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South Dakota Ag Community: Stability is Crucial as we do our Part to Feed and Fuel the World

In South Dakota and across the Midwest, harvest time is nearly upon us. Farmers are preparing to market their crop, and for many of them prices remain low. Low commodity prices and trade instability are having an impact on the ag industry in our state. Livestock producers are feeling the impact of tariffs as they work to market their products. To hear more about the issues farmers and ranchers are facing right now, I recently held an ag roundtable in Sioux Falls. We invited more than 20 ag leaders to participate and share their concerns about the economic climate for producers heading into the 2018 harvest.


Trade instability remains a top concern. I heard many ag leaders confirm what I’ve been hearing throughout the summer – that farmers and ranchers support President Trump’s desire to negotiate better trade deals for U.S. producers, but they acknowledged that time is running out to finalize deals. This is a message I’ve shared with the administration multiple times over the past months. I’ve repeatedly said that I support the president in his efforts to negotiate better trade deals, but we must make certain the tariffs are strategic and targeted, not reckless and a threat to the long-term health of the American economy.


The recent announcement from the administration about the $12 billion ‘trade aid’ proposal is a sign that they’re recognizing the negative impact that tariffs are having on ag producers, but it’s a short-term, partial band-aid. As we discussed at the roundtable, the sooner we can get trade deals completed and the market under control, the better off we’ll be. Farmers and ranchers understand that trade pacts are not only important to this year’s market, but are vital to the long-term viability of their industry.


Current trade instability is already causing chaos for South Dakota soybean producers, who market over 60 percent of their product overseas—primarily to Asia. At the roundtable, we heard reports that China has stopped bidding on U.S. soybeans. This further increases the already high basis that South Dakota producers face because local elevators lack the capacity to hold all the grain that is expected to be produced this year, so products will have to be shipped to other parts of the country where transportation costs are more expensive.


Another topic of concern among those at the roundtable was the farm bill. They said they’d like to see it finalized soon so they have some certainty when planning for next season. I agree, and I also shared with them my desire for the farm bill to include an increase on the cap of Conservation Reserve Program (CRP) acres. By increasing the cap to target marginal production acres, we have the ability to lock in land for conservation for 10 years at 2018 land values while saving money for the federal crop insurance program by getting the more marginal acres out of production.


We also talked about the Environmental Protection Agency’s (EPA) decision to issue a number of Renewable Fuel Standard (RFS) waivers to small refineries, which has reduced the amount of ethanol required under the RFS and thus reduced the demand for corn and corn ethanol. As I said to Acting EPA Administrator Andrew Wheeler at a recent congressional hearing, corn ethanol production has created thousands of jobs for the people of my state and has increased American energy independence. He shared with me at that hearing that he will work to be more transparent with EPA’s decision-making processes related to RFS waivers.


Lastly, at our roundtable we talked about the benefits of year-round E-15 sales. An open marketplace with more fuel options for consumers encourages competition and brings down fuel costs. This is an issue I’ve been pushing with the EPA, and I’ll continue to do so.


I appreciated hearing firsthand from South Dakota’s ag industry about their concerns, and I continue working to address them in the Senate.