Election

Financial Strain & D.C. Disconnect: Shaping the Rural Vote

Sat, 16 May 2026 10:33:00 GMT

Frustrations over the skyrocketing costs of doing business, trade policies and lack of E15 expansion have put producers’ votes – many in competitive political battleground states – in play, according to an exclusive poll of Farm Journal readers.

The poll, which surveyed producers through April and was commissioned by the agriculture-focused public affairs firm Amato Advisors, shows the following:

Four in 10 producers are currently undecided or considering voting for a different party.
Half of those surveyed report fair to poor finances. Twenty-five percent fear they will restructure or leave farming or ranching entirely.
Rising input costs are listed as the top challenge; of those listing tariffs at the top, almost 90% have a negative view.
Year-round E15 approval is a decisive voting factor for nearly half of all producers.
The biggest frustrations that can move voters vary by state. In Iowa, it’s E15 and trade, but in Wisconsin, it’s healthcare and input costs.

Researchers, lobbyists and analysts who reviewed the poll for Farm Journal stress this is not a realignment toward Democrats. Rural America remains Republicans’ home turf.

Instead, producers increasingly think neither party knows nor cares to understand them, let alone solve their problems, according to the findings. If a candidate from either party can prove they are serious about farm-country issues that could be enough to win votes and change the course of up-for-grabs midterm elections.

“The frustration is not simply with ‘government,’” says Nicholas Jacobs with the Bram Public Policy Lab at Colby College , who reviewed the poll’s findings. “It is with a government that is too removed from the consequences it creates and poorly aligned with the realities of rural economies. When people feel squeezed while also believing elected officials do not understand their lives, that creates real political vulnerability heading into a midterm election.”

Amato Advisors ’ founder Mike Amato , who served in senior positions in the Biden-Harris and Obama-Biden administrations, says the findings apply to both parties.

“[The results show] a strong signal of disconnect between what is happening on the land and what is happening in D.C.,” Amato explains.

This Farmer & Rancher Policy Sentiment Survey polled farmers and ranchers from April 2 to April 24. A total of 974 producers from 44 states responded. About one-third live in “swing districts” with competitive elections in November, including areas in Iowa, Wisconsin, Nebraska, Michigan and Ohio. Amato Advisors details more of the data here .

The findings come at a crucial moment for agriculture and the political direction of the country.

Year-round E15 stands front and center. Producers and retailers consider E15 expansion as the single fastest way to generate real, immediate demand for corn and reduce reliance on government support. Resentment reached a boiling point when legislators continued to delay a vote .

On Wednesday, Congress passed a bill by 15 votes that would allow nationwide year‑round sales of gasoline containing 15% ethanol. It now faces a tough battle for passage in the U.S. Senate .

In the meantime, Republicans have been losing what were comfortably safe districts, including some with agricultural voters. For example, Democrats flipped two Iowa state Senate seats in 2025 special elections (Iowa’s 1st and 35th Senate districts).

Anecdotally, producers have shared their frustrations over policies during the second Trump administration. But this Farm Journal-Amato Advisors survey is among the first to try and measure whether any of those changes will result in changes at the ballot box.

Status Quo or Shakeup? What Moves the Rural Voter

According to the poll, 61% of producers say they plan to vote for the same party as usual. However, nearly 1 in 5 say they aren’t sure yet, and 17% are actively considering either a different party or an independent/third-party candidate.

“That leaves a lot of rural America potentially up for grabs,” says Jessica Schulken , a lobbyist with the Russell Group based in Washington, D.C., who viewed the results of the poll.

Jacobs looks at it as roughly 40% of respondents express either uncertainty, openness to independents or willingness to consider another option.

“That does not mean Democrats are suddenly competitive everywhere,” he says. “It does mean this block of rural voters – who tend to be even more conservative than their neighbors – are feeling downright frustrated with the status quo.”

Noting that machinery costs, input prices, trade policy and tariffs are pinching margins for producers, Callie Eideberg , a principal with Washington lobbyist the Vogel Group , says these issues are also policy choices made by the administration.

“The administration was not forced to take action on trade and input costs, and these policy choices can be reversed or muted at any time,” she says. “If you assume respondents understand the president chose to implement policies increasing machinery costs and dismantling trade agreements, then their reporting that 61% will still vote for the same party in November implies they are also choosing to keep those policies in place.”

Rural ag voters don’t hold much confidence in the current slate of elected officials to grasp their situation. Nearly three-quarters say office holders don’t understand the realities farmers face.

So how does that translate to the rural vote?

23% say nothing would change their vote. “Until Democrats stop showing up in an election year in rural areas and then disappearing again, nothing will change my Republican vote. Words don’t help, action does.” — says a Congressional respondent
26% say candidate quality is the primary determinant. “ … I am open to voting for a solid candidate, regardless of party, which brings a strong knowledge and positive position to the table for the rural landscape and production agriculture in particular.” — says a Congressional respondent
51% name specific conditions or issues that could move them. “High input costs, tariffs causing market volatility, loss of health insurance, frustration with SNAP changes, high interest rates, high fuel prices and global conflicts coinciding with planting and harvest.” — says a Congressional respondent

“Partisanship in rural America has become increasingly layered on top of older frustrations that predate any single administration or price fluctuation,” Jacobs says. “For many rural voters, dissatisfaction with economic conditions does not automatically translate into openness to Democrats because the Democratic brand itself remains deeply unpopular.”

He says it would be similar to asking why urbanites didn’t revolt against Democrats when housing prices shot up or when schools keep failing.

The Split: Row Crop Strain vs. Livestock Optimism

When farmers were asked to describe the overall financial condition of their farming operation over the past 12 months, about half say they’re in good to excellent shape. More than 1 in 10 consider their economic condition poor or very poor.

“The farm economy at 50/50 shows the split between livestock profitability versus row crops,” adds Tyson Redpath , chairman of advocacy and business strategy for the Russell Group.

Eideberg looks at it another way.

“Just 43% of respondents reported their farm’s financial condition was ‘good’ and 38% reported ‘fair’ financial conditions,” she says. “This stands in opposition to the repeated proclamations from this administration that the ag economy is turning around.”

Rising Input Costs and Trade Policy: Farmers Rank Top Challenges

In the poll, participants were asked to identify the three biggest challenges currently facing their operation. Machinery and input costs top the list at more than 78%. Another 44.3% say it’s commodity price volatility, and another quarter say either weather or trade policy and tariffs.

When it comes to farmers who would consider changing their vote, one congressional respondent says: “I’m fed up with the U.S. financing other countries when our farmers are going bankrupt. Our politicians need to do their job on a bipartisan level!!!”

Of those citing tariffs and trade, nearly 88% say the policy is either somewhat or very negative, and 65.5% say tariffs will hurt long term.

When asked to describe the overall effect of federal government policies on their farming operation over the past year, 54.6% of nationwide respondents describe the effect as moderately or significantly negative. Just under 1 in 5 describe the effect as positive to any degree.

Why Input Costs and Trade Lead Farmer Concerns

As producers look past this vote and to the next presidential election, respondents ranked nine policy areas in order of priority for the current administration. Regardless of whether respondents are in targeted swing districts or the broader nationwide sample, input costs rank first by a wide margin, followed by trade policy and export markets. Conservation programs come in at the bottom of the priority list.

“If you look at the top issues identified by producers, input costs and trade policy, there’s not a whole lot that can be done about either one of those that will directly impact the farmers’ bottom line before the elections,” Redpath says.

Based on his analysis of the survey results, Jacobs says farmers and ranchers are searching for stable rules and better prices.

“I think both parties should pay attention to the fact that these concerns are overwhelmingly operational rather than ideological,” Jacobs says. “Rural voters are not saying the government should disappear, but rather that it needs to get its act together.

Year-Round E15 and Competition: Critical Factors for Rural Voters

The tariff and trade debate is all about finding and developing new markets for U.S. ag goods as global competitors erode a once dominant position. There’s been no bigger “new market” debate than year-round E15.

When asked how important year-round E15 approval was as a voting issue, 45.5% of nationwide respondents say it is very or extremely important — making it a direct candidate selection factor for nearly half the sample. Another 28.2% say it is somewhat important.

The poll results show E15 is one of the few issues in the survey where support for a specific policy is explicitly tied to electoral behavior rather than just expressed as a preference. Voters in key swing states and districts rate E15 as a voting issue at a slightly higher clip, which appears to reflect the higher concentration of corn and ethanol-producing states in the sample.

While trade and export markets continue to rank high, respondents are also focusing on competition abroad. More than 85% say they are very or somewhat concerned about global agriculture competition from producers in Brazil, Argentina and the European Union. The poll shows this is one of the highest rates of agreement on any issue in the survey.

How Ag Priorities Vary Across the Rural Vote

According to this poll, not all swing states are focusing on the same issues. For example:

Iowa. The most swing-available state in the sample with the highest E15 mobilization.
Wisconsin. The most financially distressed state — and the only one where Democrats are genuinely competitive on healthcare.
Nebraska. The most economically conservative electorate — but with the highest E15 intensity and notable tax concerns.
Ohio. A distinct issue mix – commodity prices and weather dominate, not input costs or tariffs.
Michigan. The highest vote motivation and switch potential in the survey — Democrats lead on farm labor.

“People do not experience politics as detached issue-by-issue calculators,” Jacobs says. “That does not make economic concerns irrelevant – and they are clearly not in this poll – but it does mean that dissatisfaction alone is often insufficient to fully reorder political loyalties.”

As Nov. 3 approaches, Amato describes midterm elections as an accountability checkpoint – a referendum on whether political actions match campaign words.

“Polls like this, combined with additional advocacy and farmers using their voices to talk to elected officials, can help close the gap so federal policy actually meets farmers where they are,” he says. “I hope this poll sends a signal to everyone who’s in elected office, or who wants to be an elected official, to take into consideration the challenges producers are facing today.”

30 Minutes With Secretary of Agriculture Brooke Rollins In Her First Week On the Job

Wed, 19 Feb 2025 21:14:01 GMT

Since Saturday, Nov. 23, 2024 , Brooke Rollins has been focused on how to build the teams and the plans that impact the trajectory of agriculture and rural America. On that day, while en route with her husband and four teenagers in their motor home to Auburn, Ala., for the Texas A&M football game, she got a call from now President Donald Trump. The purpose of his call: She was his top choice to fill his final significant cabinet position, Secretary of Agriculture.

Obviously, she had to wait for confirmation, which came last week on Feb.13 when the Senate overwhelmingly confirmed her as the 33^rd Secretary of Agriculture , but since that Saturday before Thanksgiving, she’s been on the go with an accelerated enthusiasm to understand the significant challenges facing rural communities that lost 147,000 family farms between 2017 and 2022 and why the cost of inputs are up 30% as exports are down $37 billion this year and likely to fall further in the months to come.

“This is a crisis, and this is something that I understand inherently,” Rollins said to kick off Top Producer Summit in Kansas City on Tuesday. “My promise to you is this, and my commitment will never waver, that every minute of every day for the next four years I will do everything within my power, with hopefully God’s hand on all of us and our work, to ensure we are not just entering the golden age for America, as my boss, President Trump, likes to say, but we are entering the golden age for agriculture.”

What Has Rollins Been Up to the Past Four Years?
Secretary Rollins and President Trump have worked together for almost eight years. She was in the West Wing with him for years two, three and four of his first term running his domestic policy agenda.

“This real estate guy from New York City brought that vision to life, and then in the last term, was able to really do some remarkable things,” Rollins said in regard to President Trump returning power to the people who just want a chance at the American dream. “I call it the great pause, the four years in between term one and term two. But I think the great pause allowed very intentional planning. It allowed a courageous and bold leader in President Trump to become a fearless leader and to do everything he can to bring America back to greatness.”

In the “dark days of January 2021,” as she described, Secretary Rollins helped launch the America First Policy Institute, a think tank established by former Trump officials to promote conservative policies. The idea was that those policies that made America great in Trump’s first term would continue indefinitely, not just for a second term, but for four years, eight years or 36 years, Rollins described.

First Week On the Job
Since being confirmed last week, Secretary Rollins has been in the Washington, D.C., USDA office for a few hours, but most of her time has been spent in Kentucky at National Farm Machinery Show in Louisville and Gallrein Farms and in Kansas visiting Finney’s County Feeder, High Plains Ponderosa Dairy and the National Beef Packing Plant .

Describing herself as “a reader and a studier,” Rollins seems adamant to hear firsthand from farmers and ranchers. She referenced her visits to the dairy farm and National Beef facility as inspiring, in a good way but also in a way that helps her understand the real challenges at hand.

Speaking to the crowd at Top Producer Summit, she shared her appreciation for the “entrepreneurial American game changers” who are doing their part to feed the world.

“It is so inspiring and a reminder of the very beginning of our country.” Rollins said. “Our revolution was fought by farmers, our Founding Fathers, like Thomas Jefferson and George Washington. The backbone of the great American experiment is this community.”

Thank you @topproducermag for hosting @RogerMarshallMD and me in Kansas City, Missouri, with 1,000 of the Top Producers from across the US to talk about issues like expanding trade access and cutting regulatory red tape for farmers.

Biden’s ZERO trade deals and inflationary… pic.twitter.com/ejMxKxkRMG
— Secretary Brooke Rollins (@SecRollins) February 19, 2025

Farmer Q&A
Watch and listen to what Secretary Rollins, as well as Sen. Roger Marshall of Kansas, had to say on stage at Top Producer Summit about these 7 topics:

Trade and tariffs — “ Let’s go barnstorm the world , and let’s go find some more trade partners and access [to market opportunities],” Rollins said.
Department of Government Efficiency (DOGE) efforts and modernizing USDA — “DOGE is a very valid and important effort across all government. The stories of waste and abuse were really just, not USDA specific but across government, beginning,” Rollins said.
Federal programs, such as CSP and EQIP — “Our commitment is that if there have been commitments made, those will be honored. Getting our arms around all of that right now is really, really, important. Again, going back to the President’s heart and commitment to our farmers, I feel confident we will be able to solve any issues that are in front of our ag community, that are potentially being compromised by the DOGE effort, while at the same time recognizing how very, very important it is,” Rollins said.
Future of USDA — “There’s no question USDA needs some modernization. I’m just beginning to lean into that as well,” Rollins said. USDA has 106,000 employees and 29 departments. “The Secretary is taking over a department where only 6% of the [D.C.] people work in the office,” Marshall added.
Renewable fuels — Prior to President Trump’s first term, he was “the first major candidate to support biofuels, and I think that carried him through Iowa in many ways. … We’ve got E15 year-round. I think that gives us some certainty as well. … The President is supporting that. I think we’re trying to figure out how to save 45Z, but we can’t let China benefit from it. Right now, China is benefiting more from [45Z] than my farmers and ranchers are, so we’ve got to fix that,” Marshall says.
Immigration policies and availability of long-term labor — “I have a full-bodied understanding of the challenges within the labor market, and I believe the President does too. … I believe that we will very soon be talking about it again. Clearly, the H-2A program needs significant reform, and Lori Chavez-DeRemer, she’s going through the [confirmation] process right now. … Hopefully she’ll get her vote very soon. We’ve got a lot of work to do,” Rollins said.
Trump’s cabinet members — “Our cabinet is comprised of people that have been working together and have been friends and colleagues for years, with a few exceptions. Bobby Kennedy is a new friend, but Lee Zeldin and I worked together in America First Works and America First Policy Institute for the last almost four years, Linda McMahon in education and John Brooks — these are our people,” Rollins said.

Do Tariffs Work? Leading Ag Economists Weigh In

Mon, 03 Feb 2025 17:00:00 GMT

Tariffs are a tool used by President Donald Trump during both his terms. But do they work? Not even ag economists are in alignment, as the answer seems to be: It depends.

This past weekend, Trump signed three executive orders for tariffs , the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

By Monday morning, Trump had agreed to delay tariffs on goods from Mexico for one month to allow more time for negotiations. The agreement happened just hours before the tariffs were set to take effect.

President Claudia Sheinbaum said U.S. tariffs against Mexico will be delayed for one month after a conversation with Trump on Monday. Trump then confirmed the news on Truth Social.

Which Input Could Be Impacted Most by Tariffs?

Tariffs on the U.S.'s top three trading partners could have a major impact on agriculture. The January Ag Economists’ Monthly Monitor asked economists which input is most at risk. The top answer was fertilizer.

Ag Economists’ Monthly Monitor

(Lindsey Pound)

“From a headline standpoint, it’s probably potash,” says Samuel Taylor, farm inputs analyst, Rabobank. “We get 85% to 90% of our potash from imports from the Canadian market. The residual is made up by Russia and Israel, in principle, with some other markets coming in.”

One day after Trump announced he would move ahead with planned tariffs, Prime Minister Justin Trudeau stated tariffs targeting $30 billion in American products, such as alcohol, produce, household goods and industrial materials, will roll out in two phases starting Feb. 4, the same day the U.S. tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized Canada’s response would be “strong but appropriate,” while also considering non-tariff measures such as restrictions on critical minerals.

Do Tariffs Work?

With tariffs and a potential trade war brewing that begs the question: Do tariffs work?

It’s something Farm Journal asked the nearly 70 ag economists part of the Farm Journal Ag Economists’ Monthly Monitor. The survey asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long term.”
“Absolutely, when properly applied.”
“Not over the long term. They tend to affect who gets to supply different markets around the world.”

The Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is: It depends. Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.”

Reports Now Say Trump to Tap Texas Native Brooke Rollins For Agriculture Secretary

Fri, 22 Nov 2024 19:52:16 GMT

Brooke Rollins, president of the America First Policy Institute, has officially been selected to serve as USDA Secretary. President-elect Donald Trump made the announcement Saturday, saying her “commitment to support the American farmer, the defense of American food self-sufficiency and the restoration of agriculture-dependent American small towns is second to none.”

