[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


              PRODUCER PERSPECTIVES ON THE 2023 FARM BILL

=======================================================================

                                HEARING

                               BEFORE THE

 SUBCOMMITTEE ON GENERAL FARM COMMODITIES, RISK MANAGEMENT, AND CREDIT

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                             APRIL 26, 2023
                               __________

                            Serial No. 118-8

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-037 PDF                 WASHINGTON : 2023  

                        COMMITTEE ON AGRICULTURE

                 GLENN THOMPSON, Pennsylvania, Chairman

FRANK D. LUCAS, Oklahoma             DAVID SCOTT, Georgia, Ranking 
AUSTIN SCOTT, Georgia, Vice          Minority Member
Chairman                             JIM COSTA, California
ERIC A. ``RICK'' CRAWFORD, Arkansas  JAMES P. McGOVERN, Massachusetts
SCOTT DesJARLAIS, Tennessee          ALMA S. ADAMS, North Carolina
DOUG LaMALFA, California             ABIGAIL DAVIS SPANBERGER, Virginia
DAVID ROUZER, North Carolina         JAHANA HAYES, Connecticut
TRENT KELLY, Mississippi             SHONTEL M. BROWN, Ohio
DON BACON, Nebraska                  SHARICE DAVIDS, Kansas
MIKE BOST, Illinois                  ELISSA SLOTKIN, Michigan
DUSTY JOHNSON, South Dakota          YADIRA CARAVEO, Colorado
JAMES R. BAIRD, Indiana              ANDREA SALINAS, Oregon
TRACEY MANN, Kansas                  MARIE GLUESENKAMP PEREZ, 
RANDY FEENSTRA, Iowa                 Washington
MARY E. MILLER, Illinois             DONALD G. DAVIS, North Carolina, 
BARRY MOORE, Alabama                 Vice Ranking Minority Member
KAT CAMMACK, Florida                 JILL N. TOKUDA, Hawaii
BRAD FINSTAD, Minnesota              NIKKI BUDZINSKI, Illinois
JOHN W. ROSE, Tennessee              ERIC SORENSEN, Illinois
RONNY JACKSON, Texas                 GABE VASQUEZ, New Mexico
MARCUS J. MOLINARO, New York         JASMINE CROCKETT, Texas
MONICA De La CRUZ, Texas             JONATHAN L. JACKSON, Illinois
NICHOLAS A. LANGWORTHY, New York     GREG CASAR, Texas
JOHN S. DUARTE, California           CHELLIE PINGREE, Maine
ZACHARY NUNN, Iowa                   SALUD O. CARBAJAL, California
MARK ALFORD, Missouri                ANGIE CRAIG, Minnesota
DERRICK VAN ORDEN, Wisconsin         DARREN SOTO, Florida
LORI CHAVEZ-DeREMER, Oregon          SANFORD D. BISHOP, Jr., Georgia
MAX L. MILLER, Ohio

                                 ______

                     Parish Braden, Staff Director

                 Anne Simmons, Minority Staff Director

                                 ______

 Subcommittee on General Farm Commodities, Risk Management, and Credit

                    AUSTIN SCOTT, Georgia, Chairman

ERIC A. ``RICK'' CRAWFORD, Arkansas  SHONTEL M. BROWN, Ohio, Ranking 
DOUG LaMALFA, California             Minority Member
DAVID ROUZER, North Carolina         SHARICE DAVIDS, Kansas
DUSTY JOHNSON, South Dakota          DONALD G. DAVIS, North Carolina
MARY E. MILLER, Illinois             ERIC SORENSEN, Illinois
BARRY MOORE, Alabama                 JASMINE CROCKETT, Texas
BRAD FINSTAD, Minnesota              NIKKI BUDZINSKI, Illinois
JOHN W. ROSE, Tennessee              SALUD O. CARBAJAL, California
RONNY JACKSON, Texas                 ANGIE CRAIG, Minnesota
MONICA De La CRUZ, Texas             ALMA S. ADAMS, North Carolina
JOHN S. DUARTE, California           SANFORD D. BISHOP, Jr., Georgia
ZACHARY NUNN, Iowa                   ------
MARK ALFORD, Missouri

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Brown, Hon. Shontel M., a Representative in Congress from Ohio, 
  opening statement..............................................     3
    Submitted letter.............................................   123
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     2
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     5
    Prepared statement...........................................     5

                               Witnesses

Haag, Tom, President, National Corn Growers Association, Eden 
  Valley, MN.....................................................     6
    Prepared statement...........................................     8
    Submitted questions..........................................   123
Holladay, Shawn, Chairman, National Cotton Council, Lubbock, TX..    15
    Prepared statement...........................................    17
    Submitted questions..........................................   125
Flansburg, Aaron, Chairman, USA Dry Pea and Lentil Council, 
  Palouse, WA....................................................    23
    Prepared statement...........................................    24
    Submitted questions..........................................   126
Satterfield, Kirk, Chairman, USA Rice, Benoit, MS................    26
    Prepared statement...........................................    27
    Submitted questions..........................................   128
Moore, Andrew, President, U.S. Canola Association, Dalton, GA....    30
    Prepared statement...........................................    32
    Submitted questions..........................................   129
Cates, Daryl, President, American Soybean Association, Columbia, 
  IL.............................................................    59
    Prepared statement...........................................    60
    Submitted questions..........................................   130
Frischhertz, J.D., Patrick A., General Manager, St. Louis 
  Planting, Inc.; Member, Board of Directors, American Sugar Cane 
  League, Plaquemine, LA; on behalf of American Sugar Alliance; 
  American Sugarbeet Growers Association.........................    70
    Prepared statement...........................................    71
    Submitted questions..........................................   133
Cheyne, Brent, President, National Association of Wheat Growers, 
  Klamath Falls, OR..............................................    76
    Prepared statement...........................................    77
    Submitted questions..........................................   135
Meeker, Craig, Chairman, National Sorghum Producers, Wellington, 
  KS.............................................................    85
    Prepared statement...........................................    87
    Submitted questions..........................................   137
McMillan, Daniel T., Producer, Southern Grace Farms, Enigma, GA; 
  on behalf of United States Peanut Federation...................    89
    Prepared statement...........................................    91
    Submitted questions..........................................   137

 
              PRODUCER PERSPECTIVES ON THE 2023 FARM BILL

                              ----------                              


                       WEDNESDAY, APRIL 26, 2023

                  House of Representatives,
Subcommittee on General Farm Commodities, Risk Management, 
                                                and Credit,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Austin 
Scott of Georgia [Chairman of the Subcommittee] presiding.
    Members present: Austin Scott of Georgia, Crawford, 
LaMalfa, Rouzer, Johnson, Miller of Illinois, Moore, Finstad, 
Rose, Jackson of Texas, De La Cruz, Duarte, Nunn, Alford, 
Thompson (ex officio), Bost, Mann, Brown, Davids of Kansas, 
Davis of North Carolina, Crockett, Budzinski, Carbajal, Craig, 
Adams, and Bishop.
    Staff present: Harlea Hoelscher, Patricia Straughn, Trevor 
White, John Konya, Rodney Brooks, Kate Fink, Amar Nair, Ashley 
Smith, Michael Stein, and Dana Sandman.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. The Committee will come to order. Welcome, 
and thank you for joining today's hearing entitled, Producer 
Perspectives on the 2023 Farm Bill. After brief opening 
remarks, Members will receive testimony from our witnesses 
today, and the hearing will be open to questions. In 
consultation with the Ranking Member and pursuant to Rule 
XI(e), I want to make Members of the Subcommittee aware that 
other Members of the full Committee may be joining us today.
    So over the course of today, Members of the Subcommittee 
will hear testimony from producers and leaders of ten national 
commodity organizations. These witnesses represent a broad 
segment of American agriculture and know firsthand the 
challenges facing farmers in rural American. Since the 2018 
Farm Bill was enacted into law, the agriculture sector has 
experienced numerous shifts in Federal policy outside of our 
standard farm bill programs. This includes trade aid to respond 
to illegal retaliatory actions by China, a variety of programs 
enacted in response to the coronavirus pandemic, and numerous 
iterations of disaster assistance responding to extreme weather 
events. All told, over $90 billion in ad hoc assistance has 
been provided over the past 6 years. While this assistance was 
much needed at the time and has allowed many of our farmers to 
survive economic conditions they might not have otherwise, it 
is not predictable, reliable, or fiscally responsible to expect 
such assistance in the future.
    That is why making improvements to the 2023 Farm Bill is so 
critical. Farmers need assurance that over the next 5 years a 
safety net will be in place that can stand the test of changing 
markets and extreme weather events. Title I programs, 
specifically Agriculture Risk Coverage and Price Loss Coverage, 
otherwise known as ARC and PLC, were established in the 2014 
Farm Bill, and the reference price used to determine assistance 
were set using 2012 cost-of-production data.
    Meanwhile, inflation has gone up significantly since 2012, 
and the price of most inputs has doubled or even tripled since 
2021 alone. Farm sector debt is at record high levels, and net 
farm income is expected to fall 16 percent from 2022 to 2023. 
These warning signs underscore the importance of our work on 
the 2023 Farm Bill. As the risk challenges of farming continue 
to mount, I think it is safe to say that if you are not farming 
today, you are likely not going to be farming tomorrow.
    As we deliberate, we must make sure we are doing everything 
we can to help all beginning, young, and small farmers and 
taking care of future generations. One thing I want to point 
out is that approximately 90 percent of our nation's food comes 
from approximately 12 percent of our producers. I want to say 
that again. Ninety percent of the food supply inside the United 
States comes from approximately 12 percent of our producers. 
There is no question that food security is national security, 
and that 12 percent does considerable work in making sure that 
we have the abundant, affordable food supply that we depend on.
    The testimony we will hear today will shed light on what 
improvements will be necessary to ensure we get the policy 
right and can craft a 5 year farm bill that meets the needs of 
producers across the country. I look forward to hearing 
proposals on how we can ensure the safety net is being 
appropriately targeted to acres in production and the farmers 
bearing the financial risk of growing the food and fiber to 
feed and clothe not just this nation, but consumers across the 
world.
    I want to thank the first panel of witnesses appearing here 
today and preemptively say thank you to the witnesses appearing 
on the second panel later this afternoon. Your testimony is a 
vital part of the information-gathering process that will guide 
our Committee in the farm bill reauthorization process.
    [The prepared statement of Mr. Austin Scott follows:]

 Prepared Statement of Hon. Austin Scott, a Representative in Congress 
                              from Georgia
    This hearing of the General Farm Commodities, Risk Management, and 
Credit Subcommittee will come to order. Over the course of today, 
Members of the Subcommittee will hear testimony from producer leaders 
of ten national commodity organizations. These witnesses represent a 
broad segment of American agriculture and know first-hand the 
challenges facing farmers and rural America.
    Since the 2018 Farm Bill was enacted into law, the agriculture 
sector has experienced numerous shifts in Federal policy outside of our 
standing farm bill programs. This includes trade aid to respond to 
illegal retaliatory actions by China, a variety of programs enacted in 
response to the coronavirus pandemic, and numerous iterations of 
disaster assistance responding to extreme weather events. All told, 
over $90 billion in ad hoc assistance has been provided over the past 6 
years.
    While this assistance was much needed at the time and has allowed 
many of our farmers to survive economic conditions they might not have 
otherwise, it is not predictable, reliable, or fiscally responsible to 
expect such assistance in the future. That is why making improvements 
to the 2023 Farm Bill is so critical. Farmers need assurance that over 
the next 5 years, a safety net will be in place that can stand the test 
of changing markets and extreme weather events.
    Title I programs, specifically the Agriculture Risk Coverage and 
Price Loss Coverage--or ARC and PLC--were established in the 2014 Farm 
Bill and the reference prices used to determine assistance were set 
using 2012 cost of production data. Meanwhile, inflation has gone up 
significantly since 2012, and the price of most inputs has doubled or 
even tripled since 2021 alone. Farm sector debt is at record high 
levels, and net farm income is expected to fall 16 percent from 2022 to 
2023. These warning signs underscore the importance of our work on the 
2023 Farm Bill.
    As the risks and challenges of farming continue to mount, I think 
it's safe to say that if you're not farming today, you're likely not 
going to be farming in the future. As we deliberate, we must make sure 
we're doing everything we can to help all beginning, young, and small 
farmers and taking care of future generations.
    One thing I want to point out is that approximately 90% of our 
nation's food comes from approximately 12% of our producers. There is 
no question that food security is national security, and that 12% does 
considerable work in making sure we have the abundant, affordable food 
supply that we depend on.
    The testimony we will hear today will shed light on what 
improvements will be necessary to ensure we get the policy right and 
can craft a 5 year farm bill that meets the needs of producers across 
the country. I look forward to hearing proposals on how we can ensure 
the safety net is being appropriately targeted to acres in production 
and the farmers bearing the financial risks of growing food and fiber 
to feed and clothe not just the nation, but consumers across the world.
    I want to thank the first panel of witnesses appearing here today 
and preemptively say thank you to the witnesses appearing on the second 
panel later this afternoon. Your testimony is a vital part of the 
information gathering process that will guide our Committee in the farm 
bill reauthorization process.
    With that, I will yield to the Ranking Member of the Subcommittee, 
Congresswoman Shontel Brown, for any opening remarks she would like to 
make.

    The Chairman. With that, I yield to the Ranking Member of 
the Subcommittee, Congresswoman Shontel Brown, for any opening 
remarks that she would like to make.

OPENING STATEMENT OF HON. SHONTEL M. BROWN, A REPRESENTATIVE IN 
                       CONGRESS FROM OHIO

    Ms. Brown. Thank you. Good morning. I would like to begin 
by thanking Chairman Scott for gathering us together today for 
this hearing. It is a distinct honor and privilege to serve as 
the Ranking Member of the General Farm Commodities, Risk 
Management, and Credit Subcommittee. In the American spirit of 
collaboration and bipartisanship, I look forward to working 
with you, Chairman Scott, to ensure that fundamental safety net 
programs and risk management tools that our farmers and 
ranchers rely on to feed America's families are buttressed and 
bolstered. These issues represent an intersection of the most 
important issues impacting our farmers and ranchers and, 
subsequently, American families. As we begin to work in earnest 
to craft the 2023 Farm Bill, it is my sincere hope to work 
effectively together with a collective goal of providing our 
nation's farmers and families within our Subcommittee's 
jurisdiction.
    However, Mr. Chairman, what is crucial to achieving that 
goal is ensuring that diverse perspectives are represented at 
the table and here in our committee room. Yet, as I look at our 
panel this morning, and as I will again later this afternoon, I 
would be remiss if I did not draw attention to the stark lack 
of diversity represented here today in terms of farm size, 
gender, and race. Our nation's strength in agriculture and as a 
people is our diversity. We must acknowledge that this farm 
bill is for everyone, no matter what you look like, what you 
grow, or where you grow it.
    Mr. Chairman, I hope it is easy for you to agree that a 
critical component of writing a farm bill that works for all is 
ensuring that everyone is invited to sit at the table. I would 
like to enter into the record a letter formally requesting an 
official opportunity for us to hear from minority and 
disadvantaged farmers and stakeholders on farm bill issues 
pertaining to the Subcommittee.
    The Chairman. Without objection.
    [The letter referred to is located on p. 123.]
    Ms. Brown. Thank you.
    Today's hearing gives us the opportunity to hear directly 
from our major commodity groups' leaderships to share their 
perspectives on how the existing farm bill Title I and Title XI 
programs have served their commodities. I also look forward to 
hearing insights regarding our direction for the upcoming 2023 
Farm Bill.
    The uptick in production costs over the last few years, 
coupled with the increased frequency of natural disasters, make 
it imperative that we ensure the protection and resiliency of 
our farm safety net programs and risk management tools. Over 
the last 6 years, we have seen nearly $70 billion in ad hoc 
payments to producers. This is $70 billion in addition to our 
existing farm bill safety net and disaster mitigation programs. 
These dollars, although welcomed by those who received them, 
have been distributed in an inequitable manner, favoring 
certain producers over others, as has been confirmed by the 
Government Accountability Office. We have also heard in the 
case of ad hoc disaster aid that these payments are often 
incredibly delayed, sometimes not reaching eligible producers 
until months after the disasters occurred.
    This is the bottom line. These ad hoc payments are 
unpredictable, unreliable, and inefficient. It is our duty to 
ensure that the upcoming farm bill includes a strong, up-front 
investment in the farm safety net to provide our producers with 
timely assistance when disaster strikes.
    When it comes to ensuring that producers of all 
backgrounds, including specialty crop growers, urban farmers, 
socially disadvantaged, and beginning farmers, have the tools 
they need to succeed and meaningfully contribute to our 
nation's food supply chain. I am always willing to collaborate 
with colleagues across the aisle whenever and wherever possible 
because our producers come before politics.
    I am eager to hear from our witnesses today and those we 
have in the future to get firsthand and frank insight into what 
is working well within the various program areas and where 
there is room for improvement.
    And with that, Mr. Chairman, I yield back.
    The Chairman. Thank you, Ranking Member Brown.
    And I now recognize Chairman Thompson for any opening 
comments he would like to make.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Well, thank you, Mr. Chairman and Ranking 
Member Brown, for holding this important hearing.
    As you all are aware, over the last 4 months, the 
Agriculture Committee has been working overtime to hear the 
input of stakeholders, not just through hearings in Washington, 
D.C., but at field listening sessions across the country, 
several of us just returning from one of these listening 
sessions in Gainesville, Florida, and others who attended 
events in New York, Texas, California, and my home State of 
Pennsylvania. We had a roundtable actually on Friday in North 
Carolina. And in addition, I have traveled to over 40 states 
since initially becoming the Republican leader of the House 
Committee on Agriculture. And I have done this because I know 
that to get the policy right, we need to hear directly from the 
folks in the countryside instead of voices within the beltway.
    Today, the countryside is coming to us, and I am very 
pleased that we will hear directly from producers about the 
priorities of ten national commodity groups. To have them 
gathered in one room in one place in one day is pretty 
incredible, and so thank you to both the Chairman and the 
Ranking Member for making that happen.
    These policies were developed through grassroots efforts of 
the members of those associations and will provide valuable 
insight to the Committee as we work to craft a strong, on-time, 
and effective 2023 Farm Bill. Through the listening sessions 
and my travels, I have heard loud and clear that the farm 
safety net, both commodity policy and crop insurance, needs 
improvements. These improvements will come with a price tag, 
which is why it was so critical that Ranking Member Scott, 
David Scott and myself, were able to craft a strong budget 
views and estimates letter that was unanimously adopted by the 
Committee. This letter to the Budget Committee clearly 
articulated the needs and justifications for additional 
resources to write a meaningful farm bill.
    To maximize the impact of any additional funding that may 
come, we will need valuable feedback from stakeholders about 
where those dollars can go the furthest to assist our farmers 
and ranchers and foresters, which I will ultimately benefit 
consumers and rural communities.
    The insight from today's hearing is an important part of 
ensuring Members of this Committee have a clear understanding 
of the right policy. Then it will be incumbent upon us to 
navigate the policies to get the best possible farm bill to the 
President's desk. This is no small undertaking, and it will 
require all of us, stakeholders and Members alike, to pull on 
our work boots. But if there is any sector that knows the value 
of hard work, it is agriculture.
    So I want to thank all the witnesses for being here today 
for their participation and throughout this process, and I 
yield back.
    [The prepared statement of Mr. Thompson follows:]

Prepared Statement of Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
    Thank you, Mr. Chairman and Ranking Member Brown for holding this 
important hearing. As you all are aware, over the last 4 months, the 
Agriculture Committee has been working overtime to hear the input of 
stakeholders, not just through hearings in Washington, D.C., but at 
field listening sessions across the country.
    Several of us are just returning from one of these listening 
sessions in Gainesville, Florida and others have attended events in New 
York, Texas, California, and my home State of Pennsylvania. In 
addition, I have traveled to over 40 states since becoming Republican 
leader of the House Committee on Agriculture. I have done this because 
I know that to get the policy right, we need to hear directly from the 
folks in the countryside instead of voices within the beltway.
    Today, the countryside is coming to us. I am very pleased we will 
hear directly from producers about the priorities of ten national 
commodity groups. These policies were developed through grassroots 
efforts of the members of those associations and will provide valuable 
insight to the Committee as we work to craft a strong, on-time, and 
effective 2023 Farm Bill.
    Through the listening sessions and my travels, I have heard loud 
and clear that the farm safety net--both commodity policy and crop 
insurance--needs improvements. These improvements will come with a 
price tag, which is why it was so critical that Ranking Member Scott 
and I were able to craft a strong Budget Views and Estimates letter 
that was unanimously adopted by the Committee. This letter to the 
Budget Committee clearly articulated the needs and justifications for 
additional resources to write a meaningful farm bill.
    To maximize the impact of any additional funding that may come, we 
will need valuable feedback from stakeholders about where those dollars 
can go the furthest to assist our farmers, which will ultimately 
benefit consumers and rural communities. The insight from today's 
hearing is an important part of ensuring Members of this Committee have 
a clear understanding of the right policy, then it will be incumbent 
upon us to navigate the politics to get the best possible farm bill to 
the President's desk. This is no small undertaking, and it will require 
all of us--stakeholders and Members alike--to pull on our work boots. 
But if there is any sector that knows the value of hard work, it is 
agriculture.
    So, I want to thank all of the witnesses again for their 
participation today and throughout this process, and I yield back.

    The Chairman. Thank you, Mr. Chairman.
    And before I give a very brief introduction of the people 
that are testifying before us today, I want to remind all of 
the Members that we will have a second panel that will begin at 
2:00 today. And so once the first panel is completed, we will 
break, and then we will have a second panel at 2:00.
    Our first witness today is Mr. Tom Haag, President of the 
National Corn Growers Association. The next witness on this 
panel is Mr. Shawn Holladay, Chairman of the National Cotton 
Council. Our third witness today is Mr. Aaron Flansburg, 
Chairman of USA Dry Pea and Lentil Council. Our next witness is 
Mr. Kirk Satterfield, Chairman of USA Rice. Our fifth and final 
witness for this panel is Mr. Andrew Moore, President of the 
U.S. Canola Association.
    Thank you all for being here today. We are now going to 
proceed with the testimony. You will each have 5 minutes. The 
timer in front of you will count down to 0, at which point the 
time has expired, so please begin to wrap your comments up as 
you see it approaching zero.
    Mr. Haag, please begin when you are ready.

