Local Grains

Last Updated Jun 17, 2019 8:01 AM*
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Pro Coop, Terril - 1 -.25 -.43
Lakota Ethanol - GPRE, Superior -.13 -.32
CFE, Ocheyedan - Old 1 -.11 -.34
Stateline Co-op, Halfa -.07 -.36
Poet Bio Refining, Emmetsburg -.25 -.33
Max Yield, Mallard -.29 -.44
Max Yield, Fostoria -.28 -.44
Max Yield, Kerber -.20 -.30
Ag Partners, Fonda -.25 -.38
Ag Partners, Hartley -.10 -.35

Soybeans Old Crop New Crop
Pro Coop, Terril - 1 -.80 -.90
Meadowland Co-op, Lamberton,MN -.75 -.90
CHS, Fairmont -.48 -.67
CFE, Ocheyedan - Old 1 -.79 -.96
First Co-op, Laurens -.81 -.90
Max Yield, Fostoria -.83 -.94
Max Yield, Mallard -.82 -.94
Ag Partners, Emmetsburg -.79 -.95
Ag Partners, Hartley -.83 -.91
WFS Co-op, Dolliver -.76 -.90

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*This information was current as of this date. We believe it to be accurate but assume no responsibility.

Commodity Headlines

Disaster Aid Package Approved

June 4, 2019 1:04 PM

Source:  proag

Iowa Governor Says Disaster Funding is Critical to Flood Recovery Efforts

A tractor remains flooded along the Missouri River just north of Hamburg, Iowa. The town has been battling floods for more than two months and water began rising again last week on the river, halting some recovery efforts. (DTN photo by Chris Clayton)

Iowa Gov. Kim Reynolds toured flooded areas of the southwest corner of her state on Monday, making a point that she was waiting to hear if and when Congress would give final approval for a disaster-aid package.

The House of Representatives voted 354-58 late Monday to approve the long-awaited $19.1 billion disaster aid package that will address not only Midwest flooding, but also aid recovery from hurricanes in the Southeastern states last year as well as the California wildfires. The bill now goes to President Donald Trump, who is expected to sign it.

The bill specifically includes just over $3 billion to pay for farmer losses from disasters that occurred in 2018 and 2019. The bill will help pay for farmers who lost stored grain this spring during flooding, and also includes a provision that raises prevented-planting coverage up to 90% of potential losses.

“We had run into a dead-end to help our farmers who had a tremendous amount of grain stored and the impact that had on our economy and to our farmers and their ability to come back,” Reynolds said. “The fact that we got that language in there was instrumental.”

The vote comes as the Missouri River again is rising because of continual rain throughout the basin. The state of Missouri has shut down more than 400 roads because of flooding on both the Missouri and Mississippi rivers. The Arkansas River is also inundating farm ground in Oklahoma and Arkansas, and locks and dams on the Mississippi River remain shut down as the Corps of Engineers looks for ways to relieve pressure on the system.

Flooding in southwest Iowa had receded to a point that state bridges across the Missouri River had reopened, as well as Interstate 29 to Missouri. But constant rainfall and an increase in water flows on the river had re-flooded much of the river bottom. Reynolds was surprised how much the water had again risen.

“I just wasn’t prepared to see what looks like a lake out the window,” the governor said. “I was taken aback by the amount of the water.”

The prevented-planting language in the bill could prove significant this year as USDA’s Crop Progress report this week highlighted just 67% of expected corn acres are planted as of June 2, as most states now are in the late-planting stage for crop insurance on corn. Soybean planting was estimated at 39% as well, and several states will approach the late-planting stage for soybeans within the next week.

Farmers are pushing into late season to get a crop in as USDA officials have indicated the next round of trade-aid payments will be tied to planted acres. Last week, Agriculture Secretary Sonny Perdue indicated USDA may change that requirement, but no announcement has been made. The American Farm Bureau Federation is among the groups urging USDA to alter the way it sets the assistance payments.

