Friday, March 5, 2021
Expert: Read fine print on
soil carbon market contracts
By MATTHEW WEAVER
Capital Press
Farmers should read the
fine print when entering
into agreements with soil
carbon market programs,
an expert says.
Soil carbon market pro-
grams are not fully estab-
lished, and a lot of uncer-
tainty remains, said Jeremy
Bunch, the sales, research
and logistics manager at
Shepherd’s Grain, whose
farmer-owners use no-till
practices.
“There’s a lot of com-
panies that are trying to be
leaders in this space, but
my sense is no one really
knows where they’re going
exactly yet,” he said. “It’s
still an evolving program
overall.”
More
education
is
needed, Bunch said.
“The goal is not to get
growers to sign up for car-
bon markets, the goal is to
sequester carbon,” he said.
Growers also need to
be aware of the value of
ers to implement a major
new practice to enhance
carbon sequestration.
Shepherd’s Grain is
working with several com-
panies to develop a pro-
gram that would retro-
actively apply to carbon
already stored, Bunch said.
Bunch spoke Feb. 24
during the Palouse chap-
ter of the Citizens’ Climate
Lobby meeting on agricul-
ture, soil health and climate
policy, held online.
Current programs won’t
Shepherd’s Grain necessarily help a farmer
Shepherd’s Grain is working with carbon markets to as- transition from conven-
sure that its farmer-owners will be able to participate. tional tillage to no-till, he
said. He cited one grower’s
their data. Some programs challenge for the folks who concerns over yield loss,
require sharing on-farm have been farming no-till, saying the programs didn’t
data, Bunch said.
diverse crop rotations for pay enough to cover it.
Shepherd’s Grain farm-
Long-term contracts that 20 or 30 years — it’s more
restrict farming practices difficult for them to jump ers use direct seed farming
are a deal-breaker for grow- into these programs,” he practices and are certified
ers, particularly those on said.
for sustainable practices.
leased land, Bunch said.
Growers who have The company’s primary
Many new carbon mar- already adopted no-till prac- market is the Pacific North-
kets are not able to pay for tices will be restricted from west, but it sells flour
past carbon accruals, Bunch a lot of soil carbon mar- around the U.S. through
ket programs, Bunch said. distributors.
said.
“It becomes more of a Most want to require grow-
CapitalPress.com 11
Tai, Biden’s USTR nominee,
unveils her vision for global trade
By SIERRA DAWN McCLAIN
Capital Press
WASHINGTON, D.C.
— The U.S. Senate Finance
Committee Feb. 25 held a
hearing to consider Kath-
erine Tai, Biden’s nomi-
nee to serve as U.S. Trade
Representative.
Tai is chief trade law-
yer for the House Ways
and Means Committee. She
speaks fluent Mandarin and
would be the first Asian
American to hold the role.
“The chance to serve
the American people, fight
on their behalf and repre-
sent them on the world stage
once again will be the great-
est honor of my life,” she
told senators.
If confirmed, Tai said
her priorities would include
emerging from the pan-
demic,
enhancing
the
nation’s “competitive edge,”
building diversified sup-
ply chains, rebuilding alli-
ances, holding nations to cli-
mate standards and cracking
down on unfair trade prac-
tices, especially from China.
“China is simultaneously
a rival, a trade partner and an
outsized player whose coop-
eration we’ll
also need to
address cer-
tain global
challenges,”
said Tai.
T h e
Katherine
ambassa-
Tai
d o r- d e s i g -
nate fielded
3 1/2 hours of senators’
questions.
Tai said, if confirmed, she
will push China to follow
through on its Phase 1 trade
deal commitments.
“There are promises
China made that China
needs to follow through on,”
she said.
On
the
United
States-Mexico-Canada
Agreement, or USMCA, Tai
said she understands U.S.
dairy producers’ frustration
with Canada’s dairy poli-
cies. Tai said consulting with
American dairy farmers will
be “very, very important”
as she holds Canada to its
promises.
With Mexico, she plans
to “engage” the country’s
leaders regarding labor vio-
lations and address Mex-
ico’s restrictions on U.S.
potato imports.
