Top 10 Ag Stories of 2019: 7, 6, 5
Dicamba Injury Spreads; USMCA Moves Ahead; Farm Income Rises
OMAHA (DTN) -- Each year, DTN publishes our choices for the top 10 ag news stories of the year, as selected by DTN analysts, editors and reporters. Today we continue the countdown with No. 7 being an increase in off-target dicamba movement and how state regulators and growers feel "dicamba fatigue" as they attempt to deal with the problem; No. 6 being the United States-Mexico-Canada Agreement negotiations ending with a late-year win for President Donald Trump; and No. 5 looking at the role that government assistance played in boosting farm income to its highest level in five years.
No. 7: Dicamba Fatigue Sets In
DTN's No. 7 top ag story of 2019 was dicamba fatigue setting in. Despite one of the most restrictive pesticide labels in agricultural history, dicamba continues to move off target and cause damage to landscapes across the Midwest and South. With no response from EPA, a growing number of states announced their own restrictions to dicamba labels to try to decrease injury reports and help overwhelmed state pesticide regulators. These state measures, such as early summer cut-off dates, set the stage for a showdown over states' versus federal rights in policing pesticides.
By Emily Unglesbee
DTN Staff Reporter
ROCKVILLE, Md. (DTN) -- Last year, EPA renewed the federal labels of three dicamba herbicides for use over the top of dicamba-tolerant crops. The new labels, set to expire in December 2020, are some of the most restrictive herbicide labels in agricultural history. Nonetheless, for the third consecutive year, dicamba continued to move off target across the Midwest and South in 2019.
By the end of the year, state pesticide regulators from 19 states reported nearly 1,400 cases of alleged dicamba injury. Most regulators suspect these cases represent only a fraction of the actual drift cases occurring, given that three years of reporting with no repercussions have left many rural citizens and farmers with "dicamba fatigue," a term coined by Indiana state pesticide regulator Leo Reed.
Illinois led the nation with 724 alleged cases of injury, a record for the state. Complaints in Indiana also hit an all-time high, with 178 alleged cases. States such as Arkansas, Kansas, Nebraska and Iowa reported similar levels of damage from 2018 to 2019, and a few states such as Missouri reported lower levels.
While soybean injury cases dominated conversations among many growers, the effect of off-target dicamba drift on other plants, in particular trees and specialty crops, started to draw more attention from non-agricultural sectors of society in 2019.
In Arkansas, the state's Audubon Society office raised some eyebrows by leading a volunteer canvassing effort to spot, document and report dicamba injury to the state's vegetation. Foresters are raising alarms in states like Illinois, Nebraska and South Dakota, where they are reporting newfound problems with tree health. In South Dakota, Extension officials are leading a multistate effort to collect and analyze samples from dicamba-injured trees as the start of a study on the long-term effects of herbicide injury on the nation's trees.
In March, the EPA announced it was reevaluating states' ability to use Section 24(c) special local needs labels to further restrict the federal labels of dicamba herbicides, although it permitted states to enforce them in 2019. After that announcement, EPA fell silent on the dicamba issue. Unlike in 2018, when EPA conducted weekly conference calls with state regulators and weed scientists on dicamba injury during the summer and fall, the agency had no formal communication set up with states on this topic in 2019 until late November.
With no additional guidance on the continued legality of 24(c) label restrictions, a growing number of states have announced new dicamba restrictions beyond the federal label for 2020. These state measures, mostly early summer cutoff dates, will set the stage for a showdown over states' versus federal rights in policing pesticides.
Emily Unglesbee can be reached at Emily.email@example.com
Follow her on Twitter @Emily_Unglesbee
No. 6: USMCA Negotiations Carried Throughout 2019 to a Late Win for Trump
DTN's No. 6 top ag story of 2019 was how the year ended with USMCA serving an important win for President Trump, as well as U.S. farmers. After Democrats took over the House of Representatives in January, USMCA was no longer a slam dunk for President Trump and his trade team. U.S. Trade Ambassador Robert Lighthizer spent much of the year negotiating with House Democrats while agricultural groups lobbied every way possible to get Congress to ratify the trade deal.
By Chris Clayton
DTN Ag Policy Editor
OMAHA (DTN) -- At least some agricultural commodities started 2019 facing tariffs from Canada and Mexico in retaliation for steel and aluminum tariffs the Trump administration had placed on the two countries.
That tariff battle somewhat heightened the urgency for agricultural groups to see the United States-Mexico-Canada Agreement get ratified by Congress. The push to get USMCA approved continued throughout the year as farm groups highlighted different ways to champion the trade deal.
In May, the Trump administration dropped the metal tariffs against Canada and Mexico, and the two countries reciprocated by dropping tariffs against items such as pork, cheese, apples and prepared beef products.
After Democrats took over the House of Representatives in January, USMCA was no longer a slam dunk for President Donald Trump and his trade team. Democrats were concerned about labor standards in Mexico after watching millions of manufacturing jobs head south for cheaper workers and poorer environmental regulations under the North American Free Trade Agreement. So began nearly a year of negotiations between House Speaker Nancy Pelosi, D-Calif., and her team, along with U.S. Trade Representative Robert Lighthizer.