Leo Ettleman, a farmer in Fremont County, Iowa, was among a handful of farmers who met with the governor in Hamburg as Reynolds got an update on the situation there. Ettleman said passing the disaster package was significant, especially with provisions aiding farmers and funding the Corps of Engineers for recovery efforts.

“To get money for that 2018 grain out there that was damaged is encouraging, as well as the prevent-plant changes, as long as it stays for the disaster counties — presidentially declared disaster areas,” Ettleman said. “There’s a lot of prevent-plant across the entire Corn Belt. We feel we have priority where it is presidentially declared.”

Going forward, Reynolds said work will be needed to look at crop insurance for farmers impacted by the flood to mitigate potential rate hikes they could face next year. She said, ideally, a change should be made to limit rate hikes in counties declared presidential disaster areas. “With what we’re dealing with the prices of commodities and the agricultural economy overall, if they double or triple the costs of the insurance, they just don’t have the resources to do that.”

Reynolds, along with the governors of Nebraska, Kansas and Missouri, have been meeting more frequently with the Army Corps of Engineers to look for different management strategies for the Missouri River. R.D. James, assistant secretary of the Army for Civil Works, met with the four governors last week.

“It’s effective that we have four governors to hold them accountable,” Reynolds said. “The best thing we can do is have the four of us committed to saying we need the flexibility, we need to do things differently, we need to get back to talking about people and property, and we need to really talk about the flow of the river and the command of the river.”

Reynolds said one of the frustrations is that the Corps is often regimented in what it does. She credited the Corps for considering some flexibility in river management. The governor also noted the pressure the flooding and re-flooding has put on the state’s roads as highways were repaired only to again flood out.

“We can’t keep putting the funding into our transportation system,” Reynolds said.

Several other USDA programs get specific funding under the disaster bill to help farmers, ranchers and forests recover from disasters. The Emergency Conservation Program receives $558 million and the Emergency Watershed Protection Program receives $435 million.

The bill also provided $600 million more supplemental disaster nutrition aid for Puerto Rico.

For communities affected by disasters, the bill includes $600 million for the Economic Development Administration to provide development grants.

For the Army Corps of Engineers, the bill includes under multiple accounts, just under $2.5 billion total for various flood and hurricane controls, including repairs and emergency operations, as well maintenance and natural disaster repairs.

Source: Chris Clayton, DTN

Prevented Planting Decision for Corn in the Midwest

May 20, 2019 8:48 AM

Source:  Farmdoc Daily

Gary Schnitkey, Krista Swanson, Ryan Batts

Department of Agricultural and Consumer Economics

University of Illinois

Carl Zulauf

Department of Agricultural, Environmental and Development Economics

Ohio State University

May 14, 2019

farmdoc daily (9):88

Recommended citation format: Schnitkey, G., C. Zulauf, K. Swanson and R. Batts. "Prevented Planting Decision for Corn in the Midwest." farmdoc daily (9):88,Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 14, 2019.Permalink

Continued wet weather and saturated soils over much of the Midwest suggests that many farmers will be facing decisions on whether to take prevented planting.  Prevented planting is available for those individuals purchasing the Common Crop Insurance (COMBO) product. Once the final planting date has arrived, the farmer can choose to take a prevented planting payment, plant corn, or plant soybeans or another crop. A cover crop can be planted on prevented planting farmland, but there are restrictions on haying and grazing the cover crop. In many cases, taking the prevented planting payments will have higher expected returns than planting.  However, market and policy dynamics this year make forming expectation on alternatives very difficult.   This article discusses considerations in making these decisions.

Need to Contact Crop Insurance Agents

Farmers who are considering taking prevented planting payments need to contact their crop insurance agents.  Eligibility and reporting requirements are key to assuring that a prevented planting payments can be received.  Moreover, for farmers electing prevented planting payments, the payments will be significant sources of farm income this year.  As a result, getting the details wrong can have large impacts on financial positions of farms.

Eligibility for Prevented Planting Payments.

