NEWSLETTER
News from IGPA and the Idaho Grain
The 2014 Farm Bill Has Expired: What’s Next?
October 2018
The National Association of Wheat Growers (NAWG) is disappointed that Congress failed to reauthorize the farm bill before the September 30th deadline. Expiration of the current farm bill will leave grain farmers with much uncertainty during a time when farmers have been facing low prices and a struggling rural economy. While the farm bill’s crop insurance title is permanently authorized, several programs that farmers rely on to continue their operations are not.
For instance, the U.S. Department of Agriculture (USDA) will be unable to undertake new sign-ups in the Conservation Reserve Program (CRP) and provide other assistance for growers to adopt conservation practices. Additionally, the availability of farm safety net programs like ARC and PLC for the 2019 crop year is uncertain until Congress acts, and permanent farm law in the form of parity price supports from the 1930s could be implemented if Congress doesn’t act on a new farm bill or provide an extension of the current bill by December. Parity pricing would set grain prices high (currently at $17.60 per bushel for wheat) and allow our competitors to sell at a competitive advantage. Farm program payments for the 2017 crop year haven’t been impacted and are expected to begin paying in October of this year.
There are also 39 mandatory programs that do not have baseline, because they receive $50 million or less annually, and therefore have lost funding. One example is the Foreign Market Development (FMD) program, which is responsible for developing and expanding export markets for agricultural commodities. The US Wheat Associates rely on FMD funding to ensure that wheat growers have access to trade. In the current trade environment, this is more critical than ever. Another market development program of high importance, the Market Access Program (MAP), will receive funding through the end of the year, but no further unless a farm bill is finalized. The Foundation for Food and Ag Research (FFAR) and the Beginning Farmer and Rancher Development Program are a couple more examples of programs losing funding.
Continuous inaction on the farm bill builds uncertainty for farmers who are already stressed from the current trade and economic conditions. Idaho grain growers need the stability that will come from a finalized farm bill. The National Association of Wheat Growers (NAWG) has publicly called on Congress finalize farm bill negotiations swiftly, so that growers can have working legislation before the end of the year.
NAFTA becomes the USMCA
With a deadline of Sept. 30th looming and concerns over the destruction of this long standing agreement palpable, the U.S., Canada and Mexico were able to come to a last-minute agreement to save the 25-year-old deal, now named the United States-Mexico-Canada Agreement (USMCA).
Canada and Mexico are two of the United States’ biggest trade partners, so there is much relief on this new deal being solidified. U.S. services exports to Canada and Mexico have more than tripled since NAFTA entered into force, rising from $27 billion in 1993 to $86 billion in 2016.
This new agreement is great news for wheat. Canada has agreed to grade imports of U.S. wheat in a manner no less favorable than it allows Canadian wheat, as well as promising to not require a country of origin statement on its quality grade or inspection certificate. This new grading system is a welcome first step to creating equal access for wheat on both sides of the border. This change should allow U.S. farmers growing Canadian-registered varieties to sell their wheat in Canada and receive the same price as Canadian-grown wheat, as long as the variety is included on Canada’s registered list.
Mexico is one of the most important export markets for U.S. wheat, in large part because of the most recent NAFTA. Prior to NAFTA, state intervention and import tariffs kept U.S. wheat exports out of the Mexican market. Now, U.S. wheat exports have skyrocketed to an annual average of almost 3 million metric tons. Most wheat states’ farmers rely on Mexico as their number one market. In fact, Mexico is a “Top 10” market for the three largest classes of wheat.
The new agreement continues duty-free access for most agricultural products, including wheat, and allows for a wide range of upgrades, including customs rules, regulatory practices, and non-tariff barriers, which could facilitate more open agricultural trade.
The current language is just the first step post negotiations before implementation can take place. This is due to Trade Promotion Authority, which allows the President to negotiate, but still requires final Congressional approval. The agreement can be signed by the three country leaders 60 days after the text is made publicly available, which was September 30th. That means the earliest it can be signed is Thursday, November 29th.
Once the deal is signed, the President will then have 60 days to notify Congress which U.S. laws will need to be modified to comply with the agreement. Meanwhile, the International Trade Commission will have 105 days to complete an economic impact study.
