Floods, Bankruptcies, Trade Wars And Politics — What Agriculture Means For Kansas City In 2020
The KCUR news staff presents the State of Kansas City series as a look ahead to 2020 on topics of importance to the region. Find the State of Kansas City report on other topics in the series as they are published each weekday, Jan. 6–Jan. 20. Follow coverage on these topics at KCUR.org and on 89.3 FM throughout the year.
Midwestern farmers are coming off a year of catastrophic flooding, high bankruptcies and billions in federal bailouts.
U.S. Agriculture Secretary Sonny Perdue promised “a real bonanza” when the tentative U.S.-China trade deal was announced in December, but that was five months after the Trump Administration had to spend $16 billion bailing out farmers beset by poor market conditions brought on by Trump’s international trade war.
“We've been in this roller coaster situation now for quite some time,” Missouri farmer John Vogelsmeier told us in December. “I don't think you can basically take this news to the bank.”
This year, KCUR will be keeping a close eye on the weather and the condition of Missouri River levees as we head into spring with the ground still saturated. We’ll also be monitoring how well federal policies are alleviating financial instability, how farm policy plays out in Kansas City, and how much farmers might influence the presidential election.
WHY YOU SHOULD CARE
These larger food policies play out on the plate, so consumers will feel the effects at the grocery store, the gas station and, for low-income households, in food aid.
A volatile future for food producers, along with a stagnant rural economy, could also play out in the 2020 elections, as it remains to be seen if farm states will stick with President Trump, where he did well in 2016.
“Since federal policy exerts an outsized influence over the rural economy, the November 2020 election will clearly be among the most consequential events for rural America in the coming year, as well as for the nation as a whole,” Tom Halverson, president and CEO of Cobank, wrote in a report titled “2020, The Year Ahead: Forces That Will Shape The U.S. Rural Economy.”
WHAT TO WATCH FOR
- American farmers went into 2020 carrying record high levels of debt. Farm income went down in 2019 as production was unpredictable and cattle prices declined. Bankruptcies are up more than 20% from a year ago, with the Midwest seeing more than any other part of the country. Two USDA reports in February will give us a glimpse into the new year. One will forecast how much farmers are planting, and the other will cover farm income. Most farmers would have lost money in 2019 if not for $22 billion in direct government payments, so we’ll be watching to see if those payments will be available again. We'll also monitor whether more robust trade and better weather make up the difference in farm income.
- American farmers produce far more food than Americans can eat, and they rely on exports for about 20% of their sales. Trade wars disrupting the export markets have surprised grain and pork prices, but those disputes seem to be easing. China and the United States have reached a tentative “phase-one” agreement in which China has pledged to buy more U.S. farm products. Chinese officials haven’t disclosed specific purchase commitments, but they should become clearer early this year.
- Last year the USDA announced that two large research agencies, the Economic Research Service and the National Institute for Food and Agriculture, would move to Kansas City. Proponents were happy with 700 jobs promised for agencies, but scientists and others called the move political and an attack on science. More than three quarters of the agencies' employees left, many of them highly skilled researchers. That shortage delayed dozens of economic reports and slowed the release of funding to university-based farm researchers. We’ll be watching to see if the quality, quantity and timeliness of their work recovers.
- Last year's flooding along the Missouri River in northwest Kansas and northeast Missouri meant two years of lost crops for many farmers. Levees along the Missouri and Mississippi rivers are still vulnerable, and the U.S. Army Corps of Engineers has told some farmers to expect more flooding in 2020. Expect another push from farm interests to change the way major waterways are managed.
BY THE NUMBERS
700,000 – The estimated number of people affected by December 2019 changes to the Supplemental Nutrition Program, or SNAP, or which provides food assistance to poor and elderly people. Rural Americans account for the largest percentage of SNAP users.
$120 – Average monthly food stamp, or SNAP, benefit, with 44% going to working families.
$3.6 billion – The amount of a possible third round of payouts to farmers as part of the $14.5 billion in total trade war payments made by the Trump Administration.
$2.7 billion – The net income forecast for 2020 by John Deere, which is lower than the $3.5 billion forecast. Deere cited “lingering trade tensions.”
125 – The number of eligible USDA employees who plan to relocate to Kansas City from Washington, D.C. after two research agencies were moved here. The number is a little more than a quarter of the 550 workers who could move to Kansas City.