Prevented planting payments are eligible on plans in the Common Crop insurance (COMBO) policy.  These plans include Revenue Protection (RP), RP with the harvest price option, and Yield Protection.

For corn, the full prevented planting payments will be 55% of the guarantee. A buy-up option to 60% was available at crop insurance signup.  Take, as an example, an RP policy at an 85% coverage level and a 200 Trend-Adjusted Actual Production History (TA-APH) yield for corn.  The projected price for corn in 2019 is $4.00 per bushel.  In this case, the prevented planting payment in is $374 per acre (55% prevented planting payment times 85% coverage level times 200 TA-APH yields times $4.00 projected price). Lower RP coverage levels will have lower prevented planting payments.

Note also that the harvest price does not enter into prevented planting payments.  Prevented planting payments will not increase if the harvest price is above the projected price, even on RP policies.

Some farmers purchased the Supplemental Coverage Option (SCO) this year.  Prevented planting payments are not made on SCO coverage, only on the underlying COMBO product.

Prevented planting payments are not available on Area Risk Protection Insurance (ARPI) policies or Margin Protection.

Linkages between Commodity Title Programs and Market Facilitation Program Payments

Receiving prevented planting payments will not influence Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) payments.

However, taking prevented planting claims could influence payments from a 2019 successor to the 2018 Market Facilitation Program (MFP). In 2018, the MFP resulted from President Trump Administration’s desire to compensate farmers for losses due to trade disputes. Payments were $1.65 per bushel for soybeans and $.01 per bushel for corn on 2018 production.  If prevented planting is taken, no bushels will be produced and any future MFP-like payments paid by bushel produced will not occur. If the program is repeated, 2019 MFP payment levels could be different than in 2018. The program could have a different structure. Press articles suggest that aid will be forthcoming to farmers, although no plans for distribution have been released at this time (see Reuters).

Acres Eligible for Prevented Planting

Each insurable unit will have different acres eligible for prevented planting.  Knowing how many acres are eligible is key to not being surprised when making prevented planting decisions.  Crop insurance agents can aid in determining acres eligible for prevented planting payments.

As a general guideline, the maximum acres eligible for prevented planting payments equal the maximum acres of corn planted in the last four years in that insurable unit, adjusted for acreage increases, less corn acres planted in 2019.  Other planting requirements come into play as well.

As a simple example, take a 100-acre insurance unit that has remained the same size in the last four years. If the maximum number of acres in corn in one of the four years is 75 acres, then 75 acres is the maximum number of acres on which prevented planting of corn can be taken.  If this farm gets 50 acres of corn planted, then only 25 acres are eligible for a prevented planting payment on corn.

Farmer-paid Premium and Enterprise Units

Enterprise units have significantly lower premiums than basic or optional units. To be eligible for an enterprise unit, a farmer must plant the lower of 20 acres or 20 percent of planted acres in at least two sections. Note that the requirement is based on planted acres.  Prevented planted acres do not enter into the calculations. If no planting occurs, the farm will receive prevented planting payments, but will not be eligible for the lower enterprise unit premiums.

APH Yields

Generally, prevented planting will not impact the APH yield in future years unless a second crop is planted on prevented planting acres.

Take as an example an insurable unit that has 500 acres and 400 acres are planted to corn. Prevented planting payments are taken on 100 acres and a second crop is not planted on those 100 acres. In this case, the yield used in calculating the APH for this insurable unit will be based on production from the 400 planted acres divided by 400 planted acres.

Decisions Following the Final Planting Date for Crop Insurance Purposes

For crop insurance purposes, the final planting date for a crop is key.  After the final planting data has arrived, a prevented planting payment can be taken.  There also is a late planting period which varies by state and crop and is 20 days after the final planting date for corn in Illinois.  Planting of corn after the final planting date can still occur, but the insurance guarantee is reduced 1% for each day the crop is planted after the final planting date.  After the 20 day late planting period, the guarantee will be 60% of the original guarantee.

