ANNAPOLIS, Md. — Sizing up the current and future state of agricultural policy in Maryland and nationally was a difficult task as the partial shutdown of the federal government continued into its fourth week. The 2019 Agricultural Outlook and Policy Conference, sponsored by the University of Maryland’s College of Agriculture and Natural Resources, convened on Jan. 18.
Although the USDA and its reports and staff were unavailable, the University of Maryland’s team of agriculture specialists carried the day with presentations on Commodity Price Projections, changes in the 2018 Farm Bill, and an update from the Maryland Farm Bureau on legislation initiatives affecting agriculture.
Rob Davis, with Nagel Farm Service, presented on projected commodity prices and strategies for maximizing profitability in grain sales. The Nagel Co. provides grain storage, marketing programs, crop insurance, trucking services and farm supplies throughout the Delmarva region. Davis began by pointing out that he couldn’t predict the results of trade negotiations with China and the EU, as well as the ratification of NAFTA.
“We all know that uncertainty around trade is a negative to grain markets,” Davis said.
In the corn market, while 2018 provided record yields — 178.9 bushels per acre — there is currently an insufficient supply of corn for the poultry industry. Feed is being brought in by rail. Davis estimates that the harvest per bushel price will by $3.75, that a December 2019 corn contract will be $4.03 and a strong target sell would be $4.20 per bushel.
As for soybeans, 2018 was a record world production year with 955 million bushels, in part due to an acreage shift to corn. Davis predicts as much as 1.1 billion bushels of soybeans carried out in 2019. Brazil and Argentina are aiming to take over the mantel of largest soybean producer.
“No way around it,” Davis said, “we’ve got more supply (of soybeans) than we need.”
With November 2019 contracts on soybean at $9.47 a bushel, Davis thinks the price is inflated. He guesses a fall price per bushel at $8.75, and suggests farmers take it if they can get it now.
The world’s wheat crop is the smallest in four years. The weak U.S. dollar and tight global supply of wheat make for a promising wheat market. Davis projects $5.80 for July 2019 contracts, $5.20 a bushel at harvest time and a target price of $5.50.
Davis concluded his presentation by urging farmers to familiarize themselves with the flexible marketing and sales tools including forward contracts, which lock-in pricing; the managed bushel program for diversification; structured contracts, to bundle options within a contract; and options that allow the producer more flexibility in these unsteady times.
Dr. David Newburn presented a summary of his team’s research into the effectiveness of Maryland’s Cover Crop Program and the Nutrient Trading Program. Statistics indicate that the Water Quality Trading was more popular, without cost sharing, than the Cover Crop Program.
The 2018 Farm Bill panel included Dr. Mark Zaki, Dr. Howard Leathers, Paul Goeringer and Jeff Hunt. Their task was to tease out some of the notable changes from the 2014 to the 2018 Farm Bill. Their task was particularly difficult because those charged with implementing the new bill are furloughed and nothing is being done yet to implement this piece of legislation.
The 2018 Farm Bill funding is $867.2 billion over 10 years. Farms get 23 percent, while nutrition earmarks 77 percent of the budget.
Rural Development was a big loser with a loss of $2.35 million.
Big winners with permanent or increased funding include:
• The Beginning Farmer and Rancher Program
• Outreach and Assistance to Socially Disadvantages and Veteran Farmers and Ranchers
• Farmers Market and Local Food Promotion Program
• Value-Added Producer Grants Program
• Organic Research and Extension Initiative
• Food Insecurity Nutrition Incentives, renamed Gus Schumacher Nutrition Incentives Program
• All trade promotion programs.
An Urban, Indoor and Other Emerging Agricultural Production Research, Education and Extension Initiative was created with a $10 million grants program. An Office of Urban Agriculture and Innovative Forms of Production was also created in the new bill.
There was $4 million per year granted for state agencies to partner with emergency feeding organizations to establish projects to harvest, process, package or transport commodities that are donated by agricultural producers, processors or distributors.
The Farm Bill authorizes projects that incentivize the purchase of fluid milk by SNAP households as well as provides online acceptance of SNAP benefits nationwide and redemption of SNAP benefits via mobile technologies.
In the 2018 Farm Bill, Title I Commodities Programs will receive a projected $64.6 billion and Title XI Crop Insurance Subsidies will receive $77.9 billion.
For smaller dairy farms, the new version of the margin protection program, the Dairy Risk Management Program, makes buying up protection more attractive by lowering farmers’ costs of the buy up protection, and by increasing the maximum buy up coverage.
For larger dairy farms, the 2018 Farm Bill allows farmers to combine the Dairy Risk Management Program with a margin insurance product.
The new Farm Bill makes almost no changes in crop insurance. A new rule on enterprise units allows farmers with an enterprise unit in one county and basic units in a neighboring county to combine those into a single enterprise unit.
The conservation priorities in the 2018 Farm Bill are water, wildlife, soil and grasslands/grazing.
An issue of interest to the agriculture community and the public at large is hemp and marijuana production, particularly since the DEA continues to classify marijuana as a Schedule I drug. However, the 2018 Farm Bill declassifies hemp. States can prepare a Hemp Production Plan which must be approved by the USDA before hemp production can take place in a state. A state’s Department of Agriculture will prepare and submit such a plan. The USDA has not released the regulations for these plans.
Colby Ferguson, Maryland Farm Bureau government relations director, concluded the conference with a quick review of pertinent legislation. He spoke briefly about the muscular support for an amendment to the state’s hemp production law. Ferguson noted that there is a university pilot project uderway for growing hemp seeds.
Ferguson noted that Sen. Sara Elfreth is sponsoring a bill in support of expanding agritourism in Maryland. Rep. Lorig Charkudian, Ph.D. is sponsoring a bill supporting “cottage agriculture,” such as easing regulations on the sale of farm-produced bread and preservatives in grocery stores and the procurement of local farm products for use in state facilities, such as schools and prisons.
Also, the soon-to-expire “K” tag for farm equipment has been permanently extended. The problems created around sub-aquatic vegetation and aquaculture leases is being resolved by Del. Gerald Clark’s sponsorship of a bill to revise the lease restrictions. Ferguson also announced that the new Maryland Secretary of the Department of Natural Resources is Jeannie Haddaway-Ricci, a strong advocate for agriculture.
Although presentations had been scheduled projecting commodity prices as well as the international trade outlook report, both highly anticipated reports had to be scratched as the USDA employees who would have prepared the data and presented their findings were furloughed.