Commodity Classic provides farmers and commodity organizations the opportunity to get together and work on policy to help their groups succeed. Each association holds meetings during the week and come together to discuss the current farm economy. This year’s Commodity Classic was held in Orlando, Florida, Feb. 28 to March 2.
American Soybean Association
Davie Stephens, ASA president and farmer from Clinton, Kentucky, said his vision as president is to help maintain the competitiveness of the soybean industry and restore it’s profitability to individual growers.
“I’m proud to say ASA has always been at the center of efforts to enhance the competitiveness of the U.S. soybean industry, which is essential in ensuring viability for farmers over the long term,” he said.
Stephens said efforts by the board and ASA, such as investment in the United States transportation infrastructure, biodiesel tax credit support and biotech regulations, are important to maintain soy growers’ competitiveness. Right now, trade is the biggest hurdle. He called it the “lifeblood of soybeans.”
“There’s no question the 25 percent tariff on soybeans will have a lasting and negative impact,” Stephens said. “Before the tariffs went into effect, China was our No. 1 export market.”
The market didn’t appear overnight and soybean farmers have worked with the U.S. Foreign Ag Service for 60 years to develop those foreign markets for soybeans.
“We have seen the value of U.S soybean exports to China grow from $414 million in 1996 to $14 billion in 2017,” Stephens said. “The ongoing feud has caused both short-term and long-term damage to U.S. soybean prices and our market in China.”
Port prices for soybeans in the period from June to August 2018 dropped 20 percent, and other farm prices have took a hit as well. Premiums for Brazilian soybeans increased virtually overnight.
“China’s begun to source more of its soy imports from Brazil and other countries—a trend that could continue long after the tariffs are lifted,” Stephens said. “But goodwill won’t restore the damage done to the Chinese market.”
ASA continues to advocate for rescinding the tariffs and sees it as the only way to restore the Chinese market to U.S. soybean growers to China.
“ASA appreciates the administration’s effort to lessen the short-term impact on tariffs and export prices to payments to farmers to the market facilitation program,” Stephens said. “With that being said, soybean farmers want to make their living from the market place and not from government aid.”
American soybean farmers are facing a long period of depressed prices and it’s critical that new export markets and existing markets are expanded to replace beans previously sold to China. He was a proponent of a new United States-Mexico-Canada trade agreement that still needs ratified.
“The USMCA is a great example of a trade deal that will not only benefit soy growers but will also bring market stability back to key trading partners to soybean growers and U.S. agriculture,” Stephens said.
National Corn Growers Association
Lynn Chrisp, NCGA president, always enjoys the Classic and meeting with growers from across the country to “put our collective heads together finding ways to address some of the challenges we’re currently facing in farm country.”
“It’s a challenging time, both commodity prices and near record production, the market instability have left farmers facing tall choices,” Chrisp said. “Not to mention, misleading Super Bowl ads calling our products into question.”
Amidst the challenges, NCGA is committed to driving market opportunities for U.S. corn.
“This includes increasing sales of ethanol blends through the year round sales of E15,” he said. “The government shutdown slowed this process but the administration is committed to seeing this to fruition, as are we.”
The group continues to look for ways to expand market access for U.S. corn by seeking out new trade agreements, Chrisp said. They’re also building sustainability efforts through programs like the Soil Health Partnership and partnerships with organizations like the Environmental Defense Fund. Additionally, NCGA is working on programs to build customer trust for corn farming through programs connecting consumers and producers.
“There’s a lot on our plate,” Chrisp said. “But we also have an engaged membership looking at creative ways to drive demand and I’m excited for the year ahead of us.”
NCGA wants to move forward with E15, but the ball is in the court of the Environmental Protection Agency, according to Chrisp.
NCGA has their comments ready for when the rule is published. It may not be done in a traditional manner because of the current timeframe that they’re working with, between now and June 1.
“But we’re doing absolutely everything that we can in order to see that successfully completed,” Chrisp said.
He’s got a priority list of things he’s “worried about”—things like trade, infrastructure and several other things, but trade remains top of the list.
“Getting the groundwork prepped for ratification in the USMCA is our number one priority for the year,” he said. “It’s something we are particularly focused on, want to see happen.”
