NAM-03-01-19

AG Mag Central Iowa

SHUTDOWN the uncertainty Continuous threats create unease for Iowa’s Ag industry

WILLING TO WAIT: Farmers show support for the President as trade negotiations continue

BIPARTISAN APPROACH: Federal lawmakers band together on broadband bill

FARM TO TABLE: Iowa restaurants serve up fixings their farm and butcher meat straight from the pasture A

PUBLICATION • SPRING 2019

PRSRT STD U.S. POSTAGE PAID PERMIT NO. 371 NEWTON, IA 50208 P.O. Box 967 Newton, IA 50208 CHANGE SERVICE REQUESTED

Index

AG Mag Managing Editor Mike Mendenhall

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Advertising Director Craig Mittag

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Publisher Rich Paulsen

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Central Iowa

COVERSTORY

Magazine Editor & Page Design Pam Pratt Reporters & Photographers Mike Mendenhall, Orrin Shawl, Christopher Braunschweig, Monica Amman and Sarah Scull Cover illustration Monica Amman Published by News Publishing Co. 200 First Ave. East Newton, IA 50208 641-792-3121 Articles and advertisements are the property of News Printing Co. No portion of the Central Iowa Ag Mag may be reproduced without the written consent of the publisher. Ad content is not the responsibility of News Publishing Co. The information in this magazine is believed to be accurate; however, News Printing Co. cannot and does not guarantee its accuracy. News Printing Co. cannot and will not be held liable for the quality or performance of goods and services provided by advertisers listed in any portion of this magazine.

2 Spring 2019

SHUTDOWN THE UNCERTAINTY

The recent government shutdown affected local USDA offices and farmers. It has impacted the trade market as it caused difficulties in foreign communication.

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Index RURAL BROADBAND Access to high-speed internet has become a necessity for farmers.

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FARM TO TABLE Movement has become more popular with Iowa eateries

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The uncertainty of the U.S. trade negotiations with China could have impact on local farmers.

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Connect the crops A

BY CHRISTOPHER BRAUNSCHWEIG For Central Iowa Ag Mag

fter representatives of the U.S. House adjourned to campaign for re-election during the 2018 midterms, Congressman Dave Loebsack, D-Iowa, remembered meeting with a fellow legislator just before leaving the U.S. Capitol Building.

During a January visit with the Jasper County Farm Bureau in Newton, Loebsack said he put his arm around the shoulders of U.S. Congressman Bob Latta, R-Ohio, and told him, “No matter how this election turns out, whether you guys are in charge or we’re in charge, we’re going to keep working together on this Precision Ag Bill, right?”

Both lawmakers agreed they would push through no matter the results of the election, citing the bill’s importance for connecting rural communities and farmers to high-speed internet, something Loebsack has described in the past as “essential” to every day life and is no longer a luxury.

Following the re-election of both Loebsack and Latta in November 2018, President Donald Trump signed into law the 2018 Farm Bill conference report, which included language from the Precision Agriculture Connectivity Act, the legislation the two congressmen had been toiling over for quite some time.

A December press release posted on Loebsack’s website stated the Precision Agriculture Connectivity Act establishes a specific Task Force for Reviewing the Connectivity and

4 Spring 2019

Technology Needs of Precision Agriculture in the United States.

Operating under the Federal Communications Committee (FCC) and the U.S. Department of Agriculture (USDA), the task force is to be “comprised of agricultural producers, Internet service providers, broadband mapping experts, and representatives from the satellite industry, electric cooperatives, precision agriculture equipment manufacturers, and local and state government representatives.”

At the Jasper County Farm Bureau meeting in January, Loebsack said the FCC and USDA need to determine a sense and scope of broadband services in rural America and on farms.

“So we know what it’s going to take to get everybody connected in a proper way,” Loebsack said. “…The opportunities are just almost endless out there when it comes to this.”

For example, officials at John Deere, Loebsack said, are eager to get the ball rolling as it will allow farmers stronger access to farm machinery equipped with GPS and other software to better their planting and harvesting seasons.

The Precision Ag task force would help identify, measure and hopefully help close the current gaps in broadband coverage on farmland.

Places like Partner Communications Cooperative in Gilman have been providing rural residents and farmers with broadband services for several years.

