Members of the agriculture community have started speculating on members of president-elect Joe Biden's administration.
Ag Policy Professor Ian Sheldon at Ohio State University recently said he expects changes under a new administration, most of them related to trade. Sheldon said he believes there'll be a more targeted use of tariffs with specific focus where there is a violation of trade rules. He also said he expects a Biden administration to push for a coalition with trade partners Japan and the European Union to set rules and to address intellectual property practices, as well as forced technology transfers by China.
Nebraska Farmers Union President John Hansen said he doesn't expect the next administration to augment farm income the way the Trump administration has. During President Donald Trump's time in office, the U.S. Department of Agriculture has dealt $94 billion to agriculture, far more than the baseline $6 billion per year established by the Farm Bill. Hansen said those numbers are sobering because of its use of taxpayer money, and while helpful, it hasn't offset lost income.
“When you lose a dollar and get 70 cents replaced that's good, but you're still 30 cents short,” Hansen said. “That kind of math has me really worried where we're at.”
He said the Farm Bill, as it is, isn't getting famers where they should be and it's broken. He also said grain and meat processors are capitalizing on profits by making raw materials below cost of production.
He also said the amount of support the agriculture community has received from Congress is not sustainable.
The Trump administration implemented the USMCA to replace NAFTA. This updated trade agreement between Mexico, Canada and the United States modernized relations with more outlined items regarding technology that wasn't addressed in the 30-year old NAFTA. Hansen said the new agreement updated technology and made improvements in dispute resolution but did little else to help producers.
What that means for a Biden administration, however, is unknown. Hansen said the United States has to rebound from its lack of country-of-origin labeling.
“Let's revisit this – how the United States lost its own ability to identify and differentiate made in America food products from outside competition,” he said. “If you can't identify your own product in your own market, how do you expect to get more value out of it?”
Hansen said farmers, especially those in Nebraska, have worked to feed American consumers and have done so under the cost of production. The price of corn has risen a dollar per bushel, but that came as a result of the Iowa derecho that wiped out a massive amount of corn and not from trade policy.
From the Farmers Union perspective, agriculture is in a vulnerable position going into a new administration. There's been refinancing and loss of equity. Debt-to-asset ratio has gotten worse, Hansen said.
“There are some warning clouds on the horizon from the way we see things in terms of trade policy, farm policy, market concentration, all those things,” he said.
Ending small refinery exemptions for ethanol, Hansen said, would be a valuable move from the new administration. It would be as valuable pushing deployment of E15, Hansen said. That's something President Trump said would happen during his time in office but has not yet.
Hansen said a promising start for the new administration has been its support of climate change and renewable energy. Those are important issues to farmers. He's told people that if they grabbed the weather each day through their careers and put it in a 30-gallon barrel, then lifted the lid at the end they wouldn't have much weather because it's all turned to climate.
“We have an administration that is going to make climate change mitigation a very important part of their administration as opposed to an administration that did everything they could possibly do to ignore it,” he said. “That's a big deal.”
