Forecasting ag policy, yield factors
By Trista Crossley
This winter, two topics have dominated many of Eastern Washington’s news outlets. First, of course, was the weather (Wind! Cold! Snow! More snow! More wind!), and second was the election and what it might mean for agriculture. Both of those topics came together in February thanks to the Agricultural Marketing and Management Organization.
Whether the weather
Dr. Elwynn Taylor, an Extension agronomist and climatologist from Iowa State University, tackled how growing conditions affect yields, and the importance of plotting yield data to understand volatility for crop insurance purposes.
Taylor recommended growers view a climate graph of their nearest city at yourweatherservice.com that shows average temperatures and precipitation by month. Using graphs from Spokane, Pullman and Connell, he pointed out the on-average 25 degree difference between daytime and nighttime temperatures at those locations.
“There’s a crucial time that determines yields that the USDA (U.S. Department of Agriculture) misses consistently. They only look at the things you can see when you look at a field,” he explained. The USDA looks at when crops were planted, when plants emerged, when they matured, etc., but for many grains, the crucial time is between pollination and maturity. During that period—for wheat that is about 60 days—the plant is growing by adding dry matter to the kernels. The longer a plant has to add dry matter, the better the yields. This all goes back to nighttime temperatures, Taylor said, because the warmer the nights, the faster the plant matures leaving fewer days to grow.
“Corn and wheat and rice can all mature day and night, but can only grow in the daytime,” he said. “This is the most overlooked factor of plant development affecting your economy that there is. If we have a crop going from pollination to maturity in 60 days, we get our full yield. But if nights are especially warm, it might make maturity in 55 days instead of 60. What has that just done? It’s cut 10 percent off your yield.”
Taylor said across the globe, rice yields have fallen an average of 8 percent partially because of this problem. Warmer ocean temperatures have made nights warmer by about 2 degrees in many of the coastal rice-growing areas.
“This is the unknown to put you on the correct side of the market,” he said. “What’s it worth to you to be on the right side of the market? Nothing if you don’t do anything with the market, but if you know the market is wrong, and it usually is, then you have an advantage.”
Taylor urged producers to make a graph of their annual proven yields vs. county yields to help them determine which one has the greater volatility and therefore should be what’s insured.
“If you don’t have a graph, you don’t know (where the volatility is),” he said. “That’s where money is made, off the volatility. Even more than that, you know what’s happening on your farm. You know how much grain there will be to sell this year.”
Switching over to talk about drought, Taylor said most droughts start in the Carolinas or north Georgia and move west. When weather patterns are divided across the continental divide, they tend to persist. Bad weather for growing corn in the Midwest will often be juxtaposed with good weather in the Northwest. And when Arizona is wet, Washington state will often be dry and vice versa.
“What does that tell us? That Washington and Arizona both depend on El Niño, and El Niño being bad for Washington means it is wet for Arizona. When La Niña comes and it is dry for Arizona, it’s wet for Washington. You have the opposite effect that most of the country does with an El Niño event,” he explained.
Taylor also showed a graph charting Iowa corn yields from 1925 to 2011 that showed periods of yield volatility (lasting about 25 years) alternating with periods of yield stability (lasting 18 years). He said this is an important pattern because 2012 was the first year of what looks like the beginning of a volatile period. He also predicted that a dustbowl will occur in the U.S. this century. Growth patterns from tree rings show dustbowl periods happening approximately every 89 years, with the last U.S. dustbowl in 1936.
“All of the risk management you’ve been practicing the last 10 years has been practice. Remember that the chances are, we are moving into volatility of agriculture much like we had in the 80s, hitting its peak around 2025. Manage the risk to be ready for that,” he concluded.
Ag policy report card
Dr. Barry Flinchbaugh, an agricultural economics professor at Kansas State University, tried to predict what ag policy might look like in the next few years, telling the group he is always glad to visit “the Washington that works.” He said in the 50 years he’s been involved with ag policy, it’s never been so hard to predict as it is now under the new administration and new Congress. And in those 50 years, the biggest change he’s seen is the move to partisan politics.
