November 2, 2012

Failure to pass farm bill ‘beginnings of a drought’ for ag exports

The U.S. House of Representatives failed to pass a five-year farm bill before adjourning last month, and that may mark the beginnings of a drought on U.S. agricultural exports, according to a letter the Nebraska Corn Board sent to the Nebraska Congressional delegation and Rep. Frank Lucas, chairman of the House Agriculture Committee.

In a news release, the Corn Board said because there was no action on the farm bill, the U.S. Grains Council had to indefinitely postpone a trade mission that would have promoted U.S. corn exports. Similar trade missions for sorghum and barley were also postponed.

The trade missions were canceled because they are typically supported by the U.S. Department of Agriculture’s Foreign Market Development (FMD) funding with additional support from commodity checkoff dollars like from the Nebraska Corn Board. Such funds are also used to keep trade offices open in numerous foreign countries.

In part, what is at stake by not passing a farm bill is the type of promotional efforts farmers use to expand trade and defend markets of all ag goods, from corn and soybeans to beef and pork. Agriculture exports are one of the few shinning stars in helping create a positive balance of trade for the United States. According to USDA, agricultural exports during the 2011 calendar year totaled some $136 billion dollars, while corn exports totaled nearly $14 billion.

“Trade missions are critically important for our foreign customers. They want to meet the actual producers of their commodities, they want to know who is growing the crops, how they are grown, who is feeding the cattle, pork and poultry, and how it is processed,” said Curt Friesen, vice chairman of the Nebraska Corn Board. “While we are asleep at the wheel with farm legislation, other countries are doubling down on promoting their ag products.”

For example, Australia is investing billions of dollars promoting its beef, especially in Asia, which is a key market for U.S. beef exports. “We need to be aggressive in Asia promoting our corn fed beef because the market there is expanding and beef exports add tremendous value to cattle here in Nebraska,” said the Nebraska Corn Board’s Kelsey Pope. “At the same time, Brazil and Argentina are ramping up efforts to sell corn and soybeans.”

Because the farm bill did not pass in the House, as it already has in the Senate, FMD program funding ended Oct. 1 and Market Access Program (MAP) funding, another foreign market development tool, ends Dec. 31. “Nebraska products like corn, soybeans, sorghum, wheat, beef, pork and poultry all utilize these funds, so the ripple effect will have profound impacts on rural communities and our state until Congress acts,” Friesen said.

According to the U.S. Meat Export Federation, exports add $212 in value to each beef animal and nearly $56 to the value of each hog. “Exports are vital for those sectors and Nebraska, and all of these animals consume our corn, soybeans and related feed products,” said Pope.

It is not only export programs that are hurt with the failure of getting a farm bill passed.

“Conservation, dairy, energy and specialty crops are all impacted, but just as important this year is the need for drought assistance for livestock producers,” Friesen said. “Hopefully representatives will hear from the countryside and realize just what is at stake and the ripple effects of not taking action will have back on Main Street in their district.”

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