The year started off with the passage of dedicated, long-term water quality funding to continue to scale up the ongoing conservation work underway across the state. Uncertainty around trade and the impact that has had on markets has been a key issue throughout the year. While there has been significant movement on trade in recent weeks, the trade disruptions continue to impact our farmers and the state’s economy.
Dedicated, long-term water quality funding
In January, the Legislature passed and Governor Reynolds signed into law dedicated, long-term water quality funding that commits more than $280 million to water quality efforts in Iowa over the next 12 years.
The Iowa Department of Agriculture and Land Stewardship will receive $2 million this year, $4 million next year and then $15 million annually as part of the legislation. The remaining funds will go to the Iowa Finance Authority to support communities upgrading wastewater treatment facilities and urban water quality focused practices.
The new funding is being targeted towards conservation infrastructure practices such as wetlands, saturated buffers and bioreactors. These practices are placed on the edge of fields and provide significant, long-term nutrient reduction and habitat benefits. The science assessment as part of the Iowa Nutrient Reduction Strategy shows these practices can reduce nitrate levels by 40 to 60 percent in tile drainage water.
A number of international trade disputes with several of our largest trading partners have created a lot of uncertainty within Iowa agriculture and have also had an impact on the state’s economy. In particular, retaliatory tariffs put in place by Canada, Mexico and China, three of our state’s top four trading partners, have had a significant impact on prices for a number of ag products.
A study by the Center for Agricultural and Rural Development at Iowa State University looked at the impact of the trade disruptions and showed Iowa’s gross state product (GSP) losing in the range of $1 billion to $2 billion just this year.
Fortunately, there has also been positive news on the trade front recently. The Trump administration has finalized updated agreements with Canada and Mexico as well as South Korea. They have also started the process to begin negotiating with Japan and Europe.
Recent announcements that China is resuming soybean purchases is also welcome news, but the purchases that have been announced so far only represent a very small percentage of typical U.S. soybean sales to China.
The administration has created a Market Facilitation Program to help farmers being hurt by the current disruptions.
Bountiful production despite droughts, floods
Unfortunately, words like variability and extreme were the words used by many to describe the 2018 growing season. Despite the challenges, many farmers had record or near record yields this year. Drought persisted in southeast Iowa and the dry conditions impacted yields. In northwest Iowa, periods of heavy rain and flooding impacted yields in waterlogged fields.
Despite the weather challenges, Iowa corn production is forecast at 2.52 billion bushels according to the latest USDA, National Agricultural Statistics Service Crop Production report. This would be the third largest Iowa crop on record. The statewide average yield is expected to be 198 bushels per acre, down four bushels per acre from last year.
USDA has projected record soybean production for Iowa with 577 million bushels. The statewide yield forecast is 58 bushels per acre, up one bushel per acre from last year.
African swine fever highlights importance of animal disease response planning
Widespread reports of African swine fever (ASF) in China as well as confirmed cases in Europe have caused significant concern for Iowa pork producers and highlighted the importance of farmers following strict biosecurity protocols. ASF is a reportable foreign animal disease (FAD) that could have a devastating economic impact if found in the U.S.
The Department has scaled up foreign animal disease response preparations in recent years in response to concerns about ASF, Avian Influenza and Foot and Mouth Disease. The Department has received additional funding better equip and prepare for potential future outbreaks, including hiring an Emergency Management Coordinator, updating emergency response plans and organizing disease response exercises.