    STATEMENT OF TOM HAAG, PRESIDENT, NATIONAL CORN GROWERS 
                  ASSOCIATION, EDEN VALLEY, MN

    Mr. Haag. Thank you, Chairman Scott, Ranking Member Brown, 
and the rest of the Members, for this opportunity here to 
testify today.
    My name is Tom Haag. I am a fourth generation family farmer 
from south central Minnesota, where my son and I grow 1,700 
acres of corn and soybeans. And I am currently the President of 
the National Corn Growers Association.
    Farmers across the country are busy today planting seeds 
and preparing for a strong crop and a future harvest. The 
Committee's continued outreach is laying critical groundwork 
for a strong, bipartisan farm bill. Corn growers are as 
optimistic for this process as we are for this year's harvest.
    This morning, I will focus my testimony on NCGA's top farm 
bill recommendations for the crop insurance and commodity 
prices. The areas of emphasis for corn growers are summarized 
in our key principles: protecting the Federal crop insurance, 
strengthening the producers' safety net, bolstering U.S. 
international market development, and supporting voluntary 
conservation programs.
    Our farm bill recommendations seek to make USDA programs 
more effective and responsive through strategic investments and 
policy enhancements. Federal crop insurance has a proven track 
record for helping producers quickly respond to natural 
disasters. Corn growers consistently ranked crop insurance as 
the most important program and title of the farm bill. We 
strongly oppose any efforts to restrict producers' access to 
crop insurance products and oppose harmful programs cuts that 
would negatively impact crop insurance products, their 
delivery, or the sound structure of the program.
    One area where crop insurance can be improved is the cost 
of coverage to producers. NCGA broadly supports increasing 
affordability of crop insurance. Many corn growers purchase 
endorsement policies and higher levels of buy-up. But for 
others, the individual cost of purchasing coverage can 
discourage higher levels of coverage.
    In the commodity title, ARC Program provides important 
countercyclical revenue coverage for farmers. Corn growers have 
identified two places to improve the program's effectiveness. 
Currently, our county payment's rate may not exceed ten percent 
of the county benchmark revenue. This maximum payment rate has 
limited assistance provided to producers. NCGA supports 
increasing the maximum rate above ten percent in order to 
provide increased assistance to growers who experience 
significant revenue losses. For example, in the year 2020, 
growers across Iowa suffered major losses due to the duration. 
The yield losses were widespread and deep enough for our county 
to trigger payments to multiple counties. But the program's 
effectiveness was restricted due to the limitations.
    NCGA also recommends increasing the coverage level for our 
county above the current 86 percent of the county's revenue 
benchmark to make programs more responsive to revenue losses.
    The PLC Program provides important price protection for 
farmers. Corn growers value the PLC Program as optional, 
particularly during the periods of sustained lower average 
prices. The current statutory reference price for corn is $3.70 
per bushel, well below the current market price and long-term 
historical average prices.
    NCGA supports strengthening the effective reference price's 
escalator, which allows more responsive price protection. The 
provision is capped at 115 percent. The statutory reference 
price for corn, the escalator would be capped at $4.26. For 
corn growers, the effective reference price is expected to 
trigger higher levels of price protection starting in the year 
2024. NCGA supports strengthening this market-oriented 
mechanism by raising the 115 percent cap or modifying the 
formula to be more responsive to changes in the market.
    NCGA supports funding the Market Access Program and the 
Foreign Market Development Program. NCGA also supports three 
initiatives to make the existing working land conservation 
programs more effective. We appreciate the budget challenges 
and varied approaches to current issues impacting the 
agriculture sector. Corn growers stand ready to provide 
additional feedback and support as the legislative process 
moves forward towards a successful farm bill harvest this year.
    The Chairman. Mr. Haag, we are approaching beyond the 5 
minutes. We are having problems with the clock, but if you 
could just finish up, I would appreciate it. Are you done?
    Mr. Haag. I am sorry?
    The Chairman. We are obviously having problems with the 
timer, so----
    Mr. Haag. Okay. I am through anyway, though. Thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Haag follows:]

   Prepared Statement of Tom Haag, President, National Corn Growers 
                      Association, Eden Valley, MN
    Chairman Austin Scott, Ranking Member Shontel Brown, and Members of 
the House Agriculture Committee, thank you for the invitation to 
testify today before the General Farm Commodities[, Risk Management, 
and Credit] Subcommittee.
    My name is Tom Haag. I am a fourth-generation family farmer in 
south-central Minnesota where my son and I grow more than 1,700 acres 
of corn and soybeans. I currently serve as President of the National 
Corn Growers Association (NCGA).
    Founded in 1957, NCGA is a farmer-led trade association with nearly 
40,000 dues-paying corn farmers nationwide and more than 300,000 corn 
growers who contribute to corn promotion programs in their states. The 
NCGA mission is to create and increase opportunities for corn growers 
and our vision is to sustainably feed and fuel a growing world.
    Farmers across the country are busy today planting seeds and 
preparing for a strong crop and future harvest. The hearing today and 
the Committee's continued outreach is laying critical groundwork for a 
strong, bipartisan farm bill. Corn growers are as optimistic for this 
process as we are for this year's harvest. Thank you to all the Members 
and staff for your tremendous work on behalf of the American farmer.
    In terms of farm bill priorities, the consensus number one issue 
for corn growers continues to be protecting Federal crop insurance. As 
users of the commodity programs, NCGA also supports improvements to 
strengthen both the Agriculture Risk Coverage (ARC) and Price Loss 
Coverage (PLC) commodity programs. Together, the crop insurance and 
commodity programs authorized through the farm bill are the most 
significant Federal risk management tools for corn producers.
    This morning I will focus my testimony on NCGA's approach to the 
farm bill and offer our top recommendations for the crop insurance and 
commodity titles.
2023 Farm Bill Approach
    As a grassroots led association, NCGA and our affiliated state 
associations have worked with grower leaders from across the country to 
develop principles and prioritize policy recommendations for the farm 
bill. We are working closely together to ensure the next farm bill 
addresses the current and future needs of all corn growers.
    The values, objectives, and areas of emphasis for corn growers in 
the 2023 Farm Bill are best summarized in our key principles:

   Protecting Federal crop insurance

   Strengthening the producer safety net

   Bolstering U.S. international market development efforts

   Supporting voluntary conservation programs, and

   Championing initiatives important to rural America.

    Our farm bill recommendations seek to make existing USDA programs 
more effective, efficient, and responsive through strategic investments 
and policy enhancements. The 2018, 2014 and earlier farm bills have all 
laid a great foundation for the modern producer safety net that 
Congress can continue to build upon.
    Since the 2018 Farm Bill was signed into law, corn growers and 
stakeholders within the broader farm economy have faced and weathered a 
litany of difficulties and challenges outside of producers' control. 
Key risk management tools and USDA programs continue to be stress 
tested by natural disasters, economic challenges, and black swan events 
like COVID-19 and global conflicts. Corn growers appreciate efforts by 
Congress and the Administration to provide temporary and ad hoc 
assistance for these unusual risks and losses that were uncovered by 
existing Federal programs. While recent programs outside the farm bill 
have benefited producers, the reauthorization of the farm bill is an 
opportunity to strengthen the effectiveness and responsiveness of these 
risk management tools for farmers.
    After studying potential new programs and novel approaches to these 
challenges, we continue to find that most of our members are more 
supportive of improvements to existing crop insurance and commodity 
programs than creating entirely new, complex, and untested structures 
or schemes. NCGA has a track record of advocating for market-oriented 
farm policies that help growers manage their risks. Our focus for the 
safety net continues to be on accessible tools geared towards revenue, 
which factors in both yield and price risks that producers face 
throughout the growing and market seasons.
    Corn growers appreciate the complicated budget environment in which 
the upcoming farm bill legislation will be developed. This March, NCGA 
and over twenty affiliated state associations joined a letter signed by 
400 national, regional, and state agriculture associations, ``to 
express our strong support for providing the Senate Committee on 
Agriculture, Nutrition, and Forestry and House Committee on Agriculture 
with sufficient budgetary resources to write a new bipartisan, multi-
year, comprehensive, and meaningful piece of legislation.''
    With over ninety million acres of corn planted across the country 
most years, NCGA understands small improvements and changes to Federal 
policies can potentially lead to large budgetary impacts. Given the 
nation's fiscal outlook, debt, and deficit, we recognize that hard 
choices will have to be made on Federal priorities. Just as corn 
growers work to be good stewards of the land, we also strive to be good 
stewards of Federal farm safety net resources.
Crop Insurance
    Delivered through the successful public-private partnership model, 
Federal crop insurance has a proven track record of helping producers 
quickly respond to natural disasters. Corn growers consistently rank 
crop insurance as the most important program and title of the farm 
bill.
    To meet the growing list of challenges and demands of tomorrow, 
NCGA believes crop insurance must continue to be protected and 
strengthened as the cornerstone of the Federal safety net. Throughout 
the development of the new farm bill, corn growers will strongly oppose 
any efforts to restrict producer access to crop insurance products and 
oppose harmful program cuts that would negatively impact crop insurance 
products, their delivery, or the sound structure of the program.
    NCGA is a proud and active member of the Crop Insurance Coalition 
which is comprised of a diverse range of farmer, lending, input, 
conservation, and crop insurance organizations that work together to 
advocate on behalf of crop insurance.
    Corn growers are grateful that leaders on the Agriculture 
Committees are committed to educating their peers on the benefits of 
this risk management tool and the critical role it plays in the 
agricultural value chain.
    One area where crop insurance can be improved is the cost of 
coverage to producers. While inflation has made headlines for increased 
input costs including fuel, fertilizer, and land, the costs of 
purchasing crop insurance have also risen. Farmers paid $6.55 billion 
in premium costs for 2022, a seventy-five percent increase from $3.75 
billion in 2020, before the onset of the recent high input cost 
environment. The higher costs for coverage have added pressure on 
growers already facing difficult decisions about managing rising costs.
    NCGA broadly supports increasing the affordability of crop 
insurance for producers. Many corn growers are still able to purchase 
endorsement policies and higher levels of buy up coverage, but for 
others, the individual costs of purchasing coverage can discourage 
higher levels of coverage therefore leading to a higher risk profile.
    Data published by the Risk Management Agency (RMA) demonstrates how 
Federal crop insurance is a major pillar of risk management for the 
nation's corn growers. According to RMA's summary of business, in 2022, 
corn growers purchased Federal crop insurance coverage on over 79.8 
million acres of corn, of which 11.3 million acres had additional 
companion and endorsement policies. Nationwide, corn farmers insured 
$66.5 billion in liabilities through the purchase of over 384,000 
policies that earned premium.
    Last year, in response to widespread drought and other natural 
disasters, total crop insurance indemnities for corn have so far 
totaled $4.28 billion. Despite the large scale of indemnities, the 
nationwide loss ratio for corn is 0.68, far less than the statutory 
target of 1.0. A loss ratio below 1.0 means that crop insurance 
payments were less than the total premiums paid by producers and the 
Federal Government. Over the past twenty years, from 2003 to 2022, the 
national loss ratio for corn has averaged 0.72.
    Most corn growers purchase revenue protection policies, which 
protect against loss of revenue due to a production loss, change in 
price, or a combination of both. In 2022, revenue protection policies 
alone covered over 73.8 million acres of corn. Built into these 
policies is harvest price protection, which is critical coverage for 
farmers who forward sell their corn and other crops, as well as 
livestock producers who produce their own grain. Yield protection 
policies covered an additional 4.9 million acres of corn in 2022.
    Corn growers also have access to many endorsements and options 
including several area-wide policies. In 2022, 4.65 million acres had 
coverage through the Supplemental Coverage Option (SCO) and 3.19 
million acres had coverage through the new Enhanced Coverage Option 
(ECO). The policies are optional endorsements where growers can pay for 
additional area-based coverage on top of their underlying crop 
insurance policy. Corn growers also purchase hurricane insurance 
protection-wind index (HIP-WI), margin protection policies, and whole-
farm revenue protection (WFRP). In 2022, HIP-WI endorsement covered 1.5 
million acres, representing $256.8 million in liability for corn, and 
paid $131.2 million in indemnities for all commodities with the top 
recipients in order by crop including corn, soybeans, and cotton.
    NCGA and affiliated state organizations continue to partner with 
other entities for the study and creation of improved crop insurance 
endorsements and policies. Whether through Federal research and 
development or private development for approval of Federal policies by 
the Federal Crop Insurance Corporation (FCIC), NCGA and our state 
associations have been successful in developing policies that follow 
sound insurance principles and are actuarially appropriate. Examples of 
these successful efforts include the widely adopted Trend-Adjusted 
Yield Endorsement and the recent voluntary endorsement for corn 
producers who split-apply nitrogen.
Agriculture Risk Coverage (ARC)
    NCGA supports the continuation and improvement of the Agriculture 
Risk Coverage (ARC) program, which provides important counter-cyclical 
revenue coverage for farmers with base acres. After nearly a decade of 
experience with ARC, corn growers have identified two specific 
components within the existing formula where Congress can significantly 
improve the commodity program's effectiveness. These statutorily set 
factors are the maximum payment rate and the coverage level.
    Despite higher-than-average commodity prices in recent years, the 
ARC-County program has supported growers experiencing revenue losses 
when yields were reduced due by natural disasters. For example, in the 
2020 crop year ARC-County provided $41.5 million in assistance to corn 
growers in yield impacted areas, while the price-based PLC program was 
not triggered nationally for corn growers.
    Under current law, ARC county payment rates may not exceed ten 
percent of the ARC-County benchmark revenue. In reviewing recent Farm 
Service Agency (FSA) county level data when ARC payments have been 
triggered, the maximum payment rate has often limited assistance 
provided to producers enrolled in the program. In practice, the maximum 
payment rate acts as an additional de facto payment limitation within 
the ARC program.
    NCGA supports increasing the maximum payment rate above ten percent 
in order to provide increased assistance to growers who experience 
significant revenue losses. While our members remain supportive of the 
ARC-County program, the maximum payment rate currently limits 
assistance and does not adequately address the true depth of the losses 
producers experience.
    For example, in 2020, growers across Iowa and neighboring states 
suffered major losses due to the devastating derecho. The storm and 
accompanying damaging winds hit millions of acres of highly productive 
crop land in August before corn harvest could begin. The yield losses 
were widespread and deep enough in Iowa for ARC-County to trigger 
payments in multiple counties, but the program's effectiveness in 
offsetting losses was restricted due to the ten percent benchmark 
revenue limitation.
    NCGA also recommends increasing the coverage level for ARC-County 
above the current eighty-six percent of the county revenue benchmark. 
This change would make the commodity program more responsive to growers 
facing revenue losses. Corn growers understand and agree that no 
Federal program should be designed to cover one hundred percent of 
losses or make farmers entirely whole. However, the current coverage 
level was previously set during the 2014 Farm Bill and now deserves 
reconsideration.
    The two proposed changes are simple, straightforward, and effective 
in strengthening the safety net. Increasing the maximum payment rate 
and the coverage level will allow producers to receive more responsive 
and more adequate assistance in times of revenue losses, particularly 
in areas experiencing disasters. The February 2023 CBO baseline 
projects average ARC-County payments of $21.10 per corn base acre. The 
two changes are expected to increase the average per base acre 
projected payments for corn growers.
    Although ARC-County and revenue-based Federal crop insurance 
policies both offer forms of revenue protection, Congress designed the 
programs to offer complementary risk protection by covering different 
losses. For example, ARC-County provides protection when prices are 
lower than a historical benchmark period. Crop insurance will not cover 
those situations because the prices used in crop insurance guarantees 
reset each year. ARC-County provides useful protection in years in 
which prices have declined from a historically higher price period, 
while the crop insurance revenue policies provide price protection 
within a single year.
    NCGA and our grower members also remain appreciative of the 
multiple policy improvements to the ARC-County program in the 2018 Farm 
Bill including provisions incorporating trend adjusted yields; 
increasing the transitional yield, i.e., yield plug; and shifting the 
primary source of yield data for the ARC-County program from the 
National Agricultural Statistical Service (NASS) to aggregated crop 
insurance data from RMA.
Price Loss Coverage (PLC)
    NCGA supports the continuation and improvement of the Price Loss 
Coverage (PLC) program, which provides important price protection for 
farmers with base acres. Corn growers value having the PLC program as 
an option particularly during periods of deep and sustained lower than 
average commodity prices. For this farm bill, NCGA is focused primarily 
on improvements to the effective reference price escalator.
    The current statutory reference price for corn is $3.70 per bushel, 
which is well below current market prices and long-term historical 
average prices. From 2012 to 2021, the national marketing year average 
price for corn was $4.31. The PLC reference price for corn was eighty-
six percent of the average historical prices, translating to an eighty-
six percent level of protection.
    Over the most recent 5 year period of 2017 through 2021, the 
national marketing year average price is slightly lower at $4.21, with 
the reference price representing protection at roughly eighty-eight 
percent. Notably, when the current marketing year for the 2022 crop 
finishes, these historical average prices will likely increase 
considerably.
    NCGA supports strengthening the PLC effective reference price 
``escalator,'' which was first included in the 2018 Farm Bill. The 
effective reference price allows the program to have more responsive 
levels of protection that can rise and fall in response to actual 
market prices. Under current law, the effective reference price for a 
crop year is the higher of the statutory reference price or eighty-five 
percent of the 5 year Olympic average market price, capped at 115 
percent of the statutory reference price. For corn the escalator is 
capped at $4.26.
    For corn growers, the effective reference price is expected to 
trigger higher levels of price protection starting with the 2024 crop 
year. In the February 2023 baseline, the Congressional Budget Office 
(CBO) projects that the effective reference price for corn will be 
$4.01 per bushel for the 2024 crop year, at the current maximum of 
$4.26 for the 2025 and 2026 crop years, $4.25 for 2027, and $3.71 for 
the 2028 crop year. According to these CBO projections, this mechanism 
will provide additional support for corn growers through at least 4 of 
the 5 crop years of the 2023 Farm Bill. However, the potential support 
is expected to be restricted by the 115 percent cap for at least 2 crop 
years.
    Similarly, the Food and Agricultural Policy Research Institute 
(FAPRI) at the University of Missouri estimates that the average 
effective reference price for corn over the next 10 crop years (2024-
2033) will be $4.05 per bushel. According to FAPRI, this mechanism will 
provide additional support for corn growers through all 5 crop year 
years of the 2023 Farm Bill, including effective reference prices of 
$4.01 for the 2024 crop year, $4.24 for 2025, $4.25 for 2026, $4.24 for 
2027 and $4.14 for the 2028 crop year.
    Both economic models and baselines demonstrate that the escalator 
will provide corn growers with an increased effective reference price 
through the majority of the crop years covered through the 2023 Farm 
Bill. These automatic increases in protection will provide meaningful 
support to corn growers through current law even if prices continue to 
be volatile or decline.
    Corn growers recognize that improvements to the PLC effective 
reference price can also enhance risk protection for producers. NCGA 
supports strengthening this market-oriented mechanism by raising the 
115 percent cap or otherwise modifying the effective reference price 
formula to be more responsive to changes in market prices. The February 
2023 CBO baseline projects average PLC payments of $26.13 per corn base 
acre. Improvements to the effective reference price formula are 
expected to increase the per base acre projected PLC payments for corn 
growers.
    A major challenge for corn growers in evaluating and pursuing 
potential changes to farm programs is the most recent bearish 
projections by CBO for long-term commodity prices. CBO projects that 
marketing year average prices for corn will fall to $3.90 for the 2028 
marketing year, decreasing further to $3.80 for the 2029 crop year, 
before increasing 10 to $3.90 for the 2030 and 2031 crop years.
    These price projections and their proximity to current statutory 
reference prices practically means that any increase in the statutory 
reference prices will have large Federal budgetary costs. More 
meaningful enhancements in recognition of recent prices and higher 
costs of production will have even greater Federal costs.
Commodity Program Administration
    NCGA is committed to ensuring farm programs work for producers. The 
farm bill provides an important opportunity to highlight areas where 
implementation of commodity and loan programs has gone well and where 
Congress can help improve upon the administration of farm programs.
    In terms of program designs impacting both the PLC and ARC 
commodity programs, NCGA opposes lowering payment limits and adjusted 
gross income eligibility limits below current statutory levels. Corn 
growers also believe FSA should have more flexibility to accommodate 
the growing complexity of farm business structures and 
intergenerational family farms. We remain committed to the decoupled 
nature of commodity programs from current production in order to avoid 
government programs driving or distorting planting decisions. NCGA 
supports the voluntary update of base acres and program yields when 
applicable.
    Implementation of the current farm bill has been fairly smooth, 
helped by familiarity of the programs, adequate sign-up periods, and 
increased transparency of the program components, as well as USDA fact 
sheets and additional resources on farmers.gov. We commend the 
Committee for continued support of web-based decision tools that help 
facilitate growers' education and evaluation of commodity programs and 
options.
    Corn growers support continuing the annual opportunity to choose 
between commodity programs. We appreciate that commodity program sign-
up periods are now similarly timed with crop insurance decisions, which 
allows coordinated risk management decisions to be based on current 
market conditions.
    Corn growers continue to utilize the opportunity to elect programs 
on an annual basis as shown in FSA-published data. In the 2022 crop 
year over 91.7 million base acres of corn were enrolled in the 
commodity programs, including 54.7 million corn base acres in ARC-
County, 35.6 million in PLC, and 1.3 million in ARC-Individual. For the 
2021 crop year, producers enrolled 45 million corn base acres in ARC-
County, 48.4 million in PLC, and 1.3 million in ARC-Individual. In 
terms of percentages, for the 2022 crop year, 59.7 percent of corn base 
acres were enrolled in ARC-County, 38.9 percent in PLC, and less than 
two percent in ARC-Individual. For the 2021 crop year, 47 percent of 
corn base acres were enrolled in ARC-County, 51 percent were in PLC, 
and less than two percent in ARC-Individual.
    Corn growers appreciate the working relationships with the FSA 
local, state, and Federal offices. NCGA encourages the continuation of 
the Acreage and Crop Reporting Streamlining Initiative (ACRSI) and 
similar efforts to improve the farmer customer experience and create 
greater efficiency throughout multiple USDA agencies. The agencies 
within the Farm Production and Conservation (FPAC) Mission Area are 
already working more closely together and should continue to share 
common data and best practices.
    Building upon the lessons of the pandemic, we believe opportunities 
exist to further reduce the reporting burden on producers. USDA should 
continue to find more ways to either utilize data already submitted to 
the Department or to allow for the submission of additional information 
electronically, which may reduce the number and length of in-person 
visits to county offices and save farmers both time and money.
    While the use of marketing assistance loans (MALs) is small among 
corn growers, the program remains an important risk management tool, 
particularly for corn growers without base acres. According to FSA, for 
the 2022 crop year around 4,700 MAL loans have been issued covering 
over 360 million bushels of corn. For the 2021 crop year, 6,208 loans 
were issued on over 468 million bushels of corn. The national loan rate 
for corn is $2.20 per bushel.
Additional Farm Bill Priorities
    In addition to the crop insurance and commodity titles, the farm 
bill includes programs important to corn growers including trade, 
conservation, agricultural research, rural broadband, energy, and the 
biobased economy.
    In the trade title, NCGA supports increasing Market Access Program 
(MAP) funding from $200 million up to $400 million annually and the 
Foreign Market Development (FMD) program funding from $34.5 million up 
to $69 million annually. These programs boost U.S. agricultural exports 
and help agriculture and related businesses in rural America. NCGA is 
supportive of H.R. 648, the Agriculture Export Promotion Act introduced 
by Representatives Newhouse, Panetta, and many more Members. An 
independent study showed that between 1977 and 2019 these programs 
resulted in a return of $24.50 for every dollar invested and a 13.7 
percent average annual increase in value of agricultural exports.
    In the conservation title, NCGA supports three initiatives to make 
the existing working land programs more effective in combating weed 
resistance, reducing nutrient losses through farmer-led collaborative 
watershed projects, and speeding the development and adoption of 
innovative conservation practices by strengthening the interim 
conservation practice standard program. Corn growers also encourage the 
Committee to examine opportunities for increased flexibility within 
conservation programming.
    Corn growers support legislation to enable producers to more easily 
adopt precision practices that will allow them to remain competitive in 
a rapidly modernizing industry. NCGA has endorsed H.R. 1459 the 
Producing Responsible Energy and Conservation Incentives and Solutions 
for the Environment (PRECISE) Act as introduced by Representatives 
Hinson, Panetta Finstad, and Craig. NCGA also supports H.R. 1495 the 
Precision Agriculture Loan (PAL) Act introduced by Representatives 
Feenstra, Panetta, Tokuda, Thompson, and Guest.
    NCGA supports H.R. 1290 introduced by Representatives Finstad and 
Costa which would clarify propane storage as an eligible use for funds 
under the storage facility loan program. Corn growers are also 
supportive of H.R. 1219 the Food and Agriculture Industry Cybersecurity 
Act led by Rep. Pfluger. This bill will take necessary steps to protect 
farmers across the country from growing cyber threats.
    NCGA continues to engage in multiple broad-based coalitions and is 
supportive of farm bill recommendations from these collaborative 
entities. As a steering committee member of the Food and Agriculture 
Climate Alliance (FACA), NCGA was involved in FACA's farm bill working 
groups. NCGA also continues to be involved with the AGree Economic and 
Environmental Risk Coalition (E2 Coalition) that focuses on 
recommendations for agriculture data and reducing policy barriers to 
conservation practice adoption. NCGA is supportive of the Agriculture 
Innovation Act, S. 98, introduced by Senators Klobuchar and Thune, 
which would strengthen USDA's ability to confidentially aggregate data 
the department already collects and allow for potential research on 
topics important to producers.
Challenges in the Corn Economy
    In 2022, U.S. corn farmers planted 88.6 million acres of corn, 
producing over 13.7 billion bushels with an estimated value $91.7 
billion. Corn farmers faced weather challenges last year that reduced 
planted acres and were detrimental to productivity in some regions. The 
USDA March Prospective Planting Report indicates farmers intend to 
plant 92 million acres of corn in 2023. Given an estimated planted-to-
harvest-acres ratio and USDA forecast yield of 181.5 bushels per acre, 
2023 has the potential to be a record production year surpassing 15.2 
billion bushels. Corn planting progressed ahead of a 5 year pace in the 
first half of April, but many acres remain to reach completion with 
continued possibility for weather delays. Plus, the full growing season 
and harvest period of weather and environmental uncertainty remain.
    Widespread drought and intense heat impacted much of the corn belt 
during the 2021 and 2022 growing seasons. Unfortunately, growers across 
the great plains are still facing extreme (D3) and exceptional (D4) 
drought conditions, which could impact planting and productivity of 
corn this year. According to the U.S. Drought Monitor, approximately 
twenty-eight percent of corn production is located in areas 
experiencing drought as of April 18, 2023. The latest report shows that 
ninety-eight percent of corn production in the State of Nebraska is 
within areas with drought conditions along with seventy-eight percent 
in Kansas, sixty-three percent in Texas, and thirty-nine percent in 
Iowa.
    In other parts of the country, corn growers are facing delays in 
corn planting due to late snow, excess moisture, and flooding. It 
remains too early to know if corn production will be as heavily 
impacted as it was in 2019 when wet weather conditions during planting 
season across the high plains and throughout the Missouri River Basin 
prevented many farmers from accessing flooded fields. Nationwide, 2019 
set a record with over 19 million acres of cropland reported as 
prevented from being planted, including over 11 million acres of corn.
    Inflation, particularly around farm input prices, continues to be a 
major concern. Inputs such as diesel, machinery, building materials, 
and labor all experienced notable increases in price during 2021 to 
2022. The most significant input cost increase has been fertilizer. 
Historically fertilizer costs are about \1/3\ of the operating costs 
for growing corn but are estimated at forty-six percent of corn 
operating costs for 2022 and 2023.
    Although fertilizer costs have declined from 2022 peaks, fertilizer 
remains costly compared to prices over the past decade. Depending on 
the form of nitrogen, April 2023 farm prices were fifty percent to more 
than eighty percent higher than the 2009-2020 average price.
    Similarly, prices for phosphorus fertilizers were more than fifty 
percent higher and potash thirty percent higher. Fertilizer nutrients 
are especially critical in corn productivity and returning those 
nutrients is important in maintaining healthy soils.
    Although production costs have been higher in recent years, corn 
prices have also seen volatility and large swings in prices over the 
last 2 years. As the economy transitions towards lower inflation, 
commodity prices tend to move down faster than costs. For the 2023 
crop, USDA projects the average farm price of corn at $5.60 per bushel, 
a full dollar lower than $6.60 per bushel estimated average farm price 
for the 2022 crop year. If realized, corn growers will face a 17.9 
percent drop in corn price from 2022 to 2023, compared to only 1.3 
percent decline in projected cost of production for corn.
    With average costs for 2023 mostly unchanged from 2022 and with 
corn prices notably lower, projected farm margins are expected to be 
much tighter in 2023. Average corn yield in 2023 is expected to be 
higher than the drought reduced 2022 yield, but even higher yields 
would be needed to maintain revenue levels given the expected lower 
corn price.
Market Demand and Sustainable Corn Production
    Corn and corn byproducts are a valuable part of the U.S. economy, 
helping to meet food, feed, and energy demands. Nearly forty percent of 
the corn grown in the U.S. is used for livestock feed and over forty 
percent is used for food and industrial purposes, including ethanol 
production. NCGA continues to work with partners on developing and 
supporting new uses of corn, including through the biobased economy. 
The top three priorities for NCGA this year include passage of the farm 
bill and improving both foreign and domestic demand for corn.
    Although most U.S. corn is used domestically, exports have 
comprised more than fifteen percent of total disappearance on average 
over the past 5 years. Mexico is the top U.S. corn export destination, 
accounting for twenty-seven percent of U.S. corn exports in the 2021/22 
marketing year. We are extremely concerned with the implications of 
Mexico's recent decree banning imports of biotech corn will have on 
U.S. corn farmers and our nation's economy. Reaching a resolution on 
this issue is critical and necessary to reaffirm the precedent for the 
science-based-safety of biotech corn with our trading partners. NCGA 
supports the initiation of a dispute settlement under USMCA to reach a 
resolution.
    Ethanol production represents thirty to forty percent of corn 
demand and results in valuable co-products, returning the equivalent of 
more than a billion bushels of corn as distillers grains for high-
protein animal feeds, distillers corn oil for renewable diesel and 
biodiesel and CO2 for beverage and food processing, as well 
as sequestration. Corn ethanol adds billions of gallons to our nation's 
fuel supply. Because today's ethanol cuts GHG emissions in half 
compared to gasoline, ethanol is a vital pathway for agriculture to 
help address climate change. Priced lower than gasoline, ethanol is 
available now to cut fuel prices, support domestic energy security and 
help build a clean energy future.
    Use of new ethanol blends continues to grow including E15, often 
marketed as Unleaded 88, and E85, which is offered by a growing number 
of retailers. The ethanol blend rate hit a record high of 10.39 percent 
in 2022, supported by growing demand for these higher ethanol blends.
    Ethanol has and continues to be priced at a discount to unblended 
gasoline, resulting in greater consumer price savings with higher 
ethanol blends. For example, drivers in my home state of Minnesota 
saved an average of 17 per gallon in 2022 with Unleaded 88 compared to 
regular fuel, which is a ten percent ethanol blend, and Minnesota 
drivers continue to save up to 20 per gallon with this low-cost, low-
emission fuel choice. Corn growers support policies that maintain a 
level playing field for clean transportation solutions and take greater 
advantage of the ability for ethanol to further cut emissions and costs 
to consumers, including H.R. 2434 the Next Generation Fuels Act and 
H.R. 1608 the Consumer and Fuel Retailer Choice Act.
    Corn farmers are committed to continuous improvement in the 
production of corn, a versatile crop providing abundant high-quality 
food, feed, renewable energy, biobased products, and ecosystem 
services. As stewards of the land, we understand the responsibility we 
have for creating a more environmentally and economically sustainable 
world for future generations with transparency and through continued 
advances and efficiencies in land, water and energy use. In June 2021, 
NCGA released the corn sustainability report and specific goals for 
2030.
    NCGA's Corn Sustainability Advisory Group (CSAG) has taken the lead 
in pursuing social sustainability within the corn industry. NCGA has 
been working towards ensuring our organization is inclusive and 
equitable, and finding ways to partner with other agriculture 
organizations to work towards the same goal. CSAG is in the process of 
developing a comprehensive plan to ensure we are working towards our 
best future.
Summary and Closing
    Thank you for your consideration of NCGA's priorities for the 2023 
Farm Bill. We appreciate the budget challenges and varied approaches to 
confronting current and emerging issues impacting the agricultural 
sector. Our shared goal is to make existing USDA programs more 
effective, efficient, and responsive through strategic investments and 
policy enhancements.
    NCGA recommends Congress oppose efforts to cut crop insurance or to 
restrict producer access to crop insurance products. To improve crop 
insurance, the farm bill can address the affordability and costs for 
producers who chose to purchase coverage.
    In the commodity title, NCGA has three specific recommendations for 
improvements including increasing the ARC-County maximum payment rate 
above ten percent; increasing the ARC-County coverage level above 
eighty-six percent; and strengthening the PLC effective reference price 
``escalator.'' Corn growers oppose lowering payment limits and adjusted 
gross income limits below current levels.
    In closing, NCGA greatly appreciates your work in support of 
America's farmers, rural communities, and consumers. Corn growers stand 
ready to provide additional feedback, perspectives, and support as the 
legislative process moves forward towards a successful farm bill 
harvest this year.

