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Key ag issues discussed during virtual Farmfest

Dmytro Diedov/Getty Images Plus Farmfest virtual forum
COVID-19 impact, financial challenges, trade agreements and more were hot topics of the virtual event.

Every year many key agriculture issues are discussed as part of the candidate forums and feature forums that are held at Farmfest in early August. The U.S. Senate and Congressional candidate forums, as well as other forums were held again in 2020; however, this year’s forums were conducted in a virtual format. Farmfest Virtual 2020 featured several candidates and agricultural leaders discussing many of the key issues affecting farm families and rural communities in Minnesota and the Midwest.

Following are some of the main issues that were discussed during virtual Farmfest forums.

Covid-19 impacts and assistance

There was considerable discussion about the financial impacts of COVID-19 on crop and livestock producers and on the ag processing and biofuels industries, as well as coronavirus impacts on rural families and communities. The Coronavirus Food Assistance Program (CFAP) was credited with providing some much-needed assistance to farmers, especially for small- to medium-sized livestock producers who have dealt with low prices and limited packing plant access since the COVID-19 outbreak un the U.S. However, it was pointed out that the current CFAP program did not provide any assistance to biofuel producers, to crop farmers who already sold their 2019 crop production or for market price losses incurred on the 2020 crops, or to livestock producers who had to euthanize hogs. Only 80 percent of the current CFAP payments were paid out after sign-up; however, it now appears that USDA will make the final 20 percent of the CFAP payments in the coming weeks to crop and livestock producers. Sign-up for the CFAP program continues until August 28, 2020 at local USDA Farm Service Agency (FSA) offices or online.

Farm financial challenges

Whether it was comments by U.S. Senate or Congressional candidates, or insights from other Farmfest forum panel members, the continued tight margins and low profitability in farming was a big topic of discussion. Profit margins in crop production have been quite tight in recent years, which has put many farm operations at the brink of financial disaster. Crop production expenses and land rental rates have remained relatively stable for many producers, while crop prices for corn, soybeans and wheat have remained below breakeven levels, and are now at the lowest levels in several years. For farm operators who experienced crop losses in 2019, or may have a crop loss in 2020, due to weather issues, the financial situation may be even more severe.  

The livestock sector is not faring much better from a profitability standpoint and has seen profit levels deteriorate quite rapidly since the U.S. outbreak of COVID-19 earlier this year. Dairy farmers have been dealing with very low milk prices for the past several years, which has resulted in many dairy producers exiting the industry in the past few years. However, a large number of dairy farmers have received CFAP and dairy margin coverage (DMC) payments in recent months, which together with an improvement milk prices recently, has helped to mitigate the financial losses that were incurred earlier this year. Hog producers were able to show a slight profit margin earlier in 2020, following some optimism in the pork export markets; however, the return to lower market prices and the necessary euthanizing of hogs following the COVID-19 outbreak, has created significant profit challenges for the hog industry. Cattle feedlot operators and beef cow/calf producers have also faced negative margins at most times during the past year or so.

Ag trade agreements

Most of the U.S. Senate and Congressional candidates who participated in the virtual Farmfest forums expressed concern about the continuing trade disputes between the United States and China, as well as the slowness in the implementation of the Phase 1 trade agreement with China. If implemented fully, the Phase 1 agreement would increase Chinese purchases of U.S. ag products, including grains and meat products; however, some panelists expressed concern that declining relations between the U.S. and China may again lead to restrictions and tariffs on U.S. ag products being imported by China. In the past couple of years, added Chinese tariffs on ag imports from the U.S. greatly lowered U.S. exports of soybeans, pork and other ag products to China, resulting in much lower commodity prices in the U.S. The other trade issue that garnered considerable attention during the forums was implementation of the United States-Mexico-Canada Agreement (USMCA) by the three countries, which replaced the North American Free Trade Agreement (NAFTA). Canada and Mexico, along with China, are the three largest trading partners for U.S. ag exports.

Ethanol and renewable energy

Many farm operators, ag and community leaders and investors in renewable energy plants are concerned about government policies related to the development and use of ethanol and other biofuels. Many states in the Upper Midwest, including Minnesota, have a very strong and well-established corn-based ethanol industry, which utilizes over 35 percent of the corn produced each year in the United States. In the past few years, the U.S. Environmental Protection Agency (EPA) has issued numerous blending waivers to gasoline refiners, which has reduced demand for ethanol and resulted in over-supply in some areas. The ethanol industry has also been negatively impacted by reduced gasoline consumption following the COVID-19 outbreak, as well as by the slowness to implement E-15 as an ethanol fuel blend in the U.S. The biodiesel industry in the U.S. has also been growing significantly in recent years, which has become more important for soybean usage in the past couple of years, due to the challenges with the soybean export markets.

In addition to the direct benefits to farmers, renewable energy plants have become cornerstones in rural communities by providing jobs, adding to the local tax base and enhancing the overall economic vitality of the communities. Even with all the economic, environmental and community benefits of renewable energy, many special interest groups are calling for reductions or elimination of the Federal renewable fuel standards (RFS), and other measures that would hurt the renewable fuels industry. There is also concern as to how climate change legislative proposals, such as the “Green New Deal” or further implementation of the “California Fuel Standards” might impact future development of the biofuels industry.

The candidates and ag leaders who participated in the Farmfest Virtual 2020 forums discussed numerous other issues, programs and efforts that affect rural businesses, families and communities in a variety of ways. This included dealing with the economic challenges currently being experienced by rural businesses and local governments, family health care access and costs, expansion of broadband coverage in Greater Minnesota, infrastructure needs and other issues affecting agriculture and rural communities. The candidate forums and the other Farmfest Virtual 2020 forums can be viewed online.     

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