Editor’s Note: This interview took place on July 17, 2018, and some crucial developments have been made in the ongoing trade war, and thus, were not discussed in the article. These initiatives include:
The Marketing Facilitation Program, which will provide eligible payments of corn, cotton, sorghum, soybeans, wheat, dairy or hogs.
The USDA also states that “The initial MFP payment will be calculated by multiplying 50 percent of the producer’s total 2018 actual production by the applicable MFP rate. If CCC announces a second MFP payment period, the remaining 50 percent of the producer’s total 2018 actual production will be subject to the second MFP payment rate. The initial rates are $1.65/bushel for soybeans, 1c/bushel for corn, 12c/cwt for milk, $8.00/head for hogs and 14c/bushel for wheat.”
Furthermore, the USDA notes, “MFP payments are capped per person or legal entity at a combined $125,000 for dairy production or hogs. Payment for dairy production is based off the historical production reported for the Margin Protection Program for Dairy (MPP-Dairy). For existing dairy operations, the production history is established using the highest annual milk production marketed during the full calendar years of 2011, 2012, and 2013. Dairy operations are also required to have been in operation on June 1, 2018 to be eligible for payments. Payment for hog operations will be based off the total number of head of live hogs owned on August 1, 2018. MFP payments are also capped per person or legal entity at a combined $125,000 for corn, cotton, sorghum, soybeans and wheat.”
We encourage you to contact your local FSA office for more details regarding this program.
• The Food Purchase and Distribution Program, which will purchase the unexpected surplus of affected commodities.
• The Trade Promotion Program, which will restore lost markets and develop new exports for America’s farm products.
For more information on these programs and other updates on the ongoing developments in trade, please visit farmers.gov.
The Secretary of Agriculture for the United States has always been an office of utmost importance for farmers across America. This is especially true today, as foreign tariffs and other factors loom heavily over the heads of our nation’s ag industry. Sonny Perdue, current U.S. Secretary of Agriculture, was able to take time out of his incredibly busy schedule to talk to us about what he’s doing to help American farmers in this time of uncertainty.
Bill Wallbrown: Thank you for helping in pushing on the farm bill. Where are we now?
Secretary Perdue: We’re not quite there yet; obviously we’ve still got a conference committee in the House and the Senate, and hopefully that will get reconciled before the expiration date because in these times of anxiety over trade, farmers need the certainty of plans; a renewed and reauthorized farm bill. When I spoke with Chairman Conway this morning, we’re hoping we can get that done before the expiration date, so people can make plans.
Bill Wallbrown: We hope so also. Farmers need to know where they stand. One of the big questions on trade is, with everything going on right now has had a dramatic impact on agriculture, maybe more so than on other industries. China is obviously a large importer of our soybeans. I have seen statistics where every third row of soybeans goes to China, so that’s a very important market. Farmers are generally very big supporters of Trump.
Secretary Perdue: I agree with you Bill, and I tell the President rather frequently that the farmers applaud his America first. They are some of the best patriots in America, tilling our soil, but they can’t pay their bills on patriotism and that’s the challenge. So while we hope we can get NAFTA solved sooner rather than later, get a deal with Mexico and then follow with Canada and after that the China situation. (A tentative agreement has been made with Mexico since the interview – Ed.) Most of us applaud President Trump because most of us know China has been cheating for a long time. This trade disruption we have is maybe a little like losing weight. It’s painful while you’re going through it, but you feel much better afterward. That’s the President’s objective, and he’s assured me that it’s going to be better for the American economy and American farmers than what we’ve had before. We understand that China has had a lot of non-tariff barriers and protectionism as well as the EU. The sad part about it is these trade disputes are a little bit like droughts. Whereas if you get a flood or you get a hurricane or tornado, it’s sort of episodic and it comes through and does its damage and you come back and rebuild. A drought is more debilitating because you don’t know how long it’s going to be there. So that’s sort of the debilitating nature of trade disputes and hopefully, they can be resolved sooner rather than later. That’s sort of in China’s camp. They need not continue to retaliate, but to agree to right some of the wrongs they’ve had over a number of years. That being said, I don’t know of a farmer who would rather not have a good crop at a fair price than a government check. But if we are expecting farmers to suffer economically, I believe as a country we owe it to them to help them recover. Not that we could ever make anybody whole, but we’re working on a mitigation strategy now regarding trade laws that I’m presenting to the President soon.
