USDA agencies update Illinois farmers

By Ashley Rice

Crop reports, trade mitigation packages, crop insurance and agricultural trade outlook were some topics Illinois farmers discussed with USDA staff while in Washington, D.C.

Illinois Farm Bureau’s Leaders to Washington participants and the National Agricultural Statistics Service (NASS) concurred that 2019 was an unprecedented year.

NASS staff noted the biggest lesson they learned from 2019 was communication, both internally and externally.

In response, they took several steps, including developing one-page documents, available online, which explain various scenarios and methodology.

NASS is also working to clarify questions on surveys and provide more detail as necessary. An online option to complete surveys is the most efficient way, noted NASS, and the information is in the mailed packet.

For both yet-to-be-planted acres and yet-to-be-harvested acres, NASS follows up with the producers to find out when or if the fields were planted or harvested.

In crop reports, some reorganizing is happening so these critical items are in the beginning.

The USDA Trade Mitigation Package included the Market Facilitation Program (MFP), the Food Purchase and Distribution Program and the Agricultural Trade Promotion Program. In 2018, the package was funded at $12 billion, while in 2019 it was funded at $16 billion. In 2019, 15% of U.S. net farm income came from the MFP, explained the Office of the Chief Economist.

Risk Management Agency staff reminded the group that MFP does not affect crop insurance, which is market driven. For farmers considering cutting crop insurance levels to save on input costs, the RMA noted that each farmer should weigh his or her own risks. But insurance premium coverages are lower this year, so producers can potentially get higher coverage for a lower cost.

The Foreign Agricultural Service (FAS) represents American agriculture around the world.

When looking for future markets, FAS assesses economic indicators. These include gross domestic product (GDP) growth, population growth and escalation from low income to middle class.

Only 17% of the world population lives in developed countries, and increased market demand is happening in developing markets, noted FAS.

Recently, the United States-Mexico-Canada Agreement locked in two of the best customers of the U.S., sending a signal to the rest of the world.

Looking at the U.S.-China phase one agreement, for the first time there is trade predictability and enforceability between the two countries. So far, China has not asked for any exceptions or delays in the agreement, said FAS.

As to when the Chinese purchases will happen, patience is key. Historically, around 60% of Chinese agricultural purchases from the U.S. occur in the last quarter of the year during harvest season.

The U.S. also recently expanded market access for U.S. wheat in Kenya. Africa has the largest population and GDP growth in the world, and U.S. competitors are already in the continent.

A region to keep an eye on for future trade opportunities is Southeast Asia. This region has increasing GDP and the tastes and preferences are becoming more westernized.

The biggest challenge the U.S. faces in trading with Europe is sound science. “Everyone in this room has work to do to talk about American agricultural products and how they’re produced safely,” FAS told the group.

Overall, there is positive sentiment surrounding the outlook for future market opportunities for American agriculture.

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