Rollins is the president and CEO of the America First Policy Institute (AFPI), a think tank established by former Trump officials to promote conservative policies. AFPI has advocated for curbing foreign ownership — particularly from China — of U.S. farmland, an issue with bipartisan support in Congress. She served as the president and CEO of the Texas Public Policy Foundation (TPPF) from 2003 to 2018, where she significantly expanded the organization and positioned it as a leading state-based think tank.

During Trump’s first term, she served as the Director of the Domestic Policy Council and Assistant to the President for Strategic Initiatives. In these roles, she was instrumental in shaping key domestic policies across various sectors.

Rollins has strong ties to key figures in Trump first administration, including his son-in-law Jared Kushner. Her relationships within this network might facilitate collaboration on agricultural policies and initiatives.

Educational Background
Rollins holds a degree in agricultural development from Texas A&M University and a Juris Doctor from the University of Texas School of Law. She graduated cum laude with a Bachelor of Science in Agricultural Development from Texas A&M University in 1994, where she also became the first female student body president.

Her educational credentials are complemented by her practical experience, having grown up on a farm in Texas.

Rollins thanked Trump on X (formerly Twitter) Saturday following the announcement, saying: “It will be the honor of my life to fight for America’s farmers and our Nation’s agricultural communities. This is big stuff for a small-town ag girl from Glen Rose, TX — truly the American Dream at its greatest,” Rollins said in her X post.

Thank you, Mr. President, for the opportunity to serve as the next U.S. Secretary of Agriculture. It will be the honor of my life to fight for America’s farmers and our Nation’s agricultural communities. This is big stuff for a small-town ag girl from Glen Rose, TX — truly the… https://t.co/h91Zx3eEgl pic.twitter.com/DLgxrmZhH6
— Brooke Rollins (@BrookeLRollins) November 23, 2024

Given her educational background and professional focus, Rollins has developed insights into agricultural policies, trade issues and rural development, which are critical for USDA’s mission.

3 Key Focus Areas
In her new role, Rollins is expected to focus on several key areas, including:

Support for American farmers. Rollins has expressed a strong commitment to advocating for American farmers, emphasizing food self-sufficiency and the revitalization of agriculture-dependent small towns.
Trade policies. A significant challenge will be managing Trump’s proposed tariffs on imports, which aim to boost domestic production but could disrupt critical export markets for U.S. farmers. Rollins will need to navigate these complex trade dynamics while supporting agricultural interests.
Rural development. Her background and personal connection to rural America position her well to address issues affecting rural communities, including economic development and food assistance programs.

Of all the incredible notes and well wishes and good lucks I have received over the last 24 hours, the one that perhaps means the most came from Gary Rosenbusch, my ag teacher at Glen Rose High School who changed my life forever.

When people ask about my upbringing in a tiny… pic.twitter.com/VTQXPTtVMd
— Brooke Rollins (@BrookeLRollins) November 24, 2024

Bottomline:

Rollins is going to be an impact player in the Trump administration. And will be highly effective on issues impacting ag and food that are in the purview of other Federal Departments and agencies.

Her nomination reflects Trump’s broader strategy of appointing loyalists with deep ties to his administration as he seeks to advance his economic agenda in a potential second term. Her leadership at AFPI has prepared her for this role, aligning with Trump’s vision of prioritizing American interests in agriculture and beyond.

As she steps into this pivotal position, Rollins will be tasked with not only implementing agricultural policies, but also addressing the challenges posed by current trade practices and supporting the livelihoods of American farmers amidst changing economic conditions.

Last-Minute Change?

Trump also had considered nominating former Georgia Sen. Kelly Loeffler, whom he has already tapped to co-chair his inaugural committee, to serve as Agriculture Secretary, CNN reported Friday. CNN initially said Trump was poised to offer the post to Loeffler, who reportedly met with the president-elect at Mar-a-Lago on Friday afternoon.

CNN said there had been several discussions between Loeffler and the transition team regarding the position. “But Trump held off from announcing his Agriculture pick as he issued a slew of others Friday night, raising questions about whether Loeffler was ultimately offered the post.”

Trump’s Cabinet Nominees Now Up Odds for Expanding U.S. Trade/Economic War with China

Wed, 20 Nov 2024 17:07:14 GMT

President-elect Donald Trump’s selection of Howard Lutnick, the CEO of Cantor Fitzgerald, as Commerce Secretary highlights plans to leverage tariffs in trade negotiations, with Lutnick emphasizing their use as both a revenue source and bargaining tool.

Lutnick has called the tariffs a negotiating tool that could be used to convince other countries to bring down their own levies or to force companies to move production to the U.S. He has said Trump would avoid taxes on products U.S. companies don’t make.

Commerce oversees the International Trade Administration, an agency in charge of enforcing trade laws and investigating unfair trade practices.

The appointment raises questions about the role of Robert Lighthizer, a prominent China hawk and decoupling advocate, who might still secure a key position such as National Economic Council leader or ambassador to China. The nomination marks Lutnick’s transition from co-chair of Trump’s transition team to a pivotal role in shaping U.S. economic policy.

Of note: Trump said that the Commerce Secretary would have “additional direct responsibility for the Office of the United States Trade Representative.” The phrase means that Trump may try to fold the latter position within the Commerce Department, a move that has been tried before to combine government trade work.

Trump’s trade agenda is heavily focused on imposing substantial tariffs, particularly targeting China. He has proposed a 60% tariff on Chinese goods and 10-20% tariffs on imports from other countries. Lutnick has been a vocal supporter of these tariffs, suggesting they could replace income tax revenue over time. He believes that by making American businesses more competitive through tariffs, it could lead to lower overall tax rates.

Lutnick’s vision aligns with Trump’s historical approach to trade, which emphasizes protectionism to bolster U.S. manufacturing and reduce reliance on imports. During a recent rally, Lutnick remarked that America’s economic prosperity in the early 1900s was due to tariffs rather than income taxes, indicating his belief in a return to such policies. Lutnick has said the incoming administration would use tariffs as a bargaining chip with other countries. “We’ll make a bunch of money on the tariffs, but mostly everybody else is going to negotiate with us,” he said on CNBC.

Lutnick’s appointment signals an aggressive stance on trade that could lead to increased tensions with trading partners. The Commerce Department plays a crucial role in enforcing tariffs and negotiating trade agreements, which may become contentious under Lutnick’s leadership. Economists have expressed concerns that such high tariffs could lead to retaliatory measures from other nations, potentially resulting in higher prices for consumers and disruptions in global supply chains.

On China, Lutnick has accused the country of being the source of fentanyl in the US, saying that “China is attacking America from its guts.” Kevin Chen, associate research fellow at the S. Rajaratnam School of International Studies, told the South China Morning Post, “There is little question that he will push forward with tariffs That being said, he has also suggested that the tariffs could be used to negotiate trade deals with other countries,” he said. Chen suggested that the choice of Lutnick —alongside other China hawks joining Trump’s team including Marco Rubio as secretary of state and Mike Waltz as national security adviser — could be “very dangerous for U.S./China relations” given the Commerce Department’s oversight of export controls.

“Lutnick is likely to focus tariffs on China’s manufacturing sector, especially for goods that the U.S. already produces. The likelihood of this leading to another U.S./China trade war is too high to ignore,” he said. “Lutnick fits in well with the trend of Trump’s cabinet picks … [as] he’s a China hawk who shares Trump’s strong views on the threat posed by China and how to address it.”

Asked about Lutnick’s nomination, Chinese foreign ministry spokesman Lin Jian said he would not comment on U.S. internal affairs but added that a trade war “will not produce any winner and is in no one’s interest.”

Treasury Secretary Possibilities

Trump is taking a closer look at Sen. Bill Hagerty (R-Tenn.) to potentially serve as Treasury Secretary, Axios reports. Hagerty, a former private-equity investor who was Trump’s ambassador to Japan, is one of three apparent finalists, along with former Fed governor Kevin Warsh and Apollo CEO Marc Rowan. The Treasury position is key as the Cabinet member will play in a key role in major issues, including:

Rising federal debt
Enacting Trump’s tax cut plan
Helping implement Trump’s tariff plans
Coming up with pay-for plans
Keeping inflation low
Implementing 45Z and other biofuel tax incentive programs (IRS)

U.S. businesses brace for potential Trump tariffs.

American companies are accelerating inventory orders ahead of Donald Trump’s inauguration, fearing the implementation of his proposed tariffs on imports. Trump has suggested levies of 10-20% on all imports and up to 60% on Chinese goods. Firms are also strategizing for potential impacts, including price adjustments and diversifying away from Chinese manufacturers, the Wall Street Journal reports ( link ).

Tariffs and Pricing Impacts

Walmart acknowledged the retailer would probably raise prices on some goods if Donald Trump moves forward with plans to enact sweeping tariffs. Walmart’s CFO John David Rainey stated that prices on some items may increase but it is uncertain which products might see price hikes due to the tariffs. A Walmart spokesperson indicated that any price changes are speculative, but future tariff-induced costs could burden sensitive shoppers.

Lowe’s words were more circumspect, with the home-improvement retailer’s executives noting tariffs would lift costs but also saying they were waiting to see what happens when the new administration takes office in January.

Walmart said shoppers are resilient but are still spending more on food than they have historically.

Lowe’s said homeowners are still waiting for lower interest rates to embark on big home-improvement projects.

Your Next Read: Could Trump Actually Be Good for U.S. Ag Trade?

Could Trump Actually Be Good for U.S. Ag Trade?

Tue, 19 Nov 2024 20:52:49 GMT

President-elect Donald Trump has released a slew of key cabinet and advisory picks at a historic pace the past two weeks, but the agriculture industry is waiting on two key selections — Secretary of Agriculture and the U.S. Trade Representative.

The Financial Times previously reported Robert Lighthizer could make an encore performance as the U.S. Trade Representative under Trump , but nothing official has been announced.

“Trump and Bob Lighthizer are two peas in a pod when it comes to using tariffs to get what they want in amongst our trading allies,” says Jim Wiesemeyer, Pro Farmer Washington correspondent.

If it’s a repeat of the last time, Lighthizer held that seat, there will be an increased focus on trade and using tariffs, which comes as no surprise since that was a major point on the campaign trail

“President-elect Trump was so strong on doing tariffs before that, it’s very likely that he’ll follow through now,” Mary Kay Thatcher, who’s the senior lead for federal government relations at Syngenta, told “AgDay’s” Michelle Rook. “I mean, he’s talked about at a minimum 20% tariffs on everybody. He’s talked about 60% on China, who will likely fall to two or three, but still a very important market. And he’s talked about putting them on Mexico. If Mexico doesn’t stop as many people coming across the border.”

Tariffs were the talk of the campaign trail, not just on commodities, but even ag equipment that’s imported on.

Ag groups want a focus back on trade, but they are also concerned it could come at a cost.

“Mexico, Canada, China are always our No. 1, No. 2 and No. 3 three ag markets,” Thatcher says. “And so, a lot of concern in agricultural circles about the fact that most likely that’s where the retaliation starts first.”

Reality of a Growing Ag Trade Deficit

As tariff talk heats up, there are still tariffs in place today, and a growing ag trade deficit that’s glaring for U.S. agriculture. The ag trade deficit is expected to balloon to $42 billion in 2025, under the current administration. And Indiana farmer Kip Tom, who served as the ambassador to the United Nations in the first Trump administration, argues the focus back on trade could bode well for ag.

“When Trump was president, we did nearly 50 trade deals around the world,” Tom told “AgDay’s” Clinton Griffiths in an interview. “He did the Phase One deal with China. And granted, we didn’t get to Phase Two or Phase Three, but the reality is he got to put together and he got started following the trade war that we had with him for a little bit. So, I think trade is going to be No. 1.”

Tom says Trump’s next four years will be looking at new trade deals, but today, groups like U.S. Meat Export Federation (USMEF) also want any trade negotiations to do no harm, especially considering some meat exports have actually grown this year, in spite of the widening U.S. ag trade deficit.

“I think if you look at 2024 pork exports, we’re pulling our weight. We’re going to have record volume and record value this year, approaching $8.5 billion or so on the pork side,” says Dan Halstrom, CEO of USMEF.

Mexico Becomes U.S. Top Buyer

Halstrom says record demand from pork is broad based, but the No. 1 buyer is Mexico.

“Mexico is being driven by everything,” Halstrom says. “I mean, food service, retail, convenience stores. The buying power of the Mexican trade has been record breaking but also a little bit amazing.”

Earlier this year, Mexico bumped out China as the top trading partner for the U.S. But in the final days of Trump’s presidential campaign, he threated to impose 25% tariffs on all Mexican imports if Mexico didn’t tighten the border. And Mexico’s economy minister said it’s considering retaliatory tariffs of its own.

“I think as long as we don’t have any disruption, then yes, I think the strong export pace is very well positioned to continue,” Halstrom says. “Of course, you have new administrations coming in with a lot of talk about the U.S.-Mexico-Canada Agreement (USMCA). But as long as we stay within the confines of the USMCA agreement and follow that, I think we’re well positioned to continue this momentum in Mexico.”

Dairy and the Importance of USCMA

Another protein seeing positive demand from Mexico through the USMCA is dairy.

“When the administration first negotiated USMCA, which was do no harm to what’s working well, and for us, dairy continues to be overall a really positive relationship. So, working to help preserve that,” says Shawna Morris, executive vice president of trade policy and global affairs at National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council.

The relationship with Mexico within USMCA has been a positive for dairy, but it’s the Canadian side of the agreement that needs work, according to Morris.

“I mean, they’re flat out not doing what they promised to do. And I just don’t see any way around calling them on the carpet for that,” Morris says. “Yes, they eked out a win in the last dispute settlement case the U.S. brought against them, but if one judge had changed their mind, though, we would have been on the winning side. It’s just a three-person panel. This isn’t gospel here; we’re talking about what Canada’s doing is shady. It needs fixed.”

She says between the way Canada administers the dairy tariff rate quota quantities to U.S. competitors, to their excessive exports of dairy protein, dairy is a piece of USMCA that needs to be addressed.

“The last administration tried to deal with that in USMCA,” Morris says. “We had some disciplines to try to tackle it in the agreement. And Canada has found some workarounds that both of those issues are going to need to be on the table. I think just in terms of UCMCA, it’s clean-up and follow through.”

The Biggest Wild Card: China

Even with southeast Asia, Latin America and Mexico carrying the weight for dairy exports, China is still the biggest wild card. We asked Morris if China does retaliate against Trump’s threatened 60% tariffs, if it would have the same impact as it did during the last trade war.

“China, even though it has pulled back on its global dairy imports, it’s still our third-largest export market,” Morris says. “So, it’s a pretty sizable market and difficult to place out into other markets the volume of that production, but I think what we also saw the first time around, in addition to the pain and disruption caused by the retaliatory tariffs that were imposed, was at the end of the process progress having been made.

Phase One Trade Deal with China

Progress in the form of the U.S. China Phase One agreement, which as Tom noted, was negotiated under Trump’s first term. Morris describes that deal as useful for dairy.

“We had a number of different non-tariff barriers, issues that were a drag on our ability to be able to reliably export to that market. And the phase one agreement included progress and dealt with a whole handful of those,” Morris says. “So, I’d say, yes, there’s upheaval. We’ve also seen from the first time around that that can yield significant progress in certain respects, and we’re hopeful that that’s more of what we’ll see this time around.”

China has also scaled back on their buys of U.S. pork, with exports down 11% so far this year, but Halstrom points out even with increased tariffs now entering the picture again, tariffs the past four years never went away.

“The thing to remember on these tariffs is, we’ve had a tariff now for quite a few years on China, on both beef and pork, and it’s not the ideal situation, but it doesn’t it doesn’t eliminate trade,” Halstrom says. “We ended up doing $2 billion in sales on beef with a tariff in 2022, I believe was the year. A lot of that came as a result of the phase one agreement in 2020, but people sometimes forget that there was a tariff involved, and we still had a pretty good outcome.”

Two weeks after the election, and Trump’s playbook seems to be unfolding quickly with all his cabinet picks. But some argue those tariffs might just be threats at first.

“Here’s what the Republicans tell me,” Wiesemeyer says. “Trump isn’t going to invoke these across-the-board tariffs right away. He’s going to use that as leverage to countries looking at their trade relationship with the U.S., and his key word is ‘reciprocity.’ If you don’t treat us like we treat you, then I’m going to invoke tariffs.”

Those close to Trump seem to be in alignment: the U.S. needs fair trade.

“When we’re spending $500 billion in China, and they’re only spending $350 billion with us, we need to level that out a little bit. And maybe it means more agriculture trade going into China to balance that trade out,” Tom says. “I’m very optimistic on trade with Trump. I have no doubts that we’ll get things put together. He knows farmers don’t like to get their money from the government; they like to get it from the market. And so, I’m really excited about that when we talk about trade. But yet, I know everybody’s pretty edgy about it at this point in time.”

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New Names Surface for Trump's Secretary of Ag Pick; Here's the Complete List

Mon, 18 Nov 2024 17:00:56 GMT

Agriculture continues to await President-elect’s announcement on who will be named the next U.S. Secretary of Agriculture. As the list continues to evolve, Robert F. Kennedy Jr. is reportedly playing an active role in the cabinet selection.

As AgWeb first reported last week, there were originally 15 people being considered for Secretary of Agriculture. North Dakota Governor Doug Burgum has since been tapped by Trump for Interior Secretary. He will also lead the newly created National Energy Council. And Senate Ag committee member Cindy-Hyde Smith (R-Miss.) says she plans to stay in Congress.

