DECATUR, Ill. — Questions about trade and tariffs, biofuels and livestock disease prevention dominated the 2019 Farm Progress Show ag policy forum.
Representatives of all the major Illinois agriculture commodity groups spoke to a panel that consisted of U.S. Secretary of Agriculture Sonny Perdue, and U.S. Reps. John Shimkus, Rodney Davis, Mike Bost and Darin LaHood.
“To have Secretary Perdue here not only two years ago, but to come back and hear from you again, I think that’s a testament to the administration and really a testament to Secretary Perdue on how he wants to interact with our farmers and our producers,” said Davis as he welcomed guests to the forum and to the show, which happens to be in his congressional district.
Following are excerpts of some of the questions and comments and the answers from Perdue and others.
Illinois Farm Bureau Vice President Brian Duncan, Polo: “We’ve had members express some great concerns about the (National Agricultural Statistics Service) report and its accuracy, their methodologies, specifically, how they include prevented plant acres in the corn acres and how will that work and is NASS open to becoming more data driven?
“We wonder about the methodology, the acres and then also the calculation for yield. Did NASS take into account the late planting when they figured the yield on this year’s corn crop?
“Universities usually have a graph that shows later planting equals lower yield. Has NASS considered that and can you just talk a little big about NASS’ methodology, your confidence in it and their openness to becoming better, by making it more data driven?”
Perdue: “I think it’s always interesting to really think about a conspiratorial effort at NASS to decrease the market, and I think that’s what happens when you have NASS data that doesn’t line up with what industry data is.
“This last (World Agricultural Supply and Demand Estimates) report was probably one of the widest differences between what industry was expecting and what they had done. I called NASS in and I asked them many of the questions.
“As you might imagine, I have to be very careful; they should not be subject to any kind of political influence. It ought to be about the facts, it ought to be about the data and I can’t, I don’t and I should not jawbone them about which way we want the market to go, so I hope you appreciate that.
“What I can tell you is, while there is typically, almost every year, some allegations that NASS doesn’t know what they are doing and their numbers are just crazy, if you go back and look historically, you will find that, more than not, the vast majority of the time, their numbers come out more true than maybe what some people might have alleged earlier.”
Illinois Pork Producers Association President Pam Janssen, Minonk: “We are out here trying to survive and with the tariff issue with China, what can we do? We thank you for the Market Facilitation Program that you have put into place and the work you’ve done with Japan. So, where do we go from here with the tariff issues coming back to China?”
Perdue: “The ball is in China’s court regarding their tariff situation. We don’t know what they’re going to do. The president gets signals from time to time, as you saw this last week, of them wanting a deal.
“They are kind of torn between their hardliners, and I think (Chinese) President Xi (Jinping) really wanted to do trade, understanding their economy is hurting.
“I think pork producers are going to be very benefited by the Japan agreement, the details will be announced soon. We are saying right now we have an agreement in principle. But I can tell you that pork and beef producers ought to be pretty happy about that and most everyone else.”
Illinois Soybean Association Board Member David Wessel, Chandlerville: “We have a neighbor to the south that we have been working very hard on for the last several years and Illinois has been a leader with that and that is Cuba.
“And we would like to know what we can do to get a better foothold and policies in our government that would help us make Cuba — help us expand those markets there in that region.”
Perdue: “I would love for you all to tell me what the demand that you see or what the demand potential is from Cuba. I know many states have taken delegations down there. When I was governor, I took a delegation down to Cuba.
“It almost appears to be sort of a mythical market there. I know the rice people like it and the poultry people like it, but I really wonder what the demand potential is from Cuba. I’m not dismissing Cuba. I just don’t think they are the silver bullet from that perspective at all.”
American Soybean Association National Director Rob Shaffer, El Paso: “My question goes to the dollar tax credit. We’ve been 20 months without the biodiesel tax credit. How long can plants go without that tax credit?
“We’ve lost six plants in the last month, between corn oil and soybean oil, 250 million gallons have been lost because of (small refinery exemptions) and also no tax credit. What is the administration’s stance on how do we stop the SREs or get a better allocation of volumes and also, where are we at with the biodiesel tax credit?”
Perdue: “I’ll respond to the SRE question. My four friends up here will respond to the tax credit. I wish I could be more descriptive. I don’t stonewall very well, but this is news that the president wants to deliver over the mitigation of these SREs going forward.
“We need help. Let’s think about how we grow demand, and that’s infrastructure. I presented some plans to him over infrastructure growth. One other idea I suggested was we take off these orange skull and crossbones on the E15 pumps and let the E10 pumps go to E15. This is the sort of thing we could grow ourselves out of if we give the customer a choice between E15 and E10 and build demand.
“We say we lose these plants. Obviously, manufacturing plants shutter for a period of time when margin profitability is not there. We would hope these things come back as the markets go, but it’s a tough time out there for farming and a tough time for ethanol production.”
LaHood: “Thanks for your question on the biodiesel tax credit. We passed it out of House Ways and Means. It will come to the House floor. I am optimistic when it gets to the Senate, Senator (Chuck) Grassley is very supportive. We’ve worked with him on that. But we haven’t gotten it done yet.
“We have a responsibility and an obligation before the end of the year to get it done. We are already 10 months behind. I understand the anxiety and the uneasiness out there right now, but when we get back, we’ll get it on the floor and get it passed and we’re going to work to get it done by the end of the year.”
Marquis Energy CEO Mark Marquis, Hennepin: “This is my one message, my one comment. We need those gallons that are waived to be reallocated. Back in 2007, when RFS 2 was put in place, I sold a number of ag businesses and built two ethanol plants on the promise that the RFS would increase the blending rate for 15 years into the future, until 2022.
“Now that we get 10 years into it, we’re now going to head downhill because of these SREs and not reallocating them back into the rest of the refining market.
“It feels like a double-cross to us to use the EPA, we have a situation where you have an oil guy as head of the EPA and administrating the Renewable Fuel Standard. It’s difficult, so we’d like to see those gallons reallocated.”
Perdue: “I’ve heard that before.”
Illinois Manufacturers Association President and CEO Mark Denzler, Springfield: “What are the prospects of getting the United States-Mexico-Canada Agreement done, resolving the China issue? We need a Trans-Pacific Partnership.
“Ninety-five percent of the world’s consumers live outside the United States and so if we could get some more comment on what do you think the prospects are of getting some of these trade agreements?”
Perdue: “I personally think if the Speaker (Nancy Pelosi) brought it to the floor, and that’s her call, she obviously desires to have a majority of her caucus and I think we have a majority of our caucus there, but I think it would pass pretty easily in the House today.
“It is chapter by chapter, line by line, verse by verse better than the NAFTA agreement we have. We think President Trump did what he said he was going to do. We’re going to get a better agreement that way. Hopefully, we will get that done soon when Congress returns to D.C.”