The release this week of key U.S. crop production and acreage data sent shockwaves through the grain and livestock markets. It also served as a stark reminder of the need for immediate action on a host of issues impacting the economic livelihoods of Iowa and U.S. farmers.
“We’re getting hammered from all sides,” said Iowa Soybean Association (ISA) President Lindsay Greiner who farms near Keota. “It’s long past time for the Administration and Congress to act. If they don’t, a good share of the damage done to America’s family farms will be permanent.”
Examples cited by Greiner include the ongoing U.S.-China trade war and a new U.S.-Mexico-Canada Agreement (USMCA) sitting idle in Congress as members are on recess. Adding to the misery are waivers granted by the U.S. Environmental Protection Agency to petroleum refineries allowing them to renege on Renewable Fuels Standard commitments.
Greiner’s call for action comes as economic stresses deepen in America’s heartland. An analysis released earlier this month by the American Farm Bureau Federation found delinquency rates for commercial ag loans in both real estate and non-real estate lending sectors at a 6-year high.
“Both Congress and the Administration have work to do,” Greiner said. “For reasons far beyond their control, markets and prices have tanked for farmers. Time is running out for some families.”
The loss of America’s number-one soybean customer has stung the most. As of July 25, U.S. soybean exports to China were down 63.2 percent compared to the previous marketing year and 70.9 compared to two years ago. Overall, U.S. soybean exports are down nearly 25 percent.
Congress could help heal the wounds left by the trade war and waning demand with the passage of USMCA and the biodiesel tax credit extension, said ISA Market Development Director Grant Kimberley.
An Informa study shows that biodiesel adds 63 cents a bushel to the price of soybeans. Kimberley, who also serves as executive director of the Iowa Biodiesel Board, said an extension of the $1-per-gallon credit to blenders which blend biodiesel with petroleum would help drive additional soybean demand.
“These are can-do steps that have broad, bipartisan support and will have an impact,” Kimberley added. “It’s time to get them done.”
ISA District 7 Director Jeff Jorgenson said USDA reports estimating strong corn and soybean crops show that farmers can produce under adverse conditions like the flooding he and several farmers worked through earlier this year.
“There’s the slight glimmer that we know how to produce as farmers, but there’s a lot of work to do in moving those products,” Jorgenson said. “We have to figure out how to move more products.”
One answer is the passage of USMCA.
“At this stage of the game, there is so much unknown in this market, that anything will help,” Jorgenson said. “Kicking the can down the road and hoping things will change isn’t a strategy.”
In the meantime, all three ag leaders said they will do whatever they can as an industry to sell soybeans.
As China is currently seeking to diversify its origins of soy, Greiner said the U.S. soy industry is investing to diversify its opportunities in new developing and emerging markets. This includes Europe, Southeast Asia, Asia Subcontinent and Africa.
Soybean farmers are also keeping in touch with Chinese buyers.
“U.S. soybean farmers are proud of our long-term efforts to build demand in the country of nearly 1.5 billion people,” Greiner said. “For nearly 40 years, we worked to develop strong cooperation and friendship and we do not want to lose what we have built.”