By former USDA Secretary John R. Block.
The ag industry is excited as a number of trade deals are coming together. We will have a phase one deal with China signed this week. Our annual exports to China that have fallen below the $20 billion mark will jump to $40 billion per year. The Senate should vote to pass USMCA. We have a new agreement with Japan. Here is how important those countries are to the American farmer - China, Canada, Mexico, and Japan – those four countries account for more than 50% of ag exports. I think it’s time to celebrate.
There is one disputed issue that this Administration has not been able to fix. Corn farmers are not satisfied. Did you know that 40% of our corn is processed into ethanol and distillers dried grain? Our EPA has provided exemptions for small refineries to avoid the target of 15 billion gallons of ethanol added to our gasoline. EPA says that they will insure that the 15 billion gallon number is met.
Iowa Senators Chuck Grassley and Joni Ernst are not satisfied. This is their statement “No matter what the EPA says about the impact of waivers to oil companies making billions of dollars, farmers and biofuel producers feel the negative impact of the agency’s actions.” Goeff Cooper, President of the Renewal Fuels Association said, “The EPA action fails to deliver on President Trump’s commitment.” I would say this dispute is not over yet.
Since we seem to be in a constant confrontation with China, let’s look at China. The Chinese population is 1.38 billion. That is more than 4 times our population of 330 million. With all of those people their land mass is roughly the same size as the U.S. There is the important difference. We have twice as much arable crop land as they do. Unless something dramatic happens, they will need to import a lot of food to feed all those hungry mouths. That is our opportunity.
Last subject – Conservation Reserve Programs. That was part of the 1985 Farm Bill when I was Secretary of Agriculture. The purpose was to take fragile, erodible land out of production. We have about 22.3 million acres in the program now. That grass land is scheduled to increase to 27 million acres in the next year or two. Adding a few acres to the reserve will help wildlife and could lift our prices a little.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, just go online to www.johnblockreports.com.