Will there be a new Farm Bill this legislative year? Will the Federal Reserve finally cut interest rates when they next meet in September? Will the presidential election yield new trade policy? These are just a few of the questions top of mind for Brian Duncan, the president of the Illinois Farm Bureau and a farmer himself.
“Well, we’re still out here taking care of our land and our livestock,” he said. “Things are good right now, from a weather standpoint. From a market standpoint, for agriculture, it’s a little challenging.”
Duncan spoke with “Marketplace” host Kai Ryssdal about some of these challenges. The following is a transcript of their interview.
Kai Ryssdal: It has been, I think, two years. The first question obviously has to be, how are things?
Brian Duncan: Well, we’re still out here taking care of our land and our livestock. Things are good right now, from a weather standpoint. From a market standpoint, for agriculture, it’s a little challenging.
Ryssdal: Well, say more about the say more about the market standpoint, what’s on your mind?
Duncan: Well, we’ve seen a 40 to 60% drop in prices for corn and soybeans. Hogs, we’ve just actually had our first month of profitability in 18 months. And so there’s been a lot of headwinds. You know, Kai, farmers, we’re experiencing inflation, so what we buy has cost us more, but as you and I have talked before, we’re price takers, and so unfortunately, what we’re selling isn’t keeping up.
Ryssdal: In addition to inflation being a challenge for you, as we’ve talked about in the past, trade policy has not been really any friend to you. Tell me about what’s going on there, please.
Duncan: Yeah, and that’s something we’re concerned about as we look at the election, one of our biggest markets right now for corn and pork is Mexico, but we still see markets to the Pacific Rim and China, believe it or not. And there’s a lot of uncertainty. Kai, I’m sure you’re well aware of of some of the talk about potential trade actions taken by whoever wins in November. We’re pretty concerned and watching that space very closely for what might develop.
Ryssdal: Well, let’s dig into that a little bit. Because, as you know, the Biden Harris administration has kept in place many of the tariffs on China that the Trump administration put into place. Do you expect relief if Vice President Harris wins? And are you concerned if former President Trump wins?
Duncan: Right now, Kai, I’m concerned no matter who wins. I don’t expect a lot of relief, and I haven’t seen any movement forward on new trade agreements. We’re looking at the rest of the world moves forward, there’s new free trade agreements being put in place. And so no matter who wins in November, this is very much on my radar as a producer and on my radar as president of Illinois Farm Bureau.
Ryssdal: So let’s keep going with you running the Farm Bureau. I imagine you spend a decent amount of time on the phone with people in Washington. What are your hopes for the for the Farm Bill in 2024, if any hopes at all you have?
Duncan: I’m a natural-born optimist. Kai, that’s why I’m a farmer, and I’m also a fan of the Chicago Cubs. Hey! And we won the World Series. It did happen. The Farm Bill: hopes are fading fast. There’s just not enough legislative days on the calendar to see something done before the election. And I’m afraid election year politics are going to muddle the waters. Maybe post-election in lame duck. Maybe. The problem is, we do an extension again of the 2018 Farm Bill, and some of the economic backstops are based on what agriculture’s costs were six years ago. We all know costs have gone up, and we’ve seen, like I said, 30 to 60% decrease in the price of major commodities. Those prices haven’t gone low enough to hit the economic backstop.
Ryssdal: It’s interesting to me that you mention input costs and how much they’ve gone up for you. That, of course, is another way to say inflation, which gets me to the Federal Reserve and interest rates. I imagine– hog farming especially but you know, you need outlays for seeds and fertilizer and all that stuff for regular farming as well– I imagine interest rates are of some interest to you?
Duncan: Very much. So we’ve seen our line of credit, the cost for paying for operating money has doubled over the last four years. I mean, that’s a significant hit to the bottom line. I’m hopeful for a half to three-quarter point cut in the rates.
Ryssdal: You’re going to go for a three-quarter point cut? That’s a gutsy move.
Duncan: I told you, remember, I’m a Cubs fan. I’m an optimist. I think the Fed maybe is a little slow here, so I am hopeful they’d play catch up. But yes, a family farm like myself, Kai, we’ve got three families and employees as part of this farm, the interest costs are significant.
