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A Weekly Update From Your Friends at the Red River Farm Network Monday, February 20, 2017

A Weekly Update From Your Friends at the Red River Farm Network Monday, February 20, 2017

Weekly News Highlights

Reporting Agriculture’s Business — It’s National FFA Week. The Red River Farm Network is a proud supporter of youth in agriculture and pleased to bring you special coverage this week. We’re featuring success stories of former FFA members in this week’s FarmNetNews. From the early Farm Bill discussions to the news coming out of Bismarck, St. Paul and Pierre: all can be found in FarmNetNews. Join RRFN this week at the International Crops Expo in Grand Forks. Follow coverage on your RRFN radio affiliate. You can also find us on Facebook and Twitter. The RRFN team, Carah, Mike, Randy, Jay and Don are also on Twitter.

A Potential Crisis Situation for Rural America — During testimony before the House Agriculture Committee, Texas A&M University agriculture economist Dr. Joe Outlaw outlined the results of his annual survey of crop farmers. Reflecting on farm finances, Outlaw said the economy is “bad” and could potentially be a crisis situation for Rural America. “Corn farmers from North Dakota and Iowa, as well as cotton farmers from west Texas indicated the only reason they broke even in 2016 was record yields,” said Outlaw. “Generally, all the rest indicated 2016 was a loss year and had to roll operating notes forward or draw from reserves to pay off loans. Most indicated their equity positions were down at least 20 percent from 2013.” Three-hundred farmers from across the central part of the country responded to this survey. From that sample, Outlaw said only one producer reported making a profit in 2016.

Operating Costs Have Not Declined as Much as Commodity Prices — During the same House Agriculture Committee hearing, USDA Chief Economist Rob Johansson told lawmakers farm income is expected to remain flat in 2017. “We’ve seen land values and cash rents decline last year. Evidence suggests those will continue to decline in 2017. The rate of decline remains relatively slow. Recent data from the Federal Reserve Banks indicate year-over-year declines of between one-and-one-eighth percent with ag land values. Many producers face difficulties with low commodity prices, as operating costs have not fallen as far or quickly as prices.” Johansson says some producers can rely on capital reserves, but to those new to farming, that’s no longer an option. Interest rates still low and farmland values declining somewhat slowly. As a result, farm debt presents a lower risk to agriculture than it did in the 1980s.

A 10-Year Forecast — USDA has released its annual forecast, projecting the next ten years in agriculture. USDA economist David Stallings coordinates this report and said the farm industry is re-adjusting after record income in 2014. “We do have net cash income and net farm income continuing to fall from our recent record highs. Net cash income declines through 2019 before remaining steady. Net farm income declines in 2017 and then increases back to 2016 levels in the later years of the projection period.” Stallings says the total acreage devoted to crop production will decline over the next ten years.

Getting Serious — American Farm Bureau Federation Senior Director of Congressional Relations Mary Kay Thatcher says 2018 Farm Bill discussions are about to get serious. “These are the first hearings of the year. They won’t be the last, but I think both sides have said they are going to start this out by really listening to farmers and other people affected by the Farm Bill and then they will start putting pen to paper and moving forward.” The budget will be a difficult part of the conversation. “We have a big deficit. People will be looking for other places they can take a cut. We already know we have less money in this Farm Bill to build a bill with a good safety net, nutrition program, etc., than we did the last time. The budget will play a big part in it.” The Senate Ag Committee has scheduled a Farm Bill field hearing this Thursday in Kansas.

Conway Hails Farm Bill Savings — The House Agriculture Committee hosted a hearing to review the rural economic outlook ahead of upcoming Farm Bill discussions this past week. Committee Chairman Mike Conaway said the current conditions in agriculture must be considered in developing the 2018 Farm Bill. “Another context we need to take when writing the next farm bill, is this committee’s contribution to deficit reduction. The critics of the Farm Bill are right, we didn’t save the taxpayers the $23 billion promised. We saved them $100 billion.” Conaway also said it’s important to get a bill finished on time.

In a Strong Position for the Farm Bill — Farm Bill discussions are starting quickly. South Dakota Congresswoman Kristi Noem is looking forward to getting the discussions started in the state. “Our goal is to move a bill this year and get it to the Senate. We’re advocating for a strong safety net for agriculture and conservation needs to be strong. We’re looking forward to that debate. I think we’re in a strong position, because the Farm Bill spending has been lowered the last few years.” Noem says there will also be changes in commodity programs.  “I’ve heard from lots of folks in South Dakota that the ARC-County program needs revisions.”

Starting On the Right Foot — National Farmers Union President Roger Johnson thinks farm bill discussions are starting off on the right foot. “House Ag Committee Chairman Conaway is talking about trying to build a Farm Bill first based on need instead of focusing on a declining budget number. I think that’s the right approach,” says Johnson. “It’s important to be fiscally prudent here. It puts us potentially on the edge of a difficult next several years. We’ve gone through a couple of tough years. It’s important we have a farm bill that will provide the right kind of a safety net so folks have a chance to survive.”

Trump and Trudeau Discuss NAFTA — There has been a lot of rhetoric about trade and the North American Free Trade Agreement. President Donald Trump said only minor changes will be made in the trade deal with Canada. “We have a very outstanding trade relationship with Canada,” said Trump. “We will be tweaking it, doing certain things to benefit both of our countries. It’s a much less severe situation than what’s taking place on the southern border. On the southern border, for many years, the transaction wasn’t fair to the U.S.” Canadian Prime Minister Justin Trudeau emphasized the relationship between the U.S. and Canada.  “We know by working together, ensuring the continued effective integration of our two economies, we are going to be creating greater opportunities for middle-class Canadians and Americans now and well into the future.

