2017: Year in Review

Posted on 12/29/2017 12:37 PM

2017 Pro Farmer ag story of the year: Trump trade policies dominate headlines
Trade stories dominated the headlines and pages of Pro Farmer newsletter over the course of 2017, making this a relatively easy choice for our ag story of the year. Trade is vital to the ag sector. Therefore, even a little change would be a major story. But there was far more than a little change over the past year.

When President Donald Trump took office he indicated there would be major alterations on trade policy. He clearly stated his dislike for multi-lateral trade agreements, instead favoring bilateral accords that he believes would provide more benefit to the United States. One of his main goals was to swing trade balances with key trading partners in favor of the U.S. instead of running at deficits. We warned at the time that could lead to short-term pain but long-term gains for agriculture. The amount of upheaval on the trade front has been every bit as fearful as we expected during Trump’s initial year in office.  

Trump’s first executive order after being sworn in as president was to remove the U.S. from the Trans-Pacific Partnership (TPP). During his campaign he also promised to remove the U.S. from the North American Free Trade Agreement (NAFTA). While he was talked out of withdrawing from NAFTA, he started renegotiations of the trilateral trade agreement with Canada and Mexico, two of the U.S.’s top three ag trading partners. Those renegotiations of the long-standing trilateral trade agreement have been contentious and caused both Canada and Mexico to make plans if the deal blows up.

Trump also took an aggressive stance toward China and its trade policies during his first year in office. While tensions were mostly smoothed over, there were multiple times during the year when the threat of a trade war with the world’s top commodity buyer looked very real.

Trump also pressed South Korea, another key ag trading partner, for a new trade agreement.

The fear of short-term pain remains as we move into 2018. Given the many unsettled trade issues, hopes of longer-term gains on the trade front are still on the seemingly distant horizon.

 

2017 Pro Farmer ag person of the year: Sonny Perdue
Given his tumultuous first year in office and the impact his decisions had on agriculture, we could have easily named Trump ag person of the year. But we chose Sonny Perdue for the exact opposite reason. Perdue wasn’t a popular choice to lead USDA among many in ag circles, but he knows the industry and hit the ground running after being the last Cabinet member to be announced. Importantly, he has proven to be a critical counter-balance to Trump on the ag trade front. It was Perdue who helped convince Trump to renegotiate NAFTA instead of withdrawing. For that alone, he would have been a strong candidate for ag person of the year.

Additionally, Perdue fought against changes to the Renewable Fuel Standard. He has also brought bipartisanship to Washington — something that’s sorely needed — meeting with lawmakers from both parties to get solutions to issues impacting America’s farmers/ranchers. He has proven to be a well-versed, concise spokesman for the entire ag sector.

 

2017 Pro Farmer ag event of the year: Plains wildfires
 In March, wildfires ripped across the Plains, damaging hundreds of thousands of acres of land and killing people and livestock in its path. The devastation of the wildfires to the ag community in the region would have qualified them as the event of the year. But the reason we chose this as the 2017 Pro Farmer event of the year is because of all the good that came out of a very bad situation. Thousands of dollars, countless truckloads of supplies and many hours of manual labor were donated to help farmers and ranchers recover from the devastation — a process that continues today for some. The ag community showed its heart and spirit by stepping up to help those in need. Click here for additional year-end events.

 

Honorable mentions for story, person and event of the year
Renewable Fuel Standard (RFS):
From disagreements over volume requirements to a consistent push to modify the RFS and renewable identification number (RIN) credits, this topic was prevalent throughout the year. The issue lingers as Sen. Ted Cruz (R-Texas) continues his hold on Bill Northey as a USDA undersecretary as Cruz seeks changes to the RIN system.

Hurricane-related disasters: Hurricanes Harvey and Irma affected citrus, cotton, livestock and other producers in Southern states. The devastation will take years to confront.

Ag prices, financial constraints: In our many appearances throughout farm country, we can see and hear the concerns about lingering low commodity prices. Financing problems are increasing as well. If the situation isn’t reversed, the drain on farmer equity will regretfully be a candidate for story of the year in 2018.

Tax reform: The tax reform bill brings some positive changes (lower tax rates, a big boost in estate tax exemption, immediate equipment expensing), but we want to see if there are any unintended consequences. This will likely be one of the candidates for our 2018 list, especially if it helps boost the U.S. economy.

Deregulation: This will be one of the signature issues of the Trump tenure. For agriculture, stopping the waters of the U.S. (WOTUS) rule and starting over with a new rule after mid-2018 is a major win for the ag sector. The return to costs and benefits in dealing with new regulations is another much-needed change.

Vice President Mike Pence: This is the surprise candidate for honorable mention, but more than a few ag sector lobbyists and industry executives told us Pence was their point-person in listening to their concerns, notably in the agricultural trade arena.

Chuck Conner, president of the National Council of Farmer Cooperatives: The former deputy USDA secretary and acting USDA secretary helped lead the charge for last-minute changes in the new tax reform legislation that offset in large part the repeal of Section 199, so critical to cooperatives and their many farmer members.

Big crops and record yields: South America, led by Brazil, produced record corn and soybean crops in 2017. That was followed by the second largest corn crop and the largest soybean crop on record in the United States. The massive U.S. and South American crops put pressure on prices and added to the ongoing financial struggles in the ag sector.

Stock market surge:  Amid investor optimism about the economy, regulatory pullbacks and tax reform, the Dow Jones Industrial Average surged more than 25% and set 69 record highs (through Dec. 22).

 

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