Final planting dates for corn in most Midwest states will arrive soon. It is May 25 for much of the Great Plain states, upper Minnesota, and upper Wisconsin; May 31 for southern Minnesota, southeast North Dakota, southeast South Dakota, most of Wisconsin, Iowa, northeast Missouri, extreme southern Illinois, and Kentucky; and June 5 for most of Illinois, Indiana, Ohio, and Michigan. A map showing these dates is available in the May 7 farmdoc daily article.

Once the final planting date arrives, a farmer with a COMBO product has four options:

  1. Take a prevented planting payment and not plant a crop to be harvested or grazed.
  • The prevented planting payment equals 55% of the guarantee unless an additional 5% buy-up to 60% was purchased. Take a Revenue Protection (RP) policy at an 85% coverage level and a 200 bushel per acre Trend-Adjusted Actual Production History (TA-APH) yield. Given a 55% prevented planting payment factor, the prevented planting payment is $374 per acre (55% payment factor x 85% coverage level x 200 TA-APH yield x $4.00 projected price).
  • APH yield is not impacted. If all acres in the insurable unit are not planted, the 10-year history will not change between 2019 and 2020. If some acres are planted, the average yield on planted acres will enter the APH history.
  • Full prevented planting payment for an insurable unit requires no field crop is harvested in 2019 on prevented planting acres on that insurable unit.
  • A cover crop can be planted and full prevented planting payment received if the cover crop is not hayed or grazed before November 1.
  • The full farmer-paid premium for corn must be paid on the prevented planting acres. Note that farmer-paid premium may be higher if the enterprise unit requirements are not met (see above discussion).
  1. Plant corn.
  • No prevented planting payment will be received.
  • Acres will be insured but the guarantee will decrease throughout the late planting period. Again, take an RP policy with an 85% coverage level, a $4.00 projected price, and a 200 TA-APH yield. Before the final insurance planting date, the minimum revenue guarantee is $680 per acre. This guarantee will be reduced by 1% for each day after the final insurance planting date. The guarantee will be $673 per acre one day after the final planting date, $666 per acre two days after the final planted date, and so on. After 25 days, the guarantee is fixed at 60% of the original amount, or $408 per acre (60% times $680).
  • In most cases, the 2019 yield will enter the APH history and impact future APH yields on acres planted to corn. The only exception would be if Yield Exclusion is declared for a county, allowing the yield for that year to be not included in APH histories.
  • The farmer must pay all of the farmer-share of premium on corn.
  1. Plant another crop. A farmer can plant another crop on acres intended to be corn. In most of the Midwest, this crop will be soybeans.
  • No prevented planting payment is received.
  • If the farmer signed up for crop insurance on the planted crop for the insurable unit, the acres will be covered by that policy. The insurance guarantee is not reduced until that crop’s final insurance planting date is reached. For soybeans, this date ranges from June 10 to June 30 in Midwest states (see farmdoc daily, May 7, 2019 for maps of final planting dates). If the crop that is planted was not signed up for insurance on that insurable unit, crop insurance cannot be purchased as the final sales date has passed.
  1. Take 35% of the corn prevented planting payment and plant another crop for harvest after the late planting period.
    1. In this option, the corn prevented planting payment equals 35% of the full prevented planting payment. In double-crop situations, obtaining the full prevented planting payment while planting double-crop soybeans is possible.
    2. The crop must be planted after the late planting period for corn.  This date will be in late June. Key management questions are whether an adequate stand will occur and whether an early frost will reduce yield.

The following discussion will focus on options 1 through 3.  Option 4 will be dealt with in a farmdoc daily article after the final plant date has occurred.  Option 1 is a precursor of option 4.  It is unlikely that option 4 will have a higher expected return than option 1.

Calculating Expected Returns from the Three Options

Calculations will be illustrated for a farm in Champaign County, Illinois that has chosen an RP policy at an 85% coverage level.  For Champaign County, the final planting date for corn is June 5 and for soybeans is June 20. The RP policy for corn has a 200 TA-APH yields and a 55% prevented planting payment factor applies for corn. Note that the tool gives the prevented planting payment for both corn and soybeans (see Figure 1).