CONTINUED TO PAGE 5

Christopher Braunschweig/Central Iowa Ag Mag

Christopher Braunschweig/Central Iowa Ag Mag

Chris Riddle, Customer Service, Sales and Marketing Manager of Partner Communications Cooperative, shows off a wall of fiber optics equipment sending broadband capabilities to rural communities and farmers.

Fiber optics offer rural communities broadband service. Chris Riddle, Customer Service, Sales and Marketing Manager of Partner Communications Cooperative, said the Precision Ag Bill is going to boost broadband packages for rural customers.

Customer Service, Sales and Marketing Manager Chris Riddle said the internet service provider utilizes its “many, many miles of fiber optics” to supply customers with stable broadband connections. Regulated by the FCC, Riddle said Partner Communications has about three customers per mile of fiber.

Comparing the federal government’s rural broadband initiatives to past efforts providing everyone the capability of a telephone line, Riddle stressed the importance of distributing internet to agricultural and country areas.

“We’re just hoping it’s a mechanism that works and it’s quick, because farmers needed this equipment yes-

“So that’s already in effect,” Riddle said. “And I think this Precision Ag Bill is going to give that a boost … Our farmers need this. As a cooperative, we need help getting the funding to get the cable to

terday,” Riddle said.

As someone who also lives in the country, Riddle said rural residents obviously “do not have access to everything that everybody in the city does.” He and other country dwellers rely on the internet to keep track of the markets, to sell products and to transfer money for purchases, among other needs.

Riddle said the biggest struggle Partner Communications regularly faces is the cost. Installing fiber optics for rural residents can costs tens of thousands of dollars per mile. Every year, Partner Communications is given a certain amount of federal funding and is required to increase broadband packages to rural customers.

them. I think it’s a great program. It has a great possibility and I think that we can really, really do some good work in the rural communities if this does work out like we think it’s going to.”

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Shutdown the Uncertainty is the inability for Iowa’s Ag trade association checkoffs and the Iowa Department of Agriculture to access general he 35-day government shutdown in December and market information for international trade missions. The January caused financial strain for nearly 800,000 missions are usually planned months in advance, but due federal workers, and the non-partisan Congressio- to the furlough of non-essential government personnel, nal Budget Office estimates it cost the U.S. economy as a Zylstra said the Iowa Dept. of Ag was unable to coordinate whole $11 billion in output. But one of the most heavily U.S. consulates on the ground.

And another government shutdown is always a concern impacted sectors was American agriculture. for the industry groups and farmers alike. Zylstra is As lawmakers struggled in early February to find part of a delegation planning a mid-February a compromise for a more long term continuing trip to Columbia with the U.S. Grain Council IOWA A spending resolution which includes funding L A G TR for their spring meeting. Producers from Iowa, for President Donald Trump’s mandated borMissouri and Ohio will be doing an extended der wall with Mexico, to avert a second govmission to visit feed mills and production ernment shutdown, officials in Iowa’s agrifacilities in the Central American country. culture industry have been wondering how The deadline for Congress and the preslong they can sustain that level of uncertainCOVERSTORY ident to reach a deal on border security and ty from Washington, D.C. fund the government was Feb. 15 The shutdown had negative impacts on trade, A temporary break in overseas communicaindustry associations’ ability to communicate tions can cause a delay, but some American farmers with U.S. government officials in foreign consulates, lost out on sales of existing U.S. grain supply due to the and created a backlog of paperwork for producers with farm and grain loans processed through local USDA Farm shutdown. Many farmers who put their grain under USDA loans at harvest when the market was slow, could not file Service Offices.

Roger Zylstra, a Lynnville corn and soybean farmer paperwork with their local FSA offices to have their prodand Iowa Corn Promotion Board vice president, voiced uct unsealed and moved due to the shutdown, possibly his concern on the government shutdown’s impact on missing out on an opportunity to sell at a better price.

“That was the problem for many farmers,” Zylstra said. commodity trade at a round-table in January with U.S. Congressman Dave Loebsack, D-Iowa, at the Iowa Farm “They saw an opportunity to market (their grain) but could not get the paperwork filed to unseal and lift it.”

Bureau in Newton.

The biggest challenge during a shutdown, Zylstra said, CONTINUED TO PAGE 74 CE

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BY MIKE MENDENHALL For Central Iowa Ag Mag

Mike Mendenhall/Central Iowa Ag Mag

Lynnville farmer and Iowa Corn Promotion Board Vice President Roger Zylstra speaks to the Newton Daily News on his farm in 2014. Iowa producers and Ag-industry professionals are watching Washington, D.C. for more certainty in government appropriations to keep its doors open, as the most recent shutdown affected everything from trade to farm loan processing.