Cutting Red Tape — Legislation has been introduced in the House and Senate to exempt farmers from some conservation reporting requirements. Right now, all incorporated business entities, including farms and ranches, must register with the government’s System for Award Management. A Data Universal Numbering System number is also needed to receive financial assistance from agencies like the NRCS. Minnesota Senator Amy Klobuchar is cosponsoring the bill. The National Association of Conservation Districts praises the bill, saying the current law discourages landowners from participating in NRCS cost-share programs.

New Anhydrous Regulations — New anhydrous ammonia regulations are set to go into effect March 21, 2017. North Dakota Agriculture Commissioner Doug Goehring says the new EPA regulations caught the industry off guard. “We were a bit surprised,” says Goehring. “We submitted comments last year and didn’t think it was going anywhere. We heard toward the end of the year, the rules were going to be out before former President Obama left. Sure enough, they did. No one was given a head up. We did a search in the Federal Register and found they were out there and they go into effect soon.” One of the concerns is over a required third-party auditor. “When they bring in a third-party auditor, who actually certifies them? The stipulations they have on it, even if you can find one, if you’ve done business with them in the last three years, you can’t do business with them now or for the next three years. That limits their ability.”

Rural Finance Authority is Back in Business — Minnesota Governor Mark Dayton signed legislation Friday, funding the Rural Finance Authority. This $35 million program provides small loans to beginning farmers and others through the Minnesota Department of Agriculture. The RFA ran out of funds at the end of 2016 and passed both chambers as a stand-alone bill.

A Request That Seems ‘Onerous’ for Some — A bill that would prevent the Minnesota Department of Transportation from establishing a permit process for those who mow or hay in road ditches has been referred to the House Agriculture Policy Committee. Representative Chris Swedzinski, who is a Republican from Ghent, is sponsoring the bill. Swedzinski said his bill turns back an “onerous request” from MnDOT. “While this permit may not seem like a lot in itself, it’s one of many of permits an individual has to get. The idea it’s the wild, wild west out there and farmers are destroying the ditches is simply not the case.”

BWSR to Outline Buffers and Alternative Practices — The Minnesota Board of Water and Soil Resources will provide an update on buffers and alternative practices in the State Senate this evening. This briefing will be heard at a joint hearing for the Senate Agriculture, Rural Development and Housing Finance Committee and the Environment and Natural Resources Finance Committee.

MFU Legislative Minute — Check out this update from the Minnesota Farmers Union on Minnesota’s current legislative session.

Pollinators Cited as a Reason for MnDOT Ditch Permits — The issue of mowing or haying ditches has become a major point of contention for agriculture. MnDOT director of government affairs Scott Peterson defended the permitting rules, saying safety was one reason for the permits. Peterson testified before a Minnesota House committee that there is an environmental issue. “We heard a lot of concern from some of the folks who are concerned about the habitat for pollinators, small game and birds,” said Peterson. “In addition, the governor has issued an executive order requiring MnDOT to manage its right of way to the benefit of the pollinators.” Minnesota Farm Bureau and Minnesota Farmers Union testified in support of the bill that would prevent MnDOT’s action. Pat Verly, Marshall, was one of a handful of individual farmers who also went before the House Transportation Committee. “Most of the people who cut the road ditches are doing a good job of controlling weeds and maintaining ditches and saving the DOT some expense,” explained Verly. “My concern as a landowner is why has this come about when the old system is working very well?”

Spring Outlook is Cool and Wet — Commodity Weather Group co-founder and meteorologist Dave Streit says barring a rapid flip to El Nino condition, the spring outlook for the Northern Plains looks cool and wet. “The outlook for the March/April timeframe will probably be on the cooler-than-normal side. That may slow up some of the late snow melt and the dry down in these wet soils.”

International Crop Expo This Week — The International Crop Expo comes to the Grand Forks Alerus Center Wednesday and Thursday. Show hours are 9 to 5 Wednesday, and 9 to 4 Thursday. Retired Grand Forks County Extension agent Willie Huot helped organize the agenda, and says there will be some very timely topics for the economic times we’re in. “We’re also having a joint session talking about what to do after the wet harvest that we had last fall: how you can best prepare your fields for the 2017 crop year and things you can do to mitigate some of the damage that was done. Another important one is spray drift and dicamba.” Thursday afternoon’s program about making smart financial decisions should draw some attention. “We’re going to have NDSU Extension’s Frayne Olson and Andy Swenson talking about some common-sense things growers should be thinking about in 2017 and ahead.” The trade show will be full again this year. There’s free admission and parking for the International Crop Expo.

A Step Change for Agriculture — On Friday, the Environmental Protection Agency approved six herbicide tank mixes and 27 adjuvants for use with XtendiMax. Monsanto chemistry manager Shawn Vis expects these regulatory decisions to be made right into the growing season. “It is a fluid label. That label can change. Even though we have six (tank mixes) now, we expect more to be coming in short order.” Having the regulators adjusting supplemental labels on an ongoing basis is described as “a step change for agriculture.” Information on tank mixes, adjuvants and nozzles will be available at the ag retailer. Details here. Vis says this dicamba product will provide exceptional weed control. Multiple modes of action are still recommended, including the use of a pre and a layered residual post and a post-emergence product like XtendiMax.

Fertilizer Prices Firm — Fertilizer prices continue to be firm as spring field work nears in the far south and Delta. NPK Fertilizer Advisory Service President David Asbridge cites a decision by China to cut back nitrogen production and exports. Potash and phosphate prices are also firming. “We’ve had some issues with our international companies. The Moroccans have had weather issues and haven’t been able to load. The Canadians have cut back on their potash production in the last few months, which has tightened stocks.”


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Source: Red River Farm Network