    The Chairman. Okay. Thank you.
    What do we need to do on the timer? Do you all need to just 
do a 5 minute clock? All right. We are going to run a 5 minute 
clock, and I will raise my hand when you have 1 minute. Fair 
enough? All right.
    Mr. Holladay, please begin when you are ready.

STATEMENT OF SHAWN HOLLADAY, CHAIRMAN, NATIONAL COTTON COUNCIL, 
                          LUBBOCK, TX

    Mr. Holladay. Chairman Scott and Ranking Member Brown, 
thank you for this opportunity. My name is Shawn----
    The Chairman. I am sorry, could you move the microphone a 
little closer?
    Mr. Holladay. How is that? Okay.
    Chairman Scott and Ranking Member Brown, thank you for this 
opportunity. My name is Shawn Holladay, and I am a fourth 
generation cotton farmer from west Texas. I also currently 
serve as the National Cotton Council as Chairman for 2023.
    The general structure of the 20--along with my wife Julie 
and daughter Katy. I better mention them because they are at 
home farming. Our family owns and operates H2H Farms. I am also 
a partner in a cotton gin there south of Lamesa.
    The general structure of the 2018 Farm Bill has served that 
industry well and should be maintained. However, additional 
funding is necessary to address challenges both on the farm and 
throughout the supply chain. A strong safety net must consist 
of two key components: an effective commodity policy that 
provides either price or revenue protection to address for long 
periods of low prices and depressed market conditions, and a 
strong and fully assessable suite of crop insurance products 
that producers can purchase to tailor risk management.
    Supply chain disruptions and geopolitical challenges have 
led to a dramatic increase in production costs, leading to 
tighter margins and decreased profitability. Total production 
costs now range between 90 and $1 per pound, which is well 
above the futures prices in the mid-1980s. But when calculated 
based on seed cotton, the cost of production is almost 48, far 
above the PLC reference price of 36.7 per pound. Today's 
production costs are diminishing the effectiveness of the 
current reference price, which should be increased.
    Additionally, cotton producers should not face limits to 
their crop insurance options. Eliminating the prohibition on 
simultaneous enrollment of PLC and the Stacked Income 
Protection Plan, or STAX, would allow a grower to better tailor 
their risk management options, while also decreasing their 
reliance on ad hoc disaster programs.
    On the topic of financing, the Non-Recourse Marketing Loan 
Program for upland cotton remains vital for the U.S. cotton 
industry. However, despite higher production costs, the maximum 
level of the loan rate has remained at 52 since 2002. It 
should be increased to better reflect the cost of production 
and recent market prices. Furthermore, various loan repayment 
provisions should be modernized to better reflect the global 
market and higher storage and logistics costs. These 
improvements include allowing storage credits to better reflect 
actual storage charges, determining a globally competitive 
adjusted world price based on three lowest international 
prices, limiting the amount of the annual decline in cost of 
market values, creating a 30 day window for finalizing the AWP.
    We should also remember that not all cotton is the same. 
The 2018 Farm Bill continued important programs for Pima 
cotton, which is grown in parts of the West. The 2023 Farm Bill 
should increase the Pima loan rate to a more reflective level 
of pricing and cost of production. To ensure this commodity 
remains competitive abroad, the next farm bill should also add 
marketing loan functionality to the Pima loan and maintain both 
the Pima Cotton Competitiveness Payment Program and the Pima 
Cotton Trust Fund.
    On the domestic manufacturing front, the Economic 
Adjustment Assistance for Textile Mills Program has allowed 
investments in new equipment and technology, thereby reducing 
costs, increasing efficiency, and allowing U.S. mills to be 
more competitive. To support American manufacturing, we urge 
Congress to restore the rate of 4 per pound that was in place 
prior to 2012.
    Trade is vital to our industry, which is why the Market 
Access Program and Foreign Market Development Program are so 
important. Our industry supports the coalition to promote U.S. 
agriculture exports proposal to double funding for both MAP and 
FMD.
    Finally, our industry is opposed to any further tightening 
of payment limits and program eligibility requirements. We are 
encouraged that Congress has recognized this recent reality in 
recent disasters by including increased payment limit levels to 
producers who realize the majority of their income from their 
farming operation. The same consideration should be given to 
Title I program limits in the next farm bill.
    In closing, I encourage the Committee to write a farm bill 
that provides long-term stability for the future and addresses 
the challenges that continue to be faced by our industry. Thank 
you for this opportunity, and I would be pleased to respond to 
any of your questions.
    [The prepared statement of Mr. Holladay follows:]

