Greetings!
We hope you enjoy this week’s edition of KAWG E-News. The Kansas Wheat office will be closed next Thursday and Friday in observance of Thanksgiving.
All Kansans, not just farmers, affected by NAFTA, Trade
By Ken Wood, sent out to media on Thanksgiving Week
Every year as my family sits down to eat Thanksgiving dinner, we all think about why we are thankful. We are thankful for our health, our home, our family, and we are thankful for the abundant food supply grown by our nation’s farmers. In fact, the United States is so good at producing food that a large portion of it is sold beyond our borders. As a Kansas wheat farmer, I am proud that we produce food to feed the world, but lately the rhetoric about trade coming out of Washington has me concerned.
Someday soon we may lose our ability to sell the food grown on our farm to consumers around the globe. If this happens all Kansans would be affected, not just our family farmers. Whether you work in an office building or you drive a tractor, agriculture — and the ag economy — affects you.
According to a recent study conducted by members of the U.S. food and agriculture industries, agriculture directly employs over 70,000 Kansans and has a direct economic impact of almost $20 billion. The Kansas Department of Agriculture estimates that the agriculture industry accounts for over 44% of the Kansas economy.
Despite what some may think, farming doesn’t just impact those of us out in the countryside. Agriculture employs almost 2,000 people in Johnson County, resulting in a $539 million economic impact. Similarly, in Wichita and its surrounding areas, agriculture employs over 10,000 people and produces a $3 billion economic impact. These numbers reflect direct employment and economic impact; this doesn’t even take into consideration related industries who rely on agriculture.
In order for agriculture, and Kansas, to grow and flourish, international trade must also grow and flourish. The value of all Kansas ag exports totals at $3.7 billion, and a large majority of that value comes from our North American neighbors. This is why we should all be concerned about the rhetoric surrounding NAFTA, or the North American Free Trade Agreement.
Just how important is NAFTA to Kansas? Of all the countries that Kansas companies ship their products to, Mexico is our largest customer, followed closely by Canada. Combined, these two countries make up 36% of all the international business done by Kansas companies. This is no accident; the United States enjoys unfettered access to Mexican and Canadian consumers, which in turn has been a boon for the Kansas economy.
In terms of overall impact, agriculture represents seven of the top 10 exported products from our state. This includes wheat, which is the second most valuable international export from Kansas, trailing only airplanes. Prior to NAFTA, Mexico imported an average of 11.5 million bushels of wheat from the United States. After NAFTA, that number has increased nearly tenfold to a whopping 110.2 million bushels, or 4.6 billion loaves of bread. In 2016, almost 30 million bushels of wheat went by shuttle train straight from the Kansas countryside across the border into Mexico.
Mexico is a fiercely competitive market, and we are beginning to see our market share erode in front of our eyes. Just last month, Mexico announced it will begin buying wheat from Argentina, all because of the uncertainty surrounding NAFTA. The state of Kansas, and our economy, cannot afford to lose this business.
We need to make sure that Washington knows how important trade, and NAFTA, is to our state. Whether you are an accountant in Overland Park, an engineer in Wichita, or a farmer in Chapman, the health of the ag economy affects us all.
It’s time to renew KAWG membership
| Thank you for your membership in the Kansas Association of Wheat Growers. We know times are tough on the farm with depressed commodity prices and high input costs, but your membership and participation in the association is more important than ever.
The agriculture industry has many new opportunities to influence legislation with a new presidential adminstration and fresh-faced legislators at both the state and national level. Discussion on the next Farm Bill will begin soon, increased taxation on farmland has been proposed (and defeated) for several years in the Kansas Legislature and international trade deals that affect export markets may be in danger. Now is the time for wheat farmers to be heard loud and clear on Capitol Hill, and the only way we can do that is Over the past two years KAWG has fought hard on legislation that directly affects Kansas farmers. Our organization has helped influence policies ranging from trade promotion, increased funding for agricultural research, fighting back against mandatory food labeling laws and protecting against cuts to crop insurance programs. We have also been heavily involved in protecting farmer interests on the state level, advocating for favorable tax policies, increased support for farmer programs, and protecting private
It’s renewal seasons again for the Kansas Association of Wheat Growers! If your membership is expiring, you’ll see a slip come in through the mail… If one doesn’t come, your expiration is in the future, so don’t worry! Be sure to keep an eye out for yours in the mail over the next week or so. Please send the back portion of the slip into the office alongside your check or credit card information.
If you’d like to renew by phone, we’d love to hear from you! Call 785-539-0255 and ask for Jordan. |
RMA Announces Changes to its Crop Insurance Policy
from RMA
The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) today announced changes to its crop insurance policies. Major changes for 2018 focus on conservation compliance certification and choice of unit structure based on the risk management needs of producers.
“Every producer’s situation is unique. At RMA we want to ensure the policies we provide are flexible enough so that producers are getting the most effective and efficient coverage. Ensuring producers have the right coverage helps to strengthen the farm safety net,” said RMA Acting Administrator Heather Manzano.
To offer producers increased flexibility, RMA has removed the June 1 certification deadline date from the conservation compliance provisions and will instead refer to the premium billing date. This will allow the conservation compliance certification process for crop insurance to be administered more consistently with the way it is administered for other USDA programs. RMA is also increasing the flexibility of its services by allowing a policyholder to select different unit structures by practice for either irrigated or non-irrigated practices. Policyholders may now choose an enterprise unit for one practice and the most appropriate unit structure on the other practice, be it a separate enterprise unit or optional or basic units.
These changes reduce the burden placed on producers and makes crop insurance more accessible. RMA worked closely with its stakeholders to identify the changes, which were published Nov. 24 in the Federal Register. Learn more about crop insurance and the modern farm safety net at https://www.rma.usda.gov.
