1. A Historic Harvest – This past harvest was one for the record books. Farmers struggled with rain, snow and extremely wet field conditions. Root crops endured the most difficult harvest conditions, with the crop left in the ground across many acres due to excessive moisture and and freezing temps. American Crystal Sugar Company reported two-thirds of the crop harvested, leaving 118,000 acres unharvested; there were 148,000 acres of sugarbeets unharvested nationwide. Fifty-five to 60 percent of the potatoes in the Red River Valley were left in the ground, according to the Northern Plains Potato Growers Association. Many acres of corn, soybeans, dry beans, sunflowers, wheat, canola and flax were also left in fields over the winter.
2. U.S. and China Come to an Agreement – The tit-for-tat trade spat between the U.S. and China dominated agricultural news in 2018, and that trend continued in to 2019. Market analysts, farmers and others in agriculture remained wary throughout much of the year about a deal being reached. AgResource Company President Dan Basse said traders were aware China has a history of changing or cancelling contracts. “Our confidence in terms of an agreement that wasn’t inked was very low.” After many ups and downs in the trade war roller coaster, a phase one trade agreement between the two countries was finally reached on December 13. Chinese officials were vague on the details but did confirm an agreement that includes an increase in agricultural imports. While phase one does change the market mentality, NDSU Extension crops economist Frayne Olson said prices won’t change dramatically overnight. “What I likely see happening is a slow uptrend in prices. There will still be volatility and up days and down days.”
3. Spring Bomb Cyclone Covers the Midwest – An early spring bomb cyclone left snow covering portions of the Midwest in mid-March. Snow depths were over 20 inches in many areas of southern North Dakota and northern South Dakota into Minnesota and Wisconsin. In particular, Nebraska farmers and ranchers struggled to recover from the March winter storm, which caused major damage and flooding. “The weatherman called it the strength of a Category Two hurricane. I’d believe it, as it caused a lot of damage,” said Newman Grove, Nebraska farmer Greg Anderson. Livestock producers were especially hard hit. “There was extreme mud conditions in feedlots and stress on cattle. If calving going on, there were difficulties, death and loss.” It took months to get roads and bridges repaired and some of that work is still ongoing. Several other states also experienced severe flooding as the Missouri and Mississippi Rivers overflowed their banks, including Illinois, Missouri and Wisconsin. USDA Under Secretary for Marketing and Regulatory Programs Greg Ibach, who is the former Nebraska Agriculture Director, referred to losses in Nebraska as “massive.” Ibach also said weather-related cattle losses in South Dakota, Iowa and other cattle producing areas was also a struggle.
4. Navigating a Tough Farm Economy – Farmers and ranchers are facing a difficult financial situation, navigating five-plus years of an economic downturn. “This low-margin era for agriculture can be attributed to technology and volatility,” said Dr. David Kohl, agricultural economist emeritus, Virginia Tech. “Supply is exceeding demand worldwide. Technology and information is getting in the hands of better managers, which suppresses the margin.” Farm bankruptcies were up 24 percent compared to the same time frame in 2018. “I get asked a lot if we are back in the 1980s,” said American Farm Bureau Federation economist Veronica Nigh. “For comparison, during the 1980s farm crisis there were 4,800 farms closing per year. Last year, we lost 480 due to bankruptcies.” The American economy is setting itself up for a recession. According to Kohl, this isn’t all bad for agriculture. “When the general economy is in recession, ag tends to do well. A recession often lowers the value of the dollar and lowers interest rates.” Another underlying driver is farm assets. The total value of land, buildings and equipment is significantly higher compared to the 1980s.
5. U.S.-Mexico-Canada Agreement is Finalized – After months of negotiations with the Trump administration, the House of Representatives voted to move the U.S.-Mexico-Canada Agreement forward in December. In 2020, the implementing legislation will be considered by the Senate. If ratified, the USMCA includes agricultural provisions to update Canada’s Class 7 dairy pricing system and requires Canada to grade imported wheat with the same standards as their own crop.
6. Extra Help from the Government – In July of 2018, Agriculture Secretary Sonny Perdue announced USDA would help farmers hurt by trade damage from unjustified retaliation. Farmers and ranchers received assistance via the Market Facilitation Program. That program was revamped in June of 2019 to include three payment tranches based on a county rate. It is now referred to as MFP 2.0. The first payment at 50 percent of the $14.5 billion pot was distributed at the end of August. Another 25 percent of the total 2019 MFP payment was out at the end of November. Farmers are still awaiting the third tranche of MFP 2.0, which is expected to be released in January 2020. Speaking at an event in Omaha, Agriculture Secretary Sonny Perdue said farmers should not count on additional trade assistance in 2020. Farmers impacted by natural disasters in 2018 and 2019 could apply for assistance through the Wildfire and Hurricane Indemnity Plus (WHIP Plus) program at their local Farm Service Agency office. Dairy producers also had a new risk management tool added to the toolbox. The Dairy Margin Coverage program functions like revenue insurance. Similar to crop insurance, DMC offers a price protection between the all milk price and feed costs.
