crops to reach maturity. Most farmers and agronomists expect highly variable corn and soybean yields this year.
Many farmers, agriculture and rural community leaders, as well as investors in renewable energy plants, are concerned about government policies related to the development and use of renewable energy. Many Upper Midwest states have a very strong and well-established corn-based ethanol industry, which uses more than 35 percent of the U.S. annual corn yield.
In the past few years, the U.S. Environmental Protection Agency has issued numerous waivers to gasoline refiners, which has reduced demand for ethanol and resulted in over-supply in some areas. The ethanol industry has also been concerned by the slowness to implement E-15 as an ethanol fuel blend.
There also is a growing biodiesel industry in the U.S. that utilizes a significant amount of soybeans, which is very important now because of the challenges in the soybean export markets.
In addition to the direct benefits to farmers, renewable energy plants have become cornerstones in rural communities by providing jobs, adding to the local tax base, and enhancing the overall economic vitality of the communities.
Still, many special interest groups are calling for reductions or elimination of the federal Renewable Fuel Standards and other measures that would hurt the renewable fuels industry.
Minnesota Gov. Tim Walz addressed a large audience at Farmfest, which was followed by a panel of 10 state agency commissioners and deputy commissioners. They discussed programs and efforts to work with farm businesses, families and rural communities in a variety of ways.