On July 9th and 10th I attended the SD Governor’s Agricultural Summit in Deadwood, South Dakota. This will be first of several posts examining the various portions of the Ag Summit. For this post I will focus on the State of Agriculture Address from SD Ag Secretary Lucas Lentsch.
Before going on I probably should mention I did a series of posts about the Ag summit in 2014 as well. Those posts were:
- SD AG SUMMIT PART 1: A FEW THOUGHTS ABOUT LENTSCH’S STATE OF AGRICULTURE ADDRESS
- SD AG SUMMIT PART 2: THE PUSH FOR TPP BY UNDER SECRETARY SCUSE
- SD AG SUMMIT PART 3: ENVIRONMENTAL AND REGULATORY ISSUES
- SD AG SUMMIT PART 4: PICTURES FROM THE WILDLAND FIRE DEMONSTRATION
- SD AG SUMMIT PART 5: TRANSPORTATION ISSUES
- SD AG SUMMIT PART 6: SOME THOUGHTS ABOUT THE PINE BEETLE
- SD AG SUMMIT PART 7: LOOKING AHEAD IN AG
With that out of the way, it is time to focus on the 2015 Ag Summit. The whole event can be watched on YouTube. Secretary Lentsch’s State of Ag speech begins at about 5:30.
Challenges in Ag in SD
Sec Lentsch began by talking about challenges facing SD agriculture. In particular he spoke about federal policies that were creating challenges. The Waters of the United States (WOTUS) rule was finalized by the Environmental Protection Agency (EPA) and the Army Corp of Engineers under the Clean Water Act (CWA) of 1972. Lentsch had this to say about WOTUS:
The WOTUS definition is important because it subjects land owners to a number of significant restrictions and permitting requirements for farming activities in or around these designated areas; as well as potential substantial liability for Clean Water Act violations. The map here shows water that could be regulated under the new WOTUS definition. If an area is red the body of water could be regulated by the EPA and the CORP. Without a doubt this rule will significantly impair the ability of South Dakota producers to do their job each and every day. Whether because of the uncertainty of the status of water on their land, or because they have to go through a potentially long and expensive permitting process. This rule is bad news for Ag producers.
Here is the map provided by the secretary showing what portions of SD would potentially be impacted by the new definition of WOTUS:
It is quite clear that very little of SD would be untouched by the new WOTUS definition. Lentsch noted that his office and the Governors office have tried urging the EPA to the agricultural industry and work with them. However he notes the EPA chose to ignore such comments and moved ahead, while ignoring most of the agricultural communities concerns about the new WOTUS definition.
Lentsch noted Congress is now trying to stop the EPA from proceeding. Sen Thune actually has an interactive map on his office website showing the portions of the state that would likely be impacted. Back in May of this year the US House passed H.R.1732, an act “To preserve existing rights and responsibilities with respect to waters of the United States”. Even though that bill passed the House, I don’t see it passing the Senate; or withstanding a veto if it did pass the Senate.
Lentsch also mention that SD Attorney General Marty Jackley joined a coalition of Attorney Generals from 12 other western states to stop the new definition of WOTUS. Agri-Pulse has a good story about the lawsuit.
Before moving on, I am glad to see Lentsch and Jackley fighting the new WOTUS definition. I don’t necessarily agree with either of them on a lot of issues. But for this issue I believe they are right and would urge them to continue their fight against the EPA’s power grab.
From there Lentsch spoke about the Renewable Fuel Standard (RFS) set by the EPA. He noted the standards have not been aligned to what Congress passed. Lentsch presented slides showing that RFS helps the agricultural industry in South Dakota. This is an area I will pass on writing about at this time. Personally I don’t believe the federal government should be trying to coerce the free market into favoring certain products, which is what RFS does.
Lentsch also listed misuses of the Endangered Species Act and honey bee pollination as challenges faced by agriculture in SD with federal implications. But most of his time spent on federal challenges was spent talking about WOTUS.
Avian influenza was brought up as a regional issue. One interesting step taken to stop the spread of avian flu was to keep poultry exhibitions away from fairs this year. I had no idea that was being done.
Another challenge mention is row crops have had falling prices. But that led to the first opportunity mentioned.
Opportunities in Ag in SD
While row crop prices have been falling, cattle prices have been going up. Over the last couple of years, since Atlas, the prices have gone up consistently. That will be covered in greater detail in a different session of the Ag summit.
Then Lentsch went into Trade opportunities. In particular he called out the Trans-Pacific Partnership (TPP). The countries that would be involved in TPP would potentially trade even more with the US, and potentially open more markets for South Dakota. I have been blogging against TPP off an on over the last couple of years. Sadly the politicians in SD have decided to put one industry ahead of the free market to promote a behemoth trade policy. In addition Lentsch applauded Congress giving Obama Trade Promotion Authority (TPA) so the secretive negotiations on TPP and the Transatlantic Trade and Investment Partnership (TTIP) can continue without the American people knowing what is going on. More on this topic during the trade portion of the summit.
On the good side of trade, Lentsch did note that relationships are normalizing with Cuba. That would be great. Cuba has been devastated by communism and could use some good old free market partners to help them regain a place in the global economy.
Lentsch then spoke about infrastructure. He noted most grain leaving SD goes by roads or railcar. He noted the passage of SB 1 (SoDakLiberty Posts) , which provides more revenue (tax increases) to the road and bridge infrastructure in South Dakota. Sen Vehle was at the 2014 Ag Summit to promote his infrastructure tax hike. This year Lentsch took a moment to thank him for the passage of SB1, along with the other legislators that voted for the bill.
Lentsch noted there is no competition with railroads in SD. And, unlike many other ag states, SD does not have barges to move agricultural goods. He noted Sen Thune was recently able to get S 808 passed in the US Senate. S 808 is the Surface Transportation Board Reauthorization Act of 2015, and includes reforms to make the STB more accountable. So far this bill hasn’t been taken up in the House. But Thune has been pushing hard for its passage.
Going on about rail, Lentsch noted projects by the State, B&E, and BNSF to continue expanding rail in SD. The goal is to stop the bottle-necks that happen each fall.
Lentsch then went into the statistics of changes in the last year. I would recommend watching his intro for all of the statistics. The more important ones were probably the value of crop and pasture land over the last year. I bring that up because I had heard from a few people in attendance that they would have liked a session focused on how property taxes are done for ag land. That did not happen, and was almost notably avoided. Perhaps in 2016 this can be brought forth as a topic, it will not go away!
During the conclusion of his speech the most notable news was the Ag Summit moving to Brookings for SD Ag Summit in 2016. It will be held in the Swiftel Center on June 1 and June 2.
For me the two big issues brought up by Lentsch was the EPA’s expansion of WOTUS and the trade agreements SD’s Congressional delegation are pushing for. Both of these are topics worth further scrutiny.