Ag Groups Look for Farm Bill Support

Corn, Soybean Leaders Frustrated Over Stalled Farm Bill as Crop Prices Drop

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Tuesday started out hot at the Farm Progress Show, but clouds loomed on the horizon much like the clouds now over the farm economy. Jed Bowers, first vice president-elect of the National Corn Growers Association, said farmers are frustrated about the lack of movement in Congress on a farm bill. (DTN photo by Chris Clayton)

BOONE, Iowa (DTN) -- With cash corn and soybean prices 30% below a year ago, farm leaders Tuesday at the Farm Progress Show were frustrated that the farm bill is stalled and will likely remain that way until after the November election.

"We've been fighting this battle for a while now, and we've got to get something done," said Jed Bower, a farmer from Washington Courthouse, Ohio. "There's been a tremendous amount of effort and energy we've spent in Washington trying to explain the importance this is to farmers, to have a reliable farm bill that we can work with that provides certainty."

Bower is serving as first vice president-elect of the National Corn Growers Association (NCGA).

North Dakota farmer Josh Gackle, president of the American Soybean Association (ASA), was at an event earlier this month in his home state with Sens. John Hoeven, R-N.D.; Amy Klobuchar, D-Minn.; Tina Smith, D-Minn.; and John Boozman, R-Ark., the latter being the ranking member of the Senate Agriculture Committee. Gackle said the conversation was productive, and all four senators seemed to suggest the committee was moving toward a bipartisan deal.

"Both sides see the need to get a farm bill done this year, especially now with farmers," Gackle said. "The reality on the farm when it comes to profitability and cash flow, when you look at, you know, 30% to 35% decline in commodity prices over the past couple months, the pressure is on even a little bit more."

A year ago, the average cash corn price was $5.03 a bushel. That has fallen now to a national average just under $3.50 a bushel, according to the DTN National Corn Index. Just a month ago, the corn index was closer to $3.90 a bushel.

For soybeans, last year farmers were getting an average of $13.69 a bushel for cash sales. That has collapsed to $9.34 a bushel now, the DTN National Soybean Index shows.

Bower and other NCGA board members have been highlighting the challenges with grain prices and the need to "turn this around." A new farm bill with improvements to the commodity programs and crop insurance would help stabilize commodity markets right now.

"We just need to get some certainty back into the ag economy," Bower said. He added, "But it's so frustrating to our members, our growers across the nation. I mean, we're hearing it everywhere, and I feel it on my farm."

Under the bill that cleared the House Agriculture Committee in May, the Price Loss Coverage (PLC) statutory reference price would increase 10% to 20%. Boosting the statutory reference price will then boost the calculation used to create the effective reference price.

The proposal offered by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., also would boost reference prices at least 5%, though her framework also suggests some crops would see 10%-15% increases.

The House bill also increases the Agricultural Risk Coverage (ARC) revenue guarantee from 86% to 90% of the benchmark revenue. The House bill and the Senate frameworks also increase the maximum payment rate for ARC-County to 12.5% of benchmark revenue.

Boosting the agricultural economy includes not only raising reference prices, but also beefing up the funding for trade programs such as the Market Access Program and Foreign Market Development Program -- often referred to as MAP and FMD. The House bill doubles funding for both of those programs.

"If we can get some additional funding in that, in the farm bill, and help move our products around the world, (that would) help support our prices and things of that nature," Bower said.

Farm leaders noted there is a lot of political posturing gearing up for the election in November. Congress will return after Labor Day with a short window to pass appropriation bills or a resolution to keep the government operating after Sept. 30.

"Right now, what we're being told is they're kind of wanting to see where things land after the election, and then once they know who's in charge, they will start to work it out," Bower said. "So, from our reliable sources, we really think our best option is going to be in (the) lame duck (session of Congress)."

When lawmakers get back to Washington, D.C., Gackle said he would like to see the Senate Agriculture Committee at least advance a bill out of committee. "Time is running short," he said. "There's enough time to get it done, and if much of it is agreed before the end of the calendar year, it would probably be something that could happen."

Gackle, Bower and other ASA and NCGA leaders stressed the importance of not allowing another one-year extension that would roll the farm bill into 2025.

"I think, just because of the uncertainty in farm country right now, a five-year reauthorization is even more important than just another extension of the 2018 farm bill," Gackle said. "When you talk about reference prices, base acres, some of the priorities that we've identified at ASA -- and that soybean farmers have identified as the important changes -- we need to more accurately reflect the business side of the farm and what we're facing when it comes to the financials of the farm. A five-year reauthorization is much more important, or really needed, and much more preferred over just another one-year extension."

Bower pointed to Stabenow's pending retirement, but the Michigan senator is still holding her ground on her priorities and searching for a bipartisan agreement before she brings a bill to committee.

"I understand she wants to fight for what's important to her, and I respect that, because I fight for what's important to corn farmers," Bower said. "But, man, we don't need another extension. We need something that works for growers."

More conversation about the farm bill will come Wednesday as Rep. Glenn "GT" Thompson, R-Pa., chairman of the House Agriculture Committee, is expected to visit the Farm Progress Show. Agriculture Secretary Tom Vilsack will address farmers at the show as well.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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Chris Clayton