    Prepared Statement of Shawn Holladay, Chairman, National Cotton 
                          Council, Lubbock, TX
Introduction
    I am Shawn Holladay, a fourth-generation west Texas cotton producer 
residing in Lubbock, and I currently serve as Chairman of the National 
Cotton Council (NCC). I also served as Chairman of the American Cotton 
Producers (ACP) in 2018 and 2019 and previously chaired the ACP's Farm 
Policy Task Force for multiple years, working closely with Congress on 
the creation and implementation of the seed cotton program for U.S. 
cotton producers.
    Along with my wife, Julie, and daughter, Katy, our family owns and 
operates H2H Farms. Our operation includes land in Dawson and Martin 
Counties of West Texas, primarily producing cotton. I am also a partner 
in United Gin Corporation, located south of Lamesa, Texas.
    The National Cotton Council (NCC) is the central organization of 
the United States cotton industry. Its members include producers, 
ginners, cottonseed processors and merchandizers, merchants, 
cooperatives, warehousers, and textile manufacturers. A majority of the 
industry is concentrated in 17 cotton-producing states stretching from 
California to Virginia. U.S. cotton producers cultivate between 10 and 
14 million acres of cotton, with production ranging from 12 to 20 
million 480 lb bales annually. The downstream manufacturers of cotton 
apparel and home furnishings are in virtually every state. Farms and 
businesses directly involved in the production, distribution, and 
processing of cotton employ more than 115,000 workers and produce 
direct business revenue of more than $22 billion. Annual cotton 
production is valued at more than $5.5 billion at the farm gate, the 
point at which the producer markets the crop. Accounting for the ripple 
effect of cotton through the broader economy, direct and indirect 
employment surpasses 265,000 workers with economic activity of almost 
$75 billion. In addition to the cotton fiber, cottonseed products are 
used for livestock feed and cottonseed oil is used as an ingredient in 
food products as well as being a premium cooking oil.
Economic Overview
    The U.S. cotton industry continues to navigate an environment 
characterized by increased production costs, sluggish consumer demand, 
and supply chain disruptions. For the current 2022/23 marketing year, 
the U.S. Department of Agriculture (USDA) estimates world cotton 
consumption at approximately 110 million bales, down 5% from the 
previous year and down 11% from 2020/21. The decline in global demand 
stems from several factors. First, continued price inflation, 
especially for energy and food products, is putting additional pressure 
on consumer purchasing power, thus limiting demand for apparel and 
textile products. Second, events such as the foreign currency crisis in 
Pakistan and the devastating earthquake in Turkey are limiting the 
demand for U.S. cotton by those two textile industries. Third, global 
supply chains are continuing to adjust to China's slow post-COVID 
economic reopening and the implications of the Uyghur Forced Labor 
Prevention Act. Projections for the upcoming 2023/24 marketing year 
call for a modest recovery in world cotton consumption, but those 
estimates hinge on a continued recovery in the global economy and 
moderation in overall inflation.
    In 2022, U.S. growers planted 13.8 million acres of cotton, as 
higher prices encouraged a 23% increase in area. However, due to 
extreme drought conditions in the Southwest, harvested acreage of 7.4 
million acres was at the lowest level since 1983. U.S. production of 
14.7 million bales was 2.8 million bales lower than in 2021.
    Looking ahead to the 2023/24 marketing year, production costs 
remain elevated and are only slightly lower than year-ago levels. 
According to USDA's Economic Research Service, U.S. cotton production 
costs increased by $161 per acre between 2018 and 2022--an increase of 
20 per pound based on an average yield of 800 pounds per acre. Cotton 
harvest-time futures prices in mid-April 2023 are 19% lower than a year 
ago, while the prices of competing commodities are just 7-8% lower than 
year-ago levels. Cotton producers will face difficult economic 
conditions in 2023 with lower cotton prices and high production costs.
    The current economic signals are reflected in the latest acreage 
expectations with USDA calling for 11.3 million acres planted in 2023, 
a drop of 18%. Given current drought conditions in the southwestern 
United States, there remains much uncertainty regarding cotton 
production for the 2023/24 marketing year. To estimate U.S. production 
for 2023/24, the NCC applies the 5 year average (2018-2022) abandonment 
rate and yield for most cotton-producing states. In the Southwest, 
adjustments were applied to the 5 year average values to account for 
current drought conditions. For 2023/24, U.S. harvested area is 
estimated to be 8.7 million acres with an overall abandonment rate of 
22.6%. 2023/24 U.S. production is estimated to be 15.5 million bales 
with an average yield of 853 pounds per acre.
Additional Budget Resources
    The general program structure authorized by the 2018 Farm Bill has 
served the industry well and should be maintained in the new farm law. 
However, as Congress charts the path for the 2023 Farm Bill, additional 
funding is necessary to address challenges both on the farm and 
throughout the supply chain.
    Since the implementation of the 2018 Farm Bill, ongoing trade 
tensions and geopolitical disputes have caused major disruptions in 
cotton exports, revealing gaps in cotton's safety net. A major 
disruption in the global demand for cotton fiber also occurred due to 
the worldwide COVID-19 pandemic, leading to increased storage, supply 
chain disruptions, and an overall reduction in global cotton 
consumption. Since passage of the 2018 Farm Bill, cotton growers have 
also been impacted by record droughts across the Southwest and western 
portions of the Cotton Belt as well as devastating hurricanes across 
south Texas and the Southeast.
    Thankfully, Congress and USDA responded to the needs of the cotton 
and agricultural industries by authorizing several ad hoc assistance 
programs. Since 2017, Congress has provided more than $90 billion in ad 
hoc assistance to agriculture, and between 2018 and 2021, ad hoc 
assistance comprised approximately 70% of all direct farm payments, 
which includes traditional farm bill support provided through the 
commodity and crop insurance titles. Although the U.S. cotton industry 
continues to face a challenging economic environment, Congressional 
budget procedures do not allow this past funding to be captured in the 
new farm bill without additional dollars being allocated by the House 
and Senate Budget Committees. We must ensure the House Agriculture 
Committee has the necessary resources to draft a farm bill that 
addresses the current needs facing the cotton industry.
Producer Safety Net
    The cotton safety net must consist of two key components: (1) an 
effective commodity policy that provides either price or revenue 
protection to address prolonged periods of low prices and depressed 
market conditions that span multiple years; and (2) a strong and fully 
accessible suite of crop insurance products that producers can purchase 
to tailor their risk management to address yield and price volatility 
within the growing season.
    The annual producer election of either Agriculture Risk Coverage 
(ARC) or Price Loss Coverage (PLC) included in the 2018 Farm Bill has 
worked well for growers and should continue in the new farm bill. 
Cotton producers have overwhelmingly selected the PLC program, with 
more than 90% of seed cotton base acres enrolled under that option. 
Agricultural markets are cyclical, and an effective safety net is 
imperative for the inevitable times of low prices. The combination of 
commodity program options and crop insurance provides farmers as well 
as their lenders the confidence entering the planting season that 
downside risk is mitigated in periods of steep price decline or a 
significant loss of production.
    Supply chain disruptions and geopolitical crises in nations that 
provide a substantial portion of critical production inputs have led to 
a dramatic increase in cotton production costs, leading to tighter 
profit margins and decreased profitability. Since 2018, cotton costs of 
production have increased by 20 per pound, based on average yields of 
800 pounds per acre. For many producers, total production costs now 
range between 90 and $1.00 per pound, which exceed current futures 
prices trading in the mid-1980s. When calculated based on seed cotton, 
the total costs to produce a pound of seed cotton have risen nearly 9 
since the 2018 Farm Bill, with current costs of production of almost 
48, far above the seed cotton reference price of 36.7 per pound 
(Exhibit 1). The current costs facing producers are diminishing the 
effectiveness of the current PLC reference price.
    In addition, growers enrolled in the ARC/PLC programs are currently 
limited in their access to crop insurance due to a prohibition on the 
purchase of the Stacked Income Protection Plan (STAX) on their enrolled 
farms. STAX is a crop insurance product for upland cotton that provides 
coverage for a portion of a producer's revenue based on the county, or 
area-wide experience. In 2018, when seed cotton became eligible for the 
ARC/PLC under the commodity title, Congress prohibited the purchase of 
STAX on ARC/PLC-enrolled farms, beginning with the 2019 crop. At the 
beginning of the prohibition, most growers chose to enroll their base 
acres in PLC. However, with higher cotton futures prices for the 2021 
and 2022 crops and limited effectiveness of the current seed cotton 
reference price, STAX has become a more attractive option.
    Cotton producers should not be limited on their crop insurance 
options and should be able to manage risk based on the needs of their 
operation. Eliminating the prohibition on simultaneous enrollment in 
PLC and STAX, as well as boosting the top coverage level of STAX for 
those farms with no seed cotton base or who forego enrollment in ARC/
PLC, would allow a grower to tailor their risk management options 
according to the needs of their operation while also decreasing their 
reliance on ad hoc programs, putting producers in charge of their own 
production risks.
Upland Cotton Marketing Assistance Loan
    The non-recourse marketing assistance loan program for upland 
cotton remains a cornerstone of farm policy for the U.S. cotton 
industry. While current prices are well above the loan rate, we know 
that will not always be the case. During times of low cotton prices, 
the marketing loan program is an essential tool for multiple segments 
of the cotton industry to effectively market cotton and provide cash 
flow for producers to meet financial obligations. Even in times of 
higher market prices, the marketing loan is utilized by the cotton 
industry to provide cash flow for producers and flexibility in 
marketing to encourage orderly movement of the crop throughout the 
year. In recent years, over 50% of the upland cotton crop enters the 
loan, and use of the loan approaches 80% in times of low prices. Also, 
in periods of low prices, if growers choose to forgo the marketing 
loan, they may receive a Loan Deficiency Payment (LDP) representing the 
difference between the loan rate and the market price. This is an 
important component of the marketing loan program that should be 
retained.
    Despite higher production costs, the maximum level of the loan rate 
has remained at 52 since 2002. The level of the loan rate should be 
increased to better reflect current costs of production and recent 
market prices. In addition, loan repayment provisions should be 
modernized to better reflect the competitive landscape in the global 
market and the higher storage and logistics costs facing the industry 
by: (1) allowing storage credits to better reflect actual storage 
charges; and (2) determining a globally competitive Adjusted World 
Price (AWP) based on the three lowest international prices, limiting 
the amount of the annual decline in the costs-to-market values, and a 
30 day window for finalizing the AWP (Exhibit 2).
    Since being implemented in 2006, maximum storage credits have 
declined, while actual storage charges have increased. Between 2006 and 
2022, average storage charges across much of the Cotton Belt increased 
by 45 per bale per month, while the effective storage credit fell 8 
per month. Currently, the effective storage credit is 78 below the 
average storage charge.
    Basing the AWP on an average of the three lowest quotes in the 
international market, rather than following the current practice of 
using the five lowest quotes, would create more value for cotton during 
loan redemptions and prevent cotton from stagnating in the loan and 
accruing costs. This will in-turn make the cotton loan more effective 
in providing support for producers and ensuring fluid movement into the 
marketplace. Moving to the three lowest quotes is also consistent with 
other provisions of the marketing loan program that are already based 
on three quotes.
    Establishing limitations on the annual decline in the costs-to-
market calculation is imperative. USDA currently conducts an annual 
survey of costs-to-market, and in recent years the industry has 
witnessed large changes in this calculation, which can negatively 
affect marketing decisions. While USDA would continue to conduct the 
annual survey of costs, this provision would establish limitations on 
the annual decline from the previous year to mitigate negative impacts 
on the competitiveness of U.S. cotton.
    Providing increased flexibility in AWP determinations during loan 
redemptions would allow producers to realize a more optimum AWP from 
the day of the loan redemption or the locking in of a LDP. Growers 
would then have the benefit to lower their costs to redeem cotton for a 
thirty-day period following the redemption date. This provision would 
be another tool to help move cotton from the loan and into the 
marketplace. Similar flexibility should also be provided to the 
determination of the LDP.
    Complete automation of the marketing loan program should also be 
addressed in the next farm bill. During the December 2018 lapse in 
government funding, these programs were severely impacted due to the 
need for direct personnel involvement in processing the entry and 
redemption of cotton in the marketing loan program. During this period, 
some growers were not able to enter cotton into the loan and access 
those funds, while others could not market their cotton because they 
could not redeem the loan. We urge this Committee to work with USDA to 
provide the necessary support to ensure that any future lapse in 
government funding does not negatively impact the marketing loan 
program.
Extra Long Staple (ELS) Cotton Policies
    There are important policies in place for ELS, or Pima, cotton. ELS 
cotton is grown in California, Arizona, New Mexico, and parts of Texas. 
The 2018 Farm Bill continued the ELS cotton loan program as well as a 
provision to ensure U.S. Pima cotton remains competitive in 
international markets. The balance between the upland and Pima programs 
is important to ensure that acreage is allocated in response to market 
signals instead of support levels.
    ELS producers, like their upland counterparts, have experienced 
sharp increases in production costs in recent years, with current costs 
exceeding the safety net provided by the loan program. While ensuring 
that market signals remain the driver of planting decisions, the 2023 
Farm Bill can address deficiencies in the safety net provided to ELS 
cotton producers by increasing the ELS loan rate to a more reflective 
level of pricing and costs of production.
    The next farm bill should also add ``marketing loan'' functionality 
to the ELS loan. Of all the commodities eligible for Commodities Credit 
Corporation (CCC) loan, ELS is one of only two commodities with a non-
recourse loan that lacks the provisions of an alternative repayment 
provision during periods when market prices are lower than the 
statutory loan rate. The new farm law should also maintain the ELS 
Cotton Competitiveness Payment Program and the Pima Cotton Trust Fund.
Economic Adjustment Assistance for Textile Mills
    After a decade of experiencing a precipitous decline in the amount 
of cotton used by U.S. textile mills, U.S. mill consumption has 
stabilized since 2008 due to ongoing assistance provided in the farm 
bill. The recent years of stability and expected future growth can be 
attributed to the continued benefits of the Economic Adjustment 
Assistance for Textile Mills (EAATM) program, originally authorized in 
the 2008 Farm Bill. Recipients must agree to invest EAATM proceeds in 
equipment and manufacturing plants, including construction of new 
facilities as well as modernization and expansion of existing 
facilities.
    EAATM funds have allowed investments in new equipment and 
technology, thereby reducing costs, increasing efficiency, and allowing 
domestic mills to be more competitive with foreign mills. This was 
shown to be prophetic during the COVID-19 pandemic as the U.S. textile 
industry was able to quickly shift their manufacturing facilities to 
the production of personal protection equipment (PPE). In addition, the 
industry continues to be a critical supplier of products to our defense 
industry. The yarns and fabrics produced by the U.S. textile industry 
are also integral products in the two--trade occurring with the 
Dominican Republic-Central American Free Trade Agreement (CAFTA-DR) and 
the United States-Mexico-Canada Agreement (USMCA) countries.When EAATM 
was initially implemented in 2008, the support level provided was set 
at 4 per pound of cotton consumption by the U.S. textile industry. 
Yet, budget pressures reduced that number to 3 in 2012. We urge 
Congress to restore EAATM support to the original 4 level in order to 
further support this critical employment and manufacturing base.
Payment Limits and Program Eligibility
    Our industry is opposed to any further tightening of payment limits 
and program eligibility requirements, as we believe these policies are 
already too burdensome and restrictive considering the size and scale 
of production agriculture necessary to be competitive and viable in 
today's global market. The NCC has always maintained that effective 
farm policy must maximize participation without regard to farm size or 
income. Artificially limiting benefits is a disincentive to economic 
efficiency and undermines the ability to compete with heavily 
subsidized foreign agricultural products. Artificially limited benefits 
are antagonistic with a market-oriented farm policy. In fact, the 
current program limits are incompatible with the cost structure and 
capital investments necessary for today's family farms.
    We are encouraged that Congress recognized this reality in recent 
disaster assistance by including increased payment limit levels for 
producers who realize the majority of their income from their farming 
operation. This same consideration should be given to Title I program 
limits in the next farm bill. Other proposed arbitrary restrictions 
regarding the contribution of management and labor through changes to 
the definition of ``actively engaged'' are out of touch with today's 
farming operations and would only contribute to inefficiencies. These 
policies also discourage the next generation from returning to their 
rural communities. Under these proposals a son or daughter who wants to 
return to the farm and utilize their accounting degree to market the 
crop and keep the books would not be considered as ``actively engaged'' 
in the operation. The 2023 Farm Bill should not include policies that 
seek to discourage the next generation of farmers.
Conservation
    A strong conservation title benefits the environment and is an 
important tool for producers across the United States. Voluntary 
conservation programs reward producers for implementing sensible 
environmental practices on working lands and provide a means to devote 
marginal production acres into long-term use.
    Working lands conservation programs are of utmost importance to 
most producers. Going forward, the application of conservation funds, 
both provided by the 2023 Farm Bill and the 2022 Inflation Reduction 
Act, should (1) recognize the diversity of production practices by 
rejecting a one-size-fits-all approach; and (2) reward--not penalize--
the environmental contributions of early adopters.
International Programs
    The Market Access Program (MAP) and Foreign Market Development 
Program (FMD) are extremely important tools that support U.S. exports. 
Cotton Council International, the foreign market promotion arm of the 
U.S. cotton industry, utilizes both programs and the industry has seen 
clear benefits from these programs. Our industry supports the Coalition 
to Promote U.S. Agriculture Exports proposal to double funding for both 
MAP and FMD. MAP has not been increased since 2006 and \1/3\ of funding 
has been lost to sequestration, inflation, and program administration. 
FMD has not been increased in almost 20 years. With market volatility 
and economic disruptions causing greater risks and uncertainties, the 
new farm bill can provide the additional resources necessary for U.S. 
agricultural exports to remain competitive.
Conclusion
    In closing, I encourage the Committee to write a farm bill that 
provides long term stability for the future. There will be price 
declines from current levels, there will be natural disasters with 
losses more severe than the essential assistance that commodity 
programs and crop insurance can respond to, and there will be trade 
disputes and geopolitical turmoil that will wreak havoc on our export 
markets. However, it is critical that the 2023 Farm Bill provide an 
economic safety net to address the challenges that will continue to be 
faced by our industry.
    The NCC looks forward to working with the Committee and all 
commodity and farm organizations and other stakeholders to develop and 
pass a new farm bill that effectively addresses the needs of all 
commodities and all producers in all regions of the country.
    Thank you for this opportunity, and I would be pleased to respond 
to any questions.
        Exhibit 1. Costs of Production per Pound of Seed Cotton

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Exhibit 2. Structure of the Upland Cotton Marketing Loan Program
Farm Bill Recommendations Highlighted in [Medium Gray]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The Chairman. Thank you, Mr. Holladay.
    Mr. Flansburg, please begin when you are ready.

STATEMENT OF AARON FLANSBURG, CHAIRMAN, USA DRY PEA AND LENTIL 
                      COUNCIL, PALOUSE, WA

    Mr. Flansburg. Thank you, Chairman Scott, Ranking Member 
Brown--and the microphone, hello--and Members of the 
Subcommittee. I am Aaron Flansburg. I am a fifth generation 
farmer from Palouse, and that is a farm in eastern Washington 
State. I currently am also the Chairman of the USA Dry Pea and 
Lentil Council, and I still have the privilege of farming with 
my parents and my wife, and my three kids are all on the farm 
as well. We grow pulses, of course. We also grow wheat, barley, 
canola, and alfalfa, and I am working towards organic 
certification on part of our farm as well.
    On behalf of the USA Dry Pea and Lentil Council, I would 
like to thank you all for having this opportunity to testify 
today and provide some of our perspectives on the 2023 Farm 
Bill.
    USA Dry Pea and Lentil Council represents farmers, 
processors, exporters, food manufacturers of U.S. peas, 
lentils, and chickpeas, which are part of a larger family of 
crops called pulses. And these also include dry beans. Pulses 
are nutrient-dense, healthy, affordable, and agronomically and 
environmentally friendly. Pulses have a low water footprint and 
don't require much or any nitrogen fertilizer to be grown, and 
they are able to pull nitrogen out of the air to help the plant 
to grow. This makes pulses one of the most efficient sources of 
protein of any food available and one of the lowest greenhouse 
gas emitters per gram of protein produced of any food source.
    Pulses are grown throughout the United States with most of 
the production in the northern tier States of Washington, 
Idaho, Montana, North Dakota, South Dakota, and Minnesota. We 
also have farmers in Nebraska who are part of our coalition and 
beyond.
    Dry peas, lentils, and chickpeas are Title I program crops, 
and these programs, along with crop insurance, are serving our 
growers well, providing a safety net and the risk management 
needed to allow producers to get financing for their annual 
production costs. We support the passage of a new farm bill and 
an increase to the budget baseline as an investment in food 
security for our nation and around the world.
    As you write the next farm bill, we support continuation 
and enhancement of Title I and crop insurance programs. First 
and foremost, funding must be maintained for Federal Crop 
Insurance Program that provide essential risk management for 
farmers. Farm insurance provides a critical role in maintaining 
access for growers to get credit on their farms and the 
financial stability of my own farm.
    The Agriculture Risk Coverage, ARC, and Price Loss 
Coverage, PLC, program should be continued with additional 
streamlining and flexibility. In place at the annual choice and 
sign up for ARC and PLC, we support a new idea of providing 
producers with the better-of option for these two programs in 
any given year. For farmers with landlords, the current ability 
to switch between the ARC and PLC programs is made burdensome 
by a requirement for each landowner signing off on changes of 
enrollment. We would like to see an allowance for farmers to 
use power of attorney to switch between options, and that would 
alleviate some of these administrative difficulties and 
encourage flexibilities when farm needs shift.
    In addition, we believe that the crop insurance 
Supplemental Coverage Option should be available for both PLC 
and ARC programs. If reference prices are adjusted, we would be 
in favor of reference prices for dry peas, lentils, large 
chickpeas, and small chickpeas to be adjusted proportionately 
with other crops.
    The current CBO projections show prices declining 
significantly for all of our products from current levels, and 
there is a great concern that producers will suffer operational 
losses without triggering support intended from Title I 
programs. We would like to point out that the current CBO price 
projected for dry peas, lentils, and chickpeas seems to be low. 
The current prices for 2023 are significantly higher than CBO 
estimated for this year. And based on that and the historical 
average prices, we believe CBO projections over the next 5 to 
10 years are low, and that could impact the price of this farm 
bill and estimates for any changes to reference prices.
    Our organization also represents U.S. fava bean producers 
and we request that fava beans be added to the list of crops 
exempt from the base acre reduction requirements when planting 
fruits and vegetables. We also support a voluntary update to 
base acres on farms. We also have a few other priorities I 
would like to talk about, increased support for ag research and 
pulse crop health initiative. We urge Congress to increase 
authorization for the School Pulse Crops Products Program. We 
also support doubling the funding for both the Market Access 
Program and the Foreign Market Development Programs. We support 
increased funding for food aid programs in the 2023 Farm Bill.
    And finally, the U.S. pulse processors have faced 
challenges due to natural disasters and supply chain and market 
disruptions. Like farmers, small processors need risk 
management programs.
    Thanks so much for your time. I appreciate the chance to 
speak to your Committee.
    [The prepared statement of Mr. Flansburg follows:]

Prepared Statement of Aaron Flansburg, Chairman, USA Dry Pea and Lentil 
                          Council, Palouse, WA
    Chairman Scott, Ranking Member Brown, and Members of the 
Subcommittee:

    I am Aaron Flansburg a farmer from Palouse, WA and current Chairman 
of the USA Dry Pea and Lentil Council. I am a fifth generation farmer 
in eastern Washington. I am lucky to still work with my mom and dad. We 
raise pulse crops, wheat, barley, canola, alfalfa, and are working 
toward organic certification on part of my farm. On behalf of the USA 
Dry Pea & Lentil Council, thank you for the opportunity to testify 
today and provide our perspectives on the 2023 Farm Bill.
    The USA Dry Pea & Lentil Council represents the farmers, 
processors, exporters and food manufacturers of U.S. dry peas, lentils 
and chickpeas which are part of a larger family called pulse crops, 
also including dry beans. Pulses are nutrient dense, healthy, 
affordable, and agronomically and environmentally friendly. Pulses have 
a low water footprint and don't require much or any nitrogen 
fertilizers to be productive. They are one of the few crops that pull 
nitrogen from the air to help the plant grow. This makes pulses one of 
the most efficient sources of protein and lowest greenhouse gas 
emitters, per gram of protein produced, of any food source.
    Pulses are grown throughout the U.S., with production primarily in 
the northern tier states of Washington, Idaho, Montana, North Dakota, 
South Dakota, and Minnesota. Dry peas, lentils and chickpeas are Title 
I program crops and these programs, along with crop insurance, are 
serving growers well, providing a safety net and the risk management 
needed to allow producers to get financing for their annual production 
costs.
    We support the passage of a new farm bill and an increase in its 
budget baseline as an investment in food security at home and around 
the world.
    As you write the next farm bill, we support continuation and 
enhancement of the Title I and Crop Insurance programs.
    First and foremost, funding must be maintained for the Federal Crop 
Insurance Programs that provide essential risk management for farmers. 
Crop insurance plays a critical role in maintaining grower access to 
credit and the financial stability of my farm.
    The current Agriculture Risk Coverage (ARC) and Price Loss Coverage 
(PLC) programs should be continued with additional streamlining and 
flexibility. In place of the annual choice and sign-up for ARC and PLC, 
we support providing producers with the ``better of'' the two support 
programs for that year. This would remove a significant burden on 
producers that requires them to try to predict weather and markets and 
to get approvals from landlords. For many producers this is challenging 
and time consuming. This change could also reduce the workload on FSA 
offices. For farms with landlords, the current ability to switch 
between the ARC and PLC programs is made burdensome by a requirement 
for each landowner to sign off on changes in enrollment. An allowance 
for farmers to use Power of Attorney to switch between options would 
alleviate these administrative difficulties and encourage flexibility 
as on-farm needs shift.
    In addition, we believe that the crop insurance Supplemental 
Coverage Option (SCO) should be available for both the PLC and ARC 
programs.
    If Reference Prices are adjusted, the Reference Prices for dry 
peas, lentils, large chickpeas, and small chickpeas should be adjusted 
proportionately to other crops.
    The current Congressional Budget Office (CBO) projections show 
prices declining significantly for all of the pulse crops from their 
current levels, however, the price declines are not projected to 
trigger support payments. There is a great concern that producers will 
suffer operational losses without triggering support intended from the 
Title I Farm Programs. We would point out that the current CBO price 
projections for dry peas, lentils and chickpeas seem to be low. The 
current prices in 2023 are significantly higher than CBO estimated for 
this year. Based on CBO's underestimation for 2023 and the historical 
average for pulse prices, we believe the CBO price projections over the 
next 5 to 10 years are low and that could impact the cost estimates for 
any changes to Reference Prices.
    Our organization also represents U.S. fava bean producers. We 
request that fava beans be added to the list of crops exempt from the 
base acre reduction requirements when planting fruits and vegetables.
    The USA Dry Pea and Lentil Council also supports a voluntary update 
to base acres.
    Beyond crop insurance and Title I farm programs, the other farm 
bill priorities for the pulse crop industry include:
    Ag Research and the Pulse Crop Health Initiative--Transforming and 
maximizing food production requires a long-term investment in research 
and research infrastructure for all of agriculture. Historically, pulse 
crops have received very little Federal research support despite being 
one of the most nutritious and environmentally efficient crops in the 
food system. We continue to work for increased appropriations for the 
Pulse Crop Health Initiative that was first authorized in the 2014 Farm 
Bill.
    School Food Programs--We have been working to remove barriers to 
utilization of pulse products in school lunch programs. It has been a 
slow and difficult process, but we are making progress with recent USDA 
proposals to allow pulses to count toward certain category 
requirements. To help move forward faster, we urge Congress to increase 
the authorization for the School Pulse Crops Products Program (PCPP) to 
$4 million per year.
    MAP/FMD--Strong market promotion programs are critical to 
increasing the demand for our commodities around the world. The pulse 
industry supports doubling Market Access Program (MAP) funding from 
$200 million to $400 million and the Foreign Market Development (FMD) 
program from $34.5 million to $69 million in the new farm bill.
    Food Aid--The war in Ukraine has exacerbated food security concerns 
around the world and we support increased funding for the P.L. 83-480, 
McGovern Dole and Section 32 food aid programs in the 2023 Farm Bill.
    Rural Processor Disaster/Risk Management Tools--U.S. pulse 
processors have faced challenges due to natural disasters and supply 
chain and market disruptions. Like farmers, small processors need risk 
management programs to maintain employees and processing infrastructure 
during severe and prolonged disruptions. Our industry is seeking 
options, both private-sector and public, to help small processors 
survive unforeseen and prolonged disruptions to their operations.
    Thank you again for the opportunity to testify and provide 
perspectives on the 2023 Farm Bill.
            Sincerely,

Aaron Flansburg,
Chairman,
USA Dry Pea & Lentil Council.

    The Chairman. Are our lights working now down front? Okay. 
So when you get to 1 minute, the yellow light will come on, and 
then the red light will come on when you reach your time.
    Mr. Flansburg, thanks for your testimony.
    Mr. Satterfield, you are recognized. Please begin when you 
are ready.

