June 1998
News & Views From the Wheat & Barley Growers
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
There seems to be no shortage of studies and articles nowadays telling us how bad things are in agriculture today. There's no doubt that we're in a downswing now. But ag will see an upswing. Following is an excerpt by Dan Manternach, president of Professional Farmers of America, who stresses "megatrends" headed for American agriculture, including biotechnology and a growing number of mouths to feed globally, that will be positive for U.S. agriculture over the long-term:
"It's the most promising outlook for real, lasting prosperity in agriculture since World War II. Those who see these trends and position themselves for the ride will do extremely well. Those who want to fight them might as well be standing against the ocean tide.
Our greatest concern is getting word of this bright outlook out to the young people in farming. One of the most frequent questions we get from farmers is this, "If you had a son or a daughter asking you, "Is there a future for me in farming?" what would you tell them?
We would tell them there is an incredible future in farming. We would tell them that God thought so much of farming that it was the first job he created for Adam and Eve. And that he created it for them before they sinned, so it wasn't intended to be a punishment, but part of his perfect plan.
But there's a nagging problem in agriculture that clouds over this message for too many young people in agriculture today. It's what we call the "culture of whining" that has infected our business. How many young people grow up on today's farms hearing nothing but negatives around the supper table at night? How many young people have never heard anything from Mom or Dad but that it's too hot, too cold, too dry, too wet or too unprofitable to even be a farmer? How many people have heard such a constant drumbeat of complaining about what a cruel, thankless, unrewarding job farming is that the last thing in the world they want to do is farm when they graduate from high school? Too many, my friends. Too many.
I want you all to make a vow that you will not be part of this culture of whining that has caused farmers to lose respect among the non-farming public and among our own youth. And instead, whenever you encounter whining or negativism about the profession of farming, I want you to tell this person that farmers have always had a favored spot in God's plan, sharing creation with Him.
Tell that person that in the exciting age of biotechnology that lies just ahead, farmers are about to share in God's creation in a deeper sense than ever before. For if it's true that science is nothing more than Man "thinking God's thoughts after Him," then biotechnology and precision farming are about to propel farmers deeper into God's head than ever before.
And for what purpose? To give glory to our Creator. The Creator of human minds capable of thinking His thoughts; dissecting the very design of Nature to the point where the farmers of the 21st century can MEET a growing world's need for food when there are so many doomsdayers running around predicting it can't be done and prescribing demonic solutions like abortion, mercy killing or global famine. What fun it's going to be for the farmers of the 21st century proving those doomsayers wrong!"
Whether or not you agree with Manternach, his perspective is refreshing. It's good to be reminded why we're in this business. Because we love to farm. By becoming involved in our wheat associations, we can work not to whine about our problems, but to get together and try to solve them.
Chet Edinger, Mitchell SD
President, SD Wheat Inc.
U.S. Needs to Shape Canadian Wish List Now
The NDGGA was invited to a meeting of the Canada Grain Council in Ottawa earlier this year. The focus of the meeting was developing a 2020 Vision; a vision for agriculture in the next century. I accepted the invitation and attended, participating also in another meeting with Ag Canada to talk about the Canadian Wheat Board and the marketing of Canadian grain.
After the discussion, it is apparent that both sides still have their own opinion on the present situation of how grain is flowing and the effects on price. Ag Canada gave out copies of the Canadian Wheat Board Act, a bill to "reform" the Wheat Board.
At least that is the spin that Ag Canada puts on it. While it does make some changes, it is a far cry from what US producers and some Canadian producers would like to see.
I feel they recognize that State Trading Enterprises (STEs) will be a target in the 1999 World Trade Organization talks (the follow-up to GATT), so to gain a better bargaining position, they are positioning their bargains now. This means that US producers must know what they want to come out of next year's WTO talks concerning STEs. Then they must communicate this to US trade officials and negotiators.
Ag Canada claims that presently the US position on STEs going into the next round of trade talks is that of reform, not of elimination. If that is not consistent with what we as producers want, we must get busy and get that stance changed before negotiations start.
One of the issues discussed in the Ag 2020 meeting was harmonization of chemical registration with the US, and why it has not yet happened. It sounds like both the US EPA and Environment Canada have a turf war going on and that there is not much progress in this area. The NDGGA will work with other farm groups to get this process moving.
Mark Gage, Page, ND
NDGGA President
"Just Say No" to Subsidized EU Barley
US barley farmers have a simple message for their dairy customers across this country: Just say no to subsidized barley imports from the European Union.
For the first time in US history, barley from the EU will be imported into California-our country's largest market for feed grains-carrying a whopping subsidy of $51 per ton, or $1.11 per bushel. The landed price of this barley with the subsidy factored in would be approximately $3.16 per bushel (the $1.11 subsidy plus roughly $2.15 actually paid by the buyer), compared to a local US barley price of $2.80 per bushel at the time of the sale. Clearly, EU barley would not be competitive in our market without these huge government subsidies.
Cheap imports made possible by government export subsidies might sound attractive to California dairy farmers who are experiencing their own cost squeezes. But there are several reasons why this invasion of subsidized grain is bad for US barley and dairy farmers alike.
First, subsidized barley imports discourage US barley plantings, thus undermining both the integrity of US farm programs and the availability and reliability of domestic barley supplies, which are vital to a competitive US livestock industry.
Second, subsidized imports lead to an inefficient allocation of resources and cause an unwarranted transfer of income from US producers to their subsidized counterparts across the Atlantic Ocean.
Third, subsidized imports cause a serious loss of confidence and distrust in the US government's ability to negotiate trade agreements that are fair to US farmers, businesses and consumers.