Bill Wallbrown: One thing I’ve heard the President bring up on several occasions is the disparity we have with Canadian farmers, particularly dairy farmers — their price of milk versus our price of milk. How would we rectify that type of situation? They’re getting $80 per hundred weight and we’re getting $16 here in the US and dairy farmers are hurting.
Secretary Perdue: Dairy farms in your part of the world, Pennsylvania and that area, are really hurting. I think again Canada, while we have a NAFTA agreement, it certainly hasn’t been free trade. They haven’t managed their supply, they’ve allowed their producers to over produce and they’ve put it on the world market and that depresses all the prices. So we’ve called them on that. I don’t know if Canada can do away with their whole supply management system, but never the less they need to manage that supply for domestic use and not participate in world trade on that.
Bill Wallbrown: Do you think we are going to get NAFTA fixed or do unilateral and bilateral trade agreements, in other words, directly with Canada, directly with Mexico.How do you feel that’s going to play out?
Secretary Perdue: I think we’ll get NAFTA renewed, modernized, but legging into it with an agreement with Mexico first and then go to Canada. The Mexican challenge is that we’ve seen so much of our auto production go south of the border. With Canada it’s more of the types of things we talked about earlier, like dairy restrictions. We’ve also got a wheat grading issue out in the plains. Those are irritants that we will be discussing with Canada. And I think we could probably get a deal with them as well.
Bill Wallbrown: I asked one farmer what he wanted me to ask on this call and his question was if we do lose that Chinese market, what other markets are we looking at that we can develop?
Secretary Perdue: We are going back to Japan with a bi-lateral there. Once we get NAFTA done I plan on making another attempt with the President over the TPP. If China’s still a problem, that puts us allied with a lot of other people in the TPP against China. Notwithstanding that, I think again countries in the Pacific Rim such as Indonesia, Malaysia, Thailand, the Philippines, Cambodia and those types of countries. So we are primarily looking into those growing economies, with growing middle classes, and the Pacific Rim.
Bill Wallbrown: What about the African continent and the Middle East? Can we do more business there?
Secretary Perdue: We actually have been. When the sorghum got delayed with boats on the water, we diverted some sorghum boats to the Middle East so we are obviously working on all of those countries, Israel included. Egypt had always been a good buyer of our wheat, not so much recently, so we need to go and see if we can reclaim those markets. The problem with wheat is that the Black Sea area had great production over the last three or four years, but as you well know we don’t always have a good growing season and our opportunity will come again.
Bill Wallbrown: In our business we export. This year we will export approximately 2.5 million bushels of beans into Taiwan and some other Indonesian countries.
Secretary Perdue: What was your destination on your container beans?
Bill Wallbrown: Taiwan, China, Thailand, Indonesia, that whole area. That’s been a very good container market for us. We are always looking for other markets because this container market has been good for agriculture as a whole. So switching gears here to biofuels, ethanol and diesel: where is the administration going in this area?
Secretary Perdue: As recently as this morning, we held a trade meeting in the White House where one of the things we were really advocating for was E15. We have had an issue with the EPA over these small refinery waivers. We are still trying to get that cured. And we continue to address the volume obligation. It would be a huge win to have E15 on a year-round basis.
Bill Wallbrown: That would be huge.
Secretary Perdue: Yeah, I think we could grow a good E15 market.
Bill Wallbrown: Another question is about US infrastructure. Roads, ports, locks, dams and rivers are obviously vital to agriculture and getting our products moved. We know we need to invest some capital in some of these areas, particularly in the locks and dams on the Mississippi River and other rivers. Where are we going there?