7. Farm Bill Implementation – Shortly after President Trump signed the 2018 Farm Bill into law last December, the U.S. government went into a partial shutdown. For 35 days, USDA activities were significantly reduced or halted, impacting farm bill implementation. Once the government re-opened, farm bill work resumed. Of the many programs included in the bill, the Dairy Margin Coverage program had lots of attention. To encourage farmer enrollment, Minnesota state lawmakers approved a Dairy Assistance, Investment and Relief Initiative program. By the end of the 2019, more than 22,600 U.S. dairy farmers were enrolled in the DMC. The 2020 sign-up ended on December 20.
8. Farm Stress – 2019 brought continued awareness about farm stress and mental health. Financial issues, business problems and the fear of losing the farm are just a few factors impacting farmer mental health. That’s according to a national poll sponsored by the American Farm Bureau Federation. USDA’s National Institute of Food and Agriculture invested almost $2 million to address the issue of farm stress. A Farm and Ranch Stress Assistance Network will be developed, providing help to farmers, ranchers and others involved in agriculture. Farm groups came together to help farmers and ranchers manage stress, with Farm Credit, American Farm Bureau Federation and National Farmers Union partnering on a program to recognize signs of stress for individuals who work with farmers and ranchers. “By training trusted neighbors and friends to recognize and address stress, this program will bring help closer and make it more accessible when farmers really need it,” said NFU President Roger Johnson. Prompted by the many sources of stress impacting farmers and ranchers, the Red River Farm Network joined forces with key industry stakeholders to create a new radio and podcast series called TransFARMation. Check it out here.
9. As African Swine Fever Spreads, the U.S. Prepares – African Swine Fever continues to impact global pork supplies. Due to the outbreak in China, 25 percent of the world’s pigs are gone. The virus also threatens hog supplies in the European Union and Korea. Kerns and Associates Economist Steve Meyer says ASF is a big story in the U.S. too. “We’ve had a concerted effort to figure out ways to keep from getting it,” he says. “We’re in better conditions now than we were one year ago, but there’s still work to do.” Market analysts expected China to purchase more U.S. pork in the fall as a result of African Swine Fever. Meyer says this was a case of unrealistic expectations. “We underestimated the impact of pre-loss slaughter, their stocks and the added tariffs on U.S. products. It hasn’t materialized like many thought they would. Our exports to China are up sharply this year though. If they had not, we’d be in a real mess due to the size of the supplies.” With potential tariff reductions on the horizon, more U.S. pork could be exported to China in 2020.
10. Increasing Domestic Demand – The U.S. soybean processing industry is going through one of its biggest expansion phases ever and Northern Plains farmers and agribusinesses are taking advantage of the value-added opportunity. In fall 2019, a soy processing plant opened in Aberdeen, South Dakota. The new facility, owned by Ag Processing Incorporated, is forecast to crush 40 to 50 million bushels of soybeans each year. In Crookston, Minnesota, Epitome Energy is building a 42-million-bushel soybean processing and 30-million-gallon biodiesel facility. A proposed soybean crush facility in Spiritwood, North Dakota is on hold following challenges in mid- 2019. A CoBank report says the short-term outlook for soybean processing is good. However, 2019 also proved challenging to fund new projects in a tough farm economy.
Honorable Mention –
- 2019 began on a sad note with the loss of longtime North Dakota agricultural leader Dale Ihry. Ihry, the executive director of the North Dakota Corn Growers Association and the North Dakota Corn Utilization Council at the time of his death, spent the majority of his career with the Farm Service Agency. In September, USDA officials in Fargo dedicated a training center in Ihry’s name. This past year was also a time when farmers and ranchers from the region moved into national leadership roles. Examples include American Soybean Association President Bill Gordon of Worthington, Minnesota and American Angus Association President Don Schiefelbein of Kimball, Minnesota. Former Minnesota Farmers Union lobbyist Thom Petersen was appointed state agriculture commissioner and North Dakota Agriculture Commissioner Doug Goehring took over leadership of the National Association of State Departments of Agriculture. Two individuals were also noteworthy for their impact on the grain elevator business. Former Ashby Farmers Cooperative Elevator Manager Jerry Hennessey was sentenced to eight years in prison for stealing $5 million from the elevator over a 15-year time period. Hunter Hanson of Leeds, North Dakota also went to jail for a grain trading scam that resulted in grain elevators and farmers losing millions of dollars.
- The world of agribusiness continues to deal with the aftermath of consolidation. After its merger, Dow-DuPont split into three entities in April and the seed and crop protection business is now known as Corteva Agriscience. Bayer and Monsanto continued the integration process in 2019, which was complicated by high profile litigation over the use of glyphosate. BASF acquired assets from Bayer due to Department of Justice divestiture demands from the Bayer-Monsanto deal. CHS finalized its acquisition of West Central Distribution in March. The agriculture sector also saw the growing presence of disrupters, like Farmers Business Network and Indigo Ag.