This year has already made an indelible impression that stands out among other years. Our wheat crop began with barely enough moisture to establish a stand. As spring approached, rainfall was scarce.
Based on the June version of the drought monitor map, our farm lies squarely within the dark narrow band, designated as D3 in the drought index. As weather patterns approach, they split up and move around or dissipate entirely. Although we received some of the much-needed rain in late April, hot temperatures and high winds soon dried up the soils and the wheat struggled to finish well. Yields varied greatly depending on where the rain fell.
Sentiment around the community during harvest had been guardedly optimistic, given the rising commodity prices. However, such sentiment is eroding fast. Current cash wheat prices have fallen 87 cents per bushel since June 12, down to $4.61 per bushel on June 27, 2018.
Row crop prices reflects a similar trend. From a high of a $9.67 cash price for beans on May 25, it closed at $8.01 on June 26, a loss of $1.66 per bushel. Meanwhile, corn has declined only 47 cents in that same timeframe. If we multiply these numbers across the entire US agricultural economy, they reflect a huge loss of potential revenue.
Agriculture Secretary Sonny Perdue’s promise, as written in USA Today’s June 25, 2018 op-ed, reflects the administration’s position as trade war rhetoric ratchets up and farm gate prices take a tumble from earlier highs. It also is in response to increasing concern in the country whether the administration will follow through on its promises.
Yet, to date, no mechanism has been activated and no plans are forthcoming which reveals how the administration will compensate farmers for lost revenue, especially if the markets continue to decline or remain where they are.
Perdue suggests they are not revealing their game plan, lest China takes advantage of it. Taken at face value, nothing has changed from the first time the promise was made.
In the meantime, agriculture has become the frontline of a trade war we never wanted and have already drawn first blood as market value of commodities continues its downward slide.
In early 2017, there was hopeful optimism as a newly elected president began his term of office, promising to make America great again. We are well into the second year of President Donald Trump’s term, and the battle has been joined.
There are those who prefer to minimize the political implications of decisions made regarding protectionism, tariffs and trade. However, time will tell, come November and the mid-term elections, whether it truly becomes a political battle.
Penner is a Marion County farmer and past president of the National Association of Wheat Growers. His email is [email protected].