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What's on the Political Horizon for the Ag Industry?

Glenn Wachtler
Grain, Dairy, Swine, Beef, Young, Beginning Farmers, Specialty Industries, Legislative Affairs

After several years of seeing their net income decline, agriculture producers have intensively been studying their bottom line in order to find ways to cut expenses or to generate additional farm income. In 2018, I would also encourage you to take a broader look at the political issues that will affect your farm and to become involved in the political process.

A new farm bill will be debated in 2018, and U.S Agriculture Secretary Perdue will be charged with presenting a bill to Congress that provides an effective safety net for our Country’s Agriculture producers. Dairy producers who are facing severely low prices have found little practical support in the current farm bill from the margin protection program, also known as the MPP. While crop producers worry the Agriculture Risk Coverage (ARC) county based program will lose its effectiveness because persistently low prices have decreased the average price of commodities covered by the program. Many producers and Agri-businesses are hoping for changes to these programs in order to avoid a large number of producers exiting the business at once. Secretary Perdue believes risk management based principles will be one of the keys in providing a solution.

The North American Free Trade Agreement (NAFTA) continues its’ renegotiations in 2018. Canada and Mexico are two of our largest Agricultural trading partners. Mexico is currently our number one destination for exported corn, demonstrating how the outcome of NAFTA has the potential to greatly affect our industry either positively or negatively in the near future. 

The renewable fuels standard has consistently been challenged by special interests and congress members from large oil producing states. On a current annual basis, over 5 billion bushels of corn are used in ethanol production, meaning that changes to RFS would have the potential to impact many of those living in rural America. Ethanol has become a consistent oxygenate that has an added benefit of increasing our Ag exports in this country.

The President announced that he would like to fund infrastructure projects in the US, contingent on Congress passing a new bill. Funding the proposed upgrades to the lock and dam on the Mississippi and Illinois Rivers would boost our Country’s long term competitiveness as a corn and soybean exporter. The current aged lock and dam system is a prime example of infrastructure that desperately needs to be replaced and could be funded with the new bill.

In addition, the Ag industry is in need of immigration reform. Uncertainty in regard to immigration reform makes it difficult for Ag producers and many of their employees to plan for the future. Labor uncertainty exposes an increased risk to many Ag operations.

It should come as no surprise that Ag producers want a healthy environment and clean water. Farmers understand that their quality of life and the value of their investments increase as the environment improves. It also of the upmost importance to them that they raise happy and healthy animals. Making investments in new production techniques and implementing new technologies requires financial commitments that can become extremely challenging when facing a competitive commodity producing industry. The environmental consciousness of the public and the farmer has surged in recent years and the rapid changes that are desired require additional support and financial commitment to keep up with the pace of the expected changes.
As we forge ahead into another year of tight commodity margins and potentially low incomes, it can be easy to forget about the large issues on the horizon that will affect our investments in our farms. I urge you to make the effort to be informed and involved in the political process that shapes our future. You have the power to make an impact in the creation of laws that could directly impact the future of your operation. I encourage you to reach out to your representatives in congress to voice your concerns. By hearing the stories from us directly impacted by the Agriculture industry, they can make better and more informed decisions.

Glenn Wachtler is a Financial Officer at Compeer Financial. For more industry insights from Glenn and the rest of the Compeer Team, visit
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