Prevented Planting Payment on Corn: The prevented planting payment for corn will be $374 per acre. There will be costs associated with this alternative. We built in $25 per acre of weed control costs, which could include planting a cover crop. An $18 crop insurance premium also is included. Net returns from taking prevented planting are $341 per acre. Note that land and other costs are not included in the $341 value as they will not vary for the three options. The $341 per acre is not the net income from an acre under prevented planting.  In most cases, net income after considering overhead and land costs will be negative.

Plant Corn: Planting in this example is assumed to take place on June 6. On this date, planting will result in a slight reduction in the crop insurance guarantee to $673 per acre.  Those reductions will increase the later planting occurs during the late planting period.

In our example, the expected yield is 171 bushel per acre, as is estimated using parameters in the Prevented Planting Module. Users can override expected yields produced by the model. The expected insurance harvest price is $3.70 and the estimated harvest cash price is $3.40 in this example, close to the central Illinois market in mid-May. Given the 171 yield and $3.40 cash price, crop revenue is expected to be $581 per acre. Revenue includes a crop insurance payment of $41 per acre, bringing total estimated revenue to $622 per acre.

The example assumes that there are $469 per acre in “costs yet to be incurred”.  These are costs that can be avoided if corn is not planted, but will be incurred if corn is planted and harvested. The example shown in Figure 1 assumes that all fieldwork and all inputs still need to be applied, as is the case on many farms as a wet fall precluded much field work.  Several items to note:

  • Fertilizer costs are $145 per acre and include nitrogen, phosphorus, and potash.  If nitrogen fertilizer has already been applied, then it should not be included in costs as it has already been incurred and cannot be avoided by not planting.
  • Drying costs are at $18 per acre.  Late planted corn likely will have a higher moisture level at harvest, resulting in a higher drying charge.  Harvesting corn in the high 20 percent moisture levels could result in much higher drying charges, perhaps near $50 per acre.
  • Field operations are charged at estimates of total machinery costs. Some reduction for planting and fieldwork may be warranted, but this will change results very little.

Net revenue from planting corn is $153 per acre. This is substantially lower than the $341 per acre net revenue from taking the prevented planting payment assuming no fieldwork is done and no input have been used and that all inputs are refundable.  Again, both figures are prior to land costs and therefore not equivalent to net income.

Plant Soybeans: Soybeans planted on June 6 are estimated to have a 59 bushel yield. The harvest insurance price is $8.30 and expected cash price at harvest is $8.00. Costs to be incurred for soybeans are $256 per acre.

Net returns from planting soybeans are $219 per acre. Planting soybeans has higher returns than planting corn, but still notably less than taking the prevented planting payments for corn.

Planting Corn versus Taking a Prevented Planting Payment

For this example, expectations are that net returns from taking corn prevented planting  exceeds returns from planting either corn or soybeans. Obviously, realized prices and yields will impact returns. The Planting Decision Model prepares a table giving net returns for corn under different prices and yields. These net returns include both revenue from crop sales as well as crop insurance payments (see Table 1).  Net returns above that from taking the corn prevented planting payment are highlighted in red. Note that net returns from prevented planting are above net returns from corn planting except when prices exceed $4.25 or yields are above 200 bushels per acre. Even at 210 bushels per acre, corn price needs to be above $4.00 before planting corn has higher net returns than taking prevented planting payments.

The example in Figure 1 and Table 1 uses an 85% coverage level.  Lower coverage levels will have lower prevented planting payments and net returns:

80% coverage level:  $352 prevented planting payment and $309 net return

75% coverage level: $330 prevented planting payment and $287 net return

70% coverage level: $308 prevented planting payment and $265 net return

As net returns are lowered, planting corn will become a more attractive alternative, but, even at a 70% coverage level, expected net returns from taking prevented planting payments exceed that from planting corn.

Two other considerations in the decision to plant corn or take the prevented planting payment:

  • Planting corn has the potential to lower APH yield in the future.
  • There is a possibility of MFP-like payments on corn that are higher than the $.01 level in 2018.  Higher MFP payments could increase revenue from planting corn.

