MANDAN, N.D.-- North Dakota's largest farming organization is advocating for adjusting the crop insurance payments as a way to protect farmers from ongoing international trade retaliations.
As House and Senate versions of a new Farm Bill head to conference committee, the North Dakota Farmers Union sees it as an opportunity to raise reference prices for price loss coverage crop insurance plans.
"We should do it now," NDFU president Mark Watne said at a farm bill meeting in Mandan on Thursday, July 5, with U.S. Sen. Heidi Heitkamp, D-N.D. "If you want to keep us whole, this is the best tool."
Negotiations for new agreements with a number of U.S. trade partners continue to flounder and, as farmers look ahead to harvest, they face an unfriendly market.
China is expected to implement retaliatory tariffs this week, likely causing Chinese companies to cancel the remaining soybean shipments they had committed to buy from the U.S. through Aug. 31. According to USDA data, the country has yet to take delivery of about 1.14 million metric tons of U.S. soybeans for the marketing year.
Canada announced new tariffs earlier this week on steel, aluminum and 80 other goods, such as yogurt and beef. The European Union already has imposed retaliatory tariffs on $3.4 billion in U.S. goods, including materials for manufacturing of agriculture and construction machinery, which accounts for 50 percent of North Dakota's exports to the EU. And Mexico imposed further tariffs of almost $3 billion worth of U.S. goods.
A U.S. Chamber of Commerce report estimates impacts of as much as $60 million in North Dakota exports.
The Trump Administration has promised to provide relief as it continues to battle over trade.
"There is no denying that the disruption in trade relations with China is unsettling to many in agriculture, but, if the president succeeds in changing China's behavior, America's farmers will reap the benefits. In the meantime, the president has instructed me to craft a strategy to support our farmers in the face of retaliatory tariffs. At the U.S. Department of Agriculture, we have tools at our disposal to support farmers faced with losses that might occur due to downturns in commodities markets," U.S. Secretary of Agriculture Sonny Perdue wrote in an op-ed.
Devising a diagnosis for trade and what aid should look like was a major topic of discussion during the roundtable event hosted by Heitkamp on Thursday.
In a statement to address trade concerns, U.S. Rep. Kevin Cramer, R-N.D., who is challenging Heitkamp for her Senate seat in November, said "the president has already directed the United States Department of Agriculture to use their existing authority to assist our producers during trade negotiations, if necessary."
But with loads of soybeans already rejected by China, Heitkamp argues hard times aren't just coming: "It's upon us."
One relief action typically taken is for the USDA to offer low interest loans but at least one producer said at the Mandan meeting that's not really the help he needs to maintain a cash flow for his operation.
Many producer groups at the roundtable expressed interest in Watne's PLC proposal.
PLC insurance works by providing payments when a commodity's marketing year average price falls below the reference price set by Congress in the 2014 Farm Bill. Marketing year average is determined through USDA survey data from about 1,900 mills and elevators nationwide of how much they paid for a given crop. Producers are then paid on the difference.
For example, the reference price for corn is $3.70 per bushel. Soybean's reference price is $8.40 per bushel. In 2016, marketing year averages were set at $3.36 for corn and $9.47 for soybeans, so PLC payments for corn were 34 cents a bushel.
Watne said the House and Senate have "done a lot of good work in ARC," the other form of crop insurance offered that is based on yields. But he said there are oilseed and wheat producers in the state who opted for PLC coverage that could benefit.
Wheat's reference price is $5.50 per bushel and canola's is 20 cents per pound, both numbers Watne and others would like to see raised so as to trigger payments earlier.
"It's kind of a new idea," said Heitkamp, noting she was unsure whether it would be addressed in conference committee.
"As we now move to reconcile the House and Senate Farm bills, I welcome the opportunity to review the Commodity Title - for example, to correct the Senate's reduction by $400 million," Cramer said in a statement, though he won't likely serve on the committee as it's typically made up of senior members of the Agriculture committees, which he does not sit on.
Heitkamp said there could be potential for standalone legislation as the two legislative bodies prepare to battle over controversial House-proposed changes to the Supplemental Nutrition Assistance Program.
"We'll go into conference and see what happens from there," Heitkamp said.