In many ways, 2019 played out as a “perfect storm” for much of the country’s grower-customers and the ag retailers who service their needs. First off, the weather was one of the major stories of the year. Extremely wet weather throughout the nation in April, May, and June severely delayed (or completely derailed, in some cases) crop plantings across much of the U.S.
In such states as Ohio — where 1.5 million acres of cropland went unplanted — many of the crop fields that were normally ripe with corn or soybeans showed nothing but a few patches of green across a brownish landscape. And those patches of green? They consisted of weeds, ranging from ragweed to waterhemp and everything in-between. In fact, according to the most recent USDA statistics, corn acreage nationwide was down approximately 5 million acres this year. Soybeans were off by approximately 300,000 acres.
“It’s been a tough year, no doubt,” Amy Asmus, Co-Owner of Asmus Farm Supply in Rake, IA, says. “In our part of Iowa, everything got planted OK. But this definitely wasn’t the case in many of the neighboring states.”
Even before the weather became such an issue for grower-customers, the ongoing trade dispute between the U.S. and China meant much of the soybean crop originally earmarked for export was looking for an alternative place to go. This kept commodity prices throughout the year at historic lows.
For several years, as its population has grown and livestock (especially pork) production has increased, China has been a major buyer of U.S.-grown soybeans. This demand has kept the commodity prices for the crop relatively high compared with other crops, such as corn.
But in the middle of 2018 the U.S. and China began a protracted trade dispute. This almost immediately impacted soybean exports to the country as Chinese buyers halted or cancelled their orders to avoid paying increased tariffs. The situation never really improved during the balance of 2019. This was made worse by an outbreak of African Swine Flu in China, which experts estimated destroyed approximately 50% of the country’s pig herd.
Initially, several of those within the government said their voters — including the growers they knew — were supportive of this ongoing trade war. “Farmers know that China is stealing our intellectual property, our trade secrets,” Senator Chuck Grassley (R-IA) said in a radio interview. “Their concern is intellectual property because there is an awful lot of intellectual property that goes into the creation of the surplus that we do.”
However, certain grower trade groups weren’t as positive. “We’ve been understanding during this negotiation process, but we cannot withstand another year in which our most important foreign market continues to slip away and soybean prices are 20% to 25% or even more below pre-tariff levels,” John Heisdorffer, Chairman of the American Soybean Association (ASA) and a soybean grower in Keota, IA, said mid-year. “The sentiment out in farm country is getting grimmer by the day. Our patience is waning, our finances are suffering, and the stress from months of living with the consequences of these tariffs is mounting.”
Davie Stephens, ASA President and a soybean grower from Clinton, KY, echoed these views. “The soybean market in China took us more than 40 years to build, and as this confrontation continues, it will become increasingly difficult to recover,” he said. “With depressed prices and unsold stocks expected to double by the 2019 harvest, soybean farmers are not willing to be collateral damage in an endless tariff war.”
Glyphosate Battle Lines
Without question, the other big agriculture story during 2019 was the ongoing fight involving glyphosate and its owner, Bayer. In agriculture the crop protection/seed giant is the No. 1 seller of glyphosate herbicide in the world — thanks to its 2018 acquisition of Monsanto. This combination made the company the largest such business entity in the world, with annual sales in the $22 billion range.
But along with acquiring glyphosate, Bayer also acquired a host of lawsuits across America related to it, with many of these claiming that long-term exposure to the herbicide led to the users developing some forms of cancer. The first of these lawsuits was decided during the summer of 2018 in favor of the plaintiff. Bayer was found liable and ordered to pay several hundred million dollars in damages (which was ultimately reduced to $78 million by the judge). Not long afterward, a second trial against glyphosate in California also found for the plaintiff, with damage awards hitting the $1 billion mark (which was also later reduced).
There are approximately 18,000 more such lawsuits awaiting trial dates. If all of them ultimately make it to a jury and each is decided against glyphosate, Bayer could be on the hook for more than $200 billion in damage awards. At the very least, the company will end up spending millions of dollars in legal fees fighting these cases.
“Bayer stands behind these products and will vigorously defend them,” the company stated in a prepared release. “Roundup products and their active ingredient, glyphosate, have been used safely and successfully for over four decades worldwide.”
On top of this, several countries around the globe outright began banning the use of glyphosate within their borders. For example, in late March Vietnam announced that it had banned the import of all glyphosate-based herbicides immediately, based in part upon the two verdicts that glyphosate contributed to certain cancers now present in the plaintiffs.
“As soon as there was information that the second trial in the U.S. ruled that glyphosate was related to cancer, we put a ban on the import of new herbicides containing the active ingredient,” said Hoang Trung, Director of the Plant Protection Department under the Ministry of Agriculture and Rural Development (MARD).
In July the government of Austria voted to enact a total ban on the use of the popular herbicide. “The scientific evidence for the plant poison’s carcinogenic effect is increasing,” Pamela Rendi-Wagner, the leader of the country’s Social Democrats and sponsor of the bill to ban glyphosate, said in a prepared statement, referencing the 2015 World Health Organization’s International Agency for Research on Cancer (IRAC) report that said that the herbicide was probably carcinogenic. “It is our responsibility to ban this poison from our environment.”
Finally, in early September the German government announced it had passed legislation to ban the use of the popular herbicide within its borders by 2023. In the interim, Germany plans to put into place a phased effort to reduce its use of glyphosate, starting with prohibiting the use of the herbicide in domestic gardens and on the edge of farmers’ fields.
According to the German Cabinet, the country agreed to the ban as part of its insect conservation program. “What harms insects also harms people,” Environment Minister Svenja Schulze said in a prepared statement. “What we need is more humming and buzzing.”
Bayer naturally disagreed with Germany’s stance on planning to ban glyphosate based upon anything but sound science (since the product is a herbicide and shouldn’t impact insect populations). “We disagree with the German government’s decision to ban glyphosate by the end of 2023,” Liam Condon, head of Bayer’s Crop Science Division, said in a statement. “The ruling ignores decades of scientific judgment from independent regulatory agencies around the world that glyphosate is safe when used properly.”
There was some positive news for glyphosate toward the end of 2019. The EPA said in an Aug. 7 letter that it would no longer approve product labels claiming that glyphosate is known to cause cancer, claiming such a destination is “a false claim that does not meet the labeling requirements of the Federal Insecticide, Fungicide & Rodenticide Act.” The agency went on to say that this action is based upon its comprehensive evaluation of glyphosate.
According to observers, this declaration by EPA is a challenge to the state of California’s Proposition 65 requirement that glyphosate be labeled with the warning that it “may cause cancer,” based upon the International Agency on the Research for Cancer classification that the herbicide is “probably carcinogenic to humans.”
“It is irresponsible to require labels on products that are inaccurate when EPA knows the product does not pose a cancer risk,” EPA Administrator Andrew Wheeler said in the letter. “We will not allow California’s flawed program to dictate federal policy. It is critical that federal regulatory agencies like EPA relay to consumers accurate, scientific-based information about risks that pesticides may pose to them.”
Industry associations were quick to support EPA’s view on glyphosate labeling. “This is a significant victory for science-based regulation,” Agricultural Retailers Association President and CEO Daren Coppock said. “Our members, their farmer-customers, and the public rely on EPA’s scientific expertise to evaluate pesticides for human health and environmental effects. It would be irresponsible and misleading to require or allow language on a label that conflicts with the conclusions of the scientific review.”