WSU economist: Crop insurance choice a ‘crapshoot’
By MATTHEW WEAVER
Capital Press
Wheat farmers this year
won’t have a clear-cut choice
between which federal crop
insurance program will work
best for them in the 2021-
2022 marketing year, a small
grains economist at Wash-
ington State University says.
One type of crop insur-
ance is Price Loss Coverage
— called PLC. A payment
is triggered when the price
of wheat is below $5.50 per
bushel.
USDA projects the aver-
age wheat price will be at
most $5.10 per bushel for the
next decade, assuming stable
production and demand.
“If this ends up being
accurate, and it won’t,
because it’s 10 years out,
PLC will always make pay-
ments in the foreseeable
future,” said Randy Forten-
bery of WSU.
However, Kansas State
University recently projected
an average price of $5.80 per
bushel for the 2021-2022
marketing year, and USDA
projects $5.50 per bushel for
the year after that.
That will make it difficult
for farmers to decide between
PLC crop insurance and the
Agriculture Risk Coverage
program, known as ARC,
Fortenbery said. ARC pro-
vides income support tied to
the historical base acres, not
current production, of cov-
ered commodities, according
to USDA.
To make matters even
more confusing for farm-
ers, there’s a 40% chance
the price will be below the
$5.50 per bushel target price
next summer, but there’s
also a 40% chance the price
will be above $6.50 per
bushel, he said.
“This year, right now, it
really appears to be kind of
a crapshoot between PLC
or ARC is going to give us
the strongest protection,”
Fortenbery said. “It’s going
to be a challenging deci-
sion and there is no real
clear answer in my mind
right now about which pro-
gram is likely to be the most
attractive.”
It comes down to whether
a farmer lives in an area
where county average yields
have a lot of variability, he
said.
“We’re right at that
$5.50 benchmark, where
it wouldn’t take much of a
change one way or the other
to change the attractiveness
of one program over the
other,” Fortenbery said. “It’s
very early to try and predict
which of those changes is
most likely to happen.”
Fortenbery delivered his
annual economic forecast
Feb. 24 during the Spokane
Ag Show, held virtually due
to the COVID-19 pandemic.
Part of the reason wheat
prices have recently risen is
wheat is beginning to move
into feed rations domesti-
Matthew Weaver/Capital Press File
Randy Fortenbery, small grains economist at Washing-
ton State University.
cally and internationally
because of high corn prices,
he said. About 25% more
wheat will go into feed this
year than in 2020.
China ramped up its pur-
chases of feed grain, includ-
ing wheat, exceeding expec-
tations as it rebuilds its
livestock herds, particularly
hogs, after a 50% loss due to
swine fever in the past year.
Wheat acres have been
declining steadily since
2013, and USDA predicts
that will continue through the
next decade.
This year may be the
exception, Fortenbery said,
as USDA predicts winter
wheat planted last fall for
the 2021 harvest is up about
1.6 million acres from the
30.4 million acres planted in
2020.
Ratification
of
the
U.S.-Mexico-Canada agree-
ment, Japan Trade Agree-
ment and phase 1 of the
China agreement does pro-
vide stability, Fortenbery
said.
China did not meet its ini-
tial obligations in the first
phase of the deal, but later
bought a record amount of
U.S. products, particularly
in agriculture. Continued
purchases will be an import-
ant contributor to U.S. farm
income in 2021, represent-
ing 25% of total U.S. agri-
cultural export volume.
Fortenbery called 2018
the most aggressive trade
re-alignment and re-negotia-
tion period in a century.
“We’d never approached
attempting to renegotiate
with all of our trading part-
ners simultaneously since the
1900s,” he said. “We made
some significant progress.”
The overall U.S. trade
balance declined since then,
with the country importing
more than it exported. But
for agriculture, exports have
returned to 2015-2016 levels,
Fortenbery said.
“For agriculture, we’ve
really come out of the 2018-
2019 period looking pretty
good, and in fact the picture
continues to improve,” he
said.
Early projections in
August forecast a $4.5 bil-
lion fiscal year agricultural
trade balance. By November,
the forecast had increased to
$15 billion. Fortenbery said
USDA’s current prediction
is $19.5 billion, driven by
a large increase in corn and
soybean exports.
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