Secretary Perdue: Well this was part of the President’s vision earlier this year when he introduced his infrastructure plan, and frankly his goal was to dedicate 25 percent of that to rural America and agriculture. Congress unfortunately has not acted on that, but he has a very clear understanding about the jeopardy we face if some of these locks and dams fail, which are far past their life cycle now. So those are the challenges when you look at how much we ship on the waterways, and those are zero tolerance types of failures.
Bill Wallbrown: What can we do to help?
Secretary Perdue: Do what farmers always do, produce and vote, let their voices be known. Work through your trade organizations and work through your local representatives and express your feelings for the farm plan. This is no time to shrink back, this is a time for agriculture to engage so I hope you, your company and your customers would double down on their contacts, letting their representatives know about their plight, and what their needs are in agriculture. There are fewer and fewer of us every year, so continue to be engaged. It’s no longer acceptable to just sit behind the farm gate and kind of take what you get. In this environment where there are a lot of people who don’t really care for commercial agriculture, it’s really imperative that your producers get out, get engaged, know their members of congress personally and their senators and communicate with them on a frequent basis.
Bill Wallbrown: You were in the grain business and you understand in some ways railroads have a monopoly or oligopoly. I understand they need to get a return on their investment but they can become very difficult to deal with. We don’t do a lot of rail, but we did build a rail facility last year so we’re just getting our feet wet and it’s challenging to deal with the railroads.
Secretary Perdue: Well you’re absolutely correct that the rail service has diminished both in quality and frequency over the last couple of years. I think again that this is the kind of issue that you and your customers need to be engaged in and let others know that the rail service is not satisfactory. The dependability and the frequency of service and availability of cars, as well as the rates, have all been problematic for agricultural producers. The railroad has a lot of different customers and sometimes I think they try to raise rates on ag when they may lose other businesses.
Bill Wallbrown: On another topic, in our business, we view this not as our business, we view this as God’s business. I think you believe the same way we do. I know at one point in time in 2007 you had a drought in Georgia and you lead a group prayer with several hundred people on the steps of the state capital asking for rain. How do you live out your faith in the Washington environment?
Secretary Perdue: Well that’s a good question, I think all of us come with a perspective that we’re really all stewards. It’s a little like what my dad told me when we were renting land when I was a teenager. He told me to go order lime, and I said dad, we don’t own that, we might not have it next year. He said, “Son, we are all stewards of the land whether we own it or rent it. We need to leave it better than we found it.” And that’s the truth for life in general. As a person of faith, my responsibility is to live before the people closest to me, first of all my family, and then the staff that watches me every day, and be consistent in my walk with whatever my professions are. And we try to do that. We’re obviously all fragile and frail people in many ways, we are creatures of failure, but we have to live out in faith the things that we believe. And, as a believer, we try to follow the tenants of biblical instruction and actually not just talk about believing those, but live like we believe them.
Bill Wallbrown: I appreciate that very much. To have a person in Washington that believes like that, that’s huge.
Secretary Perdue: At the table I’m sitting at right now, we hosted a Wednesday morning bible study right here in the USDA with several of our cabinet members.
Bill Wallbrown: That’s awesome. So back to your father and the farm, what is one of the biggest life lessons you learned growing up on the farm?
Secretary Perdue: Talking about life lessons, I’d call it the law of agriculture. One of the reasons I like agriculture is because you can renew every spring, but you have to do this in a decently timely order. You can ride by and see which farmers are the best producers by looking at how they care for their farmstead and their equipment, their homes and their fences and their fields. And I think in agriculture, we get to do that and it’s on display. Another thing my father told me when I was growing up, we’d go to the country store and the farmers in there would be bragging over crops, this much corn, this many beans or this much cotton. And my daddy would never say much. I’d get out there and I’d say, “Daddy you know we got some good crops, why don’t you tell them how good ours are?” He said, “Son, they’re all farmers they can ride by and see, I don’t need to tell them.” So those are the sorts of lessons, I think humility is a part of being a farmer because we know again from a faith-based perspective, we are all dependent and I think we get into trouble when we start to try to live an independent lifestyle.
Bill Wallbrown: Okay, thank you again, Secretary Perdue.