Washington Insider -- Friday

New Ag Census Release

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

USDA Critical of Vietnam Ban on Glyphosate Imports

Vietnam's action to ban imports of glyphosate has drawn criticism from U.S. government officials who defended the safety of the widely used herbicide and raised concerns about impact of the ban on Vietnamese farmers.

The decision has raised objections in Vietnam and the U.S., with USDA Secretary Sonny Perdue criticizing the decision by the Vietnamese Ministry of Agriculture and Rural Development (MARD).

"We are disappointed in Vietnam’s decision to ban glyphosate, a move that will have devastating impacts on global agricultural production," he said in a statement. “On numerous occasions, USDA has shared scientific studies with MARD from the U.S. Environmental Protection Agency and other internationally recognized regulatory bodies concluding that glyphosate is unlikely to pose a carcinogenic hazard to humans. This ban flies on the face of that scientific evidence. Furthermore, Vietnam has sidestepped its obligation to notify this regulatory change to the World Trade Organization."

China Looking at Request for Review of DDG Duties

China's Commerce Ministry confirmed to Reuters that the agency is looking at a request by the U.S. Grains Council to review antidumping duties on imports of US distillers' dried grains (DDGs).

The news service received the confirmation via fax from the Chinese ministry who said the request was submitted to the agency February 28 and they sought additional information from the U.S. Grains Council which was submitted March 29.

"Currently, the commerce ministry is investigating the request and provided it meets our legal requirements, we will decide whether to review the case," said the statement.

Should the ministry opt to undertake the review, the statement to the news service said it would be done in an impartial and fair way and a final decision would be made based on that review.

Washington Insider: New Ag Census Release

USDA’s National Agricultural Statistics Service this week released the “2017 Census of Agriculture results.” Originally scheduled for February 2019, the release was postponed because of the lapse in federal funding early in the year.

The reports are massive and not much information has been available for analysis yet, but there were a number of early, more speculative alerts. For example, Bloomberg commented on trends in the number of U.S. farms by size and speculated that big and little farms “probably grew in numbers during a period when agriculture incomes fell 22 percent” and that put pressure on mid-sized growers whose debt skyrocketed.

Blomberg said the “first new U.S. agricultural census since 2012, could offer a sobering peek” at America’s farming community in the five years ending in 2017, as well as suggesting where it’s headed.

Bloomberg then offered its best bet: farm consolidation likely didn’t abate.

The analysis noted that the current report will only capture “part of a downturn that’s persisted into 2019,” fueled by a trade war with China that’s limited buyers in a year with bumper crops. That’s boosted grower debt to a record $427 billion, spurring a continuing “death watch” on the mid-sized farm by some. In fact, the sector includes just over 2 million farms and more than 3 million people — but a large share of that group produces very little food or fiber and is much more dependent on broad economic conditions than on farm sales.

Bloomberg cited opinions including views of Todd Kuethe, a University of Illinois ag economist, who said the sector has had a sort of a “hollowing out” of the middle. “Either you’re one of these large farms or you’re one of these rural, residential farms.”

Bloomberg also reported that the number of farms that have 2,000 acres of land or more increased by 27% in 2012 from 1982 levels — as earlier reported. Conversely, operations with between 500 and 999 acres dropped by about 30%. Meanwhile, the number of “little guys” — largely part-time growers or those farming for leisure or fun — rose as well. Farms between 10 and 49 acres climbed 31%.

Bloomberg also turned to a USDA economist who said the increase in smaller farms is at least partly due to better government data — but also that it may reflect other trends at work. However, he says the trend for larger farms reflects their lower production costs, greater purchasing power and better access to new technology.

So, Bloomberg expects the later census data will provide a deep dive into grower demographics, from the sizes of farms by acreage and income, to the race and gender of those working in the fields.

The report also cites an ag economist from the University of California in Davis who thinks that consumers have benefited from farm consolidation with low prices for food and options like being able to choose between organic and non-organic, for example — and that most farms, even as they’ve grown, are still family-owned.

He also observes that more evidence of consolidation is "not bad news” and thinks that his brother made the smarter choice by staying on the farm. “For the most part we have really talented people in farming,” he says.

It is somewhat surprising that at least some in the media have been willing to share their speculations on industry trends, which in some cases will be a couple of years old by the time they are digested. In addition, farm structure is an extremely complex topic that depends on often misunderstood data. A key issue is that USDA’s definition of a farm has been bitterly criticized for many years because it counts any ag operation that produces, or could have produced $1,000 in sales as a farm. This includes many, many operations whose managers do not consider themselves farmers.

USDA provides rich detail for the several categories of farm operations it covers and points out their characteristics — but many who examine these trends often lump unlike groups together to find things they like, or don’t like.

There is a lot to learn from the detailed census data and a lot of challenges to finding and understanding both the trends and their implications, especially given the current stresses across the sector.

So, we look forward to the new ag census detail and expect a continuing brisk debate on the ins and outs of farming and the growth of the sector and its markets.

This traditionally involves exceptionally interesting fights that deserve close attention — and likely will be even more interesting in the future as the sector continues in the national spotlight on economic, trade, conservation and food policies, Washington Insider believes.

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