Once these have been worked through, the President will submit the final text to Congress 30 days before it is introduced in Congress to allow members time to review. The final Congressional vote will take place 90 session days after the bill was introduced, by first holding an up or down vote in the House Ways and Means and then Senate Finance Committees. Under TPA rules Congress is not able to amend the text of the agreement. With all of these steps, it is anticipated that it will be February or March 2019
Trade Mitigation Program
The USDA last month announced its $12 billion relief package for farmers impacted by trade retaliation. Wheat farmers are eligible for $.14/bushel, $.07/bushel now, and $.07/bushel later this year. No aid is available for barley producers, though all commodity prices will likely be affected by tariffs. For more information or to apply, go here https://www.farmers.gov/manage/mfp.
USDA Secretary Sonny Perdue announced this past summer that USDA would work to help compensate farmers in response to trade damage from retaliation. At the direction of President Trump, Secretary Perdue created a short-term relief strategy to protect agricultural producers in the interim while the Administration works to enhance trade deals to open more markets and to help American farmers compete globally. These programs will help farmers to meet some of the costs of interrupted markets.
“These programs will allow President Trump time to strike long-term trade deals to benefit our entire economy, including the agricultural sector, in the long run,” Perdue said. “Farmers will tell you that they would always prefer to sell a good crop at a fair price, rather than receive government aid, and that’s what long-term trade deals will accomplish. But in the meantime, President Trump has promised that he will not allow American agriculture to bear the brunt of the unjustified retaliation from foreign nations. Today we are putting the President’s promise into action.”
The National Wheat Foundation Begins Accepting Applications for Scholarship Honoring Ag Students
The National Wheat Foundation is officially accepting applications for the Jerry Minore Scholarship, honoring a student pursuing a career in agriculture. The scholarship is available to both high school and college students for the 2019-2020 academic year with an application deadline of December 01, 2018.
“The purpose of the Jerry Minore Scholarship is to help students who are passionate about agriculture at school and at home,” said Wayne Hurst, Chairman of the National Wheat Foundation and past IGPA president. “Our students are the future. They will go on to educate the next generation about wheat, agriculture, and their role in society.”
The late Jerry Minore was a BASF Senior Market Manager and a liaison to the wheat industry. Since his unexpected death in 2012, BASF has partnered with the National Wheat Foundation to fund scholarships and honor his advocacy efforts for wheat growers.
To learn more about the Jerry Minore Scholarship and to apply, visit: https://wheatfoundation.org/education-and-scholarships/.
Meetings and Annual Convention
Fall is meeting time around the IGPA offices. Our first round starts later this month, with our Executive Board and general board meeting, Oct. 24-26 at the new JUMP facility in downtown Boise. These meetings bring together the executive board, where bylaws are passed and issues discussed regarding the inner workings of the organization, and the general board meeting where all board members are welcome to come, share ideas, sit in on various committees and give feedback to the staff and other members. These annual meetings are very important and serve as a great way to become more involved in the organization, learn about who we are and what we do to serve you, and how we can work together to meet our goals and objectives. There are several committees to become involved in; from public relations to auction volunteers. If you’d like to attend this year’s meetings, please let our office know asap so arrangements can be made.
Another important meeting coming up in November is the Tri-State Grain Growers Annual Convention. This year the group is headed to Portland for 3 days of learning and activities. Joining forces are IGPA, the Oregon Wheat Growers League and Washington Association of Wheat Growers. This year’s agenda includes great speakers and entertainment, including country comedian Chad Prather, as well as opportunities for break-out sessions discussing current issues such as Farm Bill, NAFTA and what it all means to growers in the pacific Northwest. Visit www.wawg.org/convention/schedule/ for more information as the event approaches.
And More
Winter Cover Shot Needed
We have extended our deadline for our Winter cover shot photo contest. If you have something great, please feel free to send to info@idahograin.org. Winners are recognized on social media and will have their cover shot framed and sent to them.
Awards
Each year, IGPA likes to recognize those within the industry who go above and beyond the call of duty in terms of leadership, guidance and involvement within the organization. Three specific awards are given each year at Tri-State Annual Convention and are decided on by the IGPA executive board. This year’s awards nominations are currently being decided upon so look for the news on winners to come out soon!
Friend of IGPA: this award is given to any individual, industry associate, elected official, member of the media, or other person who has demonstrated exceptional support, value, and work with and for IGPA over the past year.
Member of the Year: this award is given to an IGPA member who has demonstrated exceptional leadership and a high level of involvement and commitment to the mission and goals of the Association over the past year.
Achievement Award: this award is given in recognition of achievement to an individual, associate, or otherwise at the discretion of IGPA’s Executive Board.