With one addition to the original list, that leaves the 14 possible picks for the next Secretary of Agriculture:

Charles Herbster. A Trump donor who led his 2024 rural campaign coalition, Herbster is a fifth-generation farmer, born and raised in Falls City, Neb. Today, he is CEO and President of Carico Farms, Herbster Angus Farms and the Conklin Company. Trump appointed Herbster as his National Chairman of the Agricultural and Rural Advisory Committee.
Texas Ag Commissioner Sid Miller. Serving in this role since January 2015, Miller was born in 1955 in De Leon, Texas and has deep roots in the state’s agriculture industry. He is a cattle rancher, a farmer and owner of a commercial nursery business. He served six terms as a member of the Texas House of Representatives from 2001 to 2013. Miller was first elected as Texas Agriculture Commissioner in 2014 and re-elected in 2018 and 2022. He granted “amnesty to cupcakes” as his first official action, drawing attention to the repeal of a ban on junk food in schools. Recently, he issued an executive order allowing Texas farmers to use water from the Rio Grande for irrigation to address water shortage concerns. Miller has faced criticism. He awarded significant bonuses to staffers and created high-paying positions for political allies early in his tenure. Miller has recently been sounding the alarm about water shortages in Texas, particularly in the Rio Grande Valley.
Sarah Frey. She is the founder and CEO of Frey Farms, a company she established at the age of 16. Frey grew up on a struggling farm in southern Illinois as the youngest of 21 children. At the age of 15, Sarah started her own fresh produce delivery business using an old pickup. Several years later, she took over the family farm, which was facing foreclosure, and purchased it outright. This bold move marked the beginning of her entrepreneurial journey in agriculture. Under Sarah’s leadership, Frey Farms has grown into a major agricultural enterprise: It is now the largest producer of pumpkins in the U.S. The company owns approximately 15,000 acres of farmland across seven states. Besides pumpkins, Frey Farms produces watermelons, cantaloupes, sweet corn and hard squash. She is an advocate for better health initiatives, nutrition policies and economic opportunities for underserved rural communities. In 2020, she published a best-selling memoir, The Growing Season: How I Built a New Life—and Saved an American Farm.
Ray Starling. A prominent figure in agriculture policy and law with extensive experience in both the public and private sectors, Starling currently serves as the general counsel of the NC Chamber and president of the NC Chamber Legal Institute. In these roles, he sets litigation strategy and leads public policy development, focusing on issues affecting businesses in North Carolina. Previously, Starling held several high-profile positions in the federal government, including chief of staff to U.S. Secretary of Agriculture Sonny Perdue; principal agriculture adviser to the president of the United States at the White House; and special assistant to the president for agriculture, trade and food assistance on the White House National Economic Council . He also worked as chief of staff and chief counsel for U.S. Sen. Thom Tillis. He grew up on a century family farm in southeastern North Carolina.
Aurelia Skipwith Giacometto. She is an American attorney, businesswoman and biologist who served as the director of the U.S. Fish and Wildlife Service (USFWS) from 2019 to 2021. She began her career at Monsanto in 2006, working her way up to sustainable agriculture partnership manager. When confirmed as the director of the USFWS on Dec. 12, 2019, she became the first African American to hold this position before leaving office on Jan. 19, 2021. She currently serves as the Secretary of the Louisiana Department of Environmental Quality since January 2024.
Gregg Doud. He served as the chief agricultural negotiator with the rank of ambassador in the Office of the United States Trade Representative, confirmed by the U.S. Senate on March 1, 2018. In this role, Doud was responsible for conducting and overseeing international negotiations related to trade in agricultural products. His background is deeply rooted in agriculture as he grew up on a dryland wheat, grain sorghum, soybean, swine and cow-calf operation near Mankato, Kan., which he remains involved with today. Doud is currently the president and CEO of the National Milk Producers Federation (NMPF). Prior to joining NMPF, he worked at Aimpoint Research, a global intelligence firm specializing in agriculture and food.
Kip Tom. The Indiana farmer transformed his family’s farm, Tom Farms, into one of the largest farming operations in the state. From April 2019 to January 2021, he served as the U.S. ambassador to the United Nations Agencies for Food and Agriculture , based in Rome, Italy. Tom was named the 2007 Top Producer of the Yea r by Farm Journal. Also of note, he helped celebrate Donald Trump’s victory on election night at The Mar-a-Lago Club.
Abel Maldonado. Said to be at or near the top of possibilities, Maldonado was the California Lt. Gov. from April 27, 2010, to Jan. 10, 2011. He is the oldest son of immigrant field workers and grew up working alongside his father picking strawberries to help support the family. He ran unsuccessfully for California’s 24th congressional district in 2012 and briefly ran for governor in the 2014 election. He was considered for USDA Secretary by Donald Trump in 2017, but was not ultimately nominated. He is currently the owner of Runway Vineyards in Santa Maria, Calif.
Former House Ag Chairman Mike Conaway. Now a private consultant, Conaway is the only person not in office who has negotiated a farm bill, led an investigation resulting in debunking the Russia hoax, turned USDA upside down to investigate where all the debt relief and climate money has gone, knows rural America, and aligned with Trump on needed SNAP reforms.
Current House Ag Chairman Rep. Glenn Thompson. The Republican U.S. representative currently serves Pennsylvania’s 15th congressional district and is the chairman of the House Ag Committee. Prior to entering politics, Thompson had a 28-year career in healthcare. He worked as a therapist, rehabilitation services manager and licensed nursing home administrator. Thompson was first elected to Congress in 2008, representing Pennsylvania’s 5th congressional district. In 2018, due to redistricting, he began representing the 15th district. In 2018, Thompson supported new work and job training requirements for SNAP (food stamp) beneficiaries. Thompson has been actively involved in crafting the 2024 farm bill.
Zippy Duvall. Since January 2016, he has served as the president of the American Farm Bureau Federation (AFBF). Duvall is a third-generation farmer from Georgia with deep roots in agriculture. He operates a farm in Georgia, currently raising beef cattle and broiler chickens and produces more than 750,000 broilers per year with his wife, Jennifer. Prior to his role as AFBF president, Duvall served as the president of the Georgia Farm Bureau for nine years.
Rep. Thomas Massie. The rebel House conservative is one most consider a long shot choice, but his name surfaced on social media last week. Massie was interviewed by Tucker Carlson in June, where he talked about his “off-the-grid home” on his Kentucky farm where he has chickens and grows food on his property. More recently, Massie has been promoting the benefits of raw milk versus pasteurized milk.
Ted McKinney. Currently, McKinney serves as CEO of the National Association of State Departments of Agriculture. Before that he was Undersecretary of Agriculture for Trade and Foreign Agricultural Affairs (2017 to 2021) and director of the Indiana State Department of Agriculture (2014 to 2017). McKinney worked for 19 years with Dow AgroSciences and 14 years with Elanco, a subsidiary of Eli Lilly and Company, where he was director of global corporate affairs.
Jimmy Emmons. The senior vice president of climate-smart programs for Trust In Food, Farm Journal’s sustainable agriculture division , who is currently on leave of absence from Farm Journal, is also a nationally recognized no-till farmer, regenerative rancher and soil-health expert. He leads Trust In Food’s national programs to accelerate the adoption of conservation agriculture. Emmons and his wife, Ginger, own and operate Emmons Farm in Leedey, Okla. Prior to Trust in Food, he was regional coordinator for USDA’s Farm Production and Conservation, where he supported operational and business functions across the Farm Service Agency, Natural Resources Conservation Service and Risk Management Agency.

Of note: If Trump makes his selection soon, it will be quicker than previous nominations for the position. Trump’s previous USDA secretary nomination, Sonny Perdue, did not occur until Jan 19, 2017, the day before inauguration and more than two months after the election. Under the Biden administration, multiple news sources reported then President-elect Joe Biden selected Tom Vilsack as his nominee for Secretary of Agriculture on Dec. 9, 2020.

Burgum As Energy Czar

Burgum, who’d previously been in the running for possible Agriculture Secretary, was named Trump’s energy czar in addition to leading Interior. This announcement came Friday. Burgum, North Dakota governor and former software executive, is positioned to become a pivotal figure in U.S. energy and climate policy under President-elect Donald Trump’s administration. Appointed as both Interior Department chief and head of the newly formed National Energy Council, Burgum will have extensive influence over federal energy policies and agencies. His focus on oil, gas production, carbon capture, and hydrogen energy aligns with advancing domestic energy goals, though environmentalists criticize his pro-fossil fuel stance and lack of conservation expertise. While not dismissing climate concerns outright, Burgum’s approach contrasts with Trump’s skepticism about climate change.

Trump also nominated Chris Wright as Energy Secretary. He currently is CEO of Colorado-based Liberty Energy Inc. and is known for his support of oil and natural gas fracking. He has championed fossil fuels as essential to global prosperity, while downplaying the severity of climate change. In his statement, Trump highlighted Wright’s contributions to the U.S. energy sector, noting his role in advancing the American shale revolution. Trump emphasized Wright’s experience in various energy fields, including nuclear, solar, geothermal, and oil and gas. Wright’s confirmation would place him on a new Council of National Energy, which will be led by Doug Burgum, Trump’s pick for Interior Secretary.

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U.S. Ag, Food Industry Groups Express Significant Concerns About Trump's Proposed Mass Deportation Plans

Fri, 15 Nov 2024 20:58:39 GMT

U.S. ag and food industry groups are expressing significant concerns about Donald Trump’s proposed mass deportation plans. These groups worry that such actions could have severe consequences for the U.S. food system and economy.

Key concerns

Labor shortage: The U.S. agricultural sector heavily relies on immigrant labor, with estimates suggesting that 50% to 70% of farmworkers are undocumented. Mass deportations would dramatically reduce the available workforce, potentially crippling agricultural production.
Economic disruption: Farmers and industry advocates argue that a crackdown on undocumented immigrants could bring their businesses to a halt. The American Farm Bureau Federation has stated that “Enforcement-only immigration reform would cripple agricultural production in America.”
Food supply disruption: There are concerns that mass deportations could “decimate our nation’s food supply and economy,” according to some politicians and advocates.
Rising food prices: A reduction in the agricultural workforce could lead to unharvested crops and decreased food production, potentially driving up food prices for consumers.
Broader economic impact: The loss of millions of workers would not only affect agriculture but could disrupt the nation’s economy.

Ag industry groups recognize the crucial role that immigrant workers play in the U.S. food system. They emphasize that these workers often take on physically demanding jobs that many American-born workers are unwilling to do. The Farm Bureau has noted the difficulty in finding American workers attracted to farm jobs, which are often challenging, seasonal, and transitory.

Small farmers and urban farmers also express concern, highlighting the importance of immigrant labor in maintaining the current food system. They worry that mass deportations would make it extremely difficult to find workers willing to perform the necessary labor under often difficult conditions.

Possible Outcomes

If mass deportations were to occur, industry groups foresee several potential outcomes:

• Reduced agricultural production and possible food shortages of some commodities
• Increased reliance on food imports, making the U.S. more vulnerable to price fluctuations and international trade policies
• Accelerated adoption of automation in agriculture, which comes with its own set of challenges and potential job losses
• Economic instability in rural communities that heavily depend on agricultural jobs

Minnesota Federal Reserve President Weighs In

Minneapolis Federal Reserve President Neel Kashkari voiced concern about the impact it wold have on inflation and the broad economy.

“If you just assume people are working - either working in farms or working in factories - and those businesses now lose employees, that would probably cause some disruption,” Kashkari said
while appearing on “Face the Nation” last weekend.

“The implications are not entirely clear to me,” Kashkari added. “Ultimately it is going to be between the business community and Congress and the executive branch to figure out how they would adjust.”

Why John Thune's Election as Senate Majority Leader is Considered Beneficial for U.S. Agriculture

Wed, 13 Nov 2024 19:50:43 GMT

Sen. John Thune (R-S.D.) wins Majority Leader race. Sen. Rick Scott (R-Fla.) was eliminated on the first ballot. And Thune beat Sen. John Cornyn (R-Tex.) 29-24 on the second ballot.

The Thune selection is good for the U.S. ag sector. He has one of the best staff in Congress.

The leadership race unfolded in two rounds of voting: 

In the first ballot, Scott was eliminated. 
In the second and final ballot, Thune secured 29 votes, defeating Cornyn, who received 24 votes.

Donald Trump stayed out of the contest but did make public demands that the incoming majority leader allow him to make recess appointments to his Cabinet. All three men quickly agreed.

Thune’s election as Majority Leader is considered beneficial for the U.S. ag sector for several reasons: 

Agricultural background: Thune has a deep background in ag policy and is a member of the Senate Agriculture Committee. 
Farm bill experience: He has been involved in writing several farm bills, demonstrating his expertise in agricultural legislation. 
Conservation programs: Thune is an avid supporter of conservation title programs like the Conservation Stewardship Program and Conservation Reserve Program.
Bipartisan approach: He is a skilled negotiator, working for the benefit of all.
Constituency focus: Coming from South Dakota, an agriculture-based state, Thune is likely to keep agricultural interests at the forefront of his agenda.  • Experienced staff: Thune has one of the best staffs in Congress, which can be crucial for effective policymaking and implementation.

Of note: This leadership change marks the end of Mitch McConnell’s (R-Ky.) 18-year tenure as the Senate’s Republican leader. Thune will assume the role of Majority Leader for the next two years, coinciding with President-elect Donald Trump’s second term. While Thune has had differences with Trump in the past, he has recently worked to improve their relationship and has pledged to advance Trump’s legislative agenda.

Trump Taps Lee Zeldin to Lead EPA; What Does It Signal for Agriculture?

Tue, 12 Nov 2024 15:36:34 GMT

President-elect Donald Trump has selected former New York congressman Lee Zeldin to lead the Environmental Protection Agency (EPA) in his upcoming administration. This appointment signals a potential shift in environmental policy and regulatory approach. Here are the key points about this nomination:

• Zeldin is a former Republican congressman who represented New York’s 1st congressional district from 2015 to 2023.
• He lacks extensive experience in environmental policy, having not served on committees with direct oversight of environmental issues during his time in Congress.
• Zeldin has a lifetime score of only 14% from the League of Conservation Voters, indicating a record of frequently voting against environmental legislation.

Trump stated that Zeldin would “ensure fair and swift deregulatory decisions” to “unleash the power of American businesses.” The administration aims to maintain “the highest environmental standards, including the cleanest air and water on the planet” while pursuing deregulation.

Zeldin is expected to focus on restoring “U.S. energy dominance” and revitalizing the auto industry.

He may be tasked with rolling back several Biden administration environmental regulations, particularly those targeting power plant pollution and vehicle emissions. There are plans to end the pause on constructing new natural gas export terminals and potentially withdraw the U.S. from the Paris climate agreement.

Zeldin joined Trump and Sen.-elect Dave McCormick in Pennsylvania for a roundtable on agriculture during Trump’s campaign in September. Zeldin praised Trump for addressing the “threat” of foreign entities buying U.S. agricultural land and highlighted Trump’s trade policies, including the U.S.-Mexico-Canada Agreement, which prioritized American farmers and strengthened supply chain resiliency.

Of note to the biofuels sector, In November 2015, Zeldin and several other members of Congress sent a letter to EPA Administrator Gina McCarthy expressing concerns about the proposed 2016 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) program. The lawmakers worried that the proposed 2016 RVOs would require blending more ethanol than could be absorbed by the E10 gasoline market, effectively “breaking through” the blend wall. There were concerns that exceeding the blend wall could drive up the price of E10 gasoline for consumers. Ultimately, the EPA did finalize 2016 RVOs that were lower than originally proposed in the RFS statute, but still represented an increase over previous years. The agency attempted to balance the competing interests and technical constraints in the fuel market.

Meanwhile, discussions are underway about possibly relocating the EPA headquarters outside of Washington, D.C.

Environmental advocates criticized the nomination, viewing it as a potential regression in environmental policy. Zeldin’s record includes opposition to several climate-related bills and support for increased fossil fuel production.

Zeldin’s appointment as EPA Administrator will require Senate confirmation.

Could 100% Bonus Depreciation Make a Return Under a Trump 2.0 Administration?

Fri, 08 Nov 2024 19:59:55 GMT

President-elect Donald Trump is preparing for his second term as president. While it’s not two consecutive terms, his history during the first term could serve as a possible playbook on how the next four years could impact agriculture.

“You have to remember, Trump is a populist,” says Jim Wiesemeyer, Farm Journal Washington correspondent. “He learned a lot from his first four years. So, he’s better prepared now. He won’t choose a lot of cabinet people who will eventually write books negative about him. He learned that lesson.”

The parlor game of whom will be named to key cabinet positions, including the U.S. Secretary of Agriculture , will continue during the next few months. One of the biggest anticipated changes that could impact farms across the U.S. is the possible change to the tax policy.

“You can up the odds that you’re going to have many, if not most, of the expiring Trump 2017 tax cuts that expire at the end of 2025 renewed. That’s good for the U.S. sector because of the estate tax exemptions will probably remain as they currently are,” says Wiesemeyer.

While anticipated changes continued to be weighed by political analysts, one agricultural tax expert thinks farmers can count on one major thing.

“I think we’re definitely going to see no tax increases. That’s for sure,” says Paul Neiffer, Farm CPA and contributor to AgWeb.

Neiffer says even though Trump campaigned on no tax on tips and no taxes on social security, Neiffer doesn’t see those proposals passing, as it would leave too big of a hole in the federal budget deficit.

“But certainly, the lifetime exemption that next year will be almost $14 million, I think that’s going to be made permanent. And that’s great news for our farmers that possibly are facing some estate taxes,” Neiffer says.

Neiffer also thinks the Section 2032A deduction, which permits an alternative method for valuing certain real property used either as a farm for a farming purpose or in a trade or business other than farming, is something that could get bumped up to $14 million per taxpayer. He believes it would be a “good deal” for farmers.

The other benefit, according to Neiffer, is the extension of the Section 199A Deduction and additional changes he expects to occur with the corporate tax rate.

“The lower rates for 199A capital will likely to be extended,” Neiffer says. “We could even see a reduction in the corporate tax rate down to maybe 15% for farmers. And if that happens, you could see a lot of farmers switching from being an individual farmer to being a corporate farmer.”

According to Neiffer, 100% bonus depreciation could also make a comeback under Trump.

“We think, perhaps, 100% bonus depreciation might be coming back for farmers,” says Neiffer. “When they buy equipment or buildings, farm buildings, etc., they’ll be able to deduct 100% of that in the year of purchase.”

Neiffer points out farmers need to be careful and make sure they optimize their depreciation related to their debt, but the idea of 100% bonus depreciation would be a welcome change for farmers.