Switching to Soybeans versus Taking a Prevented Planting Payment

Soybean net returns are $219 per acre, higher than corn’s net return of $153 per acre, but still below the $331 per acre net return from taking the prevented planting payment.  Those net returns suggest taking the corn prevented planting payment has the highest expected return.  Planting soybeans have the same considerations as planting corn, but three seem critical:

  • Net returns are based on a 59 bushel per acre yield.  This yield may be high given the late planting.
  • An MFP payment in 2019 similar to the 2018 payment would change returns.  Adding a $1.65 per bushel MFP to the example in Table 1 would increase returns to $314 per acre, coming close to the $331 per acre net return on taking the prevented planting payment on corn.
  • A low yield in 2019 will lower APH yields in future years.

Market and Policy Dynamics

Uncertainty about market and policy dynamics cause prevented planting decisions to be more difficult this year than is typical.  Items contributing to these uncertainties include:

  • The trade war with China leads to uncertainty about the level of soybean exports from the United States.
  • The presence of African Swine Fever in southeast Asia further reinforces the potential for lower export demand for soybeans.
  • The likely existence of a successor to the Market Facilitation Program in 2019 could influence market dynamics. Press reports suggest that President Trump’s administration is considering about $15 billion in aid to American farmers, more than occurred in 2018.  If this aid is tied to production as the 2018 MFP payments were, decisions related to prevented planting will impact MFP-like returns, potentially changing decisions of farmers.
  • The late planting contributes to uncertainty about acreages that will be planted and yields that will be harvested in the U.S.

In a late planting year, the expected dynamics are for corn acres to decrease and soybean acres to increase, leading to upward pressures on corn prices and lower soybean prices.  Offsetting these movements would be MFP payments at 2018 levels: $.01 per bushel for corn and $1.65 per bushel for soybeans.  The level of MFP payments in 2019 could offset the current lower soybean prices.  How this will impact planting decisions and resulting market conditions is difficult to predict.

At this point, market dynamics in corn and soybean markets are being influenced by elements not seen in the past, causing difficult projections to be even more uncertain.


Prevented planting decisions are always difficult, but market and policy dynamics make 2019 decisions even more difficult.  Given no MFP-like payments, our analysis suggests that prevented planting has the highest expected return relative to planting corn or planting soybeans.  An individual’s situation will matter.  In particular, planting may be more economical if some of the inputs, especially fertilizer on corn, have already been applied.

An individual’s expectation on another round of aid similar to last year’s MFP payments also will influence planting decisions.  Press reports suggest that aid is being considered and that aid will be larger than last year.  If this aid is targeted to 2019 production, incentives will be reduced to take prevented planting payments.

The above analysis is for a central Illinois farm situation.  Expected returns from the alternatives will vary across regions.  Farmers should conduct their own analysis. Still, the considerations and dynamics presented in this paper will apply to all farmers in the Midwest facing late planting decisions.

Market and policy conditions are very fluid this year. This article contains the best information available as of this date, but conditions may change.  Farmers should check with crop insurance agents when making prevented planting decisions.


Farmdoc FAST tools: Planting Decision Model, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Updated May 8, 2019https://farmdoc.illinois.edu/fast-tools/planting-decision-model

Mason, Jeff. “Trump says U.S. farmers to get $15 billion in aid amid China trade war.” Reuters, Business News, May 13, 2019. https://www.reuters.com/article/us-usa-trade-china-agriculture/trump-says-u-s-farmers-to-get-15-billion-in-aid-amid-china-trade-spat-idUSKCN1SJ22Z

Schnitkey, G. and C. Zulauf. "Late Planting Decisions in 2019." farmdoc daily (9):83, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 7, 2019.

New Trump aid plan for U.S. farmers seen mirroring 2018 package

May 17, 2019 9:14 AM

Source: Reuters

WASHINGTON (Reuters) - The Trump administration’s second package of aid for U.S. farmers hit by the trade war with China is expected to total $15 billion to $20 billion and involve direct payments, the agriculture secretary said on Wednesday.

