A $2.2 trillion bipartisan legislation was enacted Friday to lift the American economy from its slide due to the spread of COVID-19.
The bill is set to add $14 billion to the Agriculture Department’s Commodity Credit Corp spending authority, and will allow another $9.5 billion for U.S. farmers affected by the coronavirus pandemic.
Area farmers admit the coronavirus has had an impact on crop prices along with carrying out their prep work. Dan Daniels has been working on a spray rig for his newly purchased helicopter, but is finding it difficult to obtain parts.
“A lot of the businesses have shut down, and I’ve been trying to order parts, but they are working from home so they don’t have all the usual tools to help find you parts. Even insurance companies aren’t in their office,” Daniels said.
With the spread of the coronavirus, beef has been one of the items swept off the shelves at supermarkets across the United States. Even here in Iola, the selection of ground beef was significantly less than prior to the outbreak. Another area farmer, Josh Wrestler, believes the increase of purchasing of beef is not necessarily a spike in demand.
“We sold our calves prior to the coronavirus outbreak, so it didn’t affect us that much on our sales,” Wrestler said. “What will happen in my thoughts, is everybody is going to take the meat they can get. They are pushing up demand now, and the price is going up, but we are going to have a glut at some point in time.”
On Feb. 5, China announced it would halve additional tariffs on $75 billion worth of U.S. imports, another sign that the two-year trade war between the two countries could be coming to an end.
These tariff rollbacks come after President Donald Trump and Vice Premier Liu He, China’s top trade negotiator, signed “Phase 1” of an agreement between the two countries on Jan.15, shortly before COVID-19 filled headlines.
The deal included a pledge by China to purchase at least an additional $12.5 billion of agriculture goods in 2020, and at least $19.5 billion over 2017’s level of $24 billion in 2021.
For the past two years, farmers have been in the fight, and the tariffs have taken their toll on the price of soybeans. In June of 2019, the price of soybeans hit $8.09 per bushel, the lowest since it hit $7.84 in December of 2008.
“The bean market is down, but it has been down since the trade war. It was on its way back up, and there was a pretty good climb,” Wrestler said. “We had the ability to lock in some beans at about 9.15, which is actually a pretty good price.”
Daniels admits the low price for soybeans hurt him last year, but the Market Facilitation Program payments, also known as the Trump Bailouts, have helped him recover 80% of his usual profits.
Farmers received direct cash in the form of three payments coming in August, December, and January. According to the U.S. Department of Agriculture, the first payment consisted of the higher between either 50% of the producer’s calculated payment or $15 per acre. The second payment was 25% of the total payment expected.
Although the trade deal has made things more difficult for farmers, Wrestler is optimistic that “Phase 2” of the deal could be on the horizon, if Trump were to secure a second term.
“Without the MFP payment, most farmers would be struggling, I mean we had to have something,” Wrestler said. “I think he is probably doing what is best for our country, I just don’t know if it will ever happen with the opposition that we have now. My thoughts are China is holding on a Democatic president to get in office, and that is why China keeps pushing back, which is smart business.”
FARMERS still have much to worry about other than the country’s relationship with China. The wet climate since the fall has not been friendly to Daniels, who is behind on prep work for his corn fields.
“Usually in the fall, winter, and spring, we get out and work the ground,” Daniels said. “A lot of people do no-till, but when you have ruts in the field from combines — because we had to get the beans out — you have to go back and work those ruts down.
“If it dries up, and we get started, then we are going to have to work 24/7 to catch up basically. We are behind just a couple weeks, and are going to plant corn as soon as it is dry. Soybeans we won’t plant until June 1, so we will have time to get all the groundwork — maybe, if it doesn’t keep raining.”
Wrestler highlights that duties can easily stack up. Farmers are having to use tractors to feed their cattle opposed to pick-up trucks, which can double the amount of time spent feeding, leaving less time to prep the fields. Luckily for Wrestler, he has the tools at his disposal to work more efficiently.
“I do it a little differently than some guys,” Wrestler said. “I run liquid-32% nitrogen, so I use my sprayer versus an actual spreader or a toolbar. I just run my sprayer across, work it in, and plant corn. So, I can catch up.”
As of this Thursday, the rainfall in Iola was 9.15 inches, nearly double the average for this time of year. Last year farmers were planting corn in June versus early April, resulting in a late harvest. Wrestler did not plant corn last year, but plans to grow 500 acres of corn and nearly 1,800 acres of soybeans. So far, Wrestler is not too concerned with the thought of a potential late harvest.
“It’s not any fun mudding out the beans or corn,” Wrestler said. “But it is kind of like what do you take, a dry year that your crops burn up, or a wet year where you cut really good crops and have to work to get it out. It is a give and take.”