Wiesemeyer also says the relief for farmers is there will be no major changes to capital gains taxes, which is something the democratic nominee Kamala Harris had proposed during her campaign.

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Who Will Be the Next U.S. Secretary of Agriculture?

Thu, 07 Nov 2024 18:44:23 GMT

Donald Trump won all battleground states in a virtual red wall. Trump is the first candidate in over a century to reclaim the White House after losing it. Trump, who won election in 2016 as the 45th president, now will be the 47th and just the second candidate in U.S. history to win nonconsecutive White House terms.

Now that the results are in, it begs the question: Who will be the new USDA Secretary? That parlor game has returned with a host of possibilities which include:

Abel Maldonado, said to be at or near the top of possibilities, was former California Lt. Gov. from April 27, 2010, to Jan. 10, 2011. He is the oldest son of immigrant field workers and grew up working alongside his father picking strawberries to help support the family. He ran unsuccessfully for California’s 24th congressional district in 2012 and briefly ran for governor in the 2014 election. He was considered for USDA Secretary by Donald Trump in 2017, but was not ultimately nominated. He is currently the owner of Runway Vineyards in Santa Maria, California.
Zippy Duval, American Farm Bureau President, serving in that role since January 2016. He is a third-generation farmer from Georgia with deep roots in agriculture. He operates a dairy farm on land in Georgia, currently raising beef cattle and broiler chickens. He produces over 750,000 broilers per year with his wife, Jennifer. Prior to his role as AFBF President, Duvall served as the President of the Georgia Farm Bureau for nine years.
Kip Tom, Indiana farmer who transformed his family’s farm, Tom Farms, into one of the largest farming operations in Indiana. From April 2019 to January 2021, he served as the U.S. Ambassador to the United Nations Agencies for Food and Agriculture, based in Rome, Italy.
Former House Ag Chairman Mike Conaway, now a private consultant. He is the only person out there, not in office, who’s negotiated a farm bill; led an investigation resulting in debunking the Russia hoax; auditor who would turn USDA upside down investigating where all the debt relief and climate money has gone; knows rural America; aligned with Trump on needed SNAP reforms.
Texas Ag Commissioner Sid Miller, serving in this role since January 2015. Miller was born in 1955 in De Leon, Texas and has deep roots in the state’s agriculture industry. He is a cattle rancher, farmer, and owner of a commercial nursery business. He served six terms as a member of the Texas House of Representatives from 2001 to 2013. He was first elected as Texas Agriculture Commissioner in 2014 and re-elected in 2018 and 2022. He granted “amnesty to cupcakes” as his first official action, drawing attention to the repeal of a ban on junk food in schools. Recently issued an executive order allowing Texas farmers to use water from the Rio Grande for irrigation, addressing water shortage concerns. Miller has faced criticism. He awarded significant bonuses to staffers and created high-paying positions for political allies early in his tenure. Miller has recently been sounding the alarm about water shortages in Texas, particularly in the Rio Grande Valley.
Rep Thomas Massie (R-Ky.). He is a rebel House conservative that most consider a long shot choice.
Ray Starling: A prominent figure in American agriculture policy and law with extensive experience in both the public and private sectors. Currently serves as the general counsel of the N.C. Chamber and president of the N.C. Chamber Legal Institute. In these roles, he sets litigation strategy and leads public policy development, focusing on issues affecting businesses in North Carolina. Previously, Starling held several high-profile positions in the federal government: Chief of Staff to U.S. Secretary of Agriculture Sonny Perdue; Principal agriculture advisor to the President of the United States at the White House; Special Assistant to the President for Agriculture, Trade and Food Assistance on the White House National Economic Council. He also worked as Chief of Staff and Chief Counsel for U.S. Sen. Thom Tillis. He grew up on a Century Family Farm in southeastern North Carolina.
Ted McKinney, CEO of the National Association of State Departments of Agriculture. Before that he was Undersecretary of Agriculture for Trade and Foreign Agricultural Affairs (2017-2021); Director of the Indiana State Department of Agriculture (2014-2017): He served in this capacity before his appointment to the federal government. McKinney worked for 19 years with Dow AgroSciences and 14 years with Elanco, a subsidiary of Eli Lilly and Company, where he was Director of Global Corporate Affairs.
North Dakota Gov. Doug Burgum, who ran briefly for the Republican presidential nomination against Trump before campaigning for him. His term expires in December. Burgum is also being considered for other Cabinet positions. Of note: Every agriculture secretary since Mike Johanns in 2005 was a former governor.

— Potential candidates for U.S. Trade Representative in a second Trump administration include:

Robert Lighthizer is seen as a top contender to reprise his role as U.S. Trade Representative. However, reports signal Lighthizer wants to be either Commerce Secretary or Treasury Secretary. As Trump’s USTR during his first term, Lighthizer was a key figure in implementing Trump’s trade policies, including leading negotiations for the U.S.-Mexico-Canada Agreement (USMCA) to replace NAFTA; Overseeing trade negotiations and disputes with China; Advocating for and implementing tariffs on various imports. Lighthizer remains close with Trump and is widely viewed as a leading candidate for USTR or another top economic post, especially given Trump’s promises to pursue even more aggressive trade policies in a second term.
Bill Hagerty. The Tennessee senator and former ambassador to Japan under Trump is considered a contender for multiple Cabinet posts, including USTR.
Jamieson Greer. Served as chief of staff to Lighthizer at USTR during Trump’s first term and is reportedly a top choice to lead the office.
Robert O’Brien. Trump’s former national security advisor is seen as a candidate for Secretary of State or other foreign policy roles, which could potentially include USTR.

Of note: Trump has expressed a desire to pursue even more aggressive trade policies, including broader tariffs, in a potential second term. This suggests he may favor someone like Lighthizer who has a track record of implementing such policies. However, the final selection will likely depend on various factors as Trump assembles his full economic and foreign policy teams.

— Who will be Donald Trump’s chief of staff? This is one of the most important personnel decisions Trump faces. There are several prominent contenders being considered for the position:

Brooke Rollins: A trusted Trump associate and CEO of the America First Policy Institute, Rollins is seen as a top contender for the Chief of Staff role. She previously served as an advisor on domestic policy during Trump’s first term and is perceived as a more moderate Trump ally.
Susie Wiles: Having led Trump’s successful 2024 campaign, Wiles is also being considered for the Chief of Staff position. Her pivotal role in Trump’s electoral success, particularly after joining his campaign following her work on Ron DeSantis’ campaign in Florida, has put her in a strong position for this role.
Kevin McCarthy: The former House Speaker, who had an unceremonious exit from Washington in October 2023, is widely seen as a top contender for the Chief of Staff position. McCarthy’s intimate knowledge of how Washington works is considered a significant asset for this role. Some people, however, say he likes the money he is making currently.
Robert Lighthizer: While primarily known for his role as a trade representative, Lighthizer is also mentioned as a potential candidate for Chief of Staff. However, he is also being considered for other positions such as Treasury Secretary or Commerce Secretary.

Bottom line: The final selection will likely depend on various factors, including their relationship with Trump, their ability to navigate Washington politics, and their alignment with Trump’s vision for his second term.

Your Next Read: Washington Insiders Weigh in on What the Election Means for Agriculture

Buoyed by Stronger Support from Rural America than 2016, Trump Wins Second Term as President

Wed, 06 Nov 2024 13:58:28 GMT

Donald Trump won all battleground states in a virtual red wall while the blue wall (Pa., Wis., Mich.) cratered for Democratic challenger Kamala Harris as she faced the greatest political comeback in U.S. history.

Trump also won battleground states of North Carolina and Georgia and was close in Nevada and Arizona, two states not yet officially called. It looks like Trump will eventually garner over 300 electoral votes. Trump is the first candidate in over a century to reclaim the White House after losing it. Trump, who won election in 2016 as the 45th president, now will be the 47th and just the second candidate in U.S. history to win nonconsecutive White House terms.

The Republican Party was on track to win the popular vote for the first time since 2004.

“America has given us an unprecedented and powerful mandate,” Trump told supporters as he declared victory.

Trump garnered even stronger support in rural America versus his still robust rural vote in this first administration. That is likely a backlash against the ag policy moves of the Biden/Harris administration that focused on underserved and minority rural citizens.

Trump also won strong support among working-class voters. The AP VoteCast survey, which included more than 120,000 registered voters nationally, showed he won 55% of voters without a college degree. That was up from 51% in 2020 in his race against Biden. Harris, meanwhile, struggled to pull together the diverse coalition that elected Biden in 2020, and she was weighed down by negative views of the economy under the Biden administration.

— It’s Trump’s GOP and his party has changed in a massive realignment. It now focuses on the working class, younger Americans, including young Black men, and Hispanics. It already focused on rural Americans; Trump gained even more rural votes in this election.

—“A new star is born,” Trump said in his acceptance speech: Elon Musk, who helped Trump and the GOP in campaign funding and messaging. It is unclear what role Musk will play in the next Trump administration, but the president-elect previously said he wants Musk to lead an effort to make the government more efficient. Of note: Musk vowed to keep his political action committee going beyond the presidential election, a sign the world’s richest person is building a political machine to support Trump.

— Republicans did much better than most expected in Senate races, with a likely pickup of four seats, to 53 (perhaps more), up from their 49 total in the current Congress. They include:

• West Va.: Open seat (Joe Manchin). Jim Justice (R) beat Glenn Elliott (D)

• Mont.: Incumbent Jon Tester (D) lost to Tim Sheehy (R)

• Ohio: Incumbent Sherrod Brown (D) lost to Bernie Moreno (R)

• Pa.: Incumbent Bob Casey Jr. (D) lost to Dave McCormick (R)

• Mich.: Open seat (Stabenow). Elissa Slotkin (D) is clinging to a 4,600 vote lead over former GOP Rep. Mike Rogers.

• Wis.: Incumbent Tammy Baldwin (D) is slightly ahead of Eric Hovde (R)… after late results from Milwaukee and Racine put her in the lead.

• Nev.: Incumbent Jacky Rosen (D) leads Republican Sam Brown in both Washoe and in Clark County, where the outstanding vote likely benefits her. With many absentee ballots, this race may not be called for a while, much like the 2022 Senate contest.

• Ariz.: Open (Kirsten Sinema). Ruben Gallego (D) beat Kari Lake (R)

• Neb.: Incumbent Deb Fischer (R) squeaked by Dan Osborn (Independent)

• Texas: Incumbent Ted Cruz (R) beat Colin Allred (D)

• Current GOP Sens. Deb Fischer (Neb.) and Ted Cruz (Texas) both won their races that Democrats thought they had a chance of winning.

— What the GOP Senate tally means: This will mute to some degree GOP Senate moderates in the new Congress, including Sens. Susan Collins (Maine), Lisa Murkowski (Alaska), newly elected John Curtis (Utah) and Bill Cassidy (La.). The Senate GOP count gives Republicans powerful leverage in tax and spending battles.

— Several House races are still too close to call, but it appears Republicans will hold on to its narrow majority in the chamber. But Democrats were leading in some close races and several California races could still tip the House chamber to the Democrats. If the GOP keeps control of the chamber, that means another contentious House Speaker vote perhaps changes in its rules.

— Election winners include:
• Trump and his campaign strategy. Also, Trump’s victory coattails helped Republicans win a few Senate contests previously mentioned and helped keep the House in GOP control.
• GOP issues, including the border, tax/economic/inflation policy, energy, reduced regulations and a push for a reciprocity trade policy.
• Sen. Steve Daines from Montana played a significant role in the 2024 Senate races as the chairman of the National Republican Senatorial Committee (NRSC). In this position, he was responsible for leading the Republican efforts to flip control of the Senate from Democratic to Republican majority.

— Losers include:
• Kamala Harris who mostly refused to answer questions and make clear the policies she wanted. Her strategy of focusing on abortion and women voters was not enough to beat Trump.
• Former House Speaker Nancy Pelosi (D-Calif.), who led the maneuvers to get President Joe Biden to relinquish his re-election run for president and pushed Harris to pick Tim Walz of Minnesota as her vice president when election experts thought she should have picked Pa. Gov. Josh Shapiro.
• Harris’ campaign strategy that at the end relied on elite musical entertainers, a failed strategy that Hillary Clinton also tried. Nearly $16 billion were spent this election season, with Democrats spending a lot more than Republicans. The GOP saw the benefit of podcasts, which were a free way of getting their message across to voters.
• Pollsters who underestimated Trump voters for the third consecutive presidential election. Another loser: Iowa pollster Ann Selzer, who on Saturday predicted Harris over Trump in Iowa by 3 points; Trump won the state by double digits. Her poll turned out to be an outlier.
• President Biden’s family who helped push him to run for re-election only to wait until it was very late to see him pushed aside and forced to drop out.
• Most of the mainstream (legacy) media who clearly favored Harris and did several things that showed their bias.

— Now what?
• Trump should have learned from mistakes during his first term and will not likely make poor choices of some Cabinet and other personnel who ended up writing negative books about him.
• Trump’s Cabinet: The new GOP Senate next year will be able to provide the votes for Trump to get the Cabinet he wants. Unclear is what role RFK Jr. will play in Trump 2.0. He would not likely be confirmed by the Senate for any Cabinet position.
• High odds that a Trump favorite, Doug Burgum of North Dakota, will come into Trump 2.0 administration, perhaps as Energy Secretary, Burgum will bring ag-related interests relative to the RFS and tax incentive programs like 45Z/Sustainable Aviation Fuel (SAF). On global climate policy, Carbon Brief said Trump’s return to the White House would likely result in the U.S. missing its climate pledges “by a wide margin,” though it noted that some Biden administration policies such as a mammoth clean-tech spending program may “prove hard to unpick.”
• The lame-duck session of Congress may be encouraged to complete lingering business, including fiscal year (FY) 2025 funding, disaster aid, and perhaps a new farm bill and an ag economic aid measure.
• Foreign policy: Trump will take a more aggressive role in foreign policy rather than the near pacificist approach taken by Biden/Harris.
• Supreme Court: In the next few years, one to several existing SCOTUS members could likely depart.
• Republicans are now in position to reshape the federal judiciary.

— Budget reconciliation: With Republicans capturing the White House and Senate, and perhaps keeping control of the House, that means several budget reconciliation measures until 2026 elections could alter that situation. That means higher odds that Trump will get a lot of what he wants relative to 2017 Tax Act policies which mostly expire at the end of 2025.

— During the first days of his second term, Trump will issue executive orders dealing with border issues and energy-related matters, topics which Biden altered in recent years. Trump will also put into play that for every new regulation, up to ten regulations must be swept away.

— The ag sector will focus on Trump 2.0’s trade policy. Trump has said “tariffs” is his favorite word in the dictionary and has consistently said he would use them against China. He has also said he would put 10% to 20% tariffs on imports from other countries, but that is seen as leverage in discussions with countries for a key goal of his new term: reciprocal trade agreements. Key will be if former U.S. Trade Rep Robert Lighthizer comes into the new Trump administration as most expect and if so, under what role. It may be as Commerce or Treasury Secretary. Trump recently said he would slap on tariffs against Mexico if their new president doesn’t comply with holding illegal immigrants into her country.

— International reactions to Donald Trump’s return to political prominence:
• Israeli Prime Minister Binyamin Netanyahu referred to the outcome as “history’s greatest comeback,” signaling strong approval and a continued bond between the two leaders.
• Indian Prime Minister Narendra Modi referred to Trump as a “friend,” reflecting close ties and potentially anticipating cooperative efforts.
• Cautious optimism from Western leaders: France, Britain, and Italy’s leaders expressed a diplomatic hope for future collaboration, signaling their willingness to maintain stable relations with Trump while hedging their tone.
• Far-right leaders in Europe cheered, indicating ideological alignment or a belief that Trump’s policies resonate with their political goals.
• Measured Response from Ukraine: Ukrainian President Volodymyr Zelenskyy gave restrained praise by highlighting appreciation for a “peace through strength” approach. This suggests caution from Zelensky, likely stemming from Trump’s past relationship with Russia and potential implications for Ukraine’s security situation.

— Market reactions:
• Bitcoin is bullish on the news as Trump and Musk are supporters. Bitcoin jumped to a record high above $75,000.
• U.S. equities will likely show a continuation of higher levels as Trump’s wins will mean better tax/investment opportunities than if Harris had won.
• Banks, brokers: Robust stock markets and an end to the Biden administration antitrust crackdown should mean more profits for banks and brokers… and less regulation. Bank of America, Citigroup, Morgan Stanley, JPMorgan Chase, Charles Schwab and Goldman Sachs are all up 6% or more in premarket trading.
• Treasury yields jumped, and the dollar surged on the election results (While Trump has advocated for a weaker dollar, many investors say his policies will achieve the opposite). Treasury yields are soaring on the view that Trump’s agenda — more spending, low taxes, tariffs, restricted immigration — will fuel inflation. The 10-year US Treasury note edged towards 4.5%, a level not seen in about six months, before pulling back a bit. Bitcoin spiked to a record and the Mexican peso lost as much as 3.5%.
• Oil, gold: A stronger greenback makes dollar-denominated commodities more expensive for international buyers, so crude and precious metals are falling.
• The yuan weakened the most in two years and Chinese stocks fell on the specter of Washington slapping tariffs of up to 60% on Chinese goods. The move could further weaken the world’s second-largest economy and disrupt global supply chains.
• Ag markets will be cautious over Trump’s aggressive trade policies. Soybeans dropped given concerns about trade tensions with China, the biggest buyer.
• Federal Reserve policymakers will watch to see if Trump’s policies via across-the-board tariffs and aggressive tax cuts are inflationary.

— A key state ballot issue in South Dakota is poised to have gone against carbon pipelines. This referendum let voters decide whether to uphold a pipeline bill that was passed by legislators. With 82% of votes in, 60% have voted no and 40% voted yes. A no vote would mean the state law in question would be rejected and that raises fresh questions about the Summit Carbon Solutions pipeline and similar projects.

