Q&A with Adam Nielsen, director of National Legislation & Policy Development, Illinois Farm Bureau
IBJ: The big topic these days is the international trade market and what stands to be gained or lost. Illinois is a big player. Where do things stand?
Nielsen: There’s some optimism. The president’s team met with the Chinese, and they’ve imposed this March deadline to get some sort of a deal worked out with China, which we hope would mean an end to retaliatory tariffs, which have prevented soybeans from being sold to China. Our biggest customer has been out of the market for U.S. beans for a long time now. That’s had an impact on prices, and there’s a lot of backed-up supply here in the U.S.
IBJ: You can’t take anything for granted though.
Nielsen: No, you can’t. We’re very concerned about 2019. Farmers were able to make it through 2018 OK. Incomes were down significantly. But if nothing changes, and we’re still faced with (tariffs) from China, Mexico and Canada and from other nations, then we’re not going to have a very good 2019.
IBJ: How do the mechanics of this work? How much does a tariff weigh on the cost or shipment of soybeans?
Nielsen: Well, where you were once competitive, and the first choice, the tariff increases the price for your buyer and they are less likely to buy it.
IBJ: Doesn’t this affect every state?
Nielsen: Oh, yeah. We’re just one soybean-producing state. There are many others in the same boat.
IBJ: Are soybeans the only thing at risk here? What about other aspects of agriculture?
Nielsen: Well, there were tariffs placed on (U.S. imported) steel and aluminum last summer. Our neighbors, Canada and Mexico, who are our biggest (agricultural) customers, have retaliated against us and increased their tariffs on certain products. Pork is being taxed down in Mexico, so we’re sending less pork and dairy to Mexico as a result. Canada is mostly processed food, but there is a lot of livestock that goes back and forth across the border.
IBJ: What is your biggest export out of Illinois?
Nielsen: Soybeans. Soybeans are the second-biggest export, period, out of Illinois. There is one industrial product (light petroleum oils) that is the biggest. In a good year we do around $8 billion in agricultural trade with the rest of the world.
IBJ: Let’s skip down the road for the sake of argument and say that these tariffs are repealed or no longer a consideration. What are other areas of concern?
Nielsen: The government shutdown has kind of delayed the implementation of the next farm bill. That’s something we’ll be working on. The renewable fuel standard is one we’ll be working on. That has an impact on the demand for corn.
But at the top of the list is trade, that’s the biggest influence on the bottom line of our members up and down the state.
IBJ: In terms of your job, you must be moving around on a constant basis. Where all does your job take you?
Nielsen: I spend a lot of time in communication with the Congressional delegation and their staff here in the state and out in Washington. We take groups of farmers out to Washington a couple of times a year to talk about issues impacting us. It’s a continuing conversation, some of it takes place in person in Washington, some of it is back here at home. We do like to show off our industry. It’s always fun to be able to host members of Congress and staff on farms. Our elected officials get a better understanding of the industry and some of the challenges that farmers face. We like to activate our members so they are contacting Capitol Hill when big issues in agriculture are being decided.
IBJ: How much effort did you spend on the farm bill?
Nielsen: I spent two years working on it. We started back in late 2016 and surveyed delegates at our annual meeting about the priorities. I did 17 meetings around the state with groups of farmers where we kind of “blue skied.” I asked for a list of things they wanted to see. We whittled those lists down. They were very similar. Northern Illinois, Southern Illinois — farmers are interested in the same things. We got a couple of amendments introduced to reflect our desire to see a more simple farm bill signup. And another amendment to provide incentive for planting of cover crops.
When the bills came to the House and Senate, we got engaged over some harmful amendments that would have damaged the crop insurance program. We were able to defeat those amendments.
IBJ: What are some of the big advantages of the bill?
Nielsen. It’s going to give farmers a choice of commodity programs, which is good. They can go back and forth between signing sign up for a revenue program or a price-based program.
IBJ: Allow them to diversify their risk a little bit?
Nielsen: Yes. And the crop insurance program is also very helpful there, too. Farmers pay their premiums just like everybody else that buys insurance and hoping to not have to file a claim.
IBJ: Was there anything you tried but did not get into the farm bill?
Nielsen: Yeah. One of the ideas that came from our members was to create a program where they would have incentives to plant cover crops – a marketing loan program in which they used the proceeds to plant cover crops. Beginning farmers would be able to receive a little bit more. And we’re basing the loans on floating five-year averages of corn and soybeans. But they weren’t ready for that one. We’ll put that idea off to the side and keep working on it.
IBJ: When was the last time a farm bill was passed?
Nielsen: The last one took much longer to pass than this one. It was 2014.