The U.S. Department of Agriculture is still finalizing the plan, which is likely to prioritize hog and soybean farmers, the products most affected by the trade dispute between China and the United States, Agriculture Secretary Sonny Perdue and industry sources briefed on the plan said.

The world’s two largest economies have been embroiled in a 10-month trade war that has cost billions, roiled global supply chains and rattled financial markets. American farmers, who helped carry President Donald Trump to his surprise 2016 election win, have been among the hardest hit.

“Currently we are working out the details of the source of the funds which we assume will be similar to ... last year with the Commodity Credit Corporation,” Perdue told reporters on a conference call, referring to a Depression-era program created to support farm income. Funds from the Corporation do not need to be approved by Congress.

The USDA in 2018 pledged up to $12 billion in aid to farmers to help offset their crop losses and has to date allocated a total of around $9.4 billion, with $8.52 billion of that as direct payments to farmers.

Farmers have complained about the slow pace of payouts from the previous package and the deadline for applications for payments was extended last month to May 17.

The United States hiked tariffs on $200 billion worth of Chinese goods last Friday, escalating the trade dispute as the latest round of talks in Washington to resolve it ended with no progress. Beijing responded with retaliatory tariffs, and the escalation may not be over.

Earlier this week soybean prices fell to their lowest in a decade, while benchmark cotton futures dropped to a three-year low.

“This package seems to be driven much more by what’s going in with China,” a source briefed on the package said. “Therefore you might see the payment rates or the percentage rate that each commodity could get quite a bit different,” he said.

Economists flee Agriculture Dept. after feeling punished under Trump

May 8, 2019 11:45 AM

Source:  politico.com
Reports showing farmers hurt by the president’s policies have drawn the ire of top officials.


05/07/2019 05:03 AM EDT

Economists in the Agriculture Department's research branch say the Trump administration is retaliating against them for publishing reports that shed negative light on White House policies, spurring an exodus that included six of them quitting the department on a single day in late April.

The Economic Research Service — a source of closely read reports on farm income and other topics that can shape federal policy, planting decisions and commodity markets — has run afoul of Agriculture Secretary Sonny Perdue with its findings on how farmers have been financially harmed by President Donald Trump's trade feuds, the Republican tax code rewrite and other sensitive issues, according to current and former agency employees.

The reports highlight the continued decline under Trump’s watch in farm income, which has dropped about 50 percent since 2013. Rural voters were a crucial source of support for Trump in 2016, and analysts say even a small retreat in 2020 could jeopardize the president’s standing in several battleground states.

“The administration didn’t appreciate some of our findings, so this is retaliation to harm the agency and send a message,” said one current ERS employee, who asked not to be named to avoid retribution.

For example, two ERS researchers presented a paper at an economic conference in early 2018 that indicated the GOP tax overhaul would largely benefit the wealthiest farmers — generating negative press coverage that staff members said irked senior officials at USDA.

Then, in August, Perdue stunned members of the roughly 300-member research service by announcing plans to bring ERS under the control of USDA’s chief economist, who reports more directly to the secretary. Equally significant, he said the USDA would move the agency out of Washington to a location closer to the U.S. heartland.

Members of the agency were also caught off-guard last summer when Perdue’s office issued an internal memo directing ERS and other research branches to include disclaimers in their peer-reviewed publications stating that the findings were “preliminary” and “should not be construed to represent any agency determination or policy” — seen as a way of watering down any unflattering data from the department’s own experts.

The move to uproot the agency has led to a brain-drain of experienced researchers. So far in fiscal 2019, non-retirement departures from the agency have more than doubled on an annualized basis compared to the previous three-year average, according to data collected by employees.

Six of the economists — made up of specialists in the agricultural economy, farm taxation and food programs with more than 50 years of combined experience at ERS — left the agency at the end of April, out of frustration with the relocation process or in some cases suspicion about Perdue’s efforts to reshape USDA’s research wing, according to coworkers. More are planning to leave in the coming months.