Which Presidential Candidate Is More Likely to Tame Inflation or Support Farm Policies and Biofuels?

Mon, 04 Nov 2024 19:29:27 GMT

The presidential race is a close one , according to election analysts. And when it comes to agriculture, there’s an immense focus on the potential impact on trade, inflation, farm policy and biofuels.

Ahead of the election, the October Ag Economists’ Monthly Monitor asked economists which presidential candidate will be better for agriculture on taming inflation, providing more certainty on farm policy, as well as more likely to support biofuels policies. The Monthly Monitor is an anonymous survey of 70 ag economists from across the U.S.

On the question of which candidate would be more effective at taming inflation, 53 percent said Donald Trump.
When it comes to providing more certainty on farm policy and crop insurance, 61 percent of economists said Trump will provide more certainty.
However, when looking at policies that benefit biofuels, 53 percent of economists said Kamala Harris.

45Z and Biofuels Tax Credit in Question

Today, there is no clarity on 45Z that’s causing soybean processors like Cargill and Bunge to possibly slow or even idle production by the end of the year.

“We have industry looking to shut down production of biofuel. If we don’t get the 45Z requirements here released soon, and that doesn’t look likely, unfortunately, that’s going to hurt demand for soybean crushing for soybeans per se,” Suderman said.

“The fact that we don’t have those today, I think, is impeding investment in the sector. And people are asking for that before they spend millions of dollars to do that. And I think that has been a hiccup,” said Brown.

Role of the Federal Government

Heading into a crucial election with not just the presidential race, but also the House and Senate, the October Ag Economists’ Monthly Monitor asked, “What is the most important role of the federal government?”

Forty-six percent of economists ranked financial aid as the top priority. Nearly 43 percent said it’s passing a farm bill.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

“There’s all this discussion that the safety net is inadequate relative to commodity programs, and there’s the potential for some rather large ARC and PLC payments to come,” said Brown. “But are they too late? That’s the question. Is it too late in the cycle? Does any type of ad hoc support through a farm financial package bridge that gap?”

The October survey of economists also asked them to weigh in on the fate of the farm bill. The majority of economists think Congress will pass a new farm bill in 2025, but 21 percent think it could be 2026 before it crosses the finish line.

Farm Bill Ag Economists’ Monthly Monitor

(Lindsey Pound )

Your Next Reads:

Presidential Poll Results: How Farmers and Economists View Candidates’ Impact on Agriculture

Will USDA Fumble The 45Z Football?

Which Presidential Candidate Would Have the Biggest Impact on Ag?

A Possible Recession Still Hangs Over the Ag Economy, But Positive Shifts Are Starting to Surface

Hours Until the Election, 2024 Presidential Race is a 'Pure Toss-up’

Mon, 04 Nov 2024 16:54:31 GMT

Election analyst Nate Silver described the 2024 presidential race as a “pure toss-up,” giving former President Donald Trump a slight advantage over Vice President Kamala Harris. Silver’s latest forecast indicates Trump has a 51.5% chance of winning the Electoral College, compared to Harris’ 48.1%, as reported on Substack. He noted that while New York Times swing state polls favor Harris and Morning Consult polls lean toward Trump, neither has a decisive lead.

David Wasserman on presidential contest. “As you know, a week ago I considered Trump a 60%-40% favorite. But Trump has had a terrible past week between “floating garbage,” “taking care of women whether they like it or not,” water fluoridation, etc. Might still give him a tiny edge but outlook has tightened considerably the more off-message he’s been.”

Trump said yesterday that if elected, he would consider taking action against vaccines and fluoride in the country’s water supply, two public health issues championed by Robert F. Kennedy Jr.

Wasserman is election analyst for the Cook Political Report with Amy Walter.

Of note:

The race tightened over the weekend as the Des Moines Register’s final presidential poll shockingly had Harris up three points in the state, underscoring that the election will be closer than current market expectations. The Iowa/Selzer poll has roiled the political betting markets. Following its publication, Trump’s odds of victory fell on platforms including Polymarket, after they had climbed in recent weeks, in tandem with crypto and other elements of the Trump trade. Trump’s odds on Polymarket were at nearly 58% this morning, down from 67% on Wednesday. (Polls measure how voters intend to cast their ballots, while prediction markets track the odds of a candidate’s victory implied by bets on a platform.)

— Tom Essaye from the Sevens Report notes some key points about the 2024 presidential election:
• The 2024 presidential race is shaping up to be extremely tight, despite markets having priced in a Trump victory. While stocks have rallied and Treasury yields have risen on expectations of a Republican win, the reality, he says, is that either candidate could still emerge victorious.
• As Essaye notes, “The Real Clear Politics national average has Trump ahead by just 0.3 points (48.4 to 48.1). That’s razor thin.”
• He emphasizes that in the seven key swing states that will decide the presidency, three have polling differences of less than 1%, while the remaining four are within 3%. The election will likely come down to seven “toss-up” states: Georgia, North Carolina, Pennsylvania, Wisconsin, Michigan, Arizona and Nevada. Trump currently leads in all seven according to RCP averages, but by narrow margins.
• Essaye advises watching North Carolina and Georgia early on election night as potential barometers — if Trump wins these decisively it could signal overperformance versus polls, while close races or Harris victories would suggest the opposite.
• Importantly, Essaye points out that winning just the Sun Belt swing states is not enough for either candidate. They must win at least one Rust Belt state (Pennsylvania, Wisconsin or Michigan) to reach 270 electoral votes. He notes that if Trump wins Georgia, North Carolina, Arizona and Nevada, but Harris sweeps the Rust Belt, Harris would win 272-268.
• Given the tight race, Essaye warns that we may not have a clear winner on election night or even Wednesday morning. However, markets will likely begin pricing in the probable outcome based on early results and projections. Overall, his analysis underscores that despite market expectations of a Trump win, the election remains very much up for grabs heading into voting day.

— Overseas Americans seen as key factor in tight 2024 presidential race. Americans living abroad — numbering at least 4.4 million with 2.8 million eligible to vote — are becoming a focus for both parties in the tight presidential race between Kamala Harris and Donald Trump, Time reports ( link ). Historically low overseas voter turnout, only 7.8% in 2020, prompts efforts by Democrats Abroad and Republicans Overseas to mobilize voters, emphasizing digital outreach and local campaigns. Key issues include foreign policy and “double taxation,” a rare bipartisan concern. Trump pledged to end overseas tax filing requirements, highlighting the expat vote’s potential. However, GOP lawsuits challenging overseas ballots in swing states were rejected by courts, with critics calling such actions voter suppression.

— In the final days leading up to the presidential election, Donald Trump and Kamala Harris were actively campaigning across key swing states. Trump, in Pennsylvania, used fiery rhetoric, joking about extreme measures against media and making baseless claims that Democrats were attempting to steal the election. He also expressed lingering resentment over his 2020 loss, suggesting he “shouldn’t have left” office.

Kamala Harris adopted a hopeful and unifying tone during her campaign stop in Michigan. She aimed to appeal to voters by promising a break from fear-driven politics and pledged to work toward ending the conflict in Gaza. Her focus on Michigan reflects its strategic importance in securing a pathway to victory through the rust belt states, which are crucial for Democratic success.

Today’s agenda: Harris will spend her final day of campaigning in Pennsylvania, with rallies in Allentown, Pittsburgh and Philadelphia. Trump will be in three battleground states, holding events in North Carolina, Pennsylvania and Michigan.

— NBC aired a short video message from Donald Trump after coming under fire for allowing Harris to appear on Saturday Night Live, a sketch-comedy show, on Saturday. On the program, Harris told her mirror-image to “keep calm-ala and carry on-ala” and poked fun at her opponent. A member of the Federal Communications Commission suggested that the appearance violated the “equal time” rules that govern political programming.

— D.C. gears up with heightened security measures ahead of presidential election. Washington, D.C., is ramping up security as authorities and businesses brace for potential unrest following Tuesday’s presidential election, the Washington Post reports ( link ). New security fencing has been set up around the White House, Capitol, and Vice President Kamala Harris’s residence. The city, still marked by 2020’s protests and the Jan. 6 Capitol attack, has prepared for possible disruption by deploying all 3,300 police officers on 12-hour shifts. Business owners have reinforced properties with private security and boarded windows as a precaution, despite officials saying there is no credible threat. The Secret Service emphasized that the measures are part of broad public safety preparations.

— The dollar index falls the most in more than a month as polling data signaled the Democratic candidate Kamala Harris might be edging ahead in some swing states. Bonds and stock futures rose. Cash trade in U.S. Treasuries trade was closed in Asian trading hours as markets in Japan were closed for a public holiday. In stocks, traders are betting on volatility with the closely watched “fear index” signaling rising market stress.

— U.S. interest rate cuts are returning, with the Fed expected to announce a 25-basis-point cut on Thursday. Traders are anticipating this move, and there remains one more opportunity for a cut in December. However, JPMorgan’s strategy chief noted that a potential Trump election win could make the Fed reconsider further rate reductions.

— Harris vs. Trump: How their policies would affect U.S. consumers. The policies of Vice President Kamala Harris and former President Donald Trump present stark differences with significant implications for U.S. consumers:
• Investing: Trump aims to lower the corporate tax rate from 21%, potentially boosting corporate earnings, while Harris plans to raise it, which could have the opposite effect.
• Cost of Goods: Both propose tariff policies, but Trump’s more aggressive 10%-20% tariffs on imports may increase consumer prices. Harris seeks a federal ban on price gouging during emergencies.
• Housing: Harris aims to build 3 million housing units to increase supply, while Trump focuses on reducing demand through immigration measures, including deportations and restricting mortgages for undocumented immigrants.
• Taxes: Trump plans to extend tax cuts, fueling investments by companies and individuals, while Harris’ tax plans focus on aiding lower-income Americans while pledging to not raise taxes for those earning under $400,000 and to institute a minimum tax on billionaires.
• Childcare: Both propose expanding the child tax credit, but Harris wants to cap childcare costs at 7% of family income. Neither has addressed funding childcare facilities or workforce hiring.

— Control of the Senate is at stake in Tuesday’s election, with Republicans favored to win the majority, but Democrats still have a chance. Despite challenges, including the retirement of West Virginia Sen. Joe Manchin making the map tougher for them, Democrats’ well-funded candidates have often outperformed expectations in key races. Additionally, potential Democratic gains have emerged in states like Texas and Nebraska, providing opportunities to counterbalance Republican advances.

The Cook Political Report sees the GOP gaining control of the Senate with 51-54 seats.

Most see control of the House, like the White House, a jump ball.

— China’s legislature begins crucial session on economic stimulus amid investor concerns over potential Trump tariffs. The Standing Committee of China’s legislature has begun an important five-day session in Beijing, where economic stimulus measures are set to be discussed. The measures approved during this meeting are expected to signal the leadership’s approach to handling the country’s economic challenges. Key elements of the anticipated package include potential bank recapitalization, refinancing of local government debt, and possible support for households. This package will be closely watched by investors looking for signs that Chinese policymakers understand the gravity of the economic situation and are prepared to allocate sufficient resources to address it.

Another significant concern for investors is how China will respond if Donald Trump wins the U.S. presidential election. Trump has threatened severe tariffs of 60% on Chinese imports, which, according to UBS, could reduce China’s GDP growth by 2.5 percentage points over the following year. If such tariffs are implemented, China might need to adopt a more aggressive economic stimulus to counteract the impact.

Your Next Read: Which Presidential Candidate Would Have the Biggest Impact on Ag?

A Possible Recession Still Hangs Over the Ag Economy, But Positive Shifts Are Starting to Surface

Fri, 01 Nov 2024 23:19:58 GMT

In September, 75 percent of ag economists warned of an impending agricultural recession. October brought slight optimism to the Ag Economists’ Monthly Monitor, attributed to rising U.S. corn export demand and forecasts about cattle herd rebuilding. Yet, economists remain cautious about the potential impact of the upcoming election.

Harvest is winding down across the Midwest, and some farmers saw a record harvest pace in 2024. Harvest is typically the time of year the market sets harvest lows, but this year, commodities, like corn and wheat, came to life.

“I think over the last month, we’ve seen a little bit of a rebound or stabilization of prices, if you will. Some of that’s simply been fund short covering that is supported, some of it is a little better long-term picture for wheat and for corn, although for soybeans, it’s still looking somewhat bleak long-term,” said Arlan Suderman, chief commodities economist with StoneX Group.

The latest Ag Economists’ Monthly Monitor, which is a survey of nearly 70 ag economists and conducted by Farm Jounal each month, reflected that with short-term sentiments among economists seeing a slight improvement, but a bigger jump when asked to compare them to last year.

“We could have told you two to three years ago that, after a period of high prices, eventually we were going to have a recovery in production and that was going to suppress prices probably more than input costs. We knew that. I think when you take into account expectations heading into the year, has it deteriorated more than expectations? Probably not. We just know that we’re worse off today than where we were,” said Ben Brown, an agricultural economist with the University of Missouri.

Each month, the Monthly Monitor asks economists to list the factors that could impact crop prices over the next six months. In the latest survey, economists said:

South American weather
U.S.-China trade relations
Election outcomes
Global geopolitical risks
Biofuel demand

The Biggest Wildcard: South America

“The biggest thing that will l impact the markets is going to be South American weather. What happens in Brazil and Argentina and what’s the size of the soybean crop they’re going to get? Right now, it is raining. The crop is being planted late. Our people on the ground in Brazil are expecting a big crop if these rains continue,” Suderman said.

While the soybean crop could see suppressed prices if Brazil grows a big crop this year, the later-planted crop could eat into the supplies of corn.

“Even where we’re at today could have an impact on that second-crop corn, given that I anticipate that we’re going to see a very robust corn export picture even without a shrinkage in that second-crop Brazilian corn. I still think there’s an upside potential for the corn market, and it’s going to be based on the size of that second-crop corn in Brazil,” said Brown.

A Recent Surge in Corn Sales

The corn export demand picture has been strong, which is thanks to a surge in sales to Mexico. T hat’s one significant factor currently fueling corn prices .

“If we didn’t have it, corn prices would be a lot lower today than where they are,” said Brown.

“When we look at the export pace that we’re on right now, it’s stronger than what we normally have at this time of year, and it’s largely been because of Mexico. Mexico has been a very aggressive buyer of U.S. corn here, at what they perceive to be the harvest lows,” Suderman said.

Outlook for Livestock and Dairy

The October Monthly Monitor asked economists to list the factors that could impact livestock and dairy prices over the next six months. Economists said:

Herd size and tight cattle supplies
Outcome of the election
Health of general economy in the U.S. and consumer demand changes
Disease issues (H5N1, etc.)
Developments in China and other major importers
Consumer demand given high meat and dairy prices
Weather in the Corn Belt and Great Plains

When Will Beef Producers Start to Rebuild Their Herds?

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

The October survey also asked economists when they think producers will start to rebuild their cow herds:

50 percent said in the first half of 2026
30 percent think it’ll happen the second half of 2025
20 percent said in the first half of next year.

“We’ve seen a slowdown of cow slaughter. That’s step one, but that’s not rebuilding,” said Suderman. “It really comes down to when do we turn this weather pattern around and start getting the pasture, the feed necessary in the West in order to incentivize rebuilding the cowherd? That is the problem right now.”

Other than weather, what else is preventing producers from starting to rebuild? Economists say it’s the average age of producers, replacement costs and heifer prices.

“I also think there is this economic pull on producers of ‘how can I justify retaining these heifers when they’re bringing the prices that they are?’” said Brown.

The Inflation Factor

When you look at what could impact both livestock and row crop producers over the next six months, a major wild card is interest rates. The October survey asked economists how much farm interest rates need to fall to find economic stability for farmers, and 46% said 2%.

Ag Economists’ Monthly Monitor

(Lindsey Pound )

But even with the Fed cutting the benchmark interest rate last month, interest rates have actually gone up, not down.

“The two-year break-even inflation rate is what the market trades. It’s expectations of what inflation’s going to average over the next two years. And over the last six weeks or so, we have seen it jump a full percentage point. That is a significant short-term jump, saying that reinflation fears are coming back in a hurry,” Suderman said.

Suderman points out the Fed can influence mid- and longer-term rates, but the agency can’t control them. And it’s concerns about inflation that are pushing those rates back up again.

“That could all change over the next couple of weeks, or it could be reinvigorated. I think longer term, what I’m looking for is a return to the interest rates that we saw in the ‘90s and early 2000. But I think there’s going to be a lot of volatility in getting there,” Suderman said.

Election Impact on Ag

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Ahead of the election, the Monthly Monitor asked economists which presidential candidate will be more effective at taming inflation. Fifty-three percent said Donald Trump.

When it comes to providing more certainty on farm policy and crop insurance, 61 percent of economists said Trump will provide more certainty.

However, when looking at policies that benefit biofuels, 53 percent of economists said Kamala Harris.

Today, there is no clarity on 45Z that’s causing soybean processors like Cargill and Bunge to possibly slow or even idle production by the end of the year.

“We have industry looking to shut down production of biofuel. If we don’t get the 45Z requirements here released soon, and that doesn’t look likely, unfortunately, that’s going to hurt demand for soybean crushing for soybeans per se,” Suderman said.

“The fact that we don’t have those today, I think, is impeding investment in the sector. And people are asking for that before they spend millions of dollars to do that. And I think that has been a hiccup,” said Brown.

Role of the Federal Government

Heading into a crucial election with not just the presidential race, but also the House and Senate, the October Ag Economists’ Monthly Monitor asked, “What is the most important role of the federal government?”

Forty-six percent of economists ranked financial aid as the top priority. Nearly 43 percent said it’s passing a farm bill.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

Farm Bill Ag Economists’ Monthly Monitor

(Lindsey Pound )

Conclusion

The October Monthly Monitor reflects cautious optimism in certain areas of agriculture, marked by export strengths and potential price recoveries. But the optimism is shadowed by long-term rebuilding challenges, weather dependencies and the impact of the upcoming election.