 STATEMENT OF KIRK SATTERFIELD, CHAIRMAN, USA RICE, BENOIT, MS

    Mr. Satterfield. Thank you, and good morning, Chairman 
Scott, Ranking Member Brown, and Members of the Subcommittee. 
Thank you for the opportunity to testify today. I am Kirk 
Satterfield, a third generation family rice farmer from Bolivar 
County in the Mississippi Delta. I am the current Chairman of 
USA Rice, the national trade association representing all rice 
farmers and segments of the rice industry.
    Rice is grown on about 3 million acres across the U.S. Half 
of our rice is consumed domestically, while the other half is 
exported to more than 120 countries globally. Our industry has 
its challenges as the global rice market is among the most 
distorted of any sector, a factor that underscores the vital 
importance of the U.S. farm safety net for farmers like me.
    On average, each rice farmer contributes $1 million to 
their local economy and employs six people. The broader $34 
billion rice industry supports more than 125,000 jobs 
nationwide. Rice fields provide critical life-sustaining 
habitat for migratory waterfowl and other wildlife and also 
contribute substantially to biodiversity, raising crawfish in 
the South and salmon nurseries in California.
    Rice did not experience a large run-up in market prices in 
2020 and 2021, and the current PLC program could not adapt to 
the dramatic increases in cost of production. This led to the 
need for additional assistance for rice farmers for the 2022 
crop year. Thank you for providing the critical funding for the 
Fiscal Year 2023 omnibus appropriations bill.
    Rice prices remained very close to the reference price 
calculated using 2012 cost of production and established in the 
2014 Farm Bill, rendering the program unworkable for rice at 
its current level since the current cost of production is 
nowhere near the 2012 levels. Texas A&M conducted a study in 
2022 that show \2/3\ of rice farms are predicted to have 
negative net cash farm income for the 2022 crop year. USDA also 
reports a 30 percent increase in operating costs in 2022.
    As a high cost input crop subject to severe global market 
distortion thanks to predatory trade practices of foreign 
countries, U.S. rice farmers are more vulnerable to the impacts 
of inflation and other global events that have caused increases 
to the cost of fuel, fertilizer, labor, as well as facing the 
highest interest rates many farmers today have ever 
experienced. We need a permanent fix to the rice farm safety 
net in the 2023 Farm Bill to ensure the long-term viability of 
the rice industry.
    Recent years have seen new obstacles that the 2018 Farm 
Bill could never have anticipated. In response to each of these 
events, supplemental assistance was authorized by the 
Administration or Congress to support agriculture. We believe 
it is important to recognize that there were needs that the 
current bill simply could not handle. A strengthened safety net 
would ultimately be more cost-effective for farmers and 
taxpayers than continued ad hoc programs.
    We appreciated this Committee's budget views and estimates 
letter emphasizing the need to increase the baseline so the 
policy can be crafted to better anticipate and address the 
needs of family farms in volatile times. The PLC Program has 
traditionally been our real true safety net. It is allowed us 
to better compete on a lopsided global playing field impacted 
by foreign subsidies, tariffs, and non-tariff barriers. For 
example, India subsidizes its rice producers by upwards of 90 
percent and injected billions to offset escalating input costs. 
This is only one example of many predatory trade practices used 
by foreign competitors, and we continue to call for the U.S. to 
address this blatant WTO violation by India and others.
    USA Rice strongly believes reference prices under PLC need 
to be meaningfully increased and indexed in order to provide a 
safety net that remains relevant over the long haul. Payment 
limitations, AGI, and actively engaged rules are outdated, and 
we hope that Congress will take steps in the next farm bill to 
better reflect the risk for full-time farm families. This is a 
remedy that is long overdue.
    Planting flexibility has been a longstanding commitment to 
farmers by Congress to ensure that farmers are planting for the 
market and for the soil and not for the government programs. 
Any updates or reallocations to base acres should be voluntary 
and the farmer's decision.
    In sum, the work you do is extremely important to the farm 
families that I represent, and I am truly grateful to have this 
opportunity to testify before you today. Thank you.
    [The prepared statement of Mr. Satterfield follows:]

 Prepared Statement of Kirk Satterfield, Chairman, USA Rice, Benoit, MS
    Thank you for the opportunity to testify before you today 
concerning the current conditions in agriculture and our priorities for 
the upcoming farm bill.
    I am Kirk Satterfield, a third-generation rice farmer from Bolivar 
County in the Mississippi Delta where I farm along with my wife, 
Bridget, my parents, brother and sister-in-law, a niece and a nephew 
and a great crew. We farm the land, along with its expansion, that my 
father began with when he started his own farming endeavor in 1969.
    I have the honor of serving as the current Chairman of USA Rice, 
the global advocate for the U.S. rice industry, a $34 billion industry 
representing farmers, millers, merchants, and allied businesses. I am 
also President of the Mississippi Rice Council.
    Rice farmers in the United States produce 20 billion pounds of rice 
annually, which is grown on approximately 3 million acres of farmland 
that is highly managed for sustainability. About half of our rice is 
consumed here at home while the other \1/2\ is exported to more than 
120 countries around the globe. Nearly \3/4\ of the rice consumed in 
the U.S. is produced and processed domestically. However, our industry 
has its challenges as the global rice market is among the most 
distorted of any sector, a factor that underscores the vital importance 
of the U.S. farm safety net for rice farmers like me.
    This rice is produced on family farms across six major rice 
producing states--Arkansas, California, Louisiana, Mississippi, 
Missouri, and Texas--as well as a handful of other states, including 
Florida, Illinois, Kentucky, South Carolina, and Tennessee, with 
positive economic impacts in nearly every other state. On average, each 
rice farmer in the U.S. contributes $1 million to his or her local 
economy and employs six people. This equates to more than $5.6 billion 
in positive economic impact on the U.S. economy and a total of 31,710 
jobs directly supported by rice production. Also, rice farmers have an 
additional $5.5 billion impact on the U.S. economy in value-added and 
labor income generated by their operations. The broader rice industry 
supports more than 125,000 jobs nationwide.
    In addition to putting rice on grocery shelves, in restaurants, on 
the dinner table, and as an essential ingredient for beverages and 
other products, such as pet food, U.S. rice farmers have long been 
committed to environmental stewardship which dates back generations--
well before sustainability became a buzzword.
    Rice was not as fortunate as many other commodities that saw a 
large run up in market prices in 2020 and 2021. We have had more 
recent, relatively modest rises in price but much of the gains we have 
seen have been offset by the erosion of the Price Loss Coverage 
program's (PLC) effectiveness to adapt with the times and unprecedented 
increases in costs of production. This led to the need for additional 
assistance for rice farmers for the 2022 crop year.
    I want to thank you all for providing this vital assistance to rice 
farmers. The additional funding provided through the FY 2023 Omnibus 
Appropriations bill was truly critical for a great many rice farmers, 
including myself, as well as thousands of rural and urban communities 
and businesses that are dependent on rice production and processing.
    Many Title I commodities had marketing year average prices that 
were well over their PLC reference prices for the 2021 program year and 
are projected to be well over their reference prices for the 2022 
program year. Unfortunately, rice market prices remain very close to 
the reference price--a reference price that was calculated using 2012 
costs of production and established in the 2014 Farm Bill, rendering 
the program unworkable for rice at its current level.
    The current cost of production is nowhere near 2012 levels. The 
Agricultural and Food Policy Center at Texas A&M University conducted a 
study in 2022 to examine the impacts of the rise in costs of production 
on its representative farms and rice farms were most negatively 
impacted. The rise in cost of production equated to an $880,000 loss in 
net cash farm income from 2021 to 2022 per rice farm. According to the 
study, \2/3\ of rice farms were predicted to have negative net cash 
farm income for the 2022 crop year. USDA also shows a dramatic increase 
in operating costs--a more than 30 percent increase in 2022--compared 
to 5 years earlier.
    As an especially high input crop that is particularly subject to 
severe global market distortions due to the predatory trade practices 
of foreign countries, like India, U.S. rice farmers are much more 
vulnerable to the impacts of skyrocketing inflation and other global 
events that have caused increases to the costs of fuel, fertilizer, 
labor, and other crop inputs, as well as to the highest interest rates 
many farmers today have ever experienced. As a capital-intensive 
business, rice farmers put everything on the line each year to grow a 
crop. So, the net result of the 2022 crop year would have been a sea of 
red ink had it not been for the additional assistance that Congress 
provided.
    I should also note the challenge this is creating for our rice 
industry infrastructure. Last year, the extraordinary increase in input 
costs without a corresponding rise in rice prices created the perfect 
storm resulting in the lowest rice acres being planted in the U.S. in 
40 years. And, even with our tremendous increases in efficiency and 
yields, we had the lowest rice production in 30 years. This threatens 
not only rice farms but the entire U.S. rice infrastructure, including 
mills and elevators, pesticide applicators and farm suppliers, and many 
other rural businesses and economies that rice farmer's support.
    Although input prices remain high, we are anticipating a rebound in 
rice acres planted in the U.S. to normal levels in the near future. In 
2022, a mere 2.2 million acres was planted. However, USDA forecasts 
this year that the U.S. will plant 2.6 million acres of rice. This is 
at least one encouraging sign.
    We know that demand for rice by consumers in the U.S. and abroad 
only continues to grow. Rice is the staple food for more than half of 
the world's population and highly efficient rice farmers in the United 
States want to continue to lead the way in feeding a hungry world, 
especially at times when there is such a high potential for food 
shortages.
    Looking ahead, we need a permanent fix to the rice farm safety net 
in the 2023 Farm Bill to ensure the long-term viability of the U.S. 
rice industry.
    The purpose of any farm bill should be to provide a foundation or 
measure of stability for farmers to keep them on the farm despite 
distorted global markets, often unforgiving weather, and other 
challenges thrown at producers that are totally beyond their control.
    Recent years have seen new obstacles that the 2018 Farm Bill could 
never have anticipated, including a trade war, a global pandemic, 
unprecedented subsidization of farmers in other rice producing 
countries, and a string of especially severe and chronic natural 
disasters. In response to each of these events, supplemental assistance 
was provided by the Administration or Congress to support our vital 
critical infrastructure industry--agriculture--in order to see farm and 
ranch families through these volatile times which continue to 
reverberate through today.
    This has meant that a significant additional investment in 
agriculture, above and beyond what the farm bill provides, has had to 
be authorized to support farmers on top of the baseline funding of the 
2018 Farm Bill. While we understand this is not captured in the 
Congressional Budget Office's (CBO) baseline for the farm bill, going 
forward, we still believe it is important to recognize that there were 
needs that the current farm bill simply could not handle. And, as such, 
we believe that the safety net under the 2023 Farm Bill must be 
strengthened. A stronger safety net for farmers in the farm bill would 
be more cost effective for farmers and taxpayers than continued ad hoc 
programs.
    Given this, USA Rice believes the forward looking 2023 Farm Bill 
baseline must be increased so that policy can be crafted to better 
anticipate and address the needs of family farms in these volatile 
times. I want to thank you for the budget views and estimates letter 
that the Committee sent outlining the importance of increased funding 
for the farm safety net. We want the 2023 Farm Bill to be for farmers 
and the only way to do that is by strengthening the farm safety net.
    We think standing by our nation's critical rice industry is a 
worthy investment. The pandemic taught us, among other things, that 
food security as a national security issue is not a clever slogan. It 
is a reality. We cannot afford to lose the domestic rice industry or 
other commodities vital to the nation's food, fiber, feed, and fuel 
supply.
    Title I of the farm bill, specifically the PLC program, has 
traditionally been our true safety net. It's what has allowed us to 
better compete on a lopsided global playing field distorted by high and 
rising foreign subsidies, tariffs, and non-tariff trade barriers.
    For example, China was found to have illegally over-subsidized just 
three crops--including rice--by $100 billion in a single year. For its 
part, India subsidizes its rice producers by upwards of 90 percent and 
injected even more financial support for its farmers facing escalating 
input costs. This results in India dumping rice across global markets 
at prices below the cost of production, causing India to gain market 
share steadily and unfairly. In fact, in the past 10 years, India has 
become the largest rice exporter in the world, controlling over 40 
percent of the world market. This was made possible through India's 
trade distorting practices and egregious violations of its World Trade 
Organization commitments. These are just two examples of a litany of 
predatory trade practices used by foreign competitors.
    In the face of these and other challenges, USA Rice strongly 
believes reference prices under PLC need to be meaningfully updated and 
indexed in order to provide a relevant safety net that remains relevant 
over the long haul.
    Payment limitations also need to be adjusted to reflect the growing 
risks undertaken by family farms. Just as lenders have had to adjust 
how much they are willing to lend and what they will require as 
collateral to keep up with current conditions, so too must the farm 
bill's safety net adjust. This includes payment limitations, adjusted 
gross income (AGI), and actively engaged rules that simply have not 
kept pace with the times. They are outdated, as evidenced by the 
hundreds of Members of Congress on both sides of the political aisle 
who not long ago wrote to the Department of Agriculture expressing 
concerns that the limitations applied to pandemic and trade war relief, 
the same limitations long imposed on Title I programs, simply did not 
cover the enormous losses suffered by producers. This reality also led 
Members of Congress to pass more realistic program parameters in the 
context of natural disaster assistance, the Emergency Relief Program, 
for 2020 and 2021. We hope that Congress will take similar steps in the 
context of the next farm bill. For full time farm families, this is a 
remedy that is long overdue.
    Further, we believe that Title I programs should be exempt from 
budget sequestration. These programs are already designed to ensure 
that the farmer is not made whole when suffering losses, but rather 
deliver a modicum of help to remain in business, hopefully until 
conditions improve. Sequestration has further limited assistance to 
farmers during the times they need it most. At present, for those few 
farmers who will receive a small amount of assistance under PLC or ARC 
for losses last year, the assistance will be further reduced by 5.7 
percent due to sequestration.
    Promised producer planting flexibility has been a longstanding 
commitment to farmers by Congress to ensure that farmers are planting 
for the market and for the soil and not due to government programs. Any 
updates or reallocations to base acres should be voluntary and the 
farmer's decision.
    In sum, the work you do on this Committee is extremely important to 
the farm families I represent, and I am grateful to have this chance to 
testify before you.
    Farming has been an honor of a lifetime for me, and it means a lot 
that you would place such a value on the work that I love.
    Again, thank you for the opportunity to visit with you about these 
issues of critical importance to farm families like mine.

    The Chairman. Mr. Satterfield, that was just right. You had 
10 seconds to go.
    Mr. Moore, please begin when you are ready.

STATEMENT OF ANDREW MOORE, PRESIDENT, U.S. CANOLA ASSOCIATION, 
                           DALTON, GA

    Mr. Moore. Thank you, Chairman Scott, Ranking Member Brown, 
and Members of the Subcommittee, and Chairman Thompson. As 
President of the U.S. Canola Association, I want to thank you 
for this opportunity to present the views of canola growers. I 
am Andrew Moore. My family has been operating Moore Seed and 
Grain Farms since 1955 in the beautiful mountains and river 
bottoms of northwest Georgia. During the winter, we grow 
canola, wheat, barley, and Cosaque black oats, and during the 
summer, corn, full season, and double crop soybeans, 
sunflowers, and grain sorghum. To help manage and utilize the 
products we grow on our farm, my family vertically integrated 
our business by commencing an expeller press oil mill in 2008 
and a livestock feed mill in 2011.
    Canola production in the U.S. has been slowly but steadily 
growing but is not keeping pace with demand. The U.S. has 
planted an average of over 2 million acres of canola per year 
over the last 5 years. In 2022, the U.S. produced a record 3.8 
billion pounds of canola seed, but this will only supply 
roughly 27 percent of expected U.S. canola oil and mill 
consumption.
    While the Northern Plains accounts for the majority of U.S. 
canola production, production has been increasing in the 
Pacific Northwest, and winter canola has been successfully 
introduced in the Southern Great Plains and the Southeast. In 
the Southeast specifically, the winter canola acreage supports 
double cropping of soybeans and other spring seeded crops. 
Recently, several processors and seed companies have announced 
investments that could spur significant expansion of canola 
production. These investments are driven largely by the 
potential for winter and double cropping canola that results in 
more vegetable oil and protein meal from the same acreage. In 
my region, we can produce three crops in 2 years or five crops 
in 4 years on our existing acreage. Our farm has experienced an 
eight to ten percent yield increase in our double crop soybeans 
following winter canola versus following wheat.
    Like many other row crop producers, canola growers rely on 
the Federal Crop Insurance Program. In December, our farm 
experienced unusual 8 temperatures with 20 to 30 mile per hour 
winds that killed our canola crop. Luckily, we had Federal crop 
insurance that helped us cover planting and fertilizer cost. 
Policymakers should look to strengthen and expand crop 
insurance, encourage broader participation among producers of 
all commodities, and expand coverage to provide more protection 
for farms.
    USCA also supports the continuation of ARC and PLC programs 
with support payments tied to historical crop bases. We have 
strongly supported tying Title I program payments to the farm's 
crop acreage basis rather than to the crops planted in the 
current year. Tying payments to crops planted in the current 
year led to major production and price distortions in the 1980s 
and early 1990s as farmers made their planning decisions based 
on higher government payments for crops with higher supports. 
Decoupling payments from current year plantings allows farmers 
to respond to market signals rather than planting the highest 
government payment. Decoupling has been a key policy in every 
farm bill since 1996 and should be preserved in the next farm 
bill.
    The USCA has worked through previous farm bills to 
establish equal footing for canola in U.S. farm programs so the 
crop can compete for acreage. These efforts have included 
achieving competitive marketing loan rates, target prices, and 
reference prices. From our perspective, the reference price of 
$20.15 per hundredweight for other oil seeds, including canola, 
that was established in 2018 Farm Bill, has been effective and 
keeps canola and minor oilseed crops competitive with soybeans. 
If reference prices are increased in the 2023 Farm Bill, it is 
important to ensure that the new levels reflect their 
respective market values and parity is maintained for competing 
crops.
    As it does for most crops, the current CBO projections show 
prices declining for canola over the next 10 years. We would 
note, however, that the CBO price projections for canola are 
approximately 25 percent lower for most years than price 
projections from the other entities such as FAPRI.
    The USCA supports a couple of improvements of ARC and PLC 
programs. We support a change in providing producers the 
better-of option between ARC and PLC rather than requiring them 
to annually choose between two programs. In addition, the crop 
insurance Supplemental Coverage Option, SCO, should be 
available for both PLC and ARC.
    Finally, outside of crop insurance and farm programs, I 
would like to take this opportunity to urge support for robust 
funding for agricultural research in this farm bill. 
Transforming and maximizing food production requires a long-
term investment in research and research infrastructure for all 
of agriculture.
    The USCA joined a group of over 60 organizations, including 
commodity groups and other stakeholders, urging Congress to 
prioritize robust investments in food and agricultural research 
facilities and extension services in the farm bill. Funding in 
the research title is needed to spur scientific breakthroughs, 
keep pace with our global competitors, modernize facilities, 
and ensure nutrition security. Despite growing challenges in 
our food system, funding for public food and agricultural 
research in the U.S. has declined over the past 2 decades, 
while other countries are increasing research and surpassing 
the U.S. investments.
    Thank you again for the opportunity to testify today and 
for considering the perspectives of U.S. canola growers, and Go 
Dogs.
    [The prepared statement of Mr. Moore follows:]

Prepared Statement of Andrew Moore, President, U.S. Canola Association, 
                               Dalton, GA
    Chairman Scott, Ranking Member Brown, and Members of the 
Subcommittee:

    On behalf of the U.S. Canola Association, I want to thank the 
Chairman and Ranking Member as well as the Subcommittee for this 
opportunity to represent the views of U. S. canola growers. I am Andrew 
Moore, President of the U.S. Canola Association. Moore's Seed and Grain 
Farms, Inc. has been operating since 1955 in the beautiful mountains 
and river bottoms of northwest Georgia near Resaca, growing during the 
winter: canola, wheat, barley, Cosaque black oats. Then during the 
summer: corn, full season and double crop soybeans, sunflowers, and 
grain sorghum. To manage production and market risks by utilizing the 
products we grow on our farm, my family vertically integrated our 
business by commencing an Expeller press oil mill in 2008 and a 
livestock feed mill in 2011.
    The U.S. has planted an average of over 2 million acres of canola 
per year over the last 5 years. While the Northern Plains account for 
the majority of U.S. canola production, production has been increasing 
in the Pacific Northwest and winter canola varieties have been 
successfully introduced in the Southern Great Plains and the Southeast. 
In the Southeast, the winter canola acreage supports double cropping of 
soybeans or other spring-seeded crops. In 2022, the U.S. produced a 
record 3.8 billion pounds of canola seed, but this will only supply 
roughly 27 percent of expected U.S. canola oil and meal consumption.
    Recently, several processors and seed companies have announced 
substantial investments that could spur significant expansion of canola 
production. These investments are driven largely by the potential for 
winter and double cropping canola that results in more vegetable oil 
and protein meal on the same acreage. In my region, we can produce 
three crops in 2 years or five crops in 4 years on our existing 
acreage. For example, our farm has experienced an eight to ten percent 
increase in yield in our double crop soybeans following winter canola 
versus following wheat. Then the following year, our winter wheat 
consistently achieved higher yields in fields that were planted behind 
the canola/soybean rotation than fields that were produced behind full 
season soybeans. This benefits growers, consumers, and the regional 
economy.
    Like many other row crop producers, canola growers rely on crop 
insurance and the Federal Crop Insurance Program is the most vital 
component. On December 26, 2022, and lasting a few days, our farm 
experienced unusual 8 temperatures with twenty to thirty mile per hour 
wind. Our canola was frozen and died. Luckily, we had Federal crop 
insurance that helped us cover our planting and fertilizer cost. 
Policymakers should look to strengthen and expand crop insurance to 
encourage broader participation among producers of all commodities and 
expand coverage to provide more protection for farms.
    USCA also supports the continuation of the Agriculture Risk 
Coverage (ARC) and Price Loss Coverage (PLC) programs, with support 
payments tied to historical crop bases.
    Importantly, we have strongly supported tying Title I program 
payments to a farm's program crop acreage bases rather than to the 
crops planted in the current year. Tying payments to crops planted in 
the current year led to major production and price distortions in the 
1980's and early 1990's as farmers made their planting decisions based 
on the potential for receiving higher government payments for crops 
with higher supports. ``Decoupling'' payments from current year 
plantings allows farmers to respond to market signals rather than 
planting for the highest crop payment and has been a key policy in 
every farm bill since 1996. Market-based planting flexibility is the 
cornerstone for income support in Title I and must be preserved in the 
next farm bill.
    The USCA has worked through previous farm bills to establish equal 
footing for canola in U.S. farm programs so the crop can compete for 
acreage. These efforts have included achieving competitive marketing 
loan rates, target prices and, under the last two farm bills, the 
reference prices that are used to determine income support payments 
under the PLC and ARC Programs.
    From our perspective, the reference price established in the 2018 
Farm Bill for ``Other Oilseeds'', including canola, of $20.15 per 
hundredweight ($0.2015 per pound) has been effective and keeps canola 
and the minor oilseeds competitive with soybeans. If reference prices 
are increased in the 2023 Farm Bill, it is important to ensure that the 
new levels reflect their respective market values and parity is 
maintained for competing crops.
    As it does for most crops, the current Congressional Budget Office 
(CBO) projections show prices declining significantly for canola over 
the next 10 years, relative to prices of the past few years. We would 
note, however, that the CBO price projections for canola are 
approximately 25% lower for most years than the price projections from 
other entities such as the Food and Agricultural Policy Research 
Institute (FAPRI).
    The USCA supports a couple of improvements to the Title I 
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. 
We support a change to provide producers the ``better of'' between ARC 
and PLC, rather than requiring them to annually choose between the two 
programs. This would provide growers the support they actually need 
instead of trying to predict the weather and the market.
    In addition, the crop insurance Supplemental Coverage Option (SCO) 
should be available for both PLC and ARC. SCO is a crop insurance 
product providing county coverage above farm-level coverage. There is 
no clear reason why the SCO is not available with ARC, as it is with 
PLC, and this restriction should be dropped.
    Outside of crop insurance and farm programs, I would also like to 
take this opportunity to urge support for robust funding for 
agricultural research in this farm bill. Transforming and maximizing 
food production requires a long-term investment in research and 
research infrastructure for all of agriculture. The USCA joined a 
diverse group of over 60 organizations, including commodity groups and 
other stakeholders urging Congress to prioritize robust investments in 
food and agriculture research, facilities, and Extension services in 
the farm bill.
    Funding in the research title is needed to spur scientific 
breakthroughs, keep pace with our global competitors, modernize 
facilities, and ensure nutrition security. Food and agricultural 
advancements rely on innovations to increase productivity, adapt to new 
pests and diseases, and lower food prices. Despite growing challenges 
to our food system, funding for public food and agricultural research 
in the U.S. has declined over the past 2 decades while other countries 
are increasing research and surpassing the U.S. investments.
    Thank you again for the opportunity to testify today and for 
considering the perspectives of U.S. canola growers.

