December 16, 2016
CapitalPress.com
7
Experts predict continued
down grain markets in 2017
By JOHN O’CONNELL
Capital Press
Courtesy of Public Lands Council
Cattle and greater sage grouse share public land in Idaho. Several counties and a conservation
district have sued to stop the Bureau of Land Management’s new planning rules.
Counties sue to stop BLM planning rule
By JOHN O’CONNELL
Capital Press
SALT LAKE CITY —
Six Western counties and a
soil and water conservation
district filed a lawsuit in fed-
eral court Dec. 12 seeking to
nullify a new rule governing
Bureau of Land Management
decision-making.
Litigants include Kane
County, Utah; Big Horn
County, Wyo.; Chaves Coun-
ty, N.M.; Custer County, Ida-
ho; Garfield County, Colo.;
Modoc County, Calif.; and
the Dona Ana Soil and Water
Conservation District in New
Mexico.
American Stewards of
Liberty — a private property
rights organization that helps
local governments coordinate
with federal agencies — will
manage the lawsuit, alleg-
ing the new rule improperly
excludes local governments
from BLM planning, affecting
175 million acres in 11 West-
ern states.
Margaret Byfield, the orga-
nization’s executive director,
said BLM violated the Feder-
al Land Policy and Manage-
ment Act by failing to coor-
dinate rule development with
local governments. Further-
more, she said, BLM failed
to conduct a National Envi-
ronmental Policy Act analysis
on impacts of the rule, noting
the U.S. Forest Service lost
a lawsuit regarding its 2012
planning rule update on sim-
ilar grounds.
Finally, the suit alleges the
update was directed under the
U.S. Department of Interior’s
climate change policy, which
also failed to undergo a proper
NEPA evaluation.
In a press release, BLM
touted the new rule as mak-
ing land-use planning more
accessible to the public, more
efficient and more responsive
to changing conditions on
public lands.
“Allowing additional op-
portunities for public engage-
ment will improve respon-
siveness at the local level and
help address the challenges of
managing public lands in the
21st century,” Assistant Sec-
retary for Land and Mineral
Management Janice Schnei-
der said in the press release.
From Byfield’s perspec-
tive, the rule eliminates oppor-
tunities for local governments
to weigh in so “somebody in
New York City has as much
say as the local government
does in the way they prepare
these rules.”
Under the old rule, BLM
had to consider local plans and
restrictions in making plans,
thereby resolving conflicts
early in the process, Byfield
said. She said the new rule
places the onus on local gov-
ernments to notify the BLM
about potential conflicts, and
local officials have their first
opportunity to weigh in after
draft plans have already been
released.
Byfield said BLM officials
have suggested county leaders
weigh in during a special “co-
operative agency” process,
which occurs behind closed
doors, and county participa-
tion would therefore violate
open meetings laws.
Byfield anticipates the
new rule will result in “more
decisions based on the envi-
ronmental agenda and those
that oppose productive use of
the resources.” She said three
counties will shoulder most of
the estimated $300,000 in le-
gal fees, but she’s established
a special account for legal
fund donations.
Ethan Lane, executive di-
rector of the Public Lands
Council, said public lands
ranchers support the law-
suit, concerned the new rule
changes BLM’s goal from
managing for “multiple uses
and sustained yield” to plan-
ning and responding to “social
and environmental change.”
“This planning process
reorganization goes out of its
way to minimize those local
voices, whether they be coun-
ty governments, ranchers or
anyone else,” said Lane, who
described the rule as “half-
baked” and anticipates oppo-
nents will use multiple ave-
nues to attack it.
IDAHO FALLS, Idaho —
Utah State University agricul-
tural economist Ryan Larsen
expects 2017 will be another
down year for agriculture,
with a global supply glut put-
ting downward pressure on
the prices of major commod-
ities after a string of strong
production years.
“There’s no indicator to
point to any major changes
in 2017 on the commodities
side,” Larsen said during a
Dec. 7 presentation on the
U.S. and global agricultural
outlook during the annual Ida-
ho Ag Outlook Seminar.
Larsen predicts farmers
will continue drawing on their
equity to free up working cap-
ital and continue operating.
He also expects regulators to
downgrade farm loans as pro-
ducer profit margins tighten,
and he expects some banks
to be tempted to move toward
justifying loans based more
on collateral than cash flow
— a situation that helped lead
to the financial crisis of the
1980s.
“How many years can a
bank justify loan exemptions
to a borrower?” Larsen asked,
explaining grower profitabil-
ity has in many cases fallen
below lender requirements.
Larsen
said
Russia,
Ukraine and Kazakhstan have
reported record or near-re-
cord wheat yields. Russia also
had a record corn crop, and
Ukraine corn yields were near
record levels. Brazil has fore-
cast a record soybean crop.
Idaho Barley Commis-
sion Administrator Kelly Ol-
son said demand for grain is
strong, with U.S. wheat use
expected to increase 16 per-
cent in the 2016-2017 market-
ing year, and domestic corn
use expected to increase by 7
percent.
But it won’t be enough to
keep up with a huge supply,
she said. Wheat stocks are
projected to end the marketing
year up 17 percent in the U.S.
and 3 percent globally, while
Capital Press File
An agricultural economist predicts 2017 will be another down year
for many commodity prices.
ending corn stocks should be
up 38 percent in the U.S. and
4 percent globally.
“We’ve had two or three
years of above-average pro-
duction across the world,”
Olson said. “We have large
stocks of crops, and that’s not
driving any prices up.”
Larsen said a recent report
by an equipment manufac-
turers’ association shows an
increase in sales of combines
and four-wheel-drive tractors.
It’s a sign to him that farm-
ers are “starting to settle into
this moderated price forecast
we’re seeing.”
Within the Midwest, Lars-
en predicts the coming year
will bring increased scrutiny
by agricultural lenders and
a greater risk of growers de-
faulting on their operating
loans. Larsen ran calculations
based on financial informa-
tion from 500 sample farms
throughout the Midwest pre-
dicting their likelihood of de-
faulting on loans.
In 2012, farms in the sam-
ple averaged below a 2 per-
cent chance of defaulting. The
number rose above 3 percent
in 2016 and will likely top 4
percent in 2017, he said.
Thanks to its diversi-
ty of crops, he said Idaho’s
farm economy downturn has
lagged the Midwest.
“I think 2017 is going to
be a pivotal year in the Mid-
west, and I think we’re still
a year or two out in Idaho
before we start seeing any
major issues,” Larsen said,
adding producers who have
grown their operations at a
moderate pace and haven’t
invested a large percentage
of their revenue in machinery
or expanded rapidly through
cash land rentals should be
on more solid footing for the
downturn.
Doug Robison, a senior
vice president with Northwest
Farm Credit Services, said
he’s starting to see “earnings
weakness show up with some
producers, but probably not
on the scale that Larsen was
referring to.”
Robison said growers who
produce hay and grain have
been vulnerable but he still
expects some Idaho producers
to make profits in 2016.
However, he acknowl-
edged budgeting for 2017 will
be a tough task for farmers
statewide.
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