Which Presidential Candidate Would Have the Biggest Impact on Ag?

Fri, 01 Nov 2024 22:01:44 GMT

With early voting well underway in the presidential election, agriculture producers must decide which candidate will better serve their needs and what they want the next president to do. On the latest episode of Farm Journal’s Unscripted podcast , long-time Washington insider Jim Wiesemeyer shares what he’s hearing about who that next president could be. He tells hosts Tyne Morgan and Clinton Griffiths that early voting among Republicans could make a big impact.

With polls showing razor-thin margins between the candidates, it’s still too close to call, particularly in the swing states, Wiesemeyer says. At a recent event in Colorado Springs, CO, he heard David Wasserman from the Cook Political Report give Donald Trump a 60 percent chance of winning. “Republicans historically vote far more than Democrats on election day,” he says. “This year, more Republicans have voted early. They could gain some key votes in key states simply by voting earlier.”

On the podcast, Clinton offers, “It feels like there’s so much pressure at the polls to get it right. Everybody’s kind of on edge, which I’m okay with. I want it to be right.” When the counting is done, however, which candidate will be better for agriculture? Tyne reveals that surveys in this month’s Ag Economist’s Monthly Monitor and a Farm Journal survey of more than 4,000 ag producers tell different stories.

Key issues for the industry include the 45Z program for biofuels, farm policy, tariffs, crop insurance and inflation. Jim says, “When I talk to top producers, one thing is clear on differentiating the candidates — tax policy. Farmers like that 20 percent pass-through. They like less estate taxes, less capital gains taxes. When you talk to farm country, production agriculture, those are the things I’m told.”

They agree that the delay in clarification on the 45Z biofuels tax credit is, as Tyne says, “a complete disaster.” Is it going to happen next year? Soybean processing plants are slowing purchases because they’re not sure about receiving the credit. “As for why it’s taking so long, it’s up to the treasury department and the IRS, because it’s tax incentives,” Jim explains. “They just don’t know agriculture. Companies are starting to pull back their investment plans because they don’t know the rules. We have to know if corn-based ethanol is going to comply.”

It’s a spirited, illuminating discussion on a range of issues that farmers, ranchers and other ag professionals need to consider seriously as they cast their votes.

Watch the full episode of Unscripted.

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The Recent Boom in Livestock Profitability is Masking a Harsh Reality of the Overall Farm Economy in 2024

Tue, 15 Oct 2024 16:27:48 GMT

USDA’s revised Net Farm Income projections released in early September showed net farm income will fall $6.5 billion or 4.4%, which is a major improvement from projections released in February suggesting it would fall 26%. However, economists argue those revised figures come with some misconceptions about the health of the ag economy today, and the the recent boom in livestock profitability is hiding the reality what’s really happening on row crop farms across the U.S. right now.

The lates t Ag Economists’ Monthly Monitor from Farm Journal showed a slight rise in optimism compared to the previous month, but economists remain worried about the current state of the agricultural economy when compared to last year.

It’s clear the ag economy is dominated by two very different stories this year. The livestock sector is better than what USDA forecasted in February, but the crop sector is worse.

“The margins that farmers are facing on average are really a tough place to be in for 2022 to 2024,” says Krista Swanson, lead economist for the National Corn Growers Association (NCGA). “According to USDA, the cost to produce corn dropped 5%, but the price was down 37%. And when we look at those average numbers from USDA, looking at cost of production for corn prices and yield, that comes out to average losses of $125 per acre.”

Revised Projections on Net Farm Income for 2024

USDA’s revised Net Farm Income projections were released in early September, and the updated figures were surprising to many economists. The new numbers show net cash farm income for the 2024 calendar year will fall $12 billion, which is down about 7% from 2023, and net farm income will fall $6.5 billion or 4.4%. This is compared to projections released in February of this year which suggested net farm income would fall 26%.

The latest Ag Economists’ Monthly Monitor survey, which is an anonymous survey of nearly 70 economists, asked those economists, “What was the most interesting thing you noticed in USDA’s September Farm Income update?” Economists weren’t surprised the livestock picture improved from the February report, but they pointed out the following:

“Increase in farm asset value and equity.”
“The ‘dog that didn’t bark.’ Many people expected a more dire picture in 2024, but the drop in crop prices was only a little more severe than earlier expected, and the necessary downward correction in estimates of 2024 feed costs (the earlier estimate was unreasonably high, given what was known about feed prices at the time) helped moderate overall 2024 costs. There were also adjustments upward in receipts for crops other than grains and oilseeds that boosted the receipt and income figures.”
“The simultaneous downward revision in the net farm income estimate for 2023 paired with the upward net farm income forecast for 2024, causing the year-over year 2023-2024 decline to shrink substantially.”

Potential Recession in the Agricultural Sector

The survey also asked if agriculture is on the brink of a recession, and there was no clear consensus as economists argue the livestock sector and the row crop sector are two very different stories. Seventy-five percent said yes, agriculture is on the brink of a recession, which is up from the 56% who responded that way in the previous month’s survey. However, 54% of economists argue agriculture is already in a recession, with some economists pointing to only the crop sector seeing recession concerns.

“I think yes, and it depends on how you define a recession. I define a recession as this is one of the worst years we’ve seen in the last 20. So my short answer to the question is yes. Just looking at where the price is currently at, this is about the worst year since 2007, which was the start of the ethanol boom,” Langemeier said.

It’s clear not all economists are in agreement, but when asked to expand on why, economists said:

“Financial health is weaker but still pretty strong.”
“For select crops and regions of the country farmers are facing significant financial pressure.”
“The cost-price squeeze facing the crop sector is severe and will have larger implications if it persists. Many crop producers were profitable in 2021 and especially 2022, so they had some ability to absorb a more challenging environment over the last two years. But that ability is running out, especially for producers who rent much of the land they operate or who are heavily indebted.”
“Over-production globally and exports are soft, while biofuel policy does not support consumption of surplus.”
“The farm structures across all farms does not suggest a recession. A higher portion of farms have off-farm income to support cyclical changes. Most farms have healthy balance sheets (thanks to increased land values), and there are positive returns in certain sectors of the industry supporting those that are diversified. Areas of the ag economy that will struggle are those that are highly or fully concentrated in row crops, are full-time commercial operations between 1,000 and 2,000 acres, and have a high proportion of cash-rented acres.”
“Highly-leveraged producers are feeling economic pain already. If supplies continue to remain large, lower prices may last for a longer period of time and could result in highly-leveraged producers leaving the industry.”
“The livestock sector, specifically cattle and dairy, is performing well relative to hogs and the crop sector.”

September Ag Economists’ Monthly Monitor

(Lindsey Pound/Farm Journal)

The economists were even more divided when it came to answering whether the ag economy is already in a recession. Economists said:

“The challenges faced by the crop sector are at least partially offset by a more positive story for cattle producers, in particular. For other animal sector producers, the drop in feed costs has made 2024 a little better than 2023.”
“Farmers are already feeling the pinch, and they are looking for ways to slash expenses.”
“Lenders in our state are very concerned about the outcomes for this year and the outlook for next year.”

Poor Margins for Pork Producers

Beef and dairy producers may be looking at better margins for 2024, but even with improved feed costs, pork producers are still faced with potential losses this year.

Iowa State University estimates U.S. pork producers will see an average of $13 per head loss during 2023-2025, which would be the worst three-year period for profitability in hog production in history, even worse than 1997-1999 ($12 per head loss).

The 1997-1999 time period had a dramatic impact on the hog industry and caused mass consolidation and more vertical integration.

The September Ag Economists’ Monthly Monitor asked economists: “What is the potential impact to the industry? And how is it different than what we saw in the 1990s?”

Some economists responded by saying they expect even more consolidation to take place today, but other economists say with so much consolidation already shaping the pork industry, this time period will be different.

“In the short run: not much - minimal increase in consolidation long run: some supply adjustment - depends on who has the deepest pockets.”
“Fewer hog producers.”
“The industry is already much more concentrated than it was in the late 1990s.”
“2023 was particularly difficult for the industry. The situation remains challenging, but lower feed costs have at least reduced losses. Unless demand strengthens, there will eventually need to be a contraction in supplies to generate a more “normal” rate of profitability.”
Leads to more concentration. A similar effect occurred in the 1990s

Livestock and Dairy Prices Outlook for the Next Six Months

Cattle and dairy prices are stronger than crops. The survey asked economists, “What factor(s) are you watching that you expect will impact livestock and dairy prices in the next six months?” Economists said:

The outcome of the 2024 election
Drought
Health of the ag economy
Meat demand at restaurants
Feed costs
High beef prices and the impact on beef and pork demand
If milk supplies remain weak, it will continue to lead to strong milk prices

Key Factors Affecting Crop Prices

The survey then asked economists to list the factors they’re watching that could impact crop prices over the next six months. Economists responded by saying:

Final 2024 U.S. crop production numbers
South American weather
Fall planting in South America (timing and acreage)
China’s economy/geopolitical tensions
Policy changes after the election (tariffs, impact on trade and biofuel policies)

Tariffs and Trade: A Continued Debate

The September Ag Economists Monthly Monitor, a Farm Journal survey of nearly 70 ag economists, revealed a mixed view of the presidential candidates’ impact on trade.

(Lindsey Pound)

Another area is exploring new export demand. Ag economists pointed out the outcome of the election could impact both crop and livestock prices. The September Monthly Monitor asked economists if the two presidential candidates would help or hurt trade.

55% said a Harris administration would hurt trade.
86% percent of economists said a Trump administration would hurt U.S. trade.

“Farmers are definitely concerned about trade,” says Langemeir, who helps author the Purdue University/CME Group Ag Economy Barometer and is one of the economists surveyed by Farm Journal each month. “We don’t ask specific questions related to tariffs in the Ag Economy Barometer, but one question we do ask is if they expect exports to increase, decrease or stay the same? Really, this is the most pessimistic they’ve been for about five years with regard to trade.”

Tariffs are a tool both the former Trump administration and the current Biden/Harris administration have used.

During the first presidential debate, Trump didn’t waver from his staunch stance on tariffs and trade, reiterating his plan to use tariffs to protect U.S. industries and increase revenues. Trump reinforced his plan to impose a 10% tariff on all imported goods and a 60% tariff on goods from China.

During the debate, Harris stated tariffs are essentially a “sales tax” on American households. The Biden/Harris administration recently extended the Trump-era tariffs, while also imposing its own set of tariffs in May. Biden directed the U.S. Trade Representative to “increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.”

“That’s why I get really worried when both candidates start talking about tariffs. It’s really uncharted waters, if you will. There’s already the perception we’re struggling a little bit with trade. As we enter these uncertain waters, we’re going to struggle more,” Langemeier explained.

Do Tariffs Work?

The controversy over tariffs and whether they’re a good trade policy tool is long-standing. The September Ag Economists’ Monthly Monitor asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade-flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long-term.”
“Absolutely, when properly applied.”
“Not over the long-term. They tend to affect who gets to supply different markets around the world.”

The September Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is ‘it depends.’ Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to a trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.

Conclusion: A Complex Road Ahead for U.S. Agriculture

As U.S. agriculture faces multiple challenges, from high input costs to volatile prices and geopolitical concerns, farmers are forced to find new ways to adapt. Economists emphasize the need for new demand sources, particularly in exports, to help stabilize prices and support the sector moving forward. With the outcome of the 2024 election and global market dynamics set to play pivotal roles, the agricultural sector will need to remain flexible to navigate these uncertain times.

Your Next Read: Presidential Poll Results: How Farmers and Economists View Candidates’ Impact on Agriculture

Presidential Poll Results: How Farmers and Economists View Candidates' Impact on Agriculture

Thu, 10 Oct 2024 21:42:28 GMT

Nov. 5 — election day — is fast approaching. A few weeks ago, we asked which candidate do you believe will have a more positive impact on farming policy programs, trade, biofuels policies and inflation.

Based on 4,776 respondents, here are the results:

We also asked about the candidate’s impact on agriculture overall. Here’s that breakdown by state. Make note of the seven swing states, Georgia, Nevada, Wisconsin, Michigan, Arizona, Pennsylvania and North Carolina, outlined in black.

Farmer Rationale On Harris Vs. Trump

While various polls suggest Trump has a clear edge among rural voters and there’s significant support for Trump among farmers, Jim Wiesemeyer, Farm Journal Washington correspondent, is quick to remind the community is not uniform in its voting intentions, with policy preferences and personal values driving individual decisions.

In general terms, Wiesemeyer says farmers support Trump because they:

Believe Trump better understands rural America and agricultural issues
Are concerned about his trade policies and confrontation with China
Have concerns about border security and illegal immigration under the current Biden/Harris administration
Are of the opinion Trump will lower costs for farmers, especially related to energy
Oppose what they view as socialist or anti-American policies from Democrats

Farmers support Harris because they:

Back environmental policies and renewable energy
Approve of the Biden/Harris administration’s efforts to strengthen farm workers’ rights
Believe in Harris’ food and nutrition policies
Support Harris’ economic policies aimed at working-class Americans

Economists’ Views On Harris Vs. Trump

The September Ag Economists Monthly Monitor, a Farm Journal survey of nearly 70 ag economists, revealed a more mixed view of the presidential candidates’ impact on trade.

When asked if a Harris or Trump administration would help or hurt trade, the survey found the following:

“Farmers are definitely concerned about trade,” says Michael Langemeir, an agricultural economist from Purdue University who helps author the Purdue University/CME Group Ag Economy Barometer and is one of the economists surveyed by Farm Journal each month. “We don’t ask specific questions related to tariffs in the Ag Economy Barometer, but one question we do ask is if they expect exports to increase, decrease or stay the same? Really, this is the most pessimistic they’ve been for about five years with regard to trade.”

Tariffs are a tool both the former Trump administration and the current Biden/Harris administration have used.

During the first presidential debate, Trump didn’t waver from his staunch stance on tariffs and trade, reiterating his plan to use tariffs to protect U.S. industries and increase revenues. Trump reinforced his plan to impose a 10% tariff on all imported goods and a 60% tariff on goods from China.

During the debate, Harris stated tariffs are essentially a “sales tax” on American households. The Biden/Harris administration recently extended the Trump-era tariffs, while also imposing its own set of tariffs in May. Biden directed the U.S. Trade Representative to “increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.”

“That’s why I get really worried when both candidates start talking about tariffs. It’s really uncharted waters, if you will. There’s already the perception we’re struggling a little bit with trade. As we enter these uncertain waters, we’re going to struggle more,” Langemeier explains.

Do Tariffs Work?

The controversy over tariffs and if they’re a good trade policy tool is long standing. The September Ag Economists’ Monthly Monitor asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long term.”
“Absolutely, when properly applied.”
“Not over the long term. They tend to affect who gets to supply different markets around the world.”

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is ‘it depends.’ Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.

Trump Threatens Tariffs on Deere

During a policy roundtable in Smithton, Penn., organized by the Protecting America Initiative last month, Trump made significant statements regarding John Deere and its plans to move some production to Mexico. Trump threatened to impose a 200% tariff on John Deere products if the company proceeds with its plan to relocate some of its manufacturing operations to Mexico.

Farm Journal asked economists the likely outcome if Trump did follow through with tariffs. Here’s what they said:

Your Next Read: U.S. Agriculture Faces Growing Trade Deficit, USDA Projects a Record Ag Trade Deficit in 2024

Take Our Poll: 5 Questions Ahead of the Presidential Election

Fri, 13 Sep 2024 20:14:22 GMT

⁦Election day — Nov. 5 — is fewer than 60 days out.

Based on the presidential candidate’s responses to the American Farm Bureau Federation questionnaire , Jim Wiesemeyer, Farm Journal Washington correspondent, says Republican Donald Trump supports increasing commodity price supports, improving crop insurance and focusing on innovation to stay ahead of China. Trump also pledges to lower energy bills and end Biden’s net-zero emissions policies.

Democrat Kamala Harris highlights the Biden administration’s initiatives to protect small farmers from unfair competition, citing Trump’s previous proposals for deep cuts to critical farming programs.

We’d like to know which candidate you believe will have a more positive impact on the following:

farm policy programs
trade
biofuels policies
inflation
agriculture overall

If you have a moment, would you answer five quick questions? You can take the poll here.

There’s a lot of chatter about the presidential election. Let’s see what farm country has to say.

Your Next Read: Where Do Harris And Trump Stand On Ag Policy Issues?

Where Do Harris and Trump Stand On Ag Policy Issues?

Fri, 13 Sep 2024 19:19:34 GMT

The American Farm Bureau Federation (AFBF) released the unedited responses from Vice President Kamala Harris and former President Donald Trump to its questionnaire on federal agricultural policy. This initiative allows Farm Bureau members to directly compare each candidate’s platform.

AFBF has been collecting and sharing responses from presidential candidates across parties for over 40 years to provide transparency on key agricultural issues.

Overview
Trump supports increasing commodity price supports, improving crop insurance, and focusing on innovation to keep ahead of China. He also pledged to lower energy bills and end Biden’s net-zero emissions policies.

Harris highlights the Biden administration’s initiatives to protect small farmers from unfair competition, citing Trump’s previous proposals for deep cuts to critical farming programs.

Farm policy and programs

Trump emphasized strengthening crop insurance and risk management programs, as well as supporting beginning farmers and ranchers. He highlighted his previous administration’s efforts, including signing a “massive Farm Bill” that improved agriculture programs and increased borrowing limits for farmers.
Harris focused on defending programs that allow farmers and ranchers to prosper, criticizing Trump’s proposed cuts to essential farming programs. She emphasized the importance of crop insurance and risk management tools.

Regulatory issues

Trump pledged to slash regulations that he believes stifle American agriculture and increase costs. He cited his previous administration’s efforts to cut regulations, claiming it saved farmers and taxpayers hundreds of millions of dollars annually.
Harris committed to reducing excessive red tape while maintaining necessary protections.

On labor, both were vague.

Trump said he supports merit-based immigration.
Harris advocates for immigration reform to benefit the economy and farmers.