Andrew Moore,
President,
U.S. Canola Association.

    The Chairman. Amen.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members in order of arrival for those who joined us after the 
hearing convened. As you know, the Members will be recognized 
for 5 minutes each in order to allow us to get to as many 
questions as possible. And we can see their lights, so I think 
it would be helpful for the Members up here if we could to do 
as we were before where the lights were showing so we would 
know when we get to 1 minute if possible.
    I now recognize myself for 5 minutes.
    I think pretty much each of you referenced in your 
testimony the current reference prices that were set in the 
2014 Farm Bill using 2012 cost-of-production data, obviously, 
that is extremely old. It would be old if it were only 3 years 
based on what has happened to input prices.
    To help provide some context, I want to just go down the 
line, and could each of you give an approximate estimate of 
where the break-even price is on your farm for the commodity 
that you are currently representing and what the current 
reference price, and if you know what the current loan rate is 
for your commodity? Mr. Haag, we will start with you.
    Mr. Haag. Thank you, Mr. Chairman. One thing with--corn has 
started out with the reference price, and corn is the most 
expensive part in the farm bill when it comes down to adding on 
to what the reference price is. On the PLC, it is $3.70. You 
start adding that up and up, it takes a lot of money to get 
that up to--where we were today.
    The Chairman. If I may, but what is break-even on corn? On 
corn right now, the reference price is $3.70 a bushel, as you 
said. I believe the loan rate is $2.20 a bushel. What is the 
average break-even price for producers?
    Mr. Haag. For a producer, it depends on the farm, right 
now, I would say we are right around $5 a bushel for break-even 
as a corn farmer, but it all depends upon how much land you 
rent or how much debt you have, if you are an experienced 
farmer or a young farmer bringing it up. But $5 is pretty close 
right now to the break-even point.
    The Chairman. Mr. Holladay, how about you?
    Mr. Holladay. On cotton, the latest estimates are 90 a 
lint pound, so when you go back to our seed cotton program, 
which when we developed it, we used seed and cotton lint 
together in the matrix of the support program because they have 
two identifiable products that come out of cotton all the time, 
and they are combined. And that is what is seed cotton. So when 
you look at the seed cotton, our reference price is, what, 
36.7.
    The Chairman. 36.7 a pound is what I show.
    Mr. Holladay. Yes, and it is going to--about 48. If you 
did the calculation, it would be around 48. And, that is on an 
average producer. It runs the gamut. It could be 85, it could 
be 95 depending on where they sit and their production and all 
that as far as break-even.
    The Chairman. Mr. Flansburg?
    Mr. Flansburg. Yes, so as I look at our crops, one of the 
advantages we have is that the cost of production is actually 
fairly low, so, we have higher chemical costs, higher fuel 
costs, but in terms of having fertilizer needs, that hasn't 
driven problems for our crops specifically. So, our reference 
prices are definitely lower than what our current values are. I 
think 24 for big beans is a number for our garbanzos. And so 
large chickpeas are what I think about because it is what I 
grow the most. And, the current price is over that. So, that 
would be a point where I would have trouble selling them and 
making money.
    The Chairman. Okay. So I am showing that chickpeas are at 
$21.54 on the reference price. I am showing a loan of $14. Does 
that sound right?
    Mr. Flansburg. Yes, that sounds right.
    The Chairman. And what do you think your cost of production 
is approximately?
    Mr. Flansburg. Well, I have had to grow them for $14 
before, and I know that that doesn't work very well. So an 
exact number I would have to get back to you on that.
    The Chairman. Okay. Mr. Satterfield?
    Mr. Satterfield. So currently, the reference price on rice 
is $14 hundredweight. Where I am in the mid-South with long 
grain, I would say that number should be between anywhere 
between $17 and $18.
    The Chairman. Okay. And loan is half of that at $7?
    Mr. Satterfield. Yes, loan of $7. That is correct.
    The Chairman. Okay. Mr. Moore?
    Mr. Moore. Yes, sir, thank you. The reference price per 
hundredweight $20.15, which turns out to be about $10 a bushel. 
And that is the reference price for canola. And the loan rate 
is $10.09 per hundredweight.
    The Chairman. What is your cost of production?
    Mr. Moore. So that is the deal with canola is that we grow 
it from North Dakota all the way down to Georgia, so we double 
crop our canola. So ours is a little bit different than North 
Dakota. So it can be a range. I don't have that specific number 
because our farm is a little bit unique in how we process our 
canola.
    The Chairman. Okay. Thank you.
    Mr. Holladay, in your testimony, you mentioned how 
important the Marketing Assistance Loan is for your industry. 
And you note that despite the higher production costs, the 
maximum level of loan rate has remained the same since 2002. 
Can you speak more on how raising loan rates to reflect current 
market prices would be an effective tool for farmers?
    Mr. Holladay. We use marketing loan quite a lot in cotton 
simply because most of our cotton goes to export, and we have 
different shipping and storage issues and marketing issues, and 
we have the same volatile markets everybody else has. What we 
are looking at is it would be forward-looking to raise that 
base loan rate. Simply because it is so low, we are only going 
to be using a portion of--it is a portion of the value of that 
crop most of the time, but if you move it up, it is not a large 
cost item, and it has a significant impact on the amount of 
money that the producers can get when they put cotton in the 
loan when prices have dipped below break-even or farther.
    The Chairman. All right. Thank you. My time has expired. I 
did not see the light down there. I apologize. And I look 
forward to continued discussion on the loan and reference 
prices.
    With that, I recognize the Ranking Member, Ms. Brown, for 5 
minutes.
    Ms. Brown. Thank you, Chairman Scott.
    I am going to start off by asking a big-picture question. 
Based on your testimonies, I think we would all agree that our 
farm safety net programs are an essential tool to help farmers 
and ranchers literally weather any downturns in the market 
beyond their control. However, I also think that we would all 
agree that certain programs are easier to navigate than others. 
So I would like to hear from each of you. Do you have any 
suggestions for the sort of criteria we should use in 
understanding how our farm safety net programs are functioning? 
And I will start with you, Mr. Haag.
    Mr. Haag. I had a little hard time understanding who the--
Representative Brown? Could you kind of repeat that a little 
bit for me, please?
    Ms. Brown. Yes. So, I am just curious about any suggestions 
you may have as it relates to the criteria we should use and 
understanding how our farm safety net programs are functioning.
    Mr. Haag. With the farm safety net, it is the major tool in 
our toolbox for the farmers, especially at the younger age 
because he does not have the experience or the mandatory 
existing land paid for or buildings--or not buildings, but 
machinery. So with the crop insurance at the high level or 
where we are at right now is important to keep it there, and 
anything to help take it down would be hurting our younger 
farmers more than the other farmers.
    And the other big thing with crop insurance is that we need 
everybody to be participating like we are now because if we 
start having less people involved in crop insurance, the more 
expensive it is going to get for the next generation of farmers 
coming up.
    Ms. Brown. Mr. Holladay?
    Mr. Holladay. Yes, thank you very much for the question. 
One way that we can look at how successful programs are is 
looking at how much ad hoc disaster has to be spent as 
basically a safety net procedure. And one way to implement them 
better would be that we have to have easier access and better 
education on getting into these programs and make it equal 
access and make it a very identifiable procedure for everybody 
that could participate on any given commodity and expand the 
insurance coverage for those that might be not able to get 
insurance in different plantings.
    Ms. Brown. Thank you. Mr. Flansburg?
    Mr. Flansburg. Yes, so a big-picture measurement of how the 
farm programs are working is how many farmers are going out of 
business in any given year and how many farms are sticking 
around and able to make it. And, having farmers have the 
ability to choose what they plant is important and to enable 
them to navigate these programs is also important. So an 
interface with the FSA office, that is a good first point of 
contact for farmers to understand these programs, so all that 
should be supported. And, really, for me, the insurance program 
works well in the way that I navigate that with my own 
insurance agent. So on the farm, that is a very useful tool.
    Ms. Brown. Mr. Satterfield?
    Mr. Satterfield. So, as has been referenced earlier today, 
the cost of production being so much higher than 2012, it is 
just a completely different world that we live in now as far as 
pricing and input costs, and it really needs to be relevant for 
the PLC to work. Last year, as a good example, the PLC 
triggered very, very little, a negligible amount and on a year 
when it was so needed when the costs were just so high and you 
had exponential increases in all of your input costs. So again, 
Texas A&M had a projection that \2/3\ of rice farms will be in 
the negative, an $880,000 loss per farm. And I can tell you 
that that is a pretty accurate number because there are some 
people that are hurting out there in the rice business.
    Ms. Brown. Mr. Moore?
    Mr. Moore. Yes, ma'am. Thank you. I can back up the things 
that these other people have been saying. FSA numbers for us, I 
mean, big picture, our FSA numbers are very large. We have a 
lot of FSA numbers on different land that we have, and so 
consolidating that would be helpful. Market choices, the 
producer always wants to have a market choice that they have 
that they can grow per acre. I mean, we can do eight crops per 
year on our farm, and so we would like to have that choice on 
what works best for us. And then the PLC and the ARC program, 
it is difficult to navigate through that every year on which 
one we do. We have a lot of counties that we farm in.
    Ms. Brown. Thank you. And I see my time has expired.
    The Chairman. The chair now recognizes Mr. Crawford.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. Holladay, I want to start with you. And, we share some 
commonalities with regard to cotton production. Obviously, in 
east Arkansas, we grow a lot of cotton, and I am very familiar 
with the challenges that our growers there face, including 
drought, high production costs, inadequate demand, supply chain 
disruptions, and so on. Agriculture is inherently risky, but 
for those who are less familiar with the day-to-day operations 
and challenges of production agriculture, that suggests, well, 
maybe you can just grow some different crops. How realistic of 
an option is that for you as a cotton producer?
    Mr. Holladay. Well, I live in the middle of the biggest 
cotton patch in the world, and we grow cotton out there for a 
reason. It is a very arid environment. It is best suited for 
that environment. It takes less water for that cotton. So 
cotton is very specific to that region. We have different cover 
cropping technologies we use, but we don't have really a true 
rotation that we rotate out of.
    Mr. Crawford. This has been something that is been alluded 
to by several of the members of the panel, but crop insurance 
as an example, I think we ought to be expanding eligibility for 
crop insurance, not shrinking it. And if we really want to 
reduce cost to producers, if we really want to enhance the 
uptake for young and beginning farmers so that we start to bend 
that curve on the aging farming population and change 
trajectory, I think we ought to be expanding acres and not 
creating instability with safety net program eligibility. But 
to what extent do you think producers should be in charge of 
their own production risk? And how do you think this would 
impact ad hoc disaster assistance?
    Mr. Holladay. Well, I think increasing the safety net, we 
need to get ad hoc disasters back to disasters. It does not 
need to be a safety net policy. It needs to be for a disaster, 
something. We have such a distance between, we have to be in a 
negative cash flow so long before we ever hit this safety net. 
It is going to be unsustainable. And, the crop insurance is a 
tool that it is easily identifiable. You know exactly what is 
going to happen when this happens. The expansion of that 
product, making it more affordable at higher levels, anything 
we can do to enhance that makes it a lot easier for especially 
a young farmer to bank and have something identifiable. So not 
only do we need to keep crop insurance sound, we need to be 
looking at ways to expand it.
    Mr. Crawford. Yes, I agree with that. And I am going to 
tell you--and I am going to ask for y'all's input on this on an 
ongoing basis. Everything that Congress has done over the years 
to improve opportunities for young and beginning farmers has 
failed miserably. And if that is not true, why are we not 
seeing more young people in agriculture? Why are we seeing that 
age continue to rise instead of going the other direction? So I 
am going to ask you to really come up with some outside-the-box 
ideas because I have a few myself. But we really need some 
input because what we have done thus far has not worked. And so 
we need to work on that.
    Let me shift gears just a little bit. Mr. Holladay and Mr. 
Satterfield, I would like to direct this to you as well. Let me 
just go to Mr. Satterfield on this one. Congressman Mann and 
myself, we have led multiple efforts, including a current one, 
to call upon the Administration to formally open a dispute 
settlement case with the WTO over India's over-subsidization of 
rice and wheat. Can you explain how these trade-distorting 
practices by India are affecting rice producers and wheat 
producers?
    Mr. Satterfield. Sure. With these trade practices, India is 
dumping this rice in places that are so cheap just because of 
the over-subsidization of their growers that places that used 
to be some of our biggest markets we can't sell to anymore 
because we are growing a great product, but they are getting 
the rice so much cheaper because of the over-subsidization of 
fertilizer and everything down the line from India. They can 
take it and ship it around the world to places where we used to 
go and just really robbing the market share. So it is really 
just directly affecting us and our sales to these countries.
    Mr. Crawford. So if I understand this right, we get wrapped 
around the axle about the actual subsidization of a crop that 
we forget about the subsidization of the inputs of the crop 
that make it cheaper for them to produce. Is that fair to say?
    Mr. Satterfield. Absolutely.
    Mr. Crawford. All right.
    Mr. Satterfield. Sure. Yes. And the amount of rice that 
they keep, you hear stories of rice that they keep for their 
people and somehow ends up in other countries as well, so I 
think that right from the subsidization of the fertilizer and 
the input costs and everything down the line, it just is a very 
unlevel playing field for us for sure.
    Mr. Crawford. Thank you. I appreciate you being here today. 
And, gentlemen, I yield back.
    The Chairman. The chair now recognizes Ms. Adams for 5 
minutes.
    Ms. Adams. Thank you, Mr. Chairman.
    And thank you for your testimony today and for being here. 
Your insights as producers are informative and certainly 
important to the work that we are doing as a Committee, 
especially on the farm bill.
    Mr. Moore, I was happy to hear you talk about the 
agricultural research and the facilities' needs. I am a 
graduate of North Carolina A&T State University, the largest 
public HBCU, but also an 1890s institution, and so we always 
talk about the need for research, so I appreciate you raising 
that.
    As many of you may know, the number of Black farmers in the 
United States has decreased precipitously over the last 
century. In 1950, there were over 500,000 Black farmers. Yet, 
by 1997, that number fell to 20,000. And over the course of the 
20th century, Black farmers have lost over $300 billion worth 
of farmland and acreage. And while this outcome is the result 
of many different processes stacked against Black farmers, some 
farmers have identified that role, that discrimination by FSA 
staff and county committee members have played, including 
mishandling paperwork like applications and poor customer 
service.
    So to all of you, quickly, what are your thoughts on the 
FSA county committee system, and is there a role for county 
committees to play and if you can speak to issues with the 
office staffing and customer service that you may have 
encountered? So we will start with you, Mr. Moore.
    Mr. Moore. Thank you so much, Ms. Adams. Yes, so our FSA 
office is in our county seat, and we have small counties in 
Georgia and so there are a lot of counties that we have to work 
through. Luckily for us, Glenn has been a great man for us, for 
our county and our county area. He supports us in the ways that 
we need to ask, and his office open to us, and we go in there 
often.
    Ms. Adams. Okay. Great. So if we can move to Mr. Shawn 
Holladay?
    Mr. Holladay. Yes. I would say that the county committees 
are very, very important, and they serve their role very well. 
And, we have to have a--from an FSA employee to a county 
committee to even a state committee, we have to have very good 
people in those positions. We have been involved as the cotton 
industry, as many other commodities do. We help service 
candidates for those. We help USDA service underrepresented 
candidates for the state committee this year. I was involved in 
some of that. We have a lot of stuff going on. But all of that 
system works very well, but we have to be very careful to keep 
those seats intact because we have had a difficult time getting 
those seats filled sometimes.
    Ms. Adams. Okay. Great. Okay. So we can move on to Mr. 
Haag.
    Mr. Haag. With the FSA, it is amazing how they have 
improved, maybe that COVID was one of the things that harmed 
American farmers during that time, but the FSA office, they 
improved themselves by working more and having more work done 
over the internet so you don't have to show up at the office as 
much as you did before where you can email to get that 
information. And with having your local people in your counties 
like we have in Minnesota, it is important because they know 
the operations that go on in our counties, so that is why it is 
important to have that committee. So with the FSA is they made 
huge programs, or, I mean, made it a lot easier to work with 
the FSA than it had than in the past.
    Ms. Adams. Well, thank you. Let me just move on quickly if 
I can. USDA in recent years has undertaken efforts to enhance 
the online experience for producers. Have producers of your 
commodity had positive experiences with online tools, Mr. Haag?
    Mr. Haag. I am sorry. I didn't hear what you said, 
Representative.
    Ms. Adams. Have producers of your commodity had positive 
experiences with the online tools? Online, online.
    Mr. Haag. The online tools, actually, my daughter has a lot 
better experience than I do with it.
    Ms. Adams. Okay.
    Mr. Haag. She keeps all IT things running on our farm. But 
yes, I mean, I think we are adopting those. Anything that we 
can do online--we can't do everything, but anything we can do 
online, we are adopting those technologies, and we were finding 
them very useful.
    Ms. Adams. Thank you. I think that red means I am out of 
time, is that right? Thank you very much. Thank you, gentlemen.
    The Chairman. Before I recognize Mr. LaMalfa, I am going to 
have a roster update. Unless somebody comes in on the 
Democratic side, we will be going to Mr. Bishop and then Mr. 
Davis. And on our side, I have LaMalfa, Duarte, Johnson.
    Mr. LaMalfa, you are now recognized for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    Let me kind of pick up where Mr. Crawford left off with Mr. 
Satterfield on the situation with India and the blatant 
violations with the WTO and such and rice, as well as other 
commodities, suffering some of the similar issues. Can you 
share what you are hearing? What have you received from the 
Administration, from USDA or USTR, on what they are doing to 
address this issue?
    Mr. Satterfield. Sorry about that. That is a good question. 
We have taken cases that have gone to a certain degree and have 
not gone any further. I would say that there is definitely work 
to do there. It seems to get to a stopping point, and it 
doesn't seem to go any further, so we still are battling that.
    Mr. LaMalfa. How could Congress be helping bring more 
awareness to the----
    Mr. Satterfield. Yes. And there are things we are working 
on. We have formulated a few plans to do that. I think just an 
overall education about how it is truly affecting the American 
rice farmers, I think there is maybe a disconnect on how really 
hard it is, hard hit the rice industry is because of this.
    Mr. LaMalfa. You mentioned the $17 price needed for rice. 
What number would you put on for California?
    Mr. Satterfield. Well, that is another thing we are working 
on. And I know that is near and dear to your heart, as a rice 
man yourself. With a little bit of a different reference price 
in California and that is a number that should be a good bit 
higher than what it is now.
    Mr. LaMalfa. Yes, definitely. We grow that medium grain out 
there it is a little different but----
    Mr. Satterfield. Right. The good stuff.
    Mr. LaMalfa. Thank you.
    Mr. Holladay, you were talking about in the conservation 
programs that they must reward, not penalize, the good 
contributions that have been made across the board, but 
especially by those that have done them early on, before the 
programs were up to speed. Can you talk about that situation 
where the early adopters of conservation have not really been 
rewarded or even noticed, maybe even penalized?
    Mr. Holladay. Yes, I appreciate that question very much. 
When we look at these conservation programs and plans, they 
seem to always want to be scaled. And when you look at those 
scales, the people that have adopted a lot of these things 
early on and people who are using these conservation tools and 
practices already rather than using the program, we want to 
ensure that those early adopters are getting supported for that 
early adoption rather than having someone who had not adopted 
and have the entire scale that they could be supported as they 
move up the ladder. Basically, it is in retrospect after moving 
backwards, you are punishing the ones that have been doing the 
things that are more climate-smart to begin with.
    Mr. LaMalfa. Yes, I appreciate that. We have been bailing 
rice straw for probably nearly 30 years, and that is just one 
small example. There is not a lot of credit on that.
    Mr. Satterfield, various natural disasters have hit a lot 
operations and a lot of commodities here. In my own home state, 
again, we had several years of drought, some of it manmade and 
some of it caused by water delivery cuts and misuse of water, 
for example, of California's little over 500,000 acres of rice 
typically grown last year, that was lopped in about \1/2\, 
unbelievable what I was seeing on the west side of the valley I 
represent there, the dry fields and the resulting effects on 
wildlife and habitat and whole works. So what would you be able 
to share with the Committee to enhance and support our food 
systems where our producers would be able to get through these 
hurdles? And I would just say quick, we need more water 
storage. We need smarter allocation of water and not so much 
environmental water running out. But what would you look at a 
bigger picture we could be doing more?
    Mr. Satterfield. Yes, I mean, I think you are exactly 
right. There are a lot of great rice farmers in California, a 
lot of good friends of mine. I was out in Sacramento in 
January, saw the influx of all the water in the Sacramento 
River and all of that area. So I think just an understanding of 
the needs. The surface water, like you were talking about, 
enhancing the size or whatever. Like you said, I could probably 
defer to a few of my California friends for some specifics on 
that. But they have definitely gone through the years with the 
drought and then now with too much water, it is certainly a 
complicated situation.
    Mr. LaMalfa. Yes, certainly. And that goes with all of our 
commodities here. We used to have so much cotton in California, 
and that was one of the first things hit by water 
misallocation. And, California grows--there are many, many 
crops grown--they are 90 percent of what the U.S. consumes is 
grown there, so we have to do better.
    Mr. Chairman, I yield back. Thank you.
    The Chairman. The chair now recognizes Mr. Bishop.
    Mr. Bishop. Thank you very much. Thank you, Chairman Scott 
and Ranking Member Brown, for having this important hearing for 
us to get an update from our commodity stakeholders on their 
priorities for the 2023 Farm Bill.
    The 2018 Farm Bill enabled producers starting with the 2021 
crop year to pick between the Agriculture Risk Coverage Program 
and the Price Loss Coverage Program on an annual basis. Do you 
think that this ability to annually elect which program in 
which to participate has been beneficial to producers? If you 
could each address that briefly.
    Mr. Holladay. Yes, I think that is a really good aspect of 
the program. I think anytime you have versatility, you have 
risk management. When you have different tools to use at 
different times, anytime you can keep those elections, you are 
better off.
    Mr. Flansburg. Thank you for the question. I enjoyed the 
ability to change between these programs, but it is difficult 
