Staging ag policy
My wife, Jane, has gotten me to occasionally watch the HGTV shows “Fixer Upper” with Chip and Joanna Gaines and the “Property Brothers” with Drew and Jonathan Scott. What fascinates me about those shows is the lack of imagination that people have who cannot picture something that is not explicitly in front of them. The Gaines and the Brothers are extremely good at what they do which is turn imagination into reality so that others can see it. That is what attracts people to their show. They can see things before others can.
We were having trouble selling a Condo once and switched realtors. The new one said that we had to stage it with some furniture. She told us that people have little imagination picturing what things will look like. My wife asked her why, given that a dining table would logically go under the chandelier in the dining room that someone could not picture that. The realtor said that she understood but given her experience, people could not see it. All I can say is that after staging the Condo it sold relatively quickly.
It isn’t just homes or furnishings that people fail to see nuances in, it is a lot of things. Essentially it is my job to help farmers see the impact of ag policy. Very few people really understand the RFS…what it is and how it works. They don’t know about Trump RIN waivers and how they have harmed ethanol demand, only that E-15 is something good for farmers which is why the president keeps announcing it over and over. It is my job to help them see it. It is too bad that neither NAFTA 2.0 (USMCA) or E-15 approval for summer use are yet open for business, lacking ratification and regulatory approval. How would we stage ag policy to get the best benefit for the buck?
What importance does trade have to do with our markets? What does ag lose from the trade wars versus what they will gain? How does immigration policy impact ag production? How do the political decisions being made benefit or harm us? One thing that the Gaines and Property Brothers do not encounter that I do is someone with another agenda working against them to undermine their projects. The ag sector does have some enemies and I attract their attention.
When Chip and Joanna roll back the picture of a house taken before renovation for the reveal, their clients are typically pleasantly shocked, amazed and delighted. They often didn’t even know for sure what they wanted until they saw it in front of their eyes. They could not imagine what they were now seeing. That is where my job differs.
I have no control over the outcome of events. Sometimes what we see coming, no one will enjoy if correct. This has been one of those times. I predicted that Trump would be elected President. That was right. I also predicted that his trade and immigration policies would harm us where we live. That was right too. I was skeptical of his professed support for ethanol which proved warranted from the day he put Scott Pruitt in charge of EPA so was right about that as well. I point out that he has not completed anything big benefiting Ag that he promised and it is looking less, not more likely that he will deliver on those promises. Our House, the ag sector, is a mess and getting worse not better. A lot of people do not want to see it.
I see fiscal irresponsibility that is taking the country down the wrong path and people do not see it. People often tell me that they like what I write but do not always agree with it. I smile and ask them how that has worked out for them. I tend to be early, with forecasts that are not consensus opinion at the time but typically eventually prove accurate. Thus, by my score people that disagree with me eventually often find they are wrong. I think that is fun.
There are Trump supporters who do not like what I have said or forecasted about Trump, yet it was accurate. Trump’s policies have saved the ag sector millions of dollars through small things like de-regulation at the cost of billions from big things like trade wars and RIN waivers, just as I forecast and so far, he has “Made Brazilian Agriculture Great” with ours not so much. That doesn’t bring me acclaim however. People don’t like it when you are right about things that don’t work out as well as they hoped. I don’t think that Trump Ag policy has worked out so well. He is afraid that may be the conclusion of farmers too, which is why we got tariff relief checks when no other sector damaged by the trade wars has received such aid.
This puts me directly in opposition with the president in instances like when he says he has opened up the EU market to U.S. farmers and they would buy so much from us that farmers would love him. My immediate response was that the EU did not even agree to discuss ag in trade talks. Who was right? I do not tell farmers what they want to hear or to fit a political agenda. If that conflicts with their ideology or they operate off of a different value system for the need for truth, so be it.
I am predicting that the country is on the wrong path relative to fiscal responsibility and that the day of reckoning is coming closer. We will look back on the current economy as the light bulb getting brighter before it dims as U.S. liabilities in entitlements become too burdensome and the cost of servicing our debt handicaps future growth. That is one reason why we need immigration. That too is not the kind of forecast that people praise the messenger for.
I know enough about history and science to be both an optimist and a pessimist. I would still buy the neighboring farm if it comes up for sale despite knowing that sometime in the future it could be buried under six feet of ash when the next Yellowstone super-volcanic eruption explodes. I suggest we all retain a sense of humor.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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