MARC JACOBS
Hutch Post
While the latest Senate farm bill proposal includes several long-awaited updates for agriculture, key priorities for crop producers and livestock groups remain absent, according to Nathan Steudle, Farm Director at KFEQ Radio in St. Joseph, Missouri.
Steudle said the proposal released by Senate Agriculture Committee Chairman John Boozman includes important updates to commodity programs, crop insurance, conservation programs, and farm credit provisions designed to help producers weather another year of tight margins.
"It does have some good things," Steudle said. "The updates to ARC and PLC programs, crop insurance, conservation and increased credit limits are all designed to help producers get through these extremely tight margins until conditions improve."
However, Steudle said several major agricultural priorities were left out of the proposal.
Among the biggest omissions is legislation allowing permanent, nationwide year-round sales of E15 gasoline. The ethanol blend has been a top priority for corn growers and the biofuels industry, which currently rely on temporary federal waivers each summer.
"I know a lot of the row crop states were really counting on that," Steudle said. "We'll see if they can find a way to get that into the bill that eventually lands on President Trump's desk."
Steudle noted that the proposal also does not address California's Proposition 12, the livestock production standards that have affected pork producers nationwide. He added that several cattle grazing provisions sought by livestock organizations were also omitted.
Despite those setbacks, Steudle believes there are still opportunities to advance year-round E15 if it does not make the final farm bill.
"All is not lost," he said. "They can tack it onto another piece of legislation, whether that's a defense bill or another vehicle. It really belongs in the farm bill because it has such a profound impact on farmers today."
Crop conditions mixed across the Midwest
Steudle described this year's corn crop as generally good in northwest Missouri and southwest Iowa, though excessive moisture has created concerns farther east.
Fields in eastern Iowa, Illinois and Indiana have experienced saturated conditions that are leading to shallow root systems, leaving crops more vulnerable to wind damage later this summer.
"It's okay. I wouldn't list it as excellent, but I'd say it's good overall," Steudle said. "The problems are there now."
He said recent severe storms in western Kansas that destroyed corn fields highlight the growing weather risks producers face this season. While damaged crops could reduce supplies and support commodity prices, he noted crop insurance and recently approved federal assistance programs should help affected producers recover.
Export demand provides market support
Steudle said soybean exports offered some encouraging news this week.
New soybean sales to China, along with additional new-crop export commitments totaling more than 33 million bushels, helped soybean futures recover losses earlier in the week.
"Soybeans were up about 20 cents yesterday (Thursday)," he said. "The exports were a little bit bullish for the market."
Corn prices also posted modest gains, though Steudle expects volatility to continue as investment firms rebalance portfolios at the end of the month and quarter.
Rural ecomony still feeling pressure
Steudle also discussed the latest Rural Mainstreet Index from Creighton University, which continues to reflect economic weakness across many agricultural communities.
He said declining farm profitability is beginning to affect businesses that depend on agriculture, particularly equipment dealers.
"The margins have gotten tighter and tighter," Steudle said. "That starts to leak into rural businesses as well."
Farm equipment sales remain especially weak, with the sector's index well below growth-neutral levels.
Despite current challenges, Steudle said he believes agriculture may be beginning to turn a corner.
"I think the sentiment is starting to turn," he said. "If we can get a new farm bill done and put some of those policies in place that provide protections and open new markets, we can start finding a solid base instead of continuing to slide backward."
Steudle said producers will be watching Friday's USDA Hogs and Pigs Report before attention shifts to the July World Agricultural Supply and Demand Estimates report, scheduled for release during the second week of July.