to change between these programs as a producer, too. So, I may 
be in a somewhat unique position among farmers that I have 
probably only six distinct landowners that I farm for. And, 
there are people with 70, 80, 90+ landowners that they have to 
negotiate between these programs with. So getting all those 
signatures, getting everybody to agree on those programs is 
difficult. So while it is nice to be able to choose between one 
newer idea that we would advocate for is an automatic default 
to the better of a given program in a given year, whichever is 
more beneficial based on conditions on the ground.
    Mr. Bishop. But you have sufficient tools for the producers 
to really--do they have sufficient information upon which to 
make their decision on but which one of the programs to choose?
    Mr. Flansburg. Probably. In a given year, there is guidance 
that comes from grower organizations and FSA. But sometimes, 
the hassle of changing between them is not worth the benefit of 
trying to predict what the given year is going to do price-wise 
and weather-wise.
    Mr. Bishop. Okay. Let me ask, given the level of expected 
commodity prices this year compared to previous years, along 
with the higher input prices, do you anticipate that there will 
be higher levels of interest among farmers electing the Price 
Loss Coverage in order to be able to also purchase the 
Supplemental Coverage Option in crop insurance? Or have 
producers opted more into the ARC since the PLC seems unlikely 
to trigger for most traps again?
    Mr. Satterfield. Well, I think that is exactly right. I 
would concur with what they have said. I think when you get the 
choice between the two, the PLC program that seems to work 
better with rice, specifically, and then maybe in the ARC in 
the soybeans, just concerning what I have on my own farm. But 
yes, I think the option for the supplemental coverage will work 
in there as well.
    Mr. Moore. In U.S. canola--sorry, excuse me.
    Mr. Bishop. Go ahead, Mr. Moore.
    Mr. Moore. U.S. canola, it supports definitely adding the 
Supplemental Coverage Option for ARC and PLC for both of them. 
Right now, it is currently, I believe, just for PLC. I would 
have to check that data, but it is one or the other. I can't 
remember. There is not a clear guideline on why that is not 
available for both. For our farm, it is difficult to navigate 
through that because of the different counties that we have 
within Georgia and how that works. And so we have certain 
counties that are going to do certain things.
    Mr. Bishop. Can you talk about the role of marketing 
assistance loans and facilitating the marketing of your 
respective commodities? My time is going short, so if you could 
be brief.
    Mr. Holladay. I would just say that the Marketing 
Assistance Loan is an integral part of cotton in particular, 
but in terms of low prices and moving cotton and being able to 
get money off of that crop in the interim as you market it and 
be able to get it in the marketplace, it is very helpful to 
different productions.
    Mr. Haag. In the corn situation where we are at right now, 
$2.02 at the marketing loan, it is not very feasible for 
farmers to go into it because of the price of being up where we 
are at. The back wood corn was a lot cheaper. You saw a lot 
more farmers using that program back then than they do now.
    Mr. Moore. For farmers who have storage, we have storage on 
our facility, we are able to utilize that to help out with cash 
flow throughout the year, and so we do utilize the Marketing 
Loan Program.
    Mr. Bishop. I think my time has expired. Thank you very 
much.
    The Chairman. Okay. I am going to give a roster update real 
quick since it has changed a little bit. I have Miller and then 
Rose on our side. And on your side I have Budzinski and then 
Davis.
    Mrs. Miller, you are now recognized for 5 minutes.
    Mrs. Miller of Illinois. Thank you. You are getting into 
the Illinois farmers here. It is great to be here. Thank you to 
all of you.
    I do want to start out by saying that over the past few 
years, farmers have really faced increased input costs. And now 
more than ever it is important that we protect our crop 
insurance and ensure that farmers have a strong safety net. 
That is very important to the producers in my area.
    So, Mr. Haag, thank you for being here. And, as a farmer, I 
know how important it is to grow export markets around the 
world. Would you discuss how the farm bill could increase 
agriculture exports?
    Mr. Haag. That is a very good question. And exporting is a 
very important item with the corn growers because of the amount 
of the crop that we grow every year. So with having the crop 
insurance, but with the exporting with the farm bill, that is 
where it is important for the MAP and FMD programs to have an 
increase in there for how much good they do for overseas 
countries to get our product over there. That is very 
important.
    Mrs. Miller of Illinois. Thank you. And I just want to say 
that H.R. 648 (Agriculture Export Promotion Act of 2023) is 
something that I support and that the producers in my district 
are counting on us, on the Administration being aggressive in 
their trade policy.
    And you also mentioned in your testimony that NCGA supports 
increased flexibility within conservation. Could you please 
explain how giving farmers more flexibility will ultimately 
improve farm conservation practices?
    Mr. Haag. That is one of the major things that have 
happened in the farming process from when I started farming to 
where we are today. The farmers are taking better care of the 
land. They are more worried about the conservation. If they 
have some lighter ground or whatever, they will put it in the 
Conservation Reserve Program and keep it there where they use 
their heavier ground, then, to make sure they still have the 
cropland for that. But farmers are very concerned about the 
conservation, and down the road, we will be also.
    Mrs. Miller of Illinois. Thank you. And I do want to make 
it public that the farmers are the great conservationists, and 
they are responding to new information and new practices and 
implementing them. And I am glad that we are giving them the 
flexibility because people's geography and their climate is a 
little bit different in every area.
    So I hear from growers in my district that it is vital to 
strengthen and protect crop insurance. How important is 
continued innovation and development of new approaches to crop 
insurance tools? For example, corn growers had the recent 
split-apply nitrogen endorsement.
    Mr. Haag. That is just one of the items that your State of 
Illinois came up with here a number of years ago. And we are 
finding out even in my home State of Minnesota that we are 
doing--we on our farm, we do split applications of nitrogen. We 
are not getting the credit that you do in Illinois, but we are 
still using it because we are finding out how much more 
beneficial it can be in growing our crop.
    Mrs. Miller of Illinois. And it is great that we are not 
penalizing but we are incentivizing some of these practices. 
Thank you so much.
    The Chairman. The chair now recognizes Ms. Budzinski for 5 
minutes.
    Ms. Budzinski. Thank you, Mr. Chairman. And thank you, 
Ranking Member. It is great to be with all of you today. I 
appreciate your testimony. I had a question actually for Mr. 
Haag around biofuels. Specifically, I am also from Illinois and 
care very deeply about how we have opportunities to be 
expanding the usage of biofuels. I am really proud to be one of 
the co-leads in the House on the reintroduction of the Next 
Generation Fuels Act of 2023 (H.R. 2434). And so what one of 
the questions I had for you was, as we expand investments in 
these biofuels in that market, can you speak to where we are 
from a capacity standpoint in terms of production and what 
steps we might need to take to scale up production for 
alternative fuels?
    Mr. Haag. Well, that is one thing with the American corn 
farmer, you give him the challenge of growing more corn, we are 
up to that challenge of growing more corn, just from the 
technology that we have been provided in the last 10 years of 
that product of corn, where we can average and what we can do 
right now. It is amazing what we can do; but, like I say, the 
American corn farmer there, if biofuels is important to us and 
if we can increase and get in to the--like you mentioned the 
Next Gen Fuel Act to show that we can perform just as well as 
some of the EVs, yes, we will compete with them in that. So the 
challenge is there for the farmer. He will take that challenge 
on because it is amazing what we get out of the ground right 
now with using less of everything and how we are still taking 
care of the ground.
    Ms. Budzinski. So they are up to the challenge. That is 
great. Wonderful. Well, I also had a question related to 
energy, and this is really for anyone on the panel. The past 
couple of years have seen a sharp rise in energy costs given 
the global pressures on prices here at home. Can you discuss 
what issues you all are facing following the rise in energy 
prices and how it is affecting operations?
    Mr. Holladay. Thank you for that question. Energy is tied 
to everything nearly; but, as producers, what we have is 
anything coming to our operations we are importing all of these 
resources to grow these crops. Everything on them is tied to 
some sort of transport cost. That is the bottom level. Then we 
are using the fuel to produce the crops. And then we are using 
on the crops that we are growing that is directly linked to 
energy. So energy prices have a main line to everything that we 
do.
    Mr. Moore. So, as a U.S. canola producer in the Southeast, 
there has actually been a lot of news that has been hitting the 
cycle in the last 2 months about producing biofuels or 
renewable diesel from canola stock or winter canola. And so one 
thing that we can do in Georgia and Tennessee in the Southeast 
is that we can double crop that, so we can basically triple our 
oil production per acre with soybeans and canola combination. 
And so that rotation is what is exciting about securing that 
energy source.
    Mr. Satterfield. And I would say that is a huge concern at 
all levels, especially as you talk about with your input costs. 
Last year, at a time in your most critical irrigation time we 
were paying $4.55 for farm diesel. So, I mean, just every time 
the truck pulled into your farm, it was $16,000-$18,000 
depending on the size of the truck that you were dealing with, 
and they were pulling in fairly regularly. So it adds up pretty 
quick. I mean, and it is a little different regionally or 
different states, but where I am, we went from about $400 a ton 
of urea for rice to about $1,200 a ton, so just a great 
increase in these prices that are just exponential of where 
they have been.
    Mr. Flansburg. And I am here to speak primarily for pulse 
crops, but I can say that the cost of fuel while it is a top 
line number that is easy to look at, is not the biggest cost on 
our farm. The biggest cost on our farm is fertilizer, which is 
also driven by the cost of energy, so I mean, it is multitudes 
more than the cost of fuel. And so one of the advantages that 
our crop has is that, without having to use nitrogen-based 
fertilizers that we import onto the farm, pulse crops are an 
inexpensive option relatively to grow because we don't have to 
expend that same energy output for fertilizer onto them, so 
they are good rotation crop in that sense and reducing energy 
use.
    Ms. Budzinski. Thank you very much. I will yield back my 
time. Thank you.
    The Chairman. Thank you.
    The chair now recognizes the chair of the full Committee, 
Mr. Thompson.
    Mr. Thompson. Mr. Chairman, thank you so much. Ranking 
Member, thanks again for this hearing, and thanks to all of our 
witnesses.
    Many of you mentioned Federal crop insurance in your 
testimony. As you well know, there have been attempts in 
Congress to gut the program by imposing an adjusted gross 
income means testing, payment limits, things like that, 
including through an amendment to the debt ceiling bill filed 
just this week. Can each of you speak to how these kinds of 
proposals would impact the crop insurance program as a whole 
and your operation in particular?
    Mr. Haag. Well, that would be a major disaster if something 
like that would happen to us, Mr. Chairman, because with crop 
insurance, if we start having limitations, you might have some 
of your larger farmers not taking the crop insurance, well, 
then you have less people involved in crop insurance. That is 
going to make it more expensive for that younger farmer then to 
get going. It is going to put his inputs up higher. So we need 
to keep the crop insurance right where it is at, make sure that 
we don't have the issues like you just mentioned coming forth. 
So the stronger we can keep that net available for the farmer, 
the better off farmers we are.
    Mr. Thompson. Mr. Holladay?
    Mr. Holladay. Thanks for that question. I will answer that 
real simply. As cotton growers, we rely on insurance products, 
some regions more than others. On my operation, my daughter has 
been a full partner in our operation since she graduated from 
college, and I would have advised her not to farm if I thought 
those would be implemented because that is limiting something 
that we are using as a true safety net, but it is well below 
the cost, you can't make money off of it, but it can keep you 
in business long enough to make it to the next wreck.
    Mr. Thompson. Right.
    Mr. Holladay. Basically, and that is how important it is 
how important it is to our operation, our family operation to 
not have those kind of harmful things happen to insurance 
because I don't think they are justifiable from any aspect. On 
the insurance side, I don't think you can--just the integrity 
of the program and when you are putting limits on it like that. 
I think it goes all the way to the other end of the spectrum.
    Mr. Thompson. Mr. Flansburg?
    Mr. Flansburg. Yes, thank you for the question, and it is 
entirely critical to our operation to have strong crop 
insurance back into what we do. I am in the fortunate situation 
of not having an operating line on our farm currently, but if I 
wanted to go to the bank and I said, ``Hey, I would like to get 
a loan so I can farm, but I really don't want to buy 
insurance,'' that is not even an option.
    Mr. Thompson. Right.
    Mr. Flansburg. So access to credit is, at this point, 
dependent on having access to that insurance. And, really, it 
is a way to minimize the cost of the program and to minimize 
the risk. If you are coming in without access to finances, 
insurance is critical. Our acceptance in our industry is really 
high. We have producers buying revenue insurance at 80 to 90 
percent rates now. It is an important, important tool to us.
    Mr. Thompson. Very good. Mr. Satterfield?
    Mr. Satterfield. So, as I said, crop insurance in some 
instances does certainly have a place in rice, maybe not so 
much you are dealing with a 100 percent irrigated crops. You 
don't have as many yield variations as you do in other crops. 
We have worked to try to improve that, except in extreme 
circumstances, it is just not a really good safety net for 
rice.
    Mr. Thompson. Mr. Moore?
    Mr. Moore. Mr. Chairman, thank you. So for canola actually, 
we received a crop insurance adjustment this year because our 
canola died. It was 8 and 30 mile an hour wind with no cover. 
It kills canola. It can. And so this is the first time that we 
had experienced that with canola. Luckily, we had that crop 
insurance to be able to get us through. I think the part for us 
is that it is cash flow, so we are double cropping a lot of 
stuff. So we have our winter crops that come in with cash flow 
that comes in, in May and June, and so if we don't have that, 
then we are not able to move for our summer crops that are 
going into the ground. So crop insurance allows us to be able 
to take advantage of the dual season and protect our cash flow.
    Mr. Thompson. I had another question, but I am going to 
phrase it as a request actually. Great commodity groups, great 
organizations, lots of great members. I have been around to 
visit a few of them, looking forward to seeing a few more in my 
travels. I would just encourage your help in educating Members 
of Congress about the importance of the farm bill as you make 
visits or back home where you invite Members or their staff 
onto the farm. So that is just incredibly important, any way 
that you can to help us. We have a significant number, over \1/
2\ of the Members of Congress in the 118th have not been here 
for a farm bill. And, quite frankly, some folks who have been, 
it wouldn't hurt to do a little additional education with some 
of them.
    So thanks so much, Mr. Chairman. I yield back.
    The Chairman. All right. Thank you, Mr. Chairman.
    Before I go to Mr. Davis, on the Republican side, I have 
Finstad and then Rose. And I now recognize Mr. Davis from North 
Carolina for 5 minutes.
    Mr. Davis of North Carolina. Thank you so much, Mr. 
Chairman, and to Ranking Member Brown, and to our full 
Committee chair. It was great seeing you in North Carolina in 
the East. I think we had a great visit, so thank you.
    And good morning to all of the witnesses who are here 
today, and thank you for coming from across the country to join 
us.
    My district includes North Carolina's Inner Banks region, 
and that is vulnerable to flooding. Earlier this year, USDA 
unveiled the expanded Hurricane Insurance Protection-Wind Index 
endorsement to be offered by their Risk Management Agency this 
year. President Haag, can you speak, please, to the importance 
of new programs like Hurricane Insurance Protection to provide 
certainty for corn producers, especially those producing 
specialty varieties like blue corn that their operation will 
survive natural disasters?
    Mr. Haag. I didn't quite get everything that you mentioned 
there, sir.
    Mr. Davis of North Carolina. Yes, I was wondering if you 
could please speak to the importance of new programs like 
Hurricane Insurance Protection to provide certainty for corn 
producers, especially those producing specialty varieties like 
blue corn.
    Mr. Haag. Right. I got you now. Yes, anything that we can 
do to add new ideas to crop insurance is very beneficial 
because a number of years ago they brought one in with the 
wind. Well, that helped the State of Iowa then for that 
derecho, so anytime we can add new ideas to crop insurance, we 
as farmers are much better off. And we just want to make sure 
we don't take the good things away right now, but adding new 
things is great.
    Mr. Davis of North Carolina. And I have heard from cotton 
producers in my district about the rising cost of farm 
equipment and continued pressure on supply chains. Chairman 
Holladay, in a volatile economic environment, what kinds of 
investments do producers have to forego when they are not able 
to tailor their risk management options and lack access to 
vital programs like the STAX income protection plan?
    Mr. Holladay. Well, thank you for that. When you have a 
situation like we have right now with a huge input cost, 
everything becomes a big factor, so there is not any one thing 
that is not extremely important. And then having the ability to 
take STAX out with PLC and removing that prohibition will be a 
very great thing. We adopted the STAX program when the Brazil 
case was engaged and when the WTO ruling came out against us as 
a placeholder for us to survive until we could be a part of 
this program again. And with that, we had to in that 
negotiation--and it evolved forward. It was a situation where 
you couldn't participate in PLC and STAX at the same time, and 
that would be very helpful to get that switched.
    The investments that we make on an annual basis are all 
impacted by our safety net because you are not going to make 
any future investments. If you don't have some security, and 
that is what, basically this Committee is our security that 
stands between us and the subsidization of other countries and 
various other things like natural disasters.
    Mr. Davis of North Carolina. And, Chairman Holladay, can 
you also speak, please, to the importance of the Economic 
Adjustment Assistance for Textile Mills Program and keeping 
manufacturing and cotton production jobs here at home?
    Mr. Holladay. It is very important. One thing we don't need 
to do is lose any more textile industry. It was basically 
destroyed. We need to have the ability to do some things in 
this country, and the textile industry was nearly gone. And 
that is probably one of the reasons that we helped keep that 
industry going, and a good example of that is they were able to 
switch and make personal protective equipment during the COVID 
virus in this country as textile mills in this country. And the 
support of those mills is important, and it is important as a 
security measure as well.
    Mr. Davis of North Carolina. Again, thank you, and we yield 
back, Mr. Chairman.
    The Chairman. Thank you. The chair now recognizes Mr. 
Finstad for 5 minutes, and then it is Mr. Rose for 5 minutes.
    Mr. Finstad. Thank you, Chairman Scott and Ranking Member 
Brown, for holding this important hearing today. And thank you 
to all the witnesses. And thank you, Chairman Thompson, for 
your leadership on the Agriculture Committee.
    And I want to extend a special welcome and thank you to a 
fellow John Deere-driving Minnesota corn farming brother farmer 
of mine, Tom Haag, for being here today. I also want to just 
thank you for your leadership. And, we are really proud of you 
in Minnesota to have you on the national stage leading the 
National Corn Growers, so thanks for being here.
    I am a proud fourth generation corn and soybean farmer from 
southern Minnesota, really excited and honored to be raising 
the fifth generation. And I have been saying this over and over 
again, and I really believe it to my core that our role here in 
Congress is really important that we pass a really strong farm 
bill. But we have to make sure that it is done for the farmer, 
by the farmer, and it is done for rural America, by rural 
America. And so for you all being here today, it really helps 
us do that. It is so great to hear all of your stories, hear 
your backgrounds, and a little bit about your operations, 
fourth generation, fourth generation, fifth generation. And 
really, it speaks to, not just the quality of people that are 
involved in our profession, but also the stewardship and the 
love of the land. And what we do really is beyond you and I. It 
is about our kids and our grandkids and those next generations 
that we want to pass our farms onto, so it is really important 
that we get it right. And so for you being here, it helps us 
get it right.
    So let's talk a little bit about the farm safety net. We 
have heard quite a bit about crop insurance. I am honored to 
have put together an ag advisory committee that is really 
helping me on the ground figuring out what is really important 
for the next farm bill and how I can be an effective 
Representative to farmers in southern Minnesota.
    And I hear over and over again crop insurance, right, crop 
insurance, protecting crop insurance. So, as a farmer, I know 
you mentioned the relationship with the lender. I see it 
firsthand. You don't even get across the desk with a lender 
without being able to start with what is your crop insurance 
exposure, what are you at? And that conversation then goes from 
there, but it also doesn't end there. It ends at the very end 
when you are making those marketing decisions. And so I see it, 
I hear it, and I know it is something that we are going to work 
hard on.
    I guess I would just maybe very simply just, Tom, I will 
look at you, Mr. Chairman of the National Corn Growers, what is 
the biggest challenge that you see from a corn grower's 
perspective right now?
    Mr. Haag. I think one of the biggest things that we see 
right now is that we have a lot of opposition that want to take 
a lot of the tools out of our toolbox? We are better stewards 
of the ground. When I started farming as a young--growing up as 
a farm boy, the traditions we were doing then to the ground to 
where we are right now, I live about 2\1/2\ hours north to you, 
and we are doing vertical tillage and leaving more corn on the 
stalks on the ground that I would say that would never work, 
but it is working. So, I mean, just taking tools away from us 
would be our biggest hindrance if they were to limit the amount 
of nitrogen we were supposed to be using, the amount of 
fertilizer that we are--otherwise, we are going to be putting 
on would be a major concern to the corn farmer.
    Mr. Finstad. Yes, thank you for that. And I know Eden 
Valley very well, and it is the Garden of Eden that you get to 
farm in, so you are a lucky man.
    Mr. Haag. Thank you.
    Mr. Finstad. I will, maybe just further emphasize what you 
are saying. And I know you, I know farmers in your 
neighborhood, I know farmers in southern Minnesota, and we 
didn't need government to tell us to do the things that you 
just talked about. We knew that adapting to technology, looking 
at the advancements with equipment and the way we have taken 
care of our farms was good for us and good for generational 
moves, and so I appreciate the effort that you have.
    Just a quick last question I have, and just a yes or no 
from each and every one of you. FSA loans, turning to all of 
you, I hear concerns from Minnesota farmers that FSA loan size 
limitations have not kept up with the rising prices of farmland 
and farm inputs. The current caps make it difficult for 
farmers, especially beginning farmers, to access FSA guarantee 
loans for land purchases and operating expenses. Quick yes or 
no up and down the line, do you think farm country would 
benefit from modernizing these loan limits in the farm bill?
    Mr. Haag. Yes, I do.
    Mr. Holladay. Yes.
    Mr. Flansburg. Yes.
    Mr. Satterfield. Yes.
    Mr. Moore. Yes.
    Mr. Finstad. Thank you, Mr. Chairman. I yield back.
    The Chairman. The chair now recognizes Mr. Rose for 5 
minutes.
    Mr. Rose. Thank you, Chairman Scott and Ranking Member, for 
holding this important hearing. And thanks to our witnesses for 
being here. I want to pick up a little bit on what Chairman 
Thompson said earlier and just begin by thanking you and your 
members for all that you do to make this country self-