As of early February, many farmers were still waiting on final 2018 market reports on grain supply, yields and

sales. Due to the shutdown, farmer’s like Zylstra are concerned those reports could come late affecting farmers’

Mike Mendenhall/Central Iowa Ag Mag

The USDA Farm Services Office in Newton was shuttered for the bulk of the 35-day partial federal government shutdown in December 2010 and January 2019.

planning for 2019.

“We don’t know how much grain sold or how much was shipped,” Zylstra said.

“We’re waiting on production numbers and final yields (from 2018). Uncertainty is stifling any movement in the market.”

This comes at a time when two vital trade agreements for U.S. Ag are still sitting on the table. The deal for the renegotiated North American Free Trade Agreement — now called the United States-Mexico-Canada-Agreement or USMCA — is done but still waiting for a vote from Congress.

The shutdown also slowed talks with Japan, another major importer of American Ag goods, for a bilateral trade agreement needed after President Trump pulled the U.S. out of the Trans-Pacific Partnership.

According to the USDA,

Japan purchased $1 billion in U.S. Soybeans in 2017, $1.9 billion in pork and pork products and $1.4 billion in U.S. beef.

In a j o i n t s t a t e m e n t released Jan. 30, U.S. Sen. Chuck Grassley and Iowa Sec. of Agriculture Mike Naig said international trade and opening new markets for Iowa commodities are their top priorities in 2019.

“Unfortunately, our producers are unlikely to realize the market access promises of USMCA while the Section 232 tariffs on steel and aluminum imports from Canada and Mexico remain,” Grassley and Naig said in the statement. “Because of these tariffs, Mexico and Canada have imposed retaliatory tariffs on American exports. Mexico has hit our pork exports with a 20 percent tariff.”

According to Iowa State University economist Dermot Hayes, this is costing U.S. pork producers $12 per animal, meaning industry-wide losses of $1.5 billion annually. Paired with Chinese retaliatory tariffs on pork, soybeans, corn and wheat, Grassley and Naig say farmers need relief fast.

Grassley said in a Feb. 1 Q&A, he is against another government shutdown and that Americans in the Ag-community should expect both branches of government to reach compromise. He is co-sponsoring the End Government Sh u t d ow n s Ac t , w h i c h would generate an automatic Continuing Resolution for any spending bill not completed by the end of the federal government’s fiscal year on Sept. 30. If a deal is not reached, the act would activate an automatic 1 percent across-the-board spending cut to federal departments after 120 days and an additional 1 percent after another 90 days of failed negotiations.

“For 35 days, Americans woke up to a partial government shutdown that negatively impacted the services Americans expect from the IRS, USDA, National Parks, and more,” Grassley said.

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Farm-to-Table continues to make waves in Iowa eateries

Orrin Shawl/Central Iowa Ag Mag

Megan Pryke drops off a farm-to-table meal inside The Lemon Tree Teahouse & Restaurant. The meal features French onion soup – made from scratch with local Swiss cheese — homemade rye bread, homemade croissant and homemade butter.

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BY ORRIN SHAWL For Central Iowa Ag Mag

hese days, people go out of their way to find fresh food.

Local restaurants in Iowa appear to be making those accommodations with the growing farm-to-table movement. Eateries are serving food with the fixings they pluck from their farm and are serving sameday butchered meat straight from the pasture.

Two restaurants in the Jasper County area are no exception: the new Pitchfork Primitives & Fodder at 203 S. Main St. in Laurel, and the established The Lemon Tree Teahouse & Restaurant, 309 First Ave. W. in Newton.

Pitchfork Primitives & Fodder John and Melissa Pieters were two non-farmers who eventually made this idea come to life. John, a welder at Emerson Process Management, received a lot of encouragement from his co-workers after regularly bringing freshly sourced meals for them.

“I smoke a lot of meat. I take food to work all the time,” John said. “The guys always told me, ‘If you ever get the chance to open a restaurant, you should do it. Your food is just phenomenal.’”

Working with Melissa, who owned her own art studio called Messy Missy’s, the couple was able buy a former cafe, remaking the inside with the help of their children.

