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Farm Tensions Escalate as USDA Staffer Threatened in Midwest

Mario Parker, Michael Hirtzer and Isis Almeida
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Farm Tensions Escalate as USDA Staffer Threatened in Midwest

(Bloomberg) -- In a sign of rising tensions with the farm community, the Trump administration withdrew staff from a privately run tour of Midwestern corn and soybean fields after a government employee was threatened.

While the threat came from someone not involved in the Pro Farmer Midwest Crop Tour, the U.S. Department of Agriculture pulled all its staff as a precaution. Lance Honig, crops chief at the USDA’s National Agricultural Statistics Service, was scheduled to address the tour in Nebraska City Tuesday night but a video interview with him was screened instead.

“Federal Protective Services were contacted and are investigating the incident,” NASS Administrator Hubert Hamer said, without giving details on the threat. “The safety of our employees is our top priority.”

In another incident, which wasn’t connected to the threat, an arrest was made at a crop-tour event in Spencer, Iowa on Wednesday night.

The USDA’s data arm has been the subject of ire in recent months after crop estimates surprised traders and growers who had expected the agency to significantly reduce its outlook after rain delayed planting. The USDA had already been criticized for its June estimates and took the rare step of re-surveying farmers to get more accurate numbers.

Its withdrawal from the crop tour comes about two weeks after farmers leveled criticism at Agriculture Secretary Sonny Perdue at a fair in Minnesota over President Donald Trump’s yearlong trade war with China, which has eroded demand and pressured already low prices.

In a statement Wednesday, Farm Journal, the parent company of crop-tour organizer Pro Farmer, said it took the threat seriously and has also taken precautions to ensure the safety of participants.

“For 27 years the Pro Farmer Crop Tour has been a public service for the benefit of agriculture, in good times and bad,” it said. “And it’s clearly a stressful time right now.”

While security measures have been increased, there are no planned changes for the remainder of tour, which is scheduled to culminate in a crop report on Friday, Joel Jaeger, the general manager of Pro Farmer, said in an interview.

The first USDA staff to leave the tour were from NASS, followed by employees of the Foreign Agricultural Service, he said.

At nightly crop-tour stops in Indiana, Illinois and Grand Island, Nebraska, farmers questioned officials from both the USDA and Pro Farmer about the government’s methodology in determining corn planted area and yields. Some growers, stung by years of low prices, were frustrated by the rapid rise in prices in May and subsequent steep drop.

Corn for delivery in December is down about 11% since the release of the World Agricultural Supply and Demand Estimates report last week.

USDA officials said yield estimates were based largely on input from farmers as well as satellite imagery. Planted acreage numbers published by the Farm Service Agency earlier this month referred to Aug. 1 data and that figure has already increased, Chris Hawthorn, a NASS statistician, told farmers on the tour, explaining the difference between those figures and the ones published by NASS.

“We had a great time with the USDA guys yesterday,” said Jim Putnam, a Minnesota farmer, who traveled with two USDA staff on the tour Tuesday. “I’m sorry this happened. It makes us all look stupid.”

Last month, the Trump administration announced another $16 billion in aid to farmers to cushion the blow of its tarde war with China, after a $12 billion tranche in 2018. Earlier this month, Trump hinted his administration may provide more money for farmers if the trade war were to persist.

Trump’s overwhelming support in rural America was crucial to his narrow 2016 election victory. Maintaining the backing of farmers is critical to his re-election. Just this week, the administration has taken criticism from agricultural interests for its handling of the Renewable Fuel Standard, the policy that mandates use of corn-based ethanol and soy-based biodiesel.

On Tuesday, the Iowa Soybean Association sent a letter to Trump and Perdue, asking for a meeting to discuss the Environmental Protection Agency’s granting of small refinery exemptions, saying that the agency’s Aug. 9 announcement that it granted 31 waivers adds to the “economic pain Iowa’s farmers and biodiesel producers are experiencing.”

Administration officials were set to meet Thursday to consider options for quelling the biofuel-policy backlash, people familiar with the deliberations said.

Farmers both in Grand Island and Nebraska City cheered Pro Farmer’s Chip Flory when he questioned the ethanol blending exemptions that reduce demand for corn. On a tour stop in South Dakota, farmer Kurt Stiefvater gave the thumbs down when asked about the refinery exemptions.

Meanwhile, Delayne Johnson, chief executive officer of Quad County Corn Processors, a Northwest Iowa ethanol producer, told reporters in Iowa that he was unsure who he’d vote for president in 2020 after supporting Trump in 2016.

“I will be listening to each candidate’s platform on biofuels because it’s extremely important to me and all Iowa farmers,” Johnson said. The person he votes for would be someone who takes action and “not just talk about supporting agriculture and ethanol.”

(Updates with arrest in fourth paragraph)

--With assistance from Dominic Carey and Millie Munshi.

To contact the reporters on this story: Mario Parker in Chicago at mparker22@bloomberg.net;Michael Hirtzer in Chicago at mhirtzer@bloomberg.net;Isis Almeida in Chicago at ialmeida3@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Tina Davis

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