It’s no secret that Kentucky’s corn growers are facing some tough economic times. The added stress of ongoing trade uncertainty and retaliatory tariffs has many worried about what will happen as farmers are facing their bankers, seeking loans to put in next year’s crop.
KyCorn has been at the forefront of negotiations with the administration over how to mitigate the negative effects of these trade issues going forward. Though we face an uphill battle, we have managed to secure several market-driven policy changes on behalf of Kentucky’s corn farmers. Many of these negotiations occur behind the scenes, and we want to take an opportunity to give our members a look behind the curtain.
This summer, the administration publicly acknowledged the harm tariffs and trade uncertainty were causing to agriculture and announced that they were developing a plan to aid farmers. Through the National Corn Growers Association, we commissioned an economic analysis that found trade disputes to have lowered corn prices by 44 cents per bushel for crop produced in 2018. This amounts to $6.3 billion in lost value on the estimated 81.8 million acres projected to be harvested in 2018. We provided this analysis to the U.S. Department of Agriculture and other relevant members of the administration as they deliberated on the contents of the trade aid package.
We worked with NCGA to share information and advocate our position with senior officials from:
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USDA – Farm Service Agency
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USDA – Foreign Agricultural Service
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USDA – Office of the Under Secretary for Trade and Foreign Agricultural Affairs (TFAA)
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USDA – Office of the Under Secretary for Farm Production and Conservation (FPAC)
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USDA – Office of the Deputy Secretary
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USDA – Office of the Secretary
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USDA – Office of the Chief Economist
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USDA – Office of Budget and Policy Analysis.
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White House Office of Management and Budget
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Minority and majority of the House and Senate Agriculture Committees
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Select members of the Agriculture Committees
Farmers are never ones to ask for a handout, and while we would prefer the reinstatement of trade over an aid package, we acknowledged that temporary aid could be helpful as growers have difficult conversations with their bankers during the coming planting season. In addition to this temporary aid, we pushed hard for no-cost, market-based solutions, including rescinding tariffs, securing trade agreements and allowing year-round sales of higher-level blends of ethanol.
However, when the aid package was announced, corn growers were deeply disappointed by the 1 cent per bushel that was to be made available. While we knew it would be impossible for the aid package to make farmers whole, the announced aid provided virtually no relief. The one bright spot was the announcement of an additional $200 million to be used for developing foreign markets for U.S. crops.
In the wake of this decision, we leveraged our disappointment to push even harder for market-driven solutions. We were able to push the administration to quickly wrap up the U.S. Mexico Canada Agreement, which will replace NAFTA and bolster access to critical markets for U.S. corn, ethanol and DDGs. We were also able to secure a commitment from the president to allow year-round sales of E-15 by granting a Reid Vapor Pressure waiver to blends of ethanol E-15 and higher. We will continue to push to make sure that these agreements go into effect, as well as pushing the administration to complete new trade agreements that will expand exports of U.S. corn.
Farmers overwhelmingly supported President Trump in 2016 when he pledged to “Make our Farmers Great Again.” Now it’s time to put those words into action. KyCorn will continue to be on the frontlines to fight for Kentucky’s corn growers as the administration considers a second round of payments and other trade solutions to restore market stability.