Spring planting is right around the corner for North Dakota farmers – the start of a new season where hope for a successful year begins. This year though, possibly even more than previous years, seems to be fogged over with clouds of anxiety and apprehension as farmers enter the 2019 season with more questions than answers.
Doug Goehring, North Dakota Agriculture Commissioner, says stagnant markets are just one of the many reasons affecting how farmers are perceiving the upcoming year. One big thing that needs to be addressed, according to Goehring, is the ratification of the United States-Mexico-Canada Agreement (USMCA).
“The USMCA has to be ratified this spring to make anything meaningful going forward,” he said. “If we don’t get this ratified, there’s no reason to have a trade agreement with Great Britain, Japan or China. Everybody will just back down because why should they put out the effort if Congress isn’t going to ratify these agreements. So that situation is causing concern.”
Goehring also says the government shutdown at the beginning of the year did no favors for commodity markets.
“It threw the markets into a tizzy,” he said. “We should have been moving up and with the lack of USDA reporting, verifying and confirming of exports and stock/use ratios that depressed markets even more.”
Farmers are anxious and they’re having a tough time deciding what crops to choose for 2019. This year will mark the sixth consecutive year of declining commodity prices, and Goehring says farmers are still seeing no alignment with respect to cost of production.
“Whether it’s seed, land rent or fertilizer, they’re still out of line,” he said. “Farmers know it, but they can’t do anything to really control the cost of seed. For fertilizer they’re really at the whims of what’s happening in the global market.”
With the continued waiting of better prices, farmers are stuck trying to hit a moving target. Some have been looking at strike prices they’d like to contract at, but even those aren’t much help in the grand scheme of things.
“Those aren’t even break-evens, but they’re just the best we could get in the marketplace coming this fall,” said Goehring. “It really weighs on me. People call and voice their concerns. I thought we’d be flooded with a lot of mediation requests. We’ve had some, but I think the market facilitation payments we got this winter helped kick that can down the road a bit.”
Wetland easement and mapping
A big positive development for North Dakota agriculture, according to Goehring, was the work his office did last year with the U.S. Department of the Interior and Secretary Ryan Zinke.
“We identified a couple issues we wanted to see addressed and he stepped up,” said Goehring. “Tens of thousands of fish and wildlife easements exist in North Dakota, and a lot of those have been taken since the 1960s. We asked and worked with him to see if we could get those delineated and mapped out. Instead of fighting the battle on the whole easement issue, we need to delineate what is actually under Game and Fish control. In doing so, we take away the whole argument on the authority and control aspect around moving beyond where those wetlands are. This can help a lot of farmers in a lot of ways. By the end of 2020 we should have everything mapped out.”
Farm Bill legislation was passed the calendar year it expired and Goehring says a lot of good things came out of that.
“In many respects, we got almost $1.8 billion more in this farm bill than the previous,” he said. “That money is going toward research, horticulture and conservation programs. We also now have the ability to go back and forth with ARC and PLC, which before we couldn’t do.”
Goehring also noted positive direction in terms of loan rates going up, with soybeans going from $5-$6.20, corn from $1.95-$2.20, wheat from $2.94-$3.38.
Palmer amaranth is the new addition to the state’s list of noxious weeds and it’s definitely on farmer’s minds heading into spring planting.
“It’s every much as invasive as we’ve heard from other states,” he said. “We’ve found it in five counties so far and going forward producers are feeling a bit anxious about it. The presence of Palmer amaranth in our state also lends ourselves to thinking about better weed management strategies moving forward – both pre-plant and pre-emerge, not just post applications.”
The new ‘normal’
With markets remaining stagnant and prices continuing to trend downward each passing year, many producers find themselves asking, “When will prices rebound, or is this the new normal?”
“Everybody hangs onto hope,” said Goehring. “Right now, some things have been set in motion to help get out of this new ‘normal.’ Looking at what’s happening in the global market there’s some hope in the value of the dollar coming down. We’re trying to get some issues addressed with tariffs and non-technical trade barriers out there.
“It appears Australia is suffering some inclement weather, which could keep some wheat production down this year in the global market. Brazil is dealing with extreme temperatures and a lack of moisture, which has the potential to move the markets some. We may get some things resolved with China to put them back in the market. Their presence in the market really helps the Northern Plains because that’s really our route,” he added.
Moving forward this spring, Goehring will be looking toward the planting intentions to see which way farmers are leaning.
“Eventually the market starts to bid, and every year it starts to bid a bit earlier it seems. We may be looking at more of a March timeline when bidding for those acres actually happens. It depends on winterkill for winter wheat, what’s happening in the Southern Hemisphere and what type of exports we see here in the next 60 days. Those factors will start to drive what the acres are going to be across the United States and here in North Dakota,” Goehring concluded.