Jerry Minore Memorial Scholarship Opportunity for Students in Agriculture
from NAWG
Jerry Minore was a longtime friend of the wheat industry and advocate for wheat farmers. To honor his work and life, his company, BASF, has partnered with the National Wheat Foundation to establish a scholarship for students with connections to the wheat industry who are planning careers in agriculture. The Minore Memorial Scholarship will fund four college scholarships for the 2018-2019 academic year: two $1,500 scholarships and two $1,000 scholarships. Deadline for applications is December 31, 2017. For more information on how to apply, visit the National Wheat Foundation site.
News from National Association of Wheat Growers
NAWG President and CEO Attend MGGA Annual Convention to Speak on Current Priority Issues for Wheat
NAWG President Gordon Stoner and CEO Chandler Goule attended the Montana Grain Growers 62nd Annual Convention and Trade Show from November 28-30, 2017 in Great Falls, Montana. NAWG President Stoner spoke to attendees on his current activities as NAWG President and updated the group on the Farm Bill, Proposition 65 and Glyphosate, and his participation in a recent U.S. Chamber of Commerce panel on NAFTA and agriculture. NAWG CEO Chandler Goule provided attendees with a Washington, D.C insider look into the Farm Bill, Trade (NAFTA), policy issues impacting wheat, and tax reform.
NAWG VP of Policy and Communications Speaks to Growers at Texas Wheat Symposium
On November 29, 2017 NAWG VP of Policy and Communications spoke to growers at the 2017 Texas Wheat Producers Board and Association Symposium. The 2017 Symposium was held at the Amarillo Civic Center Grand Plaza in Amarillo, Texas. Tonsager spoke to attendees on NAWG’s latest activities and updated the group on the recent actions in Washington around the Farm Bill, Trade, and Tax Reform.
General Mills Deepens Investment in Soil Health with $735,000 Contribution to National Wheat Foundation
General Mills continues to invest in soil health practices on U.S. agricultural farmland with its latest contribution of $735,000 to the National Wheat Foundation who together with the Soil Health Partnership, will advance widespread adoption and implementation. The funds, equally distributed over the next three years, will be used to conduct soil health research on wheat farms and education outreach to more than 125,000 wheat farmers across the Northern and Southern Plains. As part of this agreement, General Mills has partnered with the SHP and the National Wheat Foundation to provide on-farm mentorship for the farm operators. SHP farmers, the farmers’ agronomists, and SHP Field Managers will train new and existing farm staff in advanced nutrient management and tillage methods. Read the joint release highlighting the partnership here.
Update Tax Reform 2017
Yesterday, November 29, 2017, the Senate voted to move to debate on the tax reform measure. As this process is happening under budget reconciliation rules, there is an open amendment process that will lead to a vote-a-rama this evening/night, similar to what has taken place on budget resolutions in the past. NAWG is closely engaged on this and will keep its grower posted with updates. Senate Majority Leader Mitch McConnell (R-Ky.) needs 50 of his 52 GOP senators to support the legislation, if every Democrat opposes it.
NAWG has been active around tax reform and has recently sent a letter Senate leadership outlining some of its concerns and positives of the tax reform legislation. Read the letter here.
USDA News Release: RMA Announces Changes to its Crop Insurance Policy
On November 28, 2017, The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced changes to its crop insurance policies. Major changes for 2018 focus on conservation compliance certification and choice of unit structure based on the risk management needs of producers. Read the announcement here.
Jerry Minore Memorial Scholarship Opportunity for Students in Agriculture
Jerry Minore was a longtime friend of the wheat industry and advocate for wheat farmers. To honor his work and life, his company, BASF, has partnered with the National Wheat Foundation to establish a scholarship for students with connections to the wheat industry who are planning careers in agriculture. The Minore Memorial Scholarship will fund four college scholarships for the 2018-2019 academic year: two $1,500 scholarships and two $1,000 scholarships. Deadline for applications is December 31, 2017. For more information on how to apply, visit the National Wheat Foundation site.
THE BATTLE INTENSIFIES FOR THE WHEAT PRICE
There is always a battle for the wheat price. Part of the time we are watching the supply side of the balance sheet and trying to predict wheat production. During the summer months, it is wheat production in the Northern Hemisphere that attracts the attention. To a lesser extent, during our winter months, wheat traders watch the wheat development in the Southern Hemisphere, namely Argentina and Australia.
This is the time of the year when wheat traders look to the demand side. It is strong wheat demand that can change the direction of the wheat price.
For the second week in row, world wheat export news has increased. Countries that tendered for wheat this week, included Egypt, Ethiopia, Bangladesh, Iraq, Algeria, Saudi Arabia, and Thailand. Egypt bought 120,000 metric tons from Russia, Algeria bought 570,000 metric tons and Iraq purchased 100,000 metric tons. Iraq’s wheat purchase included 50,000 metric tons from the United States. Most of the world wheat sales sourced out of Russia, Romania or France.
It was the fourth week in a row for lower wheat prices for exportable wheat out of Russia. This drop in their wheat price has weighed on our wheat price. I believe we have just seen the lowest Russian wheat price for the year. Russia has been active in selling wheat and shipping but soon some of their ports will freeze and movement will slow down.
Currently, United States wheat demand from the Asian countries is running well above year ago levels. This is the time of the year when wheat exports increase to this area. Australia’s wheat production has been reduced because of weather problems. They are about 50% harvested but this weekend brings heavy rains to a large area. There could be some loss in production but quality will be affect. This will move milling quality wheat into the feed wheat category.
The price action during the last three months has been counter seasonal. Record world supply is the cause for the drop in the wheat price. Hopefully, strong export demand continues.
LARRY GLENN
800-270-7694
Source: Kansas Association of Wheat Growers