MILO, Iowa — For Craig Hill, president of the Iowa Farm
Bureau and a grain and livestock farmer near Milo in Warren County, the biggest
U.S. agriculture story of 2013 is a number — four — as in $4 corn and the lower
crop prices that arrived at the end of the year.
“That is kind of the story of the year 2013,” he said.
Hill said the lower crop prices, which were a result of
several factors, including a larger-than-expected 2013 crop in corn and
soybeans, may signal the end of one cycle and the start of another.
“I think it’s the year when we changed from a very
prosperous time, a bubble, to a time when we are going to have some very stiff
constraints on our margins due to oversupply,” he said.
Hill started farming on his family’s farm southeast of Des
Moines in 1977, three years before the farm crisis of the 1980s hit head-on, but
he sees few comparisons.
“It’s quite different. We didn’t take on the debt that we
did in the 1970s. Our balance sheets are looking a lot stronger,” he said.
He said farmers today also don’t have the double challenges
of the Soviet grain embargo enacted by President Jimmy Carter nor the
inflation-fighting measures enacted by President Ronald Reagan.
“Government swings a big club and we were hit with it. I
don’t see that playing out in the next few years,” he said.
Members of the agriculture industry who are involved in
everything from state farm organizations to state leadership and agribusiness
associations talked to AgriNews about some of the top farm stories of 2013, including the drop in crop
prices, the farm bill, the Renewable Fuel Standard, the weather and regulatory
and government policy issues.
For Cress Hizer, CEO of the Agribusiness Council of Indiana,
the unexpectedly bountiful corn and soybean crops of 2013, was a good-news,
“I think it’s a tribute to how good farmers are in producing
crops despite challenges. I think it’s also a tribute to these modern corn
varieties, the genetics, the biotech, that we produced a top five corn crop,” he
The consequence of that corn crop and an equally fine
soybean crop means a more careful approach to budgeting.
“I think what it leads to is pencil-sharpening by growers,
how to cut some costs. Below $5 corn is causing quite a bit of scratching of
heads saying, ‘OK, where’s this going to lead us?’ Coupled with the uncertainty
in the ethanol marketplace, it is going to cause, I think, a little bit of
retracing of steps and looking at what our break-even points are,” Hizer said.
The U.S. Environmental Protection Agency announced its
proposed 2014 renewable fuels goals in mid-November. That proposal included a
lower amount of biofuels than expected.
“The Renewable Fuel Standard is a big concern. I think
knee-jerk political actions don’t have a very good track record,” Hill said.
Iowa was in the spotlight just days before the EPA’s
announcement after a story by the Associated Press, datelined in Iowa, drew
headlines of its own — and the ire of the U.S. ag community — with its damning
portrayal of conservation lands being cleared for corn production for ethanol.
“The RFS announcement came out as a leak. It wasn’t a formal
release. It was a leak initially, so you had some reservation, some pause, and
it turned out to be true,” Hill said.
He said members of his organization and others already are
responding during the EPA’s 60-day comment period, which continues through Jan.
“Farmers and citizens are going to respond to that. We
deserve a diversified fuel portfolio in America,” he said.
Hill said the AP story was written with one intention.
“You can spin anything however you like. It was written to
demonize and villainize those who are involved in agriculture,” he said.
Bill Northey, Iowa secretary of agriculture, said the RFS
announcement came as a shock to him, as well.
“I really hadn’t been expecting that. I was surprised, and I
guess I was surprised because, in general, the administration has been
supportive of renewable fuels through some fairly challenging times the last few
years with high grain prices,” he said.
Northey said the fact that the reduction in the proposed
amounts of renewable fuels to be used in 2014 especially were surprising in the
face of a large crop and lower grain prices.
“The case could be made more then than now for that kind of
adjustment, and they didn’t make it then, so I was surprised that they did it
now,” he said.
At its annual meeting in December, Illinois Farm Bureau had
some 900 members sign a petition opposing the proposed RFS levels.
“What I’ve been saying is this is a good time for you to
reflect on how important that policy is to you and how important it is to see
the impact in the years to come,” said Adam Nielsen, director of national
legislation and policy development for the Illinois Farm Bureau.
“I think we’re being tested with the EPA’s proposed rule,
and we’re going to have to respond. We’re doing everything we can, and we’re
going to be encouraging members to host events at ethanol plants to remind
people how important renewable fuels have been to agriculture and the related
industries,” he said.
Nielsen said the proposed cuts in the RFS aren’t the only
policy issue attached to the national debate on renewable fuels.
“It’s an interesting period. If it’s not coming at us from a
regulatory standpoint, there are a number of bills that would repeal the RFS or
make dramatic changes, so those conversations are occurring while we are
fighting the proposed rule. It’s an interesting time for us and we have to
respond to the challenge,” he said.
Hizer said that with Indiana’s closer proximity to eastern
fuel markets and with its plants being newer, he believes ethanol will continue
to be a major player in Indiana’s agriculture industry.
“I think from Indiana’s viewpoint, ethanol is going to
continue to be a strong partner in these markets. Our plants are closer to the
East Coast markets, and we’re in great shape with our infrastructure and access
to those markets,” he said.
Hizer said the issue with the drastic cut in the RFS points
to another major issue that remained front and center for U.S. farmers in 2013 —
“I think it does give us a little glimpse at this whole
discussion of is ag being overregulated,” he said.
Jean Payne, president of the Illinois Fertilizer and
Chemical Association, said the April explosion at the West Fertilizer Co. in
West, Texas, was the top story for the year.
The fire and explosion claimed 14 lives, injured more than
150 and leveled more than 60 structures, including a number of homes.