Testifying before the Senate Agriculture Committee in May, Lighthizer told senators it would take more time working with Pelosi before the Trump administration could submit USMCA to Congress for ratification.
"I think we're making progress in that, and my hope is over the next couple of weeks we will make substantial progress," Lighthizer said at the time.
Canada and Mexico are top markets for most agricultural commodities. Under NAFTA, food and agricultural exports to Canada and Mexico grew from $9 billion in 1993 to nearly $40 billion in 2018. The USMCA is expected to boost U.S. agricultural exports by an additional $2.2 billion, according to an International Trade Commission report.
Agriculture was among the biggest supporters for getting the new trade deal completed. In May, 950 agricultural groups signed a letter calling on Congress to ratify the trade deal. Lighthizer had said the new trade deal "is remarkably better" for agriculture, "even though agriculture did relatively well under the old NAFTA."
Mexico's Senate ratified the trade deal in the early summer. Canadian officials chose to wait until after the country's parliamentary elections in October, partially because Canada's dairy farmers did not like changes in USMCA that open up U.S. dairy access. As the year moved on, Canadian Prime Minister Justin Trudeau opted to wait until the U.S. ratified the trade agreement before moving ahead with it in his country.
Farm groups held rallies and former USDA secretaries got together to tout USMCA. The Missouri Farm Bureau even made a parody of the Village People song "YMCA" with farmers standing in a soybean field spelling out "USMCA."
Still, it wasn't until mid-December that Lighthizer agreed to push Mexico on higher labor standards, as well as drop a provision in the trade deal that would have locked in longer patent times for pharmaceuticals and also dropping a provision on an investor-state dispute settlement mechanism (ISDS). Changes in negotiations got the AFL-CIO labor union to support the trade deal as well as the National Farmers Union. House Democratic leadership then moved to bring USMCA to the floor.
In a paradox for American politics, one day after House Democrats voted to impeach President Trump, they voted along with House Republicans in a 385-41 vote to approve USMCA.
The trade deal will now await action in the Senate expected sometime early next year.
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
No. 5: Farm Income Boosted by Government Payments
DTN's No. 5 top ag story of 2019 was how the net farm income is projected to be the highest in five years, but how a significant part of that is government assistance. With reliance on government payments on the rise, so are other financial measures. Delinquency rates on loans, while still small, are on the rise and farm debt has hit a record-high $415 billion as debt-to-asset and debt-to-equity ratios climbed.
By Katie Dehlinger
DTN Farm Business Editor
MOUNT JULIET, Tenn. (DTN) -- USDA projects net farm income to hit $88 billion in 2019, which, if realized, would be the highest in five years.
"However, the optimistic projection on farm profitability doesn't match real-time indicators typically used to measure the health of the farm economy," American Farm Bureau Federation Market Intelligence economist John Newton wrote in a blog post (https://www.fb.org/…). The overall figure also includes a significant increase in the proportion of income that's due to government assistance.
For perspective, USDA initially forecast net farm income at $69 billion last spring before the Trump administration announced the second iteration of the Market Facilitation Program. This year's program paid out based on county-level trade impact, rather than by crop impact, spreading $16 billion around farm country.
When you add in other forms of government assistance like increased record crop insurance payouts for prevented planting, payments from the Agricultural Risk Coverage and Price Loss Coverage programs, conservation programs, etc., government assistance contributed nearly 20% to net farm income.
With reliance on government payments on the rise, so are other financial measures. Delinquency rates on loans, while still small, are on the rise for both real estate and operating notes. Farm debt has hit a record-high $415 billion as debt-to-asset and debt-to-equity ratios climbed.
"In fact, since 2012, the growth rate of agricultural debt has outpaced the growth rate in agricultural asset values," Newton wrote. "Farm debt has grown by nearly 40% since 2012, while asset values have climbed only 17%. This imbalance in asset performance relative to debt is another sign of a weakening financial situation."
Chapter 12 bankruptcies increased 24% year over year to nearly 600 nationwide, but remain below 2010 levels, as well as levels seen in the 1980s. While there's no single trend, many of the bankruptcies are concentrated in areas that have had multiple tough growing seasons in a row or are heavy into dairy production.
One upside factor for income this year: The futures market gave farmers a chance to forward sell their crop at profitable levels. Newton also added that USDA's methodology accounts for income from all production in that calendar year, even though many farmers sell their crops over a wider window.
"Though farmers and ranchers might end the year on more solid footing than current financial conditions foretell, the trade aid that are likely to get them there are not permanent solutions," Newton said. "Instead, farmers and ranchers are banking on trade, rather than aid, to see them through 2020 and beyond."
Katie Dehlinger can be reached at Katie.firstname.lastname@example.org
Follow her on Twitter @KatieD_DTN
Editor's Note: You can find Numbers 4, 3 and 2 in DTN's top 10 list on Dec. 30.
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