“We’ve owned the building for four years. It’s just taken us a little while to get it transitioned to the point where we like the inside,” Melissa said. “We ended up gutting it and doing a ton of work we weren’t expecting when we first bought it.”

The couple now announces on their Facebook page when the Pitchfork Primitives & Fodder eatery is open and what they will be serving. The dishes they’re known for include Cajun pork and New Orleans-style barbecue shrimp.

“Our aspect is farm to table, so we try to get everything as locally sourced that we can possibly get. From our meats to our vegetables,” John said. “A lot of times, when you can’t get seasonal stuff, of course, you have to go the other direction, but we do in such a way where we can fit 20 people maximum. That’s really cool because it lets me draw the menu up and everybody eats the same thing.”

The couple has no shortage of options when it comes to finding places to select the freshest ingredients. They have their own 26-acre farm where they keep a dozen head of cattle. They also visit State Center Locker, Dayton Meat Products, Inc. in Malcom, Market off Main in Albion and sometimes feature items from their friends.

Orrin Shawl/Central Iowa Ag Mag

John and Melissa Pieters get their new eatery, Pitchfork Primitives & Fodder, 203 S. Main St. in Laurel, up and running for business.

The key farm-to-table, for Melissa, is freshness.

“Through cooking for family and the experience from that, for me, it just means not using anything that comes out of a can or is frozen. We only bring in fresh ingredients that you start from scratch,” Melissa said. “It takes time because it would be a lot easier to buy a bag of frozen potatoes. It’s not going to have the same effect.”

The Lemon Tree Teahouse & Restaurant Anyone familiar with the downtown Newton has likely heard of The Lemon Tree Teahouse & Restaurant.

The teahouse is owned and operated

by Megan Pryke, with the assistance of her mother and boyfriend.

The teahouse menu includes quiche, chicken pot pie, butternut squash stew and a sweet chicken salad croissant.

Pryke said she gets the majority of her fresh ingredients from Iowa Food Cooperative out of Des Moines, as well as the grocer That Iowa Girl in Clarion.

“Just like any farm, sometimes one farm has more available than the other.

The butternut squash, I get from the co-op. My sausage comes from the co-op, my bacon comes from the co-op, my cream I make with butter that comes from the co-op,” Pryke said. “Really,

everything except for some spices that are hard to access (are locally sourced).

“A lot of the neat products I get from the co-op, they come frozen and then I use them. The chicken and the bacon I get, they come frozen. But I get it in smaller portions,” Pryke added. “I through it every two or three weeks because the co-op cycles (products) every two weeks. So I try to go through what I have.”

Throughout her life, Pryke grew up in a small farming town in New York near the Vermont-New York state line and had seen firsthand business resembling farm-to-table patterns. Thus, it made the process familiar to her when she discovered IFC and That Iowa Girl when settling in central Iowa.

“I knew about the farm-to-table movement before the farm-to-table movement was a thing. I can say that I grew up in upstate New York in a farm community right on the Vermont border,” Pryke said. “We moved here when I was a teenager and went back there during college. I worked in a couple of restaurants there and they were working with local farmers and producers to use their product from the community.

“When I found out about IFC, I knew how accessible it was,” Pryke added. “It was very easy for me to say, ‘these are local Iowa producers that give me the same and better quality (than at stores).”

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TRADE WAR 10 Spring 2019

Let’s make a deal Ag leaders hopeful a new trade deal is on the horizon China,” Greiner said. “... almost $2 per bushel less espite widespread today than they were a year skepticism that the ago.”

United States and Should the trade dispute China will reach a trade deal rally on, not only will the

by March 1, some are cauprice of grain continue to tiously optimistic. drop, but there is fear of it Curt Mether, Iowa Corn affecting the price of other Growers Association presicommodities. dent, said most farmers realMether said the removal ized something had to be of a third of the market in a done; and not only do they free-market system destroys continue to support Presithe price of everything.