65% – Percentage of U.S. farmers who invested in hemp production but couldn’t find buyers for their crops this season. Hemp production boomed after it was legalized in the 2018 Farm Bill.
Dairy Farmers of America
The country’s largest dairy cooperative is in Kansas City, and it’s poised to get a lot bigger this year. Dairy Farmers of America, or DFA, already markets about a third of the milk produced in the United States. DFA is in talks to buy a significant part of Texas-based Dean Foods, the nation’s largest milk processor, which filed for bankruptcy in November. Dairy farmers are split on the deal. Some say DFA needs to buy Dean’s processing plants to insure that the milk they produce will be processed and sold. Others say DFA is already too big and powerful. They note that DFA has settled major lawsuits alleging that the coop colluded with other buyers to hold down the prices paid to dairy farmers, and faces a possible trial this year on another price fixing lawsuit.
Missouri Director of Agriculture
Chinn was appointed director of the Missouri Department of Agriculture in 2017 by then-Gov. Eric Greitens. In 2013, she was named one of four “Faces of Farming and Ranching” by the U.S. Farmers and Ranchers Alliance, an industry group that promotes agriculture. A fifth-generation farmer near Clarence, Chinn is a gifted speaker and a leader in telling the story of farming to a mainstream audience in the U.S.
Kansas Assistant Secretary of Agriculture
Olson has worked for a decade at the crossroads of agribusiness and government, acting as a farm representative for Republican Sen. Jerry Moran of Kansas and at Syngenta, the global biotechnology company. She is currently leading a project for Kansas Gov. Laura Kelly designed to help stressed farmers and combat suicide.
President, Missouri Farm Bureau
This outspoken soybean and corn farmer leads the powerful Farm Bureau, writing op-eds and appearing in the media. When the area near his Tarkio farm was flooded in 2019, Hurst assisted Missouri Gov. Mike Parson in seeking flood relief from Washington. He’s also active on Twitter, where he regularly takes on those who criticize production agriculture.
Missouri Farmers Union, policy director
Oswald is a poetic speaker on the plight of the small farmer and was particularly effective in 2019 when the Missouri River flooded the corner where Nebraska, Missouri, Kansas and Iowa meet. Oswald’s farm near Langdon was underwater for months, and the home where he was born in 1938 was a complete loss. On his Facebook page and elsewhere, he continues to seek aid for local farmers who have lost two years of income.
President and CEO, Harvesters Community Food Network
Nicholson-Watson will no doubt be busy again this year, as the Trump Administration seeks to cut further into the Supplemental Nutrition Program, or food stamps. She heads the regional food bank serving 26 counties in northwestern Missouri and northeastern Kansas, providing food to more than 760 non-profit agencies.
Associate professor, University of Missouri College of Agriculture, Food & Natural Resources
As a rural sociology professor, Hendrickson has a holistic view of agriculture, the global food system and rural issues. She is one of the leading speakers on the consolidation of agriculture and how that has affected individual farmers. An advocate for urban farming, Hendrickson helped create the Greater Kansas City Food Policy Coalition.
Policy analyst, Kansas Rural Center
Johnson, an organic farmer in Jefferson County, is a leading advocate for small farmers and rural issues in Kansas, where large producers vastly outnumber smaller farms. Whether in community engagement events, the media, or at the legislature in Topeka, Johnson is closely watching what happens with the Farm Bill, Medicaid, rural housing and food sales taxes.
January 2020: A third possible “tranche” of farm subsidies ordered by President Trump might kick in, depending on market and trade conditions. Ag Secretary Sonny Perdue has said the payments, worth $3.6 billion are likely to be made.
January 14: The next scheduled release of the Kansas City Financial Stress Index by the Federal Reserve Bank of Kansas City.
Feb. 13: The Missouri Basin River Forecast Center issues its spring flooding outlook.
Feb. 21: The annual Western Farm Show opens in Kansas City, which is often a reflection of the farm economy for agribusiness.
April 1: Changes to the SNAP, or the food stamp program, kick in for states who administer the benefits.
Sept. 11: Fall release of the World Agricultural Supply and Demand Estimates, which could reflect the Trump Administration's changes in trade policy two months before the 2020 elections.