Finally, these subsidized imports lead to a decline in grass roots support for fast track negotiating authority and future trade agreements.
California dairy farmers might be tempted by lower barley prices but they, too, face their own battle against EU export subsidies. This is an unprecedented subsidization of EU barley into the US market. Dairy farmers should recognize that they could be next. What would be their response if the EU began targeting heavily-subsidized dairy products in their domestic market?
These agricultural export subsidies violate the spirit, if not the law, of open, free and fair trade, and the US government needs to draw the line here. If US farmers don't stand together for fair play, they run the grave risk of falling one-by-one to the European export machine. It's long past time to say NO to EU export subsidies.
Herb Karst, Sunburst, MT
President, Natl. Barley Growers Assn.
Our Top 3 Issues, Mr. Glickman: Low Prices, Crop Insurance, Scab
Three issues currently are of top concern to our organization: 1) Low grain prices; 2) Federal crop insurance reform; and 3) Federal funding for scab research.
Our association joined with South Dakota Wheat Inc. and the North Dakota Grain Growers Association to submit written testimony on these three issues at USDA Secretary Dan Glickman's Farm Forum held April 8, in Aberdeen, SD. These issues were also the crux of our message in Glickman's visit to the Red River Valley June 8.
Many factors are involved in addressing low wheat prices, but we believe the most important factor is the export situation. We are urging that U.S. export enhancement and promotion tools be aggressively used in strategic markets. Further, we must review the use of sanctions in U.S. foreign policy to allow more flexibility in exporting food and medicine to restricted countries like Iran and Cuba. The U.S. is currently locked out of 11% of the world wheat market. U.S. funding of the International Monetary Fund (IMF) will stabilize key Pacific Rim wheat markets.
Also, we urge removing the cap on the marketing loan rate for wheat established in the 1996 Farm Bill, and extending the maturity of loans beyond nine months. However, an increase in the loan rate should be accompanied by a mechanism that would prevent grain forfeitures that may lead to burdensome wheat stocks.
In the longer term, we need to make sure that unfair trading practices used by Canada and the Europeans are addressed in the next round of WTO trade negotiations.
Secretary Glickman is to be commended for initiatives announced this past spring that would expand crop insurance to new crops, reform the nonstandard classification system, address the "20-20" prevented planting minimum acreage rule, and implement a pilot program for northern counties.
We stress, however, the urgent need to fix the loss of Actual Production History yield due to crop disaster by eliminating disaster years from the APH calculation. Also, the need to recalculate the methodology used for wheat quality adjustments. Further, that more emphasis be placed on funding improvements in federal crop insurance coverage, not just funding for program delivery.
As far as solving scab, the key is ag research. The Agricultural Research Service allocated $200,000 in additional FY97 funds to fight the scab problem, and $1 million in FY98 funding- $500,000 at the Cereal Rust Lab in St. Paul (now the Cereal Disease Lab) and $500,000 to a 12-state consortium, which was organized last March when University officials assembled to propose a federal research plan and establish national scab research priorities.
The Administration's budget proposal for FY99 retains the $1 million in FY98 scab funding and proposes an increase of $600,000 for scab research as part of the Infectious Diseases Initiative. This support is appreciated, but it is not nearly enough to get the job done. While in Africa earlier this year, President Clinton pledged $61 million for agricultural improvements there. Then surely can't $5.2 million in annual funding be allocated to solve the most severe disease problem affecting wheat and barley in the United States?
Tim Dufault, Crookston, MN
MAWG President
Tough times for wheat casts shadow on checkoff vote
Minnesota wheat producers in March voted down a proposal to increase by a half cent per bushel the state checkoff for wheat research and promotion. According to the Minnesota Department of Agriculture ballot results, the referendum failed on a vote of 810 to 319. Of 1,722 ballots requested and mailed by producers, 1,129 ballots were received within the allowed election period and accompanied by the appropriate affidavit.
The referendum was the first proposed increase since the Minnesota wheat checkoff began in 1978. I think many producers realize the need for wheat research and promotion. But poor production caused by multiple years of scab, coupled by the current price slump from increased global wheat stocks, has created an economic environment where it is difficult to support any increased costs.
Indeed, it was difficult to generate support for an increased checkoff at the same time that wheat is suffering from low yield and low price. I know of producers who voted no but said they would have voted yes, if only their current cash flow situation was better. Many wheat producers right now are at the point where they are doing everything they can to control costs, even if it includes programs designed to help.
It is disappointing that less than 20% of wheat producers in the state cast a ballot. Turnout could have been better. Even the 593 ballots that were requested by producers but weren't returned or were mailed in too late to be counted could have made a difference.
The wheat checkoff will remain at one cent per bushel. However, many programs and activities funded by the MWRPC through the wheat checkoff will be frozen, reduced, or eliminated.
Multiple years of poor wheat crops caused by scab, coupled with a reduction in wheat acreage, have severely impaired the council's ability to fund domestic and export market development, value-added activities, and research. Our ability to be proactive in addressing the very problems that are challenging our industry, such as scab, will be more limited, and that is unfortunate.
A better price and improved production will do much to improve producers' views toward wheat, and the wheat checkoff. There's a lot of negativity about wheat right now, and that carried over to the wheat checkoff vote. I am optimistic that we are going to have better wheat production this year, and that the price situation will also improve once stocks are drawn down and exports pick up. The mood toward wheat and a wheat checkoff referendum would then be a different story. In the meantime, we will continue to do what we can through the current checkoff structure to improve our wheat industry.
Cliff Keller, Fergus Falls, MN
MWRPC Chairman