OMAHA (DTN) -- Minnesota farmer Harold Wolle took over as president of the National Corn Growers Association this week looking to help thread the needle on Congress passing a farm bill this year.
Commodity leaders such as Wolle are looking for Congress to take action to replace the farm bill that expired on Sept. 30. The next farm bill is expected to cost more than $1 trillion for the first time in history -- $1.5 trillion over 10 years.
Yet, right now, the House of Representatives is in the midst of intraparty turmoil in the GOP. House Speaker Kevin McCarthy, R-Calif., on Tuesday became the first House Speaker in history to lose his position as a motion to vacate passed on a 210-216 vote with eight Republicans and every Democrat voting to remove McCarthy. Among their grievances, Rep. Matt Gaetz, R-Fla., and others who voted against McCarthy pointed to the lack of efforts to rein in spending, budget deficits and the national debt.
The path forward for work on bills such as the farm bill is unclear.
Wolle, the fifth-generation corn and soybean farmer from south-central Minnesota, is now front and center in trying to get a farm bill that works better for commodity producers. Talking with reporters on Tuesday, Wolle said his "most immediate objective" is to complete a farm bill with NCGA's priorities included in it.
NCGA's top priority is to protect against attacks on crop insurance as groups have reiterated calls for Congress to reduce subsidy levels in the program. From corn growers' perspective, "We have a very good crop insurance program in place right now," he said. Still, there are tweaks NCGA would like to see, such as bringing down the costs for farmers in parts of the country.
"There are some areas of the country where the risk is deemed so high that higher levels of cover get to be prohibitively expensive for growers," Wolle said.
REFERENCE PRICES A COSTLY PROSPECT
Looking at the commodity programs, Wolle said Agricultural Risk Coverage and Price Loss Coverage (ARC and PLC) "are the programs that we are most concerned about."
Getting into the weeds of the programs, Wolle noted, "There is a push by certain folks that want to see reference prices increase." NCGA supports raising reference prices but also wants to see increases in the reference price escalator in the PLC program. The escalator allows reference prices to increase based on a crop's Olympic average over the past five years.
Wolle added that NCGA would also like to see changes to ARC, including the 10% payment limit and the 14% deductible under the program.
"We would like to see improvements in both of those areas for the ARC program," Wolle said.
Yet, all those things cost money. During a Farm Foundation forum last week, Texas A&M economist Joe Outlaw said a 10% increase in reference prices, if nothing else changes, would cost about $20 billion over 10 years. A 20% increase across the commodities would cost somewhere in the $50 billion range, Outlaw said.
DEFENDING THE COMMODITY TITLE
Asked by DTN about the conflict of Congress fighting about spending while NCGA seeks a better safety net, Wolle said that food security is national security, which ensures a reliable system of food production.
"We don't write a farm bill for the good times. We write a farm bill for the bad times," Wolle said.
Wolle said farmers have not used that farm safety net.
"The federal government has not had to spend over the recent years any money in that farm safety net because we've had good years, and that's certainly what farmers want. They want to get their income from the market. They don't want to get their income from the government," Wolle said. He added, "We need a good safety net for when those bad years come so that we can maintain our system of production in this country."
While ARC and PLC have not kicked in for most producers, farmers in disaster-prone areas have had to rely on a series of ad-hoc funding programs over the last five years. That funding doesn't go to help the next farm bill.
So far, House and Senate Agriculture Committee leaders have not called on farmers to rally around a specific issue or made a public push to get a new farm bill passed. Wolle said the committee staff are "very secretive." He added, "They don't let us know exactly which way they are going. There have not been any public asks of us as to how we might help move this forward."
EXTENSION TIME?
With the slow pace of the farm bill right now, even long-time farm bill veteran Sen. Chuck Grassley, R-Iowa, indicated this week that Congress may need to pass a one- or two-year extension of the farm bill. Responding to that, Wolle said an extension is not the preferred route NCGA would like to see.
"We've seen examples in Congress of how they wait until the very last minute, and then they are effective, and they get their job done, so I'm not ready to give up on this farm bill just yet," Wolle said.
Asked if he is concerned about the rhetoric in Congress and the fight to vacate the Speaker's chair, Wolle said, "We need to have a functioning Congress, and a functioning Congress needs to have an effective Speaker. And so, I hope we get that resolved here shortly."
GRAIN STOCKS
Asked about the U.S. harvest and large Brazilian crops, Wolle noted that as prices decline, margins for farmers get squeezed as well. USDA right now forecasts a 2.22-billion-bushel carryover next fall for the corn crop farmers are now harvesting.
"That's leading to downward pressure, and we've seen some reduction in demand, and our hog industry is not very healthy. At the moment, they aren't very profitable," Wolle noted.
Wolle emphasized the need to increase demand for corn with exports, livestock and ethanol production.
TRADE PROGRAMS
Wolle hit on another priority for commodity groups, which is to boost funding for USDA's trade promotion programs, the Market Access Program and Foreign Market Development Program, known as MAP and FMD. Both programs provide funds to groups such as the U.S. Grains Council, which Wolle noted also gets support from state corn growers. MAP, at $200 million, and FMD, at $34.5 million, have not seen funding increases in the farm bill going back roughly two decades.
"Those MAP and FMD funds ... they've remained stagnant while the expenses for these groups that promote exports around the world for our growers have increased along with everyone else, so they're feeling the effects of inflation as well," Wolle said.
The leaders of the Senate Agriculture Committee wrote Agriculture Secretary Tom Vilsack last month asking him to use his own authority to increase trade promotion. Sen. Debbie Stabenow, D-Mich., told DTN that Vilsack is preparing to make such an announcement, but so far that hasn't happened.
Wolle said a boost in dollars from USDA is appreciated, but it would be "one-time funding," and he said it's vital that there is a long-term increase for MAP and FMD in the farm bill as well.
BIOFUELS
Along with wanting firmer footing for year-round E15, which right now relies on annual waivers from EPA, Wolle called for rallying support behind the Next Generations Fuels Act, a bill that keeps getting introduced in Congress but has not gotten a lot of synergy to advance. The bill has provisions that could boost the blend of ethanol in gasoline by up to 30% and allow auto manufacturers to build engines to use those higher ethanol blends.
The Senate version bill has five sponsors, all of whom signed on when it was introduced last March. Even senators from some major ethanol-producing states such as Nebraska, South Dakota, Indiana, Ohio, Kansas and North Dakota have not signed on. The House version, also introduced in March, has 30 cosponsors from 10 different states.
"Once you get a critical mass of cosponsors on a bill, the committees of jurisdiction realize that it's important legislation and work to move it forward," he said. "We need to have that happen."
Airlines and biofuel bankers are on board for Sustainable Aviation Fuel, Wolle pointed out, which could drive demand for ethanol as the industry works to drive down its carbon footprint. "It will be possible to do ethanol-to-jet, and that's a phrase I think you're going to hear a lot more in the future. Everybody needs to kind of get on the same page if we're going to make this happen."
Chris Clayton can be reached at Chris.Clayton@dtn.com
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