“We’d like to get it resolved and go away in a hurry,” Chrisp said. “Because it just makes things a whole lot more difficult, and that’s when the question for ratification comes up.”
National Association of Wheat Growers
Jimmie Musick, president of NAWG, has been involved with the work needed to get the farm bill passed and to get it implemented.
“NAWG really has been deeply involved in the farm bill passage,” he said. “They have been on the hill and done a great deal of informational meetings. Getting together, talking to our legislators and trying to get them on board with what we’re trying to do and trying to enhance not only the other commodities, but especially wheat.”
Education remains important, and getting the information out there—especially in a time of misinformation and fake news. Musick emphasizes that NAWG wants consumers to know America’s farmers provide the most economical and safest food products in the world.
For Musick’s priority list, it “obviously” includes enactment of the farm bill. And export markets.
“We have a farm bill and its there, and it hasn’t really gotten into play and taken place yet,” he said. “Enacting that farm bill and making sure our crop insurance, our safety net is there and hoping to maybe get our tariffs and embargos out from under us where we can move our product.”
Wheat exports are as low as they have nearly ever been, he said.
“It’s because of those tariffs and those challenges we’ve got in the export market,” Musick said. “We’re looking forward to getting the relationship built with China that President Trump is working on. If we could get that in place, that’s going to help our wheat prices and our export market.”
National Sorghum Producers
Last year, sorghum producers were faced with anti-dumping accusations by the Chinese government, and by the looks of it 2019 could be a turning point.
“Our growers have suffered a very long year as a result of those actions,” Jennifer Blackburn, external affairs director for NSP said. “Our organizations are keenly aware of the financial uncertainty our growers are facing. The hurdles and small wins we have experienced over the past 12 months make it apparent the reasons why trade associations like ours exist.”
NSP and the United Sorghum Checkoff programs are working hard on behalf of growers and the checkoff continues to build demand for sorghum through both domestic and international markets.
“In the next 12 months NSP is focused on regaining markets, market access to our largest trading partner and other customers,” she said. “We need trade and we have strong customers in China who still desire U.S. sorghum after importing an average of 1.2 billion dollars worth of sorghum over the last 5 years.”
NSP is also focused on farm bill implementation and is working with USDA to ensure the process is beneficial for sorghum producers.
Even though the export dollars from China are drastically down, it’s still early in the current marketing year, but other countries have stepped up, NSP CEO Tim Lust said.
“We’ve seen sales, particularly to the EU with Spain and this past week Italy coming into the market,” Lust said. “So there is some positives there, but certainly from a China standpoint the answer is trade has really stopped.”
USCP Executive Director Florentino Lopez said things in the world market are very interesting because “we continue to receive many responses from China.”
“We have great relationships with many, many individuals from companies and also from trading companies as well as end users,” Lopez said. “We get those comments constantly.”
Most contacts are looking to source sorghum very quickly, but there’s still a lot of things that need to take place before any trading with the Chinese can happen.
“But definitely, our understanding today is those buyers would quickly come into the marketplace,” he said. “They like the product. They feel very comfortable utilizing it.”
Lopez believes the checkoff, along with other organizations, has done a wonderful job positioning sorghum as a reliable feed ingredient.
“Not only from a feed ingredient for livestock, but as well as food products in China,” he said.
Lust also said due to severe drought and now flooding in Australia, there is around 2 million metric tons of sorghum that China would normally get, not available on the world market—causing a shortage.
“What didn’t get droughted out, got flooded out in northern Queensland so the combination there, there’s certainly a lot of demand for sorghum,” Lust said.
For the rest of 2019, Lust said their priorities have started to line up. NSP has a new strategic plan document available now that got pushed aside because of the anti-dumping case. Now’s the time to get back to that. As well as farm bill implementation.
“While I think the process will be relatively quick there are key decisions that still have to be made,” Lust said. “From an organizational stand point, I think the other side of this is where the bigger trading picture is. We can talk about all these other things but it really comes down to trade.”
Trade is one, two and three on the priority list for Lust.
“Until we get markets back open, and particularly our largest customer, then everything else kind of pales in comparison,” he said.
Kylene Scott can be reached at 620-227-1804 or [email protected].
