Sunday, April 2, 2017

Mike Rounds And The Mastery Of Nothingness

     Our Senator Mike Rounds' typically platitudinous observations about the ag sector of South Dakota's economy in last Sunday's Rapid City Journal was unsurprisingly long on
Senator Rounds
Not Much Substance
rhetoric and short on specifics.  
I think the Senator may have finally realized that his political paramour President Donald Trump stands to be a real problem for our state's largest industry.  In his RCJ piece, Rounds laments the painful drop in ag commodity prices in recent years but provides no hint of how to improve on the situation.  He offers some meek hope that with the new administration "burdensome and unnecessary rules don't hamper production capabilities," which is his usual canard about how he'll be the champion of agricultural interests in this state.  As to the substantial stuff, better markets for our farmers and ranchers, Rounds has no ideas and can only say "in the long term, only a return to stronger commodity prices will actually provide real relief," a conclusion that merits a "duh."

      Having spent more than a decade in close contact with South Dakota's grain and livestock producers as a broker and cattle feeder, I'd say the burden of regulations is meaningful enough, but not really the issue.  EPA and USDA regulations can often be a pain, but those regulations didn't cause the halving of corn and feeder cattle prices during the past few years.  Rounds somewhat helplessly acknowledges that  producers "may continue to see low commodity prices in 2017," a likelihood borne out by prices in the futures markets. That's a reflection of the lack of enthusiasm for the Trump administration and its political handmaidens, our Congressional trio of Rounds, Thune and Noem included.  They're mired in mixed signals about the future of corn-based ethanol, which uses about a third of our corn production.  As to the outlook for
Noem, Rounds, Thune
Say, What's Up With COOL?
exports, considering that Trump's general approach to the growth of free trade has been negative, even brutal, American ag producers--who export about 20% of our total crop production--have good reason to be concerned.  

      Mike Rounds bypassed those compelling issues but singled out "economic growth" and "consumer demand" as the basis for better prices.  Actually, we've had excellent consumer demand and a steadily growing economy during the past few years and the ag markets did nothing but go down.  Domestic issues aren't the drivers of commodity prices that they once were, mainly because trade expansion has been the name of the game for the ag industry, which has to compete in a take-no-prisoners global environment.  Markets are skittish about the big policy picture, particularly trade, which Rounds and his fellow SD congressional reps continue to ignore.

ADDENDUM.  And from today's New York Times:  Mexico is about to play the corn card in trade talks.
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