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4 CapitalPress.com Friday, January 18, 2019 Farm Bureau Analyst: ‘Irrational’ fluctuations may help crop prices Commodity prices often related to market emotions By MATEUSZ PERKOWSKI Capital Press NEW ORLEANS — Though economic funda- mentals don’t support a sharp surge in commodity crop prices, that doesn’t mean the outlook for U.S. farmers is entirely pessimistic, accord- Mateusz Perkowski/Capital Press ing to a market analyst. Farmers in the coming Todd Hultman, grain markets analyst with the DTN information service, speaks year may be able to take about crop prices at the American Farm Bureau Federation’s convention in New advantage of swings in the Orleans on Jan. 13. commodity crop market due els, they come from people,” Corn’s price is highly cor- to “irrational” shifts that are DTN information service. divorced from actual supply “When it comes down to Hultman said at the Amer- related with other crops, such and demand over the long it, markets are people. Prices ican Farm Bureau Federa- as soybeans and wheat, but it term, said Todd Hultman, don’t come from a text- tion’s annual convention in also tends to track other com- modities, such as gold, cop- grain market analyst with the book or mathematical mod- New Orleans on Jan. 13. per and crude oil, Hultman said. Volatile swings in these markets can be triggered by perceptions that don’t directly relate to market fundamen- tals, he said. For example, corn prices dropped from roughly $8 to $3 per bushel during the 2008 financial cri- sis without dramatic changes in yield or inventory. Mere fears of a drought or another weather event can affect this “big interconnected haggling process” enough to have a significant financial impact on farmers, Hultman said. “It doesn’t take a lot to move a market.” That’s likely to be par- ticularly true in 2019, since inventory levels of corn are expected to be in a range that’s associated with wide price fluctuations, he said. Current projections antici- pate “ending stocks” of corn will represent about 14 per- cent of corn usage in 2019, Hultman said. When the ratio of ending stocks to usage is below 7 percent, it signals a “bull mar- ket” for corn prices, but if it’s above 16 percent, it signals a “bear market,” he said. When the ratio falls between those two bench- marks, however, corn prices tend to be less predictably associated with supply and demand, he said. “It’s not as well defined as we think it is.” In light of uncertain- ties such as Chinese tariffs on U.S. farm exports, Hul- tman said the price of corn next year could fall between $2.80 and $3.80 per bushel. “In times of surplus, these irrational rallies are the best opportunities to shoot for,” he said. Western federal lands policy Guest farmworker reforms open to challenge, attorney says unlikely, attorney says By MATEUSZ PERKOWSKI Capital Press Federal ownership of vast acreage across the West is vulnerable to a con- stitutional challenge by affected state governments, according to a public lands attorney. While court rulings until now have supported the fed- eral government’s control over Western public lands, attorney George Wentz said those cases predate the Fed- eral Land Policy and Man- agement Act of 1976, which made federal ownership permanent. An argument could be made that federal owner- ship of major swaths of 12 Western states effectively deprives them of the same sovereignty as the remain- ing 38 states, he said. “Why are we inferior because George Wentz, we chose to live in the West?” Wentz asked growers at the American Farm Bureau Federation’s annual con- vention in New Orleans on Jan. 13. For reasons of legal standing, it’s likely that FLPMA would have to be challenged by a state gov- ernment impacted by the law, but none have stepped up to the challenge so far, said Wentz, who has repre- sented Utah in a dispute over federal land management. In the case of Oregon, Idaho, Utah, Nevada and Alaska, the federal govern- ment owns more than half the land mass. Realistically, such vast federal ownership of pub- lic land limits the ability of Western states to develop economically and attract residents, effectively hin- dering their political power permanently, Wentz said. “A less-than-sovereign state can’t protect its citi- zens in the way a fully sov- ereign state can,” he said. “How do I compete with Texas, how do I compete with New York, how do I compete with Florida?” The U.S. electoral sys- tem has basically been “gerrymandered” to favor populous states in the East and Midwest over sparsely populated ones in the West, he said. 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At the conclusion of his presentation, Sequeira com- pared such a development to other unlikely occur- rences as he showed a slide depicting a sasquatch, a leprechaun, and several extraterrestrials. Since 2005, the federal government’s H-2A agri- cultural guestworker pro- gram has grown by roughly 400 percent, to more than 240,000 annual positions, and is on track to hit 300,000 positions, he said. The expansion is partly propelled by the participa- tion of large farms in Wash- ington, each of which can employ hundreds or even more than a thousand H-2A workers, Sequeira said. What’s worrisome to farmers is the rising min- imum wage paid to these workers, known as the adverse effect wage rate, which has climbed from a national average of $8.61 per hour in 2015 to $12.96 in 2019, he said. With Democrats winning a majority in the House and the retirement of a longtime champion of agricultural guestworker reform — Rep. Bob Goodlatte, R-Va. — it’s unlikely Congress will soon undertake such controversial Mateusz Perkowski/Capital Press Bob Boehm, left, general manager of Great Lakes Agricultural Labor Services, and attorney Leon Sequeira, center, speak about guest farmworkers with attendees at the American Farm Bureau Federation’s annual convention in New Orleans on Jan. 13. legislation, Sequeira said. The Democrat-controlled House is more likely to now focus on providing a path to citizenship for workers who are in the U.S. illegally, he said. Disputes over the status of farm workers already living in the U.S. ille- gally helped sink several attempts at agricultural guestworker reform since 2017, he said. It became apparent there was strong Republican sup- port for a bill to make the guest farm worker pro- gram more flexible, such as one proposed by Goodlatte that would have allowed up to 450,000 such posi- tions annually and permit- ted year-round operations, such as dairies, to partici- pate, Sequeira said. “We were within striking distance,” he said. The attempts ultimately weren’t successful partly because employers on the West Coast, some of whom heavily rely on undocu- mented farm workers, were unhappy with provisions impeding a path to legal status for such immigrants, Sequeira said. While the American Farm Bureau Federation tries to take incremental steps toward improving access to legal guestworkers, the situ- ation becomes complicated if the changes favor some growers over others, said Paul Schlegel, the organiza- tion’s managing director for public policy. “You get into a political tug-of-war,” he said. For now, the existing H-2A program will largely remain the only viable legal option for many labor-de- pendent farmers, said Bob Boehm, general manager of Great Lakes Agricul- tural Labor Services, which assists growers with the program. Foreign workers consider obtaining an H-2A visa “like winning the lottery” due to higher wages and free hous- ing, while farmers appre- ciate the predictability of the program, he said. For example, H-2A workers can be depended upon to stay through the end of the grow- ing season instead of mov- ing elsewhere. “It’s often those tail ends where your profit is,” Boehm said. Strong Since 1959 Trusted Manufacturing Diverse Bag Capabilities 1-800-456-7878 www.justusbag.com • SPOKANE PLANT & HEADQUARTERS 11205 E. Trent Ave. Spokane Valley, WA 99206 - 4630 darin@justusbag.com 509-924-8353 • PORTLAND PLANT 2734 N. Hayden Island Dr. Portland, OR 97217 ctoombs@justusbag.com 503-287-3885 • MOSES LAKE BRANCHES 417 E. 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