For his part, Perdue has said the relocation was motivated by his desire to save taxpayer dollars, bring the research service closer to major farming regions, and help attract economists who could be deterred by Washington’s high cost of living.

“I really have been a little surprised with the naysayers on this,” he said last month at a Senate Appropriations hearing, touting the move as a common-sense, cost-cutting measure.

Perdue’s office declined to provide information on the numbers of employees who’ve quit or respond to allegations of political interference in the research service.

But the secretary alluded to frustrations with the quality of USDA research in comments to POLITICO on April 30, saying that all decision-making in the department must be “fact-based.”

“In USDA, we want good scientific discovery,” Perdue said, when asked about the mandated research-disclosure language. “We want peer-based evidence there. We know that research, some has been found in the past to not have been adequately peer-reviewed in a way that created wrong information, and we’re very serious when we say we’re fact-based, data-driven decision makers. That relies on sound, replicatable science rather than opinion. What I see unfortunately happening many times is that we tried to make policy decisions based on political science rather than on sound science.”

Perdue and Trump made clear in their budget request in March that they wanted to reduce the scope of the ERS, eliminating “low priority research” into such politically sensitive areas as food stamps and environmental issues.

The White House blueprint called for slashing ERS staff levels by more than 50 percent, cutting the total number of positions from about 329 to 160.

The budget is unlikely to be approved by Congress, but members of the service say they’ve already seen the effects of Trump’s and Perdue’s preferences.

“Things like conservation, rural development, food assistance, have just been de-emphasized” in favor of the administration’s preferred topics, said one economist who left ERS because of the relocation plan.

Former ERS Administrator Susan Offutt, who oversaw the service under Presidents Bill Clinton and George W. Bush, said the agency’s studies showing how USDA’s farm-subsidy programs disproportionately benefit wealthier farmers have been a “perennial irritant” to influential lobbying groups, but an “over-the-top reaction” to clamp down on such reports would be unprecedented.

“Of course, this is not the story the farm lobby wants to tell about struggling farmers,” said Offutt. “Controlling ERS would stop unflattering news about federal farm subsidies favoring high-income, high-wealth farm households from reaching the public.”

Lawmakers have complained that USDA has yet to provide a full cost-benefit analysis of its plan to move the office closer to the heartland. Republicans have increasingly supported the relocation plan, while House Democrats have filed legislation to block the move.

On Friday, the USDA announced three finalists for the new headquarters of the service and the National Institute of Food and Agriculture, which is also being moved out of Washington. The finalists are Kansas City, the North Carolina research triangle region and multiple locations in Indiana.

Perdue’s office has promised to release further data justifying the move when he announces a final site recommendation this month.

Within the service, skeptical employees view the secretary’s rationale for the move and the months-long site selection process carried out by accounting firm Ernst & Young as a smokescreen.

“The message we’ve been getting is, ‘The cost-benefit analysis doesn’t matter. Being close to stakeholders doesn’t matter. The only thing that matters for you is the fact that the secretary wants you to move, thinks it’s in your best interest, and that’s what we’re doing,’” said another senior ERS economist who declined to use his name for fear of retaliation.

Brian Stacy, a former ERS economist who left in February, said he thinks the move is a way for the administration to force out staff members and reduce the size of the ERS without congressional approval.

“Part of me wonders whether this relocation is just a way to get at that staff reduction,” Stacy said, referring to the president’s budget request. “I don’t know how else to read some of the moves being made.”

ERS employees are planning to vote on unionization on Thursday.

USDA intends to keep 76 ERS employees in Washington and relocate 253 positions to the new location, USDA senior adviser Kristi Boswell told a House Appropriations panel in March.

“This is the spiraling down of the fantastic work that the ERS has done for years,” said Sonny Ramaswamy, who headed the National Institute of Food and Agriculture under the Obama and early Trump administrations. “It’s one way to drain the swamp, as it were.”