Tariffs affect dent Donald Trump in his “That’s what it’s doing to commodity prices attempt to negotiate a favorsoybeans ... that has affects able trade deal with China, on corn acres for next year Lindsay Greiner, Iowa Soybut they are willing to wait. because they plant more bean Association board pres“Farmers wait a whole year corn and that could hurt the ident, said soybean prices for a crop, so they ... are willprice of everything,” Mether are much lower today than ing wait awhile for Trump’s said. “Just take off the top 20 this time last year. negotiation style to work,” percent of demand and that’s “I think that soy beans in Mether said. a big issue.” particular have taken a hit Should a trade deal fail to Iowans can expect to see on this trade dispute with the prices of some items that were once exported go a bit lower, but other prices will go higher. While the impact these tariffs would have on farmers is not easy to predict, commodity prices will be one of the first places it noticed.

The ISU study shows that Iowa’s soybean industry could lose between $159 million and $891 million, and the state’s corn industry may lose between $90 million and $579 million.

Ethanol producers are estimated to lose $105 million. However, the Iowa hog industry is expected to face a loss of up to $955 million.

Even if a trade deal is made, a climb in commodity prices are expected to show slow gains.

“We’re not going to see a rebound in soybean prices in the absence of a deal with China Greiner said. “So were going to look at prices that are break even at best, if not lower than break even.”

Although some farmers have taken some risk-management steps to stay ahead, such as selling off grain early, what

BY SARAH SCULL For Central Iowa Ag Mag

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happen by the self-imposed deadline, Trump plans t o i n c re a s e tariff rates on more than $200 billion Curt worth of ChiMether nese imports – an increase from 10 to 25 percent – and Iowa farmers will be hit hard.

happens in 5, 10, 20 years should a trade war continue?

Long-term reduction in market share In the 1980s, the U.S. enacted a grain embargo against the former Soviet Union, and farmers in the U.S. felt the sting of falling commodity prices as they watched the European farmers gained much of the trade American farmers lost. In 2009, a trade dispute with China resulted in the U.S. losing a significant portion of its China poultry trade to Brazil and the European Union.

Today, soybean producers are facing a similar situation.

“Brazil is starting to combine beans, and now they have another supply,” Mether said. “There was a short window for three or four months where we were their market.

That has disappeared. That’s going to keep the price of soybeans down for awhile, I’m afraid.”

Dealing with loss As the nation’s second-largest agricultural exporter, after California, Iowa leads the nation in corn, soybean and pork exports. Therefore, Iowa farmers are expected to receive approximately $550 million in direct aid from the USDA’s Market Facilitation Program (MFP), to help offset export losses due to the tariffs.

In an interview with Wallace’s Farmer Iowa Soybean Association CEO Kirk Leeds said the $1.65 per bushel USDA is offering soybean farmers through the MFP will help but doesn’t compare to the amount farmers would get from the U.S. settling the trade war with China and other countries.

However, there is hope that a trade deal is nearing.

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USMCA After 13 months of negotiations, the governments of the United States, Canada and Mexico announced a trilateral free-trade agreement on Sept. 30.

The agreement, called the United States-Mexico-Canada Agreement (USMCA), is intended to replace the North American Free Trade Agreement (NAFTA) and create a modernized free-trade system between the three Lindsay parties and address critiGreiner cal issues, such as the harmonization of regulatory systems, e-commerce and the protection of intellectual property.

A d d i t i o n a l l y, t h e USMCA changes some rules and processes governing how certain goods are traded within North Kirk Leeds America and the mechanisms available for how trade disputes are resolved.

“We do feel really good about the USMCA,” Mether said. “We got that done. It still has to go through congress yet, and hopefully it will get approved.

And it should.”

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USMCA was signed by all three countries on Nov. 30 at the G20 Summit in Buenos Aires.

On Dec. 2, Trump announced he would begin the six-month process to withdraw from NAFTA, adding that Congress needed either to ratify the USMCA or else revert to pre-NAFTA trading rules.

Despite the lack of a trade agreement, Greiner said certain activity appears to be a sign of positive things to come and gives him hope that an agreement is coming.

“The Chinese have agreed to purchase an additional 5 million metric tons of U.S. soybeans, which I think is a good sign,” Greiner said. “It still doesn’t get us even close to what we were selling to them before the trade dispute, but any little bit is good. Not quite as good as we’ve been hoping for, but there’s progress.”

The USMCA Agreement, also referred to as NAFTA 2.0, is currently awaiting the approval of Congress before it can be ratified.

Mether said farmers are giving Trump more time, but are growing impatient.

“If he doesn’t get them to work, I think he’ll lose their support pretty quickly.

But they are still thinking that he’s going to get something done in the next couple of months,” he said.