Environmental issues

Trump emphasized increasing ethanol production and reducing EPA regulations. Trump promised to end Biden’s net-zero emissions policies.
Harris underscored the importance of clean water and conservation efforts.

Trade policy

Trump promised to fight barriers to agricultural exports and highlighted his previous administration’s trade deals, including the Phase 1 agreement with China.
Harris vowed to stand firm against unfair trade practices, especially from China. She criticized Trump’s previous trade war, citing the costs to farmers and taxpayers.

Endangered Species Act

Trump suggested focusing on incentive-based programs for species recovery, criticizing the current law’s effectiveness.
Harris emphasized the need for cooperative initiatives that consider all Americans, including farmers and ranch owners, in conservation efforts.

Trump Picks JD Vance as Running Mate, Here's Where He Stands on Policy Issues and Agriculture

Tue, 16 Jul 2024 14:14:01 GMT

— Former President Donald Trump selected Ohio Senator JD Vance as his vice-presidential running mate for the 2024 election. This decision marks a significant transformation in Vance’s political career, as he has evolved from being a vocal critic of Trump during the 2016 election to becoming a staunch ally and supporter of the former president.

At 39 years old (he turns 40 on Aug. 2), Vance would be one of the youngest vice-presidential nominees in recent history, potentially becoming the third-youngest vice president if elected. His selection brings a youthful energy to the ticket, contrasting with Trump’s 78 years and President Biden’s 81. Vance’s attractions to Trump more likely lie in his appeal to white working-class voters across a wider geographical area — particularly in genuine battleground states like Pennsylvania, Michigan and Wisconsin.

Key aspects of Vance’s background that likely influenced Trump’s decision include:

• Military service: Vance is a Marine Corps veteran who served in Iraq, adding a military dimension to the ticket.
• Legislative career: Vance was elected to the U.S. Senate in 2022 and sworn into office on Jan. 3, 2023, representing Ohio. As one of the youngest members of the Senate, Vance quickly made a name for himself, particularly in culture war issues. In his first year in office, Vance:
— Frequently repeated MAGA talking points on social media and right-wing podcasts.
— Co-sponsored bipartisan bills on issues such as accountability for CEOs of failed banks.
— Clashed with fellow Republicans, including Senator Mitt Romney and GOP minority leader Mitch McConnell, particularly on the issue of U.S. aid to Ukraine.

Vance has introduced legislation on various issues, including:
— A bill to make English the official language of the United States.
— A proposal to make gender-affirming care for minors a federal felony and block taxpayer funds from being used for it.

He has taken strong stances on immigration, proposing to spend $3 billion to finish Trump’s border wall.

• Rust Belt appeal: His roots in Ohio and his bestselling memoir “Hillbilly Elegy” could resonate with voters in key swing states like Pennsylvania, Michigan, and Wisconsin. Vance’s childhood was tumultuous. Not only did his father leave the family, but his mother struggled with an addiction to drugs and alcohol, which Vance documented in his book.

• Populist alignment: Vance has embraced Trump’s populist policies and become a prominent defender of the MAGA agenda. Vance has become a close friend of Trump’s eldest son, Donald Jr, who made the case for him to be the running mate on the grounds that he shared his father’s political vision.

• Cultural warrior: He has established a reputation as a culture warrior while also fostering bipartisan relationships to advance his populist agenda.

• Parent: He and his wife, Usha Chilukuri Vance, 38, have three children aged 7, 4 and 2 years. His wife is the daughter of Indian immigrants who grew up in the San Francisco area. Until this week, Usha worked as a litigator for Munger, Tolles and Olson LLP, a national law firm based in San Francisco. She specializes in complex civil litigation and appeals in sectors like education, government, entertainment, and technology. She has worked as a law clerk for both the Supreme Court of the United States (under Chief Justice John Roberts) and the United States Court of Appeals for the District of Columbia Circuit (under Judge Brett Kavanaugh). She met JD at Yale Law School in the early 2010s and they were married in 2014, a year after graduating from Yale Law.

• Good debater. His intellect and communication skills will prove handy when it comes to a forthcoming debate before Nov. 5 elections… and on the campaign trail.

Trump announced his VP choice on social media just before the Republican National Convention in Milwaukee, praising Vance’s academic achievements, military service, and representation of American workers. The former president emphasized Vance’s potential to appeal to voters beyond Ohio and his commitment to supporting American workers and farmers. Trump said his new running mate would “be strongly focused on the people he fought so brilliantly for, the American Workers and Farmers in Pennsylvania, Michigan, Wisconsin, Ohio, Minnesota, and far beyond.”

This selection is seen as a departure from suggestions within the Republican Party to choose a candidate who could diversify the ticket racially or adopt a more moderate tone. Instead, Trump has opted for a running mate who mirrors his combative approach and enjoys popularity among the MAGA base.

Vance’s journey from Trump critic to vice-presidential nominee highlights the evolving dynamics within the Republican Party. His selection positions him as a potential torchbearer for the MAGA movement.

— JD Vance’s positions on other key issues:

• Vance has been a leading opponent of U.S. aid to Ukraine, saying defense against China should be a much bigger priority, a position that aligns him with Trump. In an interview on Steve Bannon’s War Room podcast earlier this year, he said: “I don’t really care what happens to Ukraine one way or the other.”
• Abortion: Vance opposes the practice even in case of rape or incest, although he has stopped short of saying there should be a national ban and has said exceptions should be allowed when the mother’s life is at risk. Nevertheless, when he ran for Senate in 2022, his website carried a headline on the subject that read: Ban Abortion.
• Tariffs and immigration: Vance, like Trump, has argued for “broad-based tariffs,” a position in line with Trump, who is promising a 10% across-the-board tariff on all imports, despite warnings from economists that it will fuel inflation. He also echoes Trump on immigration, advocating the completion of the border wall on the southern frontier with Mexico and opposing an amnesty for illegal immigrants. As one of the most protectionist Republicans in Congress, Vance has supported raising tariffs and blocking imports. This stance could potentially impact agricultural trade and protect domestic farmers from international competition.
• Agriculture: Vance was named a “Friend of Agriculture” by the Ohio Farm Bureau, indicating that his views on agricultural policy align with the organization’s membership. The Ohio Farm Bureau stated that Vance has been “very attentive to Ohio Farm Bureau members, making himself accessible to them to discuss their concerns when it comes to issues that could have an impact on agriculture in Ohio or across the country.” Vance appears to support government subsidies for farmers, aligning with his party’s base on this issue.
• Energy: Vance is a vocal advocate for the oil and gas industry, particularly emphasizing Ohio’s role as a major producer of natural gas and oil. He opposes solar power and electric vehicles, showing skepticism towards clean energy initiatives. Vance has expressed doubt about human-caused climate change, arguing that climate variations have been occurring for thousands of years. He advocates for policies that support domestic energy production, aiming to reduce reliance on foreign oil and achieve energy independence for the United States. Vance has blamed Democratic leadership for high energy prices and advocates for “common-sense energy policies that put the American consumer first.” Vance’s stance aligns closely with former President Trump’s energy policies, including a focus on bolstering U.S. energy production and maintaining a protectionist, anti-China economic policy in the energy sector. He supports reducing regulations on fossil fuel industries while being critical of clean energy initiatives.

Biofuels: We can infer some alignment between Vance and Trump’s policies on biofuels based on the following points:

• Vance has become a strong supporter of Trump’s policies since aligning himself with the former president. He has shifted his views on various issues to match Trump’s positions.

• Trump has been supportive of ethanol and biofuels, particularly in relation to the agricultural sector. In 2018, Trump ordered the Environmental Protection Agency to expand sales of corn ethanol, which was seen as a gift to farm states and corn producers.

• Trump’s directive aimed to increase the availability of E15 gasoline (containing 15% ethanol) year-round, which was a significant move to support corn growers and the ethanol industry.

• Vance has positioned himself as pro-Trump and supportive of policies that benefit domestic industries. As a senator from Ohio, an agricultural state, he is likely to be attentive to policies that support farmers.

• Vance has been critical of Biden administration policies related to energy, including the Inflation Reduction Act, which he claims has made the economy less energy independent. This suggests he may favor policies that support domestic energy production, potentially including biofuels.

• While we can find no explicit statements from Vance on ethanol and biodiesel, his alignment with Trump’s policies and his representation of an agricultural state suggest he may support similar pro-biofuel stances. However, it’s important to note that Vance has also been supportive of the oil and gas industry, which could potentially conflict with strong support for biofuels.

• Tax policy: Unlike traditional Republican tax policies, Vance has shown willingness to consider tax hikes, particularly on high earners and universities. He supports raising taxes on corporate mergers, which diverges from typical GOP pro-business stances. Vance advocates for increasing taxes on university endowments, potentially impacting higher education institutions. His tax policy positions generally align with a populist conservative agenda, focusing on working-class voters and challenging established corporate interests. Vance has been critical of Democratic leadership’s economic policies, which likely extends to their approach to taxation.
• Anti-monopoly stance: Vance has advocated for breaking up tech giants and criticizing companies like Google. This anti-monopoly position could potentially extend to large agricultural corporations or agribusiness conglomerates, which have been criticized for their market dominance in the farming sector. His tough stance on large banks and willingness to collaborate with senators like Elizabeth Warren (D-Mass.) on penalizing failed bank executives suggests he might support stricter regulations on large agribusiness corporations as well.
• Criticism of big tech influence: Vance’s concerns about biased AI models and calls for reforms to Section 230 could relate to agriculture in terms of how technology companies influence or control agricultural data, precision farming technologies, or digital marketplaces for farm products.
• Broadband access initiatives: Vance’s support for expanding broadband access could benefit rural farming communities by improving their connectivity and access to digital agricultural technologies.

— Ohio’s political landscape if Trump and Vance win in 2024. If Donald Trump defeats President Joe Biden and JD Vance becomes vice president, Ohio Governor Mike DeWine, a Republican, would appoint a replacement senator, who would serve until a special election in 2026. The winner would complete Vance’s term, with a regular election in 2028.

Ohio Republicans, who dominate state government, have several potential candidates for the Senate seat. DeWine previously endorsed state Sen. Matt Dolan in a primary, where Dolan was runner-up to Trump-backed Bernie Moreno. Ohio Secretary of State Frank LaRose and Rep. Warren Davidson were also notable contenders.

Other potential candidates include Lt. Gov. Jon Husted and entrepreneur Vivek Ramaswamy, though DeWine will likely choose someone with strong electability.

DeWine emphasized the importance of a candidate who can win and raise funds. He will face pressure to select a candidate reflecting Ohio’s increasingly populist lean.

Ohio, a former presidential bellwether, has shifted Republican, with Trump winning by 8 points in both 2016 and 2020. Vance was elected to the Senate in 2022 by a 6-point margin over Tim Ryan, bolstered by Trump’s endorsement.

The 2026 midterms, with Trump potentially in the White House, could be competitive, especially if Ohio’s Senate race is closely contested. Vance will appear with Trump on Ohio ballots this fall, alongside Moreno, who aims to unseat Sen. Sherrod Brown, and Republicans are targeting swing-district Reps. Marcy Kaptur and Emilia Sykes.

New CoBank Report says Federal Reserve is on the 'Horns of a Dilemma’

Tue, 16 Apr 2024 15:47:20 GMT

The U.S. economy outperformed many economists’ expectations in 2023 and into the first quarter of this year, thanks to high employment numbers and consumer spending.

But Rob Fox, director of the Knowledge Exchange Division at CoBank, told AgriTalk Host, Chip Flory, there are worrisome clouds on the horizon. Namely, unruly inflation is not cooperating with the Federal Reserve’s efforts to tame it.

“Inflation numbers are not coming down as fast as they’d hoped,” Fox said. “The Fed has said as much that inflation is going to be a little bit higher for longer.”

Continued, high inflation contributed to the theme and title of CoBank’s new report released last week, “Sticky Inflation Puts Fed on the Horns of a Dilemma.” The report can be read here .

“The horns of the dilemma that I’m describing is that our economy is doing better than what everybody or a lot of people thought,” Fox told Flory on Monday. “Most people, economists, at the end of the year figured, ‘Hey, we’re probably going to have a recession. We’ve gone through the highest, fastest rate-increase cycle in the past 40 years. It’s almost impossible that we don’t have a recession.’ Well, as it turns out, we’ve avoided a recession, we’re doing much better than people thought,” he added.

Clouds On The Horizon

But Fox said some metrics are deteriorating and the Fed is watching them closely.

“For example, if you look at the broader unemployment numbers, and you include people who consider themselves to be under-employed, those numbers have been creeping up for the past year,” he said.

“Job openings have been declining for the past 18 months. Fewer people are quitting jobs, because they know it’s harder to find one,” he added.

Along with that, Fox said that real disposable income growth – which drives consumption and is the biggest part of the economy – has been trending downward for the past 18 months.

He cited information released by the Federal Reserve Bank of Atlanta in its weekly GDP forecast, called GDPNow, as another indicator that there are cracks beginning to show up in the economy.

“At the beginning of February, they predicted that the Q1 GDP for the year estimate would be 4% today, and (instead) they’re seeing 2.4%,” Fox said. “So, not bad, but a definite deceleration is happening right now.”

Wildcards In The Deck

In addition, he highlighted some wildcards that the Fed is monitoring:

Oil prices: They are approximately $90 a barrel now, and economists say they are likely to hit $100 by mid- to late summer. “That would be a big damper on the economy,” Fox said.

Federal debt: Fox said the federal debt is out of control “That’s driving up borrowing costs for everybody,” he said. “That’s driving up market interest rates, without the Fed having to do anything. So, federal spending is taking care of those rate hikes for them.”

Stock market: Fox said he sees similarities between now and what happened when the dot-com bubble burst in March 2000. “That bubble bursting back in the day was one of the main contributors to a recession the following year,” Fox said.

How is the Federal Reserve likely to respond in the near term?

“My bias today, right now, is that they’re hoping to push this economy stronger and crossing their fingers that within the next couple of months, this inflation doesn’t get worse than it is.”

Fox told Flory he believes the Fed will continue on its stated path to making three cuts to interest rates in 2024, unless some extenuating circumstances arise.“You know, we’ve seen a lot of crazy geopolitical things going on, and you never know, but the Fed rarely changes its stated policy,” Fox said. “I’m an outlier in the world of economists here, but I’m sticking with this position.”

Despite the national election being less than eight months out, Fox said he doesn’t expect that to influence the Fed’s decision.

“In my mind, they completely ignore it because as we know, these cuts take some time to take effect, and that won’t happen until after the election,” he said.

For more AgWeb articles, see:

Will We See a Hard Fall or Soft Landing? It’s the Million Dollar Question for the Farm Economy This Year

Gulke: What’s Causing All the Volatility in Commodity and Financial Markets?

Why Did Grains Give Back Friday’s Gains? Will Selling Escalate into Month End?

Infrastructure Woes To Watch: Potholes Plague Global Ag Trade

The AgriTalk discussion between Fox and Flory is available here.

Former Dairy Farmer Leads Trump-Russia Investigation

Fri, 20 Nov 2020 03:00:38 GMT

Devin Nunes once said all he wanted to do was work on a dairy farm.

Now the Republican from the rural Central Valley of California is running one of the most scrutinized, complex and politically fraught congressional investigations in recent memory.

As chairman of the House intelligence committee, which holds its first public hearing on Monday, Nunes is at the helm of a probe of Moscow’s meddling in the 2016 campaign and the murky web of contacts between President Donald Trump’s campaign and Russia. It’s a potentially sprawling enterprise that spans continents, plumbs spycraft and dominates international headlines.

He’s a long way from raising cattle.

“I’m not asking for any profile,” Nunes told The Associated Press, when asked about his new place in the spotlight.

Until recently, the soft-spoken 43-year-old — dubbed a “normal dad” by friends — was hardly a fixture on the national news circuit. Now he is holding weekly press briefings and being asked to weigh in on daily twists and unexpected developments. At Monday’s hearing he will call FBI Director James Comey as a witness, an event that amounts to must-see television in Washington.

Nunes was not an early Trump backer, but was named to the transition team as an adviser on appointments.

The burden of leading a bipartisan, credible investigation into the integrity of the U.S. campaigns, not to mention the possible role of the new president’s campaign associates, is a heavy one not only for him but for many veteran lawmakers.

On the other side of the aisle, Democratic Sen. Mark Warner, of Virginia, has said the Senate intelligence committee investigation, which he is co-leading, is probably the most important thing he will do in his public life. Nunes says he does not feel the same way.

“Everything we do around here is really important,” Nunes said. “I wouldn’t put one in front of the other.”

It’s an understatement his friends recognize.

Nunes is a third-generation Portuguese-American, and he grew up working on his family’s dairy farm. As a teenager, he raised cattle and saved money to buy farmland with his brother, according to his congressional biography. He has degrees in agriculture and keeps his hand in farming through an investment in two California wineries run by a friend he met through his alumni network.

Rep. David Valadao, a Republican congressman from a district next to Nunes’ and fellow dairyman, said Nunes takes his job as congressman seriously. But, he said, aside from his work, “he’s a normal dad” to three young daughters.

“All I wanted to be was a dairy farmer,” Nunes told a group of high school students as he campaigned for his seat in Congress in 2002, according to an article in the Fresno Bee.

His education and childhood aspiration suited his political ambitions. Like many politicians from California’s interior farm belt, Nunes was well versed in agriculture and the water supply that supports it.

Nunes’ first entree into politics was as a member of the board of a local community college. He ran for Congress in 1998 and lost in the primary. In 2001, he was appointed by President George W. Bush to a California post at the U.S. Department of Agriculture.

He was only 28 when he won a hotly contested congressional seat, beating his Republican competitors in the 2002 primary by appealing to the concerns of ranchers and dairymen in his solidly conservative district.

Tom Barcellos, a Tulare County dairy producer who has known Nunes since he was a child, said Nunes was focused early on politics, without being showy.

“He knew what he wanted and he did his research, and he didn’t blow a lot of smoke,” Barcellos said.

