Censky sees hopeful trade prospects, hints at new developments

In a meeting with High Plains Journal before giving the lunch address at the Nov. 15 Chicago meeting of the Waterways Conference Inc., Stephen Censky, deputy secretary of agriculture, strongly hinted at positive developments to come at the just-concluded Group of 20 meeting in Argentina, during which President Trump was scheduled to meet one-on-one with China’s President Xi Jinping.

Censky, who grew up on a farm himself, said he is aware of the pain that soybean farmers have been experiencing as a result of the tariff wars with China.

At the WCI luncheon talk, Censky said the trade dispute between the United States and China could be resolved “in a matter of months,” and added, “We need not just commitments from China on intellectual property and access issues, but commitments for major agriculture buys.” He said U.S. ag exports “could come roaring back fairly quickly.”

 “The goal of my entire team is to unleash the competitiveness of American farmers, ranchers and the agriculture industry,” Censky, said. He said American waterways infrastructure is “horribly outdated,” and the needs of the water transportation system that has “kept U.S. farmers competitive” are dragging down the economy.

In his lunch talk, Censky cited U.S. Department of Agriculture figures showing that soy movements by barge were down 20 percent by early November, not enough to offset a 5 percent increase in corn movements during the year. “We are strong believers that we need a strong infrastructure system, and that has to include a strong inland waterway system,” he said. “Barging is still the most efficient way to get bulk exports to market.”

Before being sworn in Oct. 22, 2017, as deputy at the U.S. Department of Agriculture responsible for its day-to-day operations, Censky spent 23 years at the American Soybean Association, 21 of those years as its CEO.

Censky touted the administration’s trade agreements with Canada and Mexico as a “big win” for farmers, especially the agreement with Canada, which removed onerous protectionist restrictions against U.S. wheat and dairy imports. For instance, he said. Canada had long had rules requiring that all U.S. wheat imports be rated “feed grade,” no matter the quality of the wheat, while Canadian wheat was free to get whatever price it could in the U.S. based on quality. These rules were repealed in the new agreements, as well as restrictions on daily imports long campaigned against by U.S. dairy farmers. He said poultry and egg farmers got more expanded access to Canada’s markets under the new agreement.

Censky acknowledged that the Chinese tariffs against U.S. soybeans have had a major impact. They have left U.S. farmers with a billion excess tons of soybeans. Censky acknowledged that many farmers might decide to plant other crops if the tariff situation is not resolved soon. “The ball will be in China’s court,” he said.

Censky said that the Trump administration has dedicated about $12 billion to aid farmers hurt by the tariff wars. Some of that money was set aside to buy soy stocks at $1.65 a bushel; about half that money had been spent since August, he said, with the other half held pending further tariff talks.

About $1.23 billion of the aid was used to buy assorted crops like pistachio nuts and table grapes for distribution to food banks. And about $200 million was used to expand market development programs, finding new buyers for U.S. ag products.

When asked about what some wheat and other growers consider a lack of a comprehensive administration ag trade plan, Censky cited ongoing negotiations with South Korea and Japan as well as what he called the “new NAFTA” with Canada and Mexico that will likely be signed in Argentina in conjunction with the G20 meeting.

“There is a huge demand in Japan for American beef, pork, wheat, potatoes and other ag products,” he said.

Asked how farming has changed since his youth, Censky said, “Precision agriculture was unheard of when I was growing up.”

In response to a question from the High Plains Journal about consolidation of farm sizes, Censky said he sees growth ahead for both larger and small farms. He agreed that many big farms are getting bigger by buying up medium-sized farms and using technology and precision agriculture to achieve economics of scale.

But Censky said he also sees growth among smaller niche farms, most of those also family-owned, that supply the growing “farm-to-table” market among restaurant diners who are increasingly demanding locally-sourced foods in their meals. The medium-sized farms that remain, he said, are finding success by specializing in higher-margin non-GMO and organic crops.

Censky stressed that the Trump administration is committed to the closing of the “digital divide” on the farm. He said that 80 percent of the 24 million Americans who don’t yet have access to high-speed internet live in rural areas. Rural internet access is not just a matter of equity. Censky champions the so-called “internet of things,” by which more and more farm machines (and other machines) will be connected with each other and the cloud. He said “tele-medicine” will also be delivered over the Internet to reach rural populations that currently have less access to high-quality health care.

David Murray is a senior staff writer at Waterways Journal.