Authorities attributed the explosion to a large amount of ammonium nitrate
fertilizer stored at the company.
“I think No. 1 for our customers, the retailers, was the
executive order issued by the White House in August 2013 after the explosion in
West, Texas,” Payne said.
She said the order requires OSHA, the Department of Homeland
Security and the U.S. EPA to reevaluate existing regulations on chemical and
chemical storage facilities.
“We’re already seeing the federal agencies respond to that
order,” she said.
Payne said the response is coming in the form of more audits
of facilities and more random visits.
“We’re concerned about what that will lead to — we’re
concerned about yet more regulations impacting our industry. I think it’s the
nature of the beast that anytime there is a tragedy, the reaction is typically
let’s do more to regulate these facilities,” she said.
Nielsen said he worries that the remaining months of a
lame-duck president’s term could bring more proposed regulations.
“In the last two years of a president’s term, the amount of
regulations that end up in the Federal
Register go up astronomically, and we expect this to happen in the
final years of the Obama administration. They could involve all kinds of issues
that would have an impact — water quality, nutrient standards, the EPA’s ‘waters
of the U.S.’ changed to encompass land-use decisions. We’re going to be paying
very close attention to those. I think the regulatory agenda will be pretty
substantial,” he said.
Hizer said he expects to see more discussion on regulations.
He said the rulemaking process is lengthy, and while regulations may be
proposed, that process means that not all will become law.
“I’m experienced in rulemaking, and we can see these
proposals for a while, but the rulemaking process is a very long gauntlet. I
think you’ll see a lot of debate. I predict some kind of compromise on things
like the RFS. I think with issues like regulating dust, we’ll talk about those
things, but the rulemaking process is a very long and open process,” he
Farm Bill Inaction
Same time, next year.
Nobody thought, when December 2013 headlines threatened the
“dairy cliff” if a farm bill or extension wasn’t passed by midnight on Dec. 31,
2012, that the same time, a year later, lawmakers still would not have a new
When Payne accompanied some of her members on a trip to
Washington, D.C., in March, the attitude surprised her.
“When we asked our members of Congress what was going on
with the farm bill, we overwhelmingly got — well, that there was a kind of
apathy about it. The reason they felt things really hadn’t moved was they
weren’t really hearing that much from farmers about the need to get a farm bill
done,” she said.
Activity picked up on the farm bill, but after the Senate
twice passed a version of a new farm bill, the U.S. House first failed to bring
a House Ag Committee version to the floor, then passed a bill that split the
nutrition titles from the rest of the bill.
Shortly before leaving for their holiday break, both
chambers passed a one-month extension and indicated an agreement was close.
“The presumption is it’s going to happen soon. I think all
of us are concerned about whether it really is,” Northey said.
He said his frustration with the process stems from the same
apathy mentioned by Payne.
“It would seem like the difference could be figured out if
you have the will to do it. To me, that was a demonstration of the lack of a
will to do it. It did appear at some times that at least some people were not
trying very hard to get it done,” he said.
For Hizer, the farm bill activity over the summer presented
a different sort of dilemma.
“Obviously, what makes it interesting for Indiana farmers is
the fact that the historical coalition that farmers have always had via the farm
bill has been with urban folks on the nutrition title. Interestingly enough,
that break was led by a young congressman who is a well-respected Indiana
farmer, Marlin Stutzman,” he said.
Hizer said the action by Stutzman, who first floated the
proposal to separate the nutrition titles from the rest of the farm bill, came
as a surprise.
“We all supported Marlin. He’d done a great job in the state
Legislature for agriculture. He’s the only true farmer we have, and decoupling
that historical partnership caused some concern. I know Farm Bureau and some
other groups weren’t sure how to really respond,” he said.
Hizer said the move to decouple the farm bill jeopardized
the link between food and farm in the farm bill.
“Farming is all about food, and it just caused a lot of
concern about what’s going to happen with the historical coalition of how to get
farm legislation passed by using our dining-room table,” he said.
“I would say 2013 was a roller-coaster year for the farm
bill, lots of twists and turns,” Nielsen said.
He said the debate over the farm bill points to other issues
of concern for agriculture on the national policy stage.
“It’s not surprising given the character of the candidates
that have been elected to Congress in the last four years. It’s increasingly
conservative and fiscally conservative, suspicious of any legislation that
smacks of a comprehensive-type of bill. It was not a surprise given the changing
demographics and makeup of Congress. These are individuals who were elected to
say no,” he said.
Nielsen said the outlook is positive for a new farm bill to
pass once Congress goes back to work in January.
“I think most of the job is done,” he said.
Nielsen said he believes the compromise over cuts to the
nutrition programs would be acceptable to both parties and that the outlook for
crop insurance also is positive.
“It sounds like conservation compliance will be linked to
crop insurance. We’re hoping there will be no means testing for crop insurance,
but we won’t know until we see the details. Despite attempts to radically change
the program, it appears we are going to come out on the other end in very good
shape,” he said.
If there was an ongoing story in agriculture for 2013, it
was what mood is Mother Nature in this week.
Spring planting across the Corn Belt was delayed for weeks,
in some areas in Iowa until mid-June, as rains kept fields flooded and muddy.
After farmers managed to get in their fields, the new crop was further
handicapped by a severe drought in midsummer.
“In Iowa, we broke records in May and June for rain. It
really limited our ability to raise a big crop this year — over a million acres
in Iowa was prevented from being planted. Then it quit raining. Between the heat
and the drought, we really were afraid we were losing our crop in Iowa and parts
of Minnesota. Lo and behold, whether it’s genetics or management practices, we
came through with a pretty decent yield, a better yield than we ever expected,”