Nunes consistently has supported bills that would roll back environmental protections and boost federal water supplies to the fertile farmlands of the San Joaquin Valley, the lower stretch of California’s vast Central Valley. His ongoing fight against what he describes as jobs-killing regulations promoted by “radical environmentalists” is a priority shared by a local group of wealthy farmers who belong to the giant Westlands Water District, which hired Nunes’ friend and former chief of staff as its deputy general manager two years ago.

“Devin, from day one, has made water his top priority,” said Tom Holyoke, a political scientist at California State University, Fresno.

Nunes served on the Agriculture Committee during his first term, but quickly landed a spot on the House Ways and Means Committee, one of Congress’ most influential panels.

He was spotted by Republican leaders as a party loyalist and he was named to a leadership position during his first term.

He vied for the chairmanship of the intelligence committee in 2014. While competing against more senior members, he proved a better fundraiser, bringing in far more money for his party than his competitors for the chairmanship. While many congressional committee leadership positions are based on seniority, the House intelligence committee leadership was chosen by then-House Speaker John Boehner.

Nunes has suggested he pursued the intelligence committee post because it would be good for his constituents. Intelligence can play a key role in trade negotiations, he said, although it is only a sliver of the intelligence agencies’ missions.

“The intelligence committee — that’s a committee that I call the tip of the spear, because without national security it’s tough to keep those trade routes open,” Nunes said in a 2014 interview with the Tulare Advance-Register.

Until now, much of Nunes’ work on the committee has been focused on investigations into NSA leaker Edward Snowden, the intelligence behind the Iran nuclear deal, Hillary Clinton’s emails and the placement of a Defense Department intelligence center.

The congressman made a push to have the center built on the Azores islands, 800 miles off the coast of Portugal, a proposal that was popular among the valley’s many dairy producers of Portuguese descent. The department ultimately chose a site in the U.K.

Monday’s hearing will be the latest spotlight on the tension between Nunes’ loyalty to Trump and his commitment to a thorough, bipartisan investigation.

The congressman’s independence has already been questioned. Last month, the White House enlisted him to push back on a news article it didn’t like about Trump associates’ ties to Russia. The congressman has said he did nothing improper when he reached out to a reporter.

Nunes has not appeared to relish the role of Trump defender. He’s described Trump as a “political neophyte.” Asked about Trump’s tweeted claims that former President Barack Obama wiretapped his phones, Nunes’ response did little to help quiet the controversy.

“Are you going to take the tweets literally?” Nunes said. “If so, clearly the president was wrong.”

First Thing Today: Republicans Prevail in Special Elections

Thu, 12 Nov 2020 04:42:03 GMT

Good morning!

Quiet overnight session for corn and soybeans, wheat faces profit-taking... Corn futures are fractionally to a penny higher after holding to a narrow trading range overnight. Soybeans also saw a quiet overnight session and the market is steady to 1 cent higher of 6:30 a.m. CT. Wheat futures are down 4 to 5 cents amid some profit-taking. The U.S. dollar index is slightly lower today, while crude oil futures are chopping around unchanged.

Argentine government orders striking port employees to get back to work... Argentina’s work ministry has ordered striking workers at the country’s main Rosario shipping hub to suspend their work stoppage for 15 days and return to the negotiating table. A union spokesman said that workers had not received any official notification so the strike will continue for now. Workers have been striking for a nearly a week, halting shipments from the port system that typically ships 80% of the country’s total grain output.

Handel defeats Ossoff in Georgia special election... Final results for the House seat vacated by Health and Human Services Secretary Tom Price saw Karen Handel (R) defeating Jon Ossoff (D), with Handel receiving 51.9% of the votes to 48.1% for Ossoff. The most expensive House race in history was a toss-up coming into election day, although most polls showed a slight lead for Ossoff. Democrats said the race was a referendum on President Donald Trump and pulled out all the stops, but still fell short. Elsewhere, Republican Ralph Norman beat Democrat Archie Parnell in the race for Budget Director Mick Mulvaney’s South Carolina House seat — but by a much closer than expected 3.2%.

President visits Cedar Rapids, Iowa today... He will view and talk about precision agriculture and other farm tech during a visit to Kirkwood Community College in Cedar Rapids, Iowa, where he will announce a commitment to include rural broadband development in his promised infrastructure package. USDA Secretary Sonny Perdue and Commerce Secretary Wilbur Ross will join the president to highlight the need to expand rural broadband to give farmers access to new tools and to reiterate his “commitment to agriculture and rural America,” said Ray Starling, special assistant to the president for agriculture, trade and food assistance. U.S. Ambassador to China Terry Branstad, the former longtime Iowa governor, and Iowa Agriculture Secretary Bill Northey, Perdue’s likely pick for a key USDA undersecretary post, will also be on hand.

Iowa newspaper focuses on declining Mexico imports of U.S. farm products... The Des Moines Register’s editorial board argues that Trump’s anti-Mexico rhetoric has hurt sales of Iowa farm and agricultural products south of the border. “Perhaps the drop will be short-lived, as currencies fluctuate and other economic factors change,” the board wrote. “But Mexican officials are busy shopping for food suppliers in other countries. Uncertainty about NAFTA and future U.S. trade policies has encouraged our third-largest customer for farm goods to cultivate new partnerships. And they’re making progress.” Commerce Secretary Wilbur Ross could comment on this topic during his appearance with Trump today in Cedar Rapids.

Trade policy issues focus in and outside Washington… USDA Secretary Sonny Perdue hosted his counterparts from Canada and Mexico yesterday in Savannah, Ga., where the three officials noted the importance of keeping trade open. Next week, the Office of the U.S. Trade Representative holds three days of hearings on the 23-year-old agreement to prepare for the start of renegotiations as early as August. Meanwhile, U.S. Trade Rep Robert Lighthizer appears today before a congressional panel on the Trump trade policy agenda.

Soybean planting on hold as Indian farmers wait for monsoon to arrive... India’s monsoon has been slow to arrive in key growing states like Madhya Pradesh and Maharashtra, delaying soybean planting, reports the Solvent Extractors Association of India. Typically, monsoon showers cover most parts of Madhya Pradesh by mid-June, but this year rains have yet to arrive.

Tyson takes steps to improve animal welfare... In yet another sign than consumers’ concerns about animal welfare are impacting the industry, Tyson Foods Inc. announced it will launch a new animal well-being initiative as well as a pilot project to test using gas rather than electricity to stun chickens before they are killed as a possibly more humane solution. The company also announced a new video monitoring system that will track how live chickens are being handled. Tyson is also deploying animal well-being specialists across all of its beef, pork and poultry operations.

Cattle futures trading well below cash market... Traders have extended futures’ discount to last week’s cash trade that averaged around $130, signaling traders’ lower bias toward this week’s action. But with futures trading double-digit below last week’s average cash price, traders have likely overdone it to the downside. Plus, some live cattle futures contracts dipped into oversold territory yesterday, according to the nine-day Relative Strength Index.

Pork prices on the rise... The pork cutout value surged $2.66 yesterday on solid movement of 326.30 loads. The cutout value is now within a $1.70 of the psychologically significant $100.00 per cwt. level. Recent gains signal some buying for July Fourth and BLT season is likely underway.

Overnight demand news... Egypt tendered to buy at least 30,000 MT of soyoil. Jordan canceled its tender to buy 100,000 MT of milling wheat after receiving just one offer. Japan received no offers for feed-quality wheat or barley in its simultaneous buy and sell auction. Bangladesh tendered to import 50,000 MT of wheat.

Today’s reports:

8:00 a.m., Cost-of- Production Forecasts -- ERS
9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Broiler Hatchery -- NASS

A New Era: The Ag Equipment Industry's Sugar High Is Over

One of my first story assignments as an agricultural journalist was covering a liquidation auction of repossessed farm machinery in Columbia, Missouri.

It was late summer 1985, and the 1980s farm crisis was at its zenith. I can still envision the endless row of used corn heads across the length of the fairgrounds. In total, 174 pieces of agricultural equipment hit the auction block that day.

This was certainly not the “feel-good” story I had envisioned to start my journalistic journey in the field of agriculture, but I learned about our industry’s fragility.

Fast forward to today, and I’m reading a story by Bloomberg news that proclaimed used equipment, not new technology, was this year’s star of the Farm Progress Show. The article highlighted that BigIron Auctions, a provider of used farm machinery and one of the show’s exhibitors, had its biggest-ever offering. Although this may be good news for the auction company, it is likely a prophecy of bad news to come for the rest of the industry.

You may ask, how bad? When agricultural equipment manufacturers start shedding union line workers, shuttering plants and shifting factories to Mexico, and there’s a glut of used equipment covering dealer lots, you know the tide is quickly turning.

What Goes Up Comes Down
Many of us have observed farm economic cycles. This time, despite the sharp rise in input costs, commodity prices more than kept pace, and ultimately, net farm income tallied $182 billion in 2022. Those good times are in the rearview mirror, though. For 2024, projected net farm income drops to $140 billion.

Not surprisingly, farmers bought fresh paint during the boom period. U.S. farm equipment manufacturers and machinery dealers recorded some of their best sales in more than a decade in 2021, and strong sales continued through most of 2023. Although sales of new small- and medium-sized tractors peaked in 2021, sales of bigger horsepower tractors and combines held their own—until early this year.

The Party’s Over
This most recent sugar high for the ag equipment industry was foiled by high inflation, high interest rates and falling crop prices. New machinery prices ramped up 30% on average in the past four years. In 2020, the average price of a new tractor was $363,000. In 2023, it skyrocketed to $491,800.

Since March 2022, the Federal Reserve has raised the interest rate 11 times to curb inflation. So not only does that fresh paint cost at least 30% more, but also the money borrowed to purchase capital items is 161% higher. Now with commodity prices falling faster than either interest rates or equipment prices, this boom time hayride is over.

The Fallout
The Association of Equipment Manufacturers says June 2024 sales of new two-wheel drive tractors were down 16.3% versus 2023. Combine sales were down 31%.

Farm Journal’s machinery analyst Greg Peterson, who leads the popular online platform Machinery Pete, says BigIron Auctions’ expanded presence at Farm Progress is a sign dealers are trying to get ahead of the train. He notes the night-and-day difference in the OEM-dealer response to this downturn compared to the previous one in 2014 to 2015. This time around, dealers have been aggressively paring down large late-model used inventory. In the first eight months of 2024, the market saw a 450% increase in the raw number of one- to two-year-old equipment units taken to auction compared with ’14 and ’15.

Peterson projects used equipment values will continue to deteriorate in the short term. However, the change in those values may not rival the percentage drops seen in the previous down market. Why? Online bidding.

It is a market force that was in its infancy a decade ago. Machinery auctions used to be a local affair. Now, they are regionalized, perhaps nationalized. Even 65-year-old-plus farmers are bidding on tractors being sold eight states away.

Despite the unprecedented number of large late-model used equipment transactions, Peterson points to a potential silver lining in seeing such a quick spike. The sooner the glut of inventory turns, the sooner the equipment industry will return to brighter times. How quickly this happens is going to depend on a lot of things, so it may be prudent to nudge the market in the right direction.

Craving Certainty
With the politics of this election behind us, there’s a lot that could be done to give the marketplace more certainty. I made a “to-do list” for our newly elected officials to follow to address this issue.

Pass a new farm bill. This is the roadmap for everything from conservation programs to public food policy. Get it done!
Make the expanded Section 179 and bonus depreciation incentives permanent. Incentives from the Tax Cuts and Jobs Act of 2017 are winding down or expiring. U.S. ag manufacturers don’t need less incentive for customers to buy.
Pause new EPA and climate change regulations. Saddling manufacturers with more regulations in a crisis is simply not smart.
Do not raise corporate or personal tax rates. Raising taxes domestically only gives U.S. manufacturers another reason to relocate more factories and jobs out of this country. Maybe it’s time Washington, D.C., starts viewing U.S. agricultural manufacturing to be as important as producing semiconductor chips domestically. If semiconductor chip production is that critical to our national security, then I would argue food security ranks right up there.

According to market analysts, we will be at the bottom of this rollercoaster ride for the next year or so. The good news is that long-term, all signs point to a very healthy recovery of agricultural manufacturing by the end of the decade. As robotics, AI and information systems become increasingly integrated, the U.S. ag machinery sector is poised to grow from $39.56 billion this year to $53.7 billion in 2029.

Of course, hitting such numbers depends on how rough the road is financially between now and then. All I know is we do not need history repeating itself. The last thing I want is to have one of the last stories of my journalistic career mimic the heartbreaking one I started with nearly 40 years ago.

Government Price Controls Didn't Work The First Time, And They Won't Now Either

Do you ever get the feeling that you may be living in a time warp? I mean, doesn’t it seem just a little weird that bell-bottom pants and Marcia Brady hairstyles are the latest rage? I don’t know about you, but one trip through the 1970s was good enough for me.

Unfortunately, bad fashion sense and bad hairdos are not the only bad idea that has been resurrected from this tumultuous decade. Recently, the idea of reviving government price controls on food and other consumer staples has been injected into the public forum.

Why Now?
It’s an election year, and a presidential election year at that. We all know politicians will say almost anything if it will mean just one more vote come election day.

On Friday, August 16, Democratic presidential candidate Kamala Harris floated a public policy that hasn’t been tried since the Nixon administration. To address rising food prices, Harris proposed a federal ban on price gouging, focusing on “excessive” and “unfair” mergers and acquisitions that give big food companies the power to “jack up” food and grocery prices.

There is a reason that such a heavy-hand tampering by the government in the supply and demand workings of the marketplace was banished from the political landscape as we know it. Former president Richard Nixon tried it, and it failed miserably! It would have been prudent for Vice President Harris to have brushed up on her history before rolling out this bad batch of political candy to lure the last group of undecided voters.

The twist of historical irony is that Nixon rolled out his first series of economic control measures, including wage and price freezes, almost 53 years to the day that Harris publicly floated her ideas. On August 15, 1971, in a nationally televised address, Nixon announced, “I am today ordering a freeze on all prices and wages throughout the United States.”

After a 90-day freeze, increases would have to be approved by a pay board and a price commission, with an eye toward eventually lifting controls — conveniently, after the 1972 election. Unfortunately the American people would pay the price — but not until after Nixon coasted to a landslide re-election in 1972 over Democratic Senator George McGovern.

Not Then, Not Now
By the time Nixon reimposed a temporary freeze in June 1973, Daniel Yergin and Joseph Stanislaw explain in “The Commanding Heights: Battle for the World Economy,” it was obvious price controls didn’t work: “Ranchers stopped shipping their cattle to market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets.”

When price controls were implemented in 1971, inflation stood at 5.8%. By the summer of 1975 it had ballooned to 8.7%. For the rest of the decade, inflation totally derailed the U.S. economy. The real pain came with what it took to ultimately slow that train. The Federal Reserve took the Fed Funds rate from a low of 3.75% in 1971 to an astronomical 19.29% in 1981.

For U.S. agriculture, these were the worst of times. As interest rates rose and land and commodity prices bottomed, U.S. agriculture endured one of the darkest periods in modern history. The final governmental gut punch came in 1979 with President Jimmy Carter imposing a grain embargo on the Soviet Union, resulting in a 20% decline in agricultural exports.

Farmers saw the rally cry to “plant fencerow to fencerow” and “feed the world” turn into prayers so that they could feed their family. Bankruptcies and suicides became all too common as the fabric of rural America ripped apart. Government had failed them, and their best hope was that Willie Nelson would show up to do another Farm Aid concert in their back 40.

With farm income expected to record its largest year-to-year dollar drop in history, now is not the time to roll out love me ’til election day economic proposals. Still reeling from supply chain chaos caused by the Covid-19 pandemic, U.S. agriculture is in a weakened state.

The Real Drivers
It is important that all links of the U.S. food supply chain remain strong. With average profits of less than 3% for farms and only 1.6% for grocery stores, one has to wonder who the government is going to have to squeeze if price controls were implemented. Vice President Harris specifically pointed her finger at large corporate food processing companies and suppliers.

Although the Harris proposal was light on specifics, it marshals the Federal Trade Commission and state attorney generals with new authority to “impose strict new penalties” on companies that price gouge. She also said her administration would address “unfair mergers and acquisitions” that contribute to higher priced food and groceries.

One would hope if these government agencies were currently doing their day job, then the above mentioned issues should not be a problem in the first place. We don’t need a governmental “grocery czar” telling us what a box of Cheerios should or shouldn’t cost.

Our government needs to look in the mirror to see the key factors that have really driven up grocery prices. Energy costs and interest rates are two of the biggest. Both have a huge impact on food production costs and the price paid at the grocery store. Over the past four years, the consumer price index for energy has risen 32%. In that same time, the prime interest rate has gone from 3.25% to 8.50%.

Even Captain Obvious could connect the economic dots from the current administration’s policies and legislative actions to the reality that is happening to consumers at the checkout line. On day one in office, President Biden canceled the Keystone XL pipeline, and he and Harris have continued for the past three-and-a-half years to throttle the traditional fossil fuel industry at every turn. Meanwhile, the Congressional Budget Office projects that under Biden’s four-year term $7.902 trillion will have been added to our overall national debt. Such actions and polices have been a lead foot on the gas pedal that is driving inflation.

It’s That Bad
So, before we grant our government Wizard of Oz powers over the nation’s food supply chain, it might behoove Vice President Harris and her economic advisers to address the root cause of inflation. Instead of trying to fix it artificially through failed policies of the past and election year pandering, they should address the real issues behind high food prices and inflation as a whole. When friendly press allies such as the New York Times, Washington Post and CNN all shot the Harris plan down from the moment it left her lips — you know it’s bad. The Washington Post called it a “populist gimmick”, and personal finance guru Dave Ramsey said, “It’s not sustainable because it’s artificial.”

Let us hope and pray that such policies will forever remain as a footnote in our history books and not become part of our future economic reality. Whenever I hear something like this I’m always reminded of what Ronald Reagan considered the nine most terrifying words of the English language, “I’m from the government, and I’m here to help!”