“In 1966, ag politicians, rural state politicians without any doubt put farmers first and partisan politics second. Farm bills in those days were bipartisan. Today, it’s exactly opposite. Partisan politics are first in both parties, and you are second, and that’s got to change or ag policy is going to get really nasty and very difficult to get anything accomplished,” he explained.
Flinchbaugh called the farm bill the number one ag policy issue right now, telling the group that rural America gave Trump 75 percent of their vote, which is why he won the electoral college while losing the popular vote.
“That means we should hold his feet to the fire,” he said, adding that Congress and the president are facing a fragile ag economy. Many of the main players who developed and funded the last farm bill will be working on the 2018 Farm Bill, including Sen. Pat Roberts (R-Kan.), Sen. Debbie Stabenow (D-Mich.), Rep. Mike Conaway (R-Texas) and Rep. Collin Peterson (D-Minn.). “So the fact that it is the same crew also means this is not the time for a major overhaul of the farm bill.”
One of the biggest issues with the upcoming farm bill will be the relationship between crop insurance and food stamps. Without nutrition and food stamps, which make up 85 percent of the U.S. Department of Agriculture’s budget, farmers will no longer have a seat at the cabinet table.
“If you take food stamps out of the farm bill, this will be the last farm bill. Urban congressmen are not going to vote for a farm bill that doesn’t have food stamps in it,” he said. “You’d better pay attention to this. Why is this tied to crop insurance? Urban congressmen will vote for crop insurance if rural congressmen support food programs.”
The other big issue that the next farm bill needs to address is refining Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs to make them more palatable, including allowing producers to change their program choice in the middle of the life of the farm bill.
Flinchbaugh discussed other major issues facing Trump (and he included Congress because most of these issues can’t be addressed without Congress) and graded the president on his efforts:
• Trade. Earlier in his talk, Flinchbaugh said that as far as wheat farmers are concerned, this is a permanent global economy with trade representing 28 percent of the gross domestic product. Looking a little closer to home, he pointed out that in 2015, Washington exported $3.8 billion of farm products out of the state with $340 million of that from wheat. Exports in the state have been cut in half since 2013. Pulling the plug on the Trans-Pacific Partnership (TPP) and trying to gut the North American Free Trade Agreement (NAFTA) are only going to make the situation worse. “TPP is the most lucrative trade agreement ever negotiated by this country on behalf of agriculture. It would add $5 billion per year to net farm income. We are pulling the plug with a fragile ag economy. We are pulling the plug on what we really needed,” he said. “Clearly, to date, if I had Trump in class, on trade, I’d flunk him.”
• Immigration. Flinchbaugh gave Trump a B, saying that the president has said publicly that he understands that agriculture needs a permanent, legal immigrant workforce. “Seventy-five percent of this country’s fruits and vegetables are picked by illegals. Half the cows in this country are milked by illegals, and they are becoming more expensive. Why? Contrary to what the president says, immigration is now moving south. There are more immigrants leaving this country than are coming in (in 2016).”
• Deregulation. A+ “There’s no question agriculture is over-regulated and that it increases our cost of production.”
• Bio-fuels. During the campaign, Flinchbaugh said Trump was hot on ethanol but has waffled since the election. He gave him a B.
• GMO labeling. Flinchbaugh gave Trump an A, saying the president appears to be a strong supporter.
• Climate change. Flinchbaugh gave Trump a D, saying, “…There is climate change. Beyond that, I don’t know that we know very much. Is it normal? Could be. What causes it? We think fossil fuels, but do we know? It is very controversial. Trump called it a Chinese hoax; he’s now dropped the Chinese. His new EPA administrator agrees it is a hoax. His new Interior secretary thinks it’s real. You got to give him credit for allowing disagreement in the cabinet.”
Flinchbaugh said he would argue that GMOs and climate change have no business in politics because they are scientific issues, not political issues, and they should never have been set up and divided along party lines.
“Our belief in science is declining, and when you believe less in science, you believe more in political crap because they substitute for each other,” he said. “The next four years is going to be a real challenge, but the opposite of challenge is opportunity.”