Farm Show Allows Some Venting
China, Trade Markets Dominate Farmfest Forum With Secretary Perdue
REDWOOD FALLS, Minn. (DTN) -- Bob Worth didn't wait for a listening session at Farmfest on Wednesday to start before getting a few words with Agriculture Secretary Sonny Perdue about the prevented planting situation in southwest Minnesota.
Worth visited with Perdue while the secretary was eating pancakes. The secretary said he didn't think USDA would have a lot of extra funds to increase prevented planting indemnities, even though that was tied to a disaster package.
"We really, really got hit hard with prevented planting," said Worth, who ended up with prevented planting claims on about 70% of his ground. "It's going to be very difficult for farmers to make their loans and secure financing. It's going to affect our small towns, as well, because they rely on agriculture."
Whether it was sharing the struggles of getting a crop in or worrying about where the crop may go, farmers and Minnesotans had a lot on their minds at a Farmfest forum with Perdue and House Agriculture Committee Chairman Collin Peterson, D-Minn. The listening session also included Democratic Minnesota Reps. Angie Craig and Dean Phillips, Republican Reps. Jim Hagedorn and Peter Stauber and Rep. Ted Yoho, R-Fla.
One farmer got a loud round of applause by telling the secretary USDA shouldn't put out speculative planting numbers that kill a market rally. Perdue defended the math and accuracy of USDA statisticians.
Kevin Paap, president of the Minnesota Farm Bureau, called on the congressmen to come together on issues such as broadband coverage, improving the situation for agricultural labor, and trade. "We need your help and your leadership. Can we count on you for that?"
Peterson said he supports the U.S.-Mexico-Canada-Agreement because it does not harm U.S. agriculture and improves trade potential. "When they came out with the agreement, they not only maintained that, but they improved it."
As Peterson made those comments, Perdue held up a "#USMCA Now" sign.
Gary Wertish, president of the Minnesota Farmers Union, told the panel his group disagrees with President Donald Trump's strategy on trade with China. Further, he said, the Market Facilitation Program payments are viewed as "welfare payments" and "bailouts" by other Americans.
"This is causing long-term, devastating damage not only to farmers but rural communities," Wertish said. The payments also do not make up for the lost markets farmers are facing with a continuing cycle of low prices that will be compounded with anticipated lower yields this fall, he said.
"The banker doesn't tell him (the farmer), 'You are a patriot, and you don't have to pay your bills,'" Wertish said.
Brian Thalmann, a farmer from Plato, Minnesota, and president of Minnesota Corn Growers Association, thanked the secretary for the new round of MFP payments. But Thalmann also criticized some tweets from Trump implying that farmers were doing great now.
"We're not starting to do great again," Thalmann said. "Things are going downhill and going downhill quickly."
CHINA A BIG FOCUS
Joel Schreurs, a farmer from Tyler, Minnesota, and a national director for the American Soybean Association, told the panel he did not think the continuing hardline approach with China was going to work, and in the meantime, soybean farmers are losing a long-term relationship with China.
Schreurs said afterward that China, as a culture, takes a longer view and strategy than the U.S.
"I just don't see that market coming back quickly," he said. "It's not going to be a six-month thing."
Perdue disagreed. "I think we will get the market back," he said. "It's got to be fair, free and reciprocal." Perdue added the U.S. is also exploring more markets in Southeast Asia and India.
With the trade tension ratcheting up again this week, Perdue and Peterson also spoke to reporters with China largely dominating the questions. Perdue was asked what lies ahead in the next few months.
"My goal would be to have China play fair, to commit to what they committed to do 20 years ago in the WTO (World Trade Organization)," Perdue said.
The secretary cited China's theft of intellectual property, such as shipping biotechnology seed corn to China to "try to re-engineer the patented technology," as well as the forced transfer of technology.
"That's not the way the No. 2 economy in the world should trade, and President Trump is pretty firm about that, and they need to change their ways and change their culture of trying to build their economy on the backs of cheating," Perdue said.
The next step, Perdue said, "Is the ball is in China's court."
As negotiations were progressing earlier this spring, Perdue said, hardliners in China got to President Xi Jinping, and China then began to backtrack on its commitments, including agricultural purchases. Perdue said Chinese officials were having a meeting this month.
"I hope they get it sorted out and decide to come to the table and be reciprocal, free and fair traders."
The secretary later added, "We want to continue to have talks. President Trump would like to have a trade revolution."
Perdue noted the Market Facilitation Program sign-up just began for a second round of payments, and he said there is no intention of going beyond the $16 billion program, for now.
"If President Trump has some other ideas, we'll talk to him," Perdue said. "It depends on what the market does for the rest of the year."
Peterson said he disagreed with at least some of Trump's trade moves and would have kept the U.S. in the Trans-Pacific Partnership. Peterson said he is doing what he can to work with the administration to mitigate the challenges facing farmers. He said he agreed with some of the comments made by farmers about the market difficulties.
"I hope there is a successful outcome, and the facilitation payments have more than offset the losses from what I can see," Peterson said.
Still, Peterson said he thinks at least some farmers "are going to have some tough sledding this winter. They are going to have a tough time getting financed. I'm not blaming anybody. That's just the reality of where we are at."
Peterson also noted China isn't in a position to buy more soybeans because of the decline of China's hog herd due to African swine fever (ASF). By some market estimations, China has lost or culled as much as half of its hog herd because of the disease.
"The demand for soybeans has gone down, not because of the tariffs, but because 60% of their hog herd is killed," Peterson said.
Perdue added that once China goes through its frozen pork stocks, then the country will ideally turn back to the U.S. for some pork.
"We believe once they get their freezers emptied out, there will be a lot of demand for U.S. pork in China," he said.
ON DAIRY PROGRAMS
Peterson said he was surprised that a month into enrollment of the Dairy Margin Coverage (DMC) that only about 61% of Minnesota dairies have enrolled yet.
"For the life of me, I cannot figure out why it is not 100%," he said.
Peterson also said he didn't understand why dairy farmers didn't take the five-year option for a 25% insurance discount.
"This gives us a safety net, and that's what we have needed," he said.
Peterson got pushback from Tiffany Knott, who works with dairies on their milk quality. Knot said she has watched at least five client dairies go out of business in recent months. The DMC does not make up for several years of low prices and little protection over the past five years, she said.
Peterson said he is getting complaints. "I just get frustrated with people who are looking at this backwards," he said. "This is not about how much money you are going to get from the government. This is about guaranteeing a gross income for your operation."
On negotiations with EPA regarding small-refinery exemptions, Perdue said USDA has objected to EPA over the idea of not at least reallocating any gallons waived by EPA.
At least one farmer cited during the listening session that the small-refinery exemptions had cost corn farmers roughly 866 million bushels in demand over the past two years. Perdue basically said talks with EPA and White House staff are continuing.
"We're working on those numbers now with EPA," he said.
USDA ERS RELOCATION
A reporter asked Perdue to respond to comments from Mick Mulvaney, acting White House chief of staff, who said at a political speech in South Carolina that USDA showed one way to get federal workers to quit was to move the agency out of D.C.
After laughing, Perdue said, "No, that was not the purpose. I think that was a different crowd in South Carolina. You have heard me state from the beginning that our goal was that all of these members would find a transfer. We understood for family purposes that would not be. But that was in no way, shape or form our intention."
Chris Clayton can be reached at Chris.Clayton@dtn.com
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