sufficient and strong. And I think as we think about the 2023 
Farm Bill, it is important to remember that we live in a time 
when we enjoy the most bountiful, inexpensive, safest supply of 
food and fiber in the history of humankind. And it is a credit 
to American farmers that you are able to do that battling 
through the challenges that you have, so I commend you for 
that.
    I will begin with Mr. Haag. In your written testimony, you 
talk about the importance of marketing assistance loans as a, 
quote ``an important risk management tool,'' close quote. Can 
you expand a little on how these loans work and why they are 
important to the agricultural community?
    Mr. Haag. It is a loan that the farmer can take out, and it 
is important to have that in order for putting your crop in, 
for getting your inputs, and all that. So that marketing loan 
that we would get through the government, it is vital yet. So, 
I mean, I don't know how to really explain how good it is, but, 
I mean, it is there, and we need to continue to have it.
    Mr. Rose. And in part, I asked the question, and some of 
the questions that I am going to ask will be aimed at trying to 
educate those who might be listening about why we have farm 
programs. As an old ag policy student years ago at Purdue, I 
learned why we have the programs we do, why we support farmers, 
and why it is so important to maintain a supply of food and 
fiber here at home. And so really, that is what I am trying to 
get at is to give you a chance to kind of broadly explain why 
that Marketing Assistance Loan Program is so important, so 
thank you for that.
    Shifting gears a little bit, over the last 6 years, the 
Federal Government has paid out over $93 billion in ad hoc aid 
to producers. For any of you that would like to jump in, do you 
feel like the ad hoc payments are an efficient risk management 
tool?
    Mr. Holladay. No, they are not an efficient--I mean were 
they well-needed? Yes. Could we identify the need and can we 
justify them? Absolutely. But a risk management tool should 
step in when things are going south and let you--and they 
should be predictable. They should be something that you can 
bank on. Ad hoc disaster, it saved us over the past couple of 
years, but it is not something that is predictable, and it is 
not something we can bank on it. And we need to move away from 
those as quickly as possible. The problem is, is can we get the 
money? Do we have the political will to get the money to put in 
the baseline because that ad hoc is not baseline. And the money 
that has been keeping us healthy out there is not something we 
can use to write the farm bill like you all know, but from an 
education standpoint, we need baseline expansion to be able to 
write a farm bill that works properly.
    Mr. Rose. Thank you. Anyone else want to add to that?
    Mr. Satterfield. I would agree totally with that. The ad 
hoc assistance is something that, sort of when you are looking 
back and not looking forward, something that after the disaster 
has happened and the cost of it as well, with a stable, well-
maintained, consistent farm safety net, that is something that 
you can take--I think the thing that I would like to just leave 
with you more than anything is what you can take to your 
banker. I mean, if you have a safety net that is in place, you 
know what is going to be there, it makes for a much better 
conversation with your lenders. The ad hoc assistance is good 
in these disaster situations and other times that come up. But 
as a long-term goal, we would much rather have a clear, concise 
safety net that we can depend on and dependable and know it is 
there.
    Mr. Rose. Thank you. Anyone else? Go ahead.
    Mr. Holladay. I would just add that the significant number 
in ad hoc disaster payments is just a symptom of the amount of 
money that we don't have in the farm program safety net.
    Mr. Moore. Thank you. Mr. Rose, I think it is important to 
talk about the goals of it as well, and so the goal of risk 
management is to be able to farm the next year to be able to 
cover your cost, to be able to continue to be creative, and to 
have national security through our food and our agriculture. 
And so as long as we have those safety net programs, those are 
important to us. We can't predict the weather, and so that is 
where the ad hoc comes in.
    Mr. Rose. Thank you. I see my time has expired. I yield 
back.
    The Chairman. All right. I will give a roster update. I 
have Moore, Duarte, Nunn, Alford, Johnson. So the chair now 
recognizes Mr. Moore for 5 minutes.
    Mr. Moore of Alabama. Thank you, Mr. Chairman. Thank you to 
all witnesses for being here. I have a Judiciary hearing going 
too, so I am kind of running back and forth.
    But, farming has always kind of been a difficult 
profession, and the past year has been tougher than most on 
many of the farmers I talk to, cotton farmers and peanut 
farmers alike. But we have all heard about various weather 
challenges that producers have been facing, but I would like to 
hear a little more, Mr. Holladay, about the input costs. I know 
the farmers, ranchers, foresters are certainly feeling a pinch 
in their margins, regardless of commodity or region. Would you 
expand on that for me, Mr. Holladay?
    Mr. Holladay. Yes. I mean, just specifically on fertilizer 
prices alone, we went up three times, and where the big news is 
fertilizer prices are coming down, we are about twice what we 
were to start with. So, when you are up 300 percent and down 
half that. It is not all that exciting. It is better. You have 
a cost per acre. You basically raise your cost per acre by $100 
to $150 an acre across the board. And if you are just figuring 
your major inputs, by the time you get everything cost 
associated with it, you are having to make an above-average 
crop at a very good price to make everything work. And that is 
not a sustainable situation, so we are having to use every 
efficient tool we have just to get there and make it work.
    Mr. Moore of Alabama. Yes, I was talking to my cousin. He 
is a young farmer, and he just went back to our farm and he was 
telling me he planned I think he told me $3.13 a gallon for 
diesel fuel for the whole year, going into this planting 
season, and it certainly hasn't worked out for him of course. 
Are there any other issues? I know fertilizer, certainly, that 
is an issue, fuel costs. What else are we seeing? Inflation in 
general just hitting all the family farms?
    Mr. Holladay. Yes. But when you look at a farm operation, 
eight percent, they talk eight percent inflation, I mean, it is 
30 to 50 percent when you look at a farming operation because 
you buy everything at retail, sell everything at cost. That is 
what producers do. So you buy full price everything, you sell 
everything at cost. And everything that comes to you has a 
transport load. Everything that comes to you has their 
transport load, and the person next to them, transport loads, 
so energy prices have a great deal with what is going on with 
the supply chain shortages and some of the increasing prices. 
But just because it can't get here quick enough, it has been 
absolutely huge. So the last 2 years have been an anomaly 
that--we have the potential to get better, but the hangover 
effect seems to be lasting quite a while.
    Mr. Moore of Alabama. Yes, I figured that as well, the 
hangover effect as just some of the inflation and spending we 
did at the end of the year still going to continue to hit.
    Yes, sir. Mr. Flansburg, would you like to hit on that?
    Mr. Flansburg. Yes, if you don't mind me saying. Thanks for 
the question. And, certainly, there are a lot of costs 
associated with farming outside of energy and fuel. And, one of 
those is availability of parts, the availability of new 
equipment. I have heard from dealers that we have about \1/2\ 
the combine production each year that we used to in terms of 
number of machines produced, so getting headers to the farm has 
been near impossible to get a new header. So, just equipment 
availability even is hard. Chemical costs have gone up a lot in 
addition just because of supply chain issues. So it is not just 
those baseline energy inputs. It is all things
    And, being the farmer that I am, my newest combine is a 
2003, so I am not exactly stimulating the local ag economy with 
new equipment purchases.
    Mr. Moore of Alabama. I hope you are a really good 
mechanic.
    Mr. Flansburg. We will see come harvest.
    Mr. Moore of Alabama. Yes. All the time we are working on 
stuff. I get it.
    Anyway, Mr. Chairman, I am going to yield back. I got about 
50 seconds, but I will yield back. Thank you.
    The Chairman. All right. Thank you. You can actually work 
on a 2003 piece of equipment, and you can't work on the new 
ones.
    Mr. Duarte, 5 minutes.
    Mr. Duarte. Thank you, Mr. Chairman.
    Well, thank you guys for being here today. I am a farmer 
also, almond and wine grape farmer, as well as a nursery, so I 
sympathize. I have seen it.
    First take, someone might say, ``Well, gee, doesn't supply 
and demand just kind of regulate markets, and if we just let 
supply and demand take care of it, wouldn't that just all work 
itself out in the long run?'' But we know that is not all that 
is affecting us these days. So I would like you to talk to a 
few things that I see out there and just let us know how they 
are affecting yourselves. And I won't ask any specific one of 
you. You are doing a pretty good job cooperating.
    Retaliatory agricultural tariffs, America puts an 
antidumping suit on Indian steel producers, and all the sudden 
farmers are paying the price for it back here in the United 
States. Have you had specific impacts in your commodities and 
markets due to these?
    Mr. Flansburg. If I could just speak to that.
    Mr. Duarte. Sure, please, Mr. Flansburg.
    Mr. Flansburg. Thanks for the question because this is one 
of the most important things to me as far as maintaining market 
access goes. When those tariffs came in and we started to get 
into this bout with India, we went from India being our largest 
trading partner to virtually nonexistent. And so our price of, 
let's say, large chickpeas we sold for over 40 prior to those 
tariffs going in, and the price dropped it down to 13 a pound. 
So, it was disastrous for our market. So any way we can 
maintain access to those markets, I feel we as American farmers 
can compete with anybody in the world and deliver a superior 
product, so having those trade agreements in place and free 
trade, we are all for it.
    Mr. Duarte. Where does India get its chickpeas now that you 
are sidelined?
    Mr. Flansburg. Well, some of them are grown there, 
certainly. But, one of the biggest competitors for all our 
products, lentils especially, peas, et cetera, is Canada. And, 
they are still at a trade advantage to us, and we are still 
subject to those trade restrictions due to tariffs.
    Mr. Duarte. So a little loss of the Indian market puts an 
extra supply back in our market, and a commodity, a little bit 
of extra supply can mean catastrophically lower prices. And 
that, you just said, went from 40 a pound in a balanced market 
situation all the way down to 13 a pound. Does that cover the 
cost of production?
    Mr. Flansburg. No, no. And so that is where those marketing 
loans came in for me. So, I look at when I have to take a 
marketing loan because of bad prices, it allows me to wait for 
prices to go down further and sell later, so----
    Mr. Duarte. Well, great. Well, thank you, Mr. Flansburg.
    Does anyone have a better example or even as good an 
example as Mr. Flansburg's? Because I know the almond growers 
and the walnut growers in my district certainly do. But that is 
excellent.
    Can I ask another question about logistics? We have had a 
lot of agricultural commodities back up in the last couple of 
years just because of--call it COVID-related, but who really 
knows? Just we couldn't get containers to the port. We couldn't 
get our logistics problem solved. Do any of you have a good 
example of how that has impacted your market and left 
commodities on the market that softened prices and had other 
economic impacts on you?
    Mr. Holladay. Well, nearly every bale that I grow is going 
overseas, so during that whole process, it impacts the world 
market when you look at shipments when it comes to cotton in 
the U.S. So when we slow down at the ports and when we slow 
down and our trucking industry is strained, when our 
infrastructure is strained, whether it is COVID or whatever 
reason you want to pick out the hat, it is incredibly 
detrimental to not only cotton; but, anything that ships, which 
is nearly everything. But it has had an impact because you 
increase the volatility of a market in a place you don't really 
have to increase it if you can't move it properly.
    Mr. Duarte. Thank you. That is great. Non-tariff barriers, 
it seems like a lot of the crop protection tools that we want 
to use here in America that are very sustainable, very safe, 
and very effective tools, very proven, are being banned because 
of material residues, issues over in the EU particularly. Are 
any of you backed up with inventory because of MRLs?
    Mr. Flansburg. Yes, so I have seen it affect us on the farm 
just related to glyphosate. There is demand for non-glyphosate 
products. So one of the problems we have, too, is just to get a 
chickpea crop off without some form of desiccation, and so 
alternative chemistries to be used for that are even worse. 
Let's put it that way. So yes, that that puts us at a 
disadvantage when MRLs aren't consistent.
    Mr. Duarte. Thank you very much. I yield back.
    The Chairman. The chair now recognizes Mr. Nunn for 5 
minutes.
    Mr. Nunn. Thank you very much, Mr. Chairman.
    And thank you for the group for being here today. We were 
hard at work all through last night on the Rules Committee 
protecting some of the things that are very important to 
communities like ours. Here in my home State of Iowa, biofuels 
being a huge part of it and making sure that we have success, 
going forward, really is a team effort. So I am happy that we 
are leading that here in the Majority.
    But speaking across the aisle here, Representative Nikki 
Budzinski from Springfield--I am from Des Moines--so two 
Midwestern communities that both have a great opportunity for a 
homegrown energy source. And she highlighted the sale of year-
round E15. Now, sitting in your seat just a week ago was the 
Administrator from the EPA, who still can't give us an answer 
after months of asking about what the requirements are to 
change 2023 use of year-round E15. So, Mr. Haag, I think you 
recognize, as the National Corn Growers Association here, that 
E15 year-round fuel sales is only 5 days away from being taken 
away from consumers at the pump. Look, I got a little family. 
That is going to be 17 per gallon on our family minivan, 
probably even more on the truck. Could you talk to us a little 
bit about what the impact is going to be on corn growers 
specifically if we don't have year-round E15, which is clearly 
a bipartisan priority, but we are hearing nothing back from the 
EPA on a solution to fix it?
    Mr. Haag. Well, one of the things what it would affect us 
as corn growers is that it would be less grind for the corn. We 
are producing five percent. Right now we are at 50 percent more 
with E15. And, in my State of Minnesota, we have had the 
infrastructure there for E15, and we are the largest user of 
E15, my state is, so, I mean, that would be a huge thing that 
the consumer is used to using it. It is a better quality 
gasoline for the engines. It is cleaner air for us to breathe, 
so it would be in my opinion a huge mistake if we take this 
petroleum E15 away from the consumer right now, just because 
even what you mentioned, we saved money last year. It was a 
perfect example to have it last year. Gas prices have come down 
but not a lot, so it would still be a savings to the consumer.
    Mr. Nunn. Yes, I could not agree with you more. And we in 
Iowa look forward to selling you as much corn as possible up 
there in Minnesota and getting it in the tank. It is a team 
effort on this, and I think this is something collectively we 
need to continue to pressure the Administration. I invited the 
Administrator to come out and he can drive his EV. I will drive 
my truck. I will invite him out in February, and we will see 
who goes further. But we will be there to pick him up when it 
runs out.
    Look, I want to move next to Agriculture Risk Coverage 
Program, the ARC, for county. In your testimony, you touched on 
the devastation farmers and rural communities suffered in the 
2020 derecho that hit the Midwest. Again, both our states' 
experienced and all of our communities experienced the damage 
that can be done. In my community, the ultimate cost was $1.5 
billion in the middle of the growing season. As a result, the 
Agriculture Risk Coverage Program across our state--however, 
there are several farmers in our district that don't feel like 
ARC goes quite far enough. So my question to you is, can you 
describe how the current maximum payment rate for ARC limits 
assistance and what we could do to help address or fix these?
    Mr. Haag. I think a lot of that had to do with--we 
mentioned that benchmark, if we can increase that just that ten 
percent would help a lot because if we would increase it more, 
it is going to cost more money in our farm bill, which we don't 
know if we have that or not. But I think if we can just get 
that ten percent up there and then you also take, what, 86 
percent of the benchmark there that you don't get the full 100 
percent there, so if we could get the ten percent, plus that 
other increase of up to 100 percent, it maybe wouldn't--what 
was going to say here? It would make you probably heal, but it 
will still make you a lot better off if we can increase that 
than where we are right now.
    Mr. Nunn. Than you would have been before, I think you are 
absolutely right on that. Is there anything we can do to help 
the producers navigate or at USDA put some safeguards on there? 
Because I think the Chairman has highlighted correctly, we 
don't want to be writing a blank check to USDA that they could 
use on potentially anything else. We would take advice on any 
safeguards you would have either for the farmer or that we can 
do with USDA.
    Mr. Haag. That is a good question because I think that the 
more conversations that the farmers get to our organization, 
what we can do to improve is a big thing because that is where 
we always stress with corn growers, we are grassroots, we start 
from the bottom up, and the more information we can get from 
the local farmer, the better off our organization can be.
    Mr. Nunn. I very much agree. Good luck in your planting 
season.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The chair now recognizes Mr. Alford. Then it 
will be Mr. Johnson.
    Mr. Alford. Thank you so much, Mr. Chairman and Ranking 
Member. Thank you for having us and this great panel here 
today.
    From my conversations with Missouri producers, we have 
really heard how crop insurance and the farm bill safety net 
programs are a vital risk management tool for many producers. 
We put together a great advisory group to keep us updated on 
the most important issues to them, and one of the things they 
are talking about is lenders requiring farmers to carry 
insurance. Generally, it works well in most years. But could 
each of you talk about your experience with crop insurance and 
what type of policy you typically carry? Are there any changes 
or improvements you would like to see, and we will start with 
you, Mr. Haag, and work our way down.
    Mr. Haag. One of the things that when I started using crop 
insurance, it was things that--that was back in the early days 
when the government required us to do it from the 1988 drought, 
okay? Then all sudden, you get into it and you get into it. 
Well, then all of a sudden when your son starts to get involved 
with farming, the first thing he does is sit down with his loan 
officer and go over all the details of what they need for 
money, and that is where we can set our percentage of where we 
need to be at for crop insurance. We basically run in our 
area--or my son and I at 80 percent for corn and 80 percent for 
soybeans. That is the magic number to move up a little bit 
more. It is more expensive than--there isn't that much more 
back to us, so that is where we are at is that 80 percent.
    Mr. Alford. Mr. Holladay?
    Mr. Holladay. I think we are the same, but we are at 70 
percent. But, we are highly volatile, very arid country. I 
think the ways to improve it would be, it costs the most--
anything that is going to trigger is what costs the most, and 
that level above you that you can't afford is where you need to 
be, somewhere in that top tier. And the cost of that moving up 
the scale, especially in highly volatile areas where you need 
it the most is you just can't afford to get there. So higher 
subsidy rates for higher levels of coverage and continuing to 
develop new products, I think the best thing about crop 
insurance is that there are new products developing as we 
speak. Producers, grower organizations, independents, 
everybody, they can find a data set that is insurable within 
agriculture, it is something that we could look at and see how 
many people might be using it and have value in it. And it is a 
very good concept, and it is working well, but that higher 
level of coverage is where you need to be.
    Mr. Alford. I want to skip down, running out of time here. 
I want to talk about the credit situation with the rest of you. 
What is it like in your part of the country? Are bankers 
typically able to make the loans that you need?
    Mr. Flansburg. They are for me, and from what I hear around 
the area, yes. We tend to have a fairly stable yield from year 
to year, but in certain cases, we don't, like 2021. So, yes, in 
my experience, they are.
    Mr. Alford. Mr. Satterfield?
    Mr. Satterfield. I would say an area that is getting 
harder, especially after years like last year, I have heard 
stories about lenders not renewing loans and some instances 
where people with the high input costs like you referenced 
earlier and not being able to show the particular, the profits 
that the banker wants to see. But again, I will go back to with 
the farm safety net, having it in place, it is a very handy 
tool that your lender--he wants to look at something that he 
knows he can depend on, with that farm safety net as well.
    Mr. Alford. Mr. Moore?
    Mr. Moore. So for us personally, we are highly diversified 
in what we do on our farm, and so our lenders have still been 
working with us pretty well. The requirements of documentation 
has been increased over the past 2 years. The amount of labor 
it takes to be able to get the documents and everything ready 
to go has increased for us, so we have dedicated staff that 
actually works through that. So it is hard to do that as an 
individual farmer, the amount of work that was having to go 
through, but as for us, we have had to hire another person that 
helps us with that.
    Mr. Alford. Thank you to the panel once again. And, Mr. 
Chairman, I yield back.
    The Chairman. The chair now recognizes Mr. Johnson for 5 
minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    There has been a little conversation about base acre 
updates today, but I guess I would ask each of you, does your 
organization have a stand on mandatory base acre update versus 
optional? And what should this Subcommittee keep in mind as we 
are moving forward? Mr. Haag, we can start with you.
    Mr. Haag. Thank you for that question, Mr. Johnson. As of 
NCGA right now, we are basically having our book that we are 
keeping with the base acres. We know that your State of South 
Dakota and there are other states that would like to increase 
them and everything like that, which would be great. But the 
biggest thing then comes down is how much money do we have in 
order to increase that for that farmer. South Dakota is due to 
growing corn compared to some of the other states where they 
had that base acreage before, but I understand where South 
Dakota is coming from. But if we can find new money, we are for 
increasing that base acres for the farmer.
    Mr. Holladay. From the National Cotton Council's 
standpoint, the consensus we have is to remain where we are at 
this point. The talk amongst us achieving that consensus was 
the vast amount of money it would take to increase the bases 
and move around within those bases and get that done on a 
voluntary basis would be probably unachievable at this time. 
But at this point right now, as a group, we have decided not to 
advocate for that to change.
    Mr. Flansburg. Yes, our group is in favor of an update on a 
voluntary basis to our base acres. And since the last base 
update in 2014, really, a lot of our crops have gone into 
growing regions where there was once summer fallow. And so 
instead of having a lower number of acres in that case that 
were actually in production, and many now have pulse crops on 
them across the northern tier, so it is important to us to have 
that be a voluntary option.
    Mr. Satterfield. I would concur with Mr. Flansburg as with 
his commodity. USA Rice, I think the consensus is a voluntary 
base update, and I think if you pointed to the fact that there 
are more base acres in rice that are being used, I would point 
to the fluctuation of acres. You have states that go through 
really big periods of fluctuation due to weather and planting 
rotations and whatnot, but we would be for the voluntary.
    Mr. Moore. And the same for U.S. Canola, we believe in a 
voluntary update if there is one. And so we like producers 
having the choices to make in making those choices, voluntary 
update.
    Mr. Johnson. Well, I want to thank the associations and the 
groups that are open to a base acre update. It seems to me that 
we talk all the time about how dynamic American agriculture is. 
We laud that as important, that we want technology, we want 
innovation. Of course, that technology and innovation over time 
is going to mean that the types of crops grown in certain 
places will change. I don't know that our support system 
framework is well-served by freezing that data into yesteryear, 
and I think we want to continue to have that conversation as we 
move forward.
    Mr. Chairman, thank you, and I yield back.
    The Chairman. Thank you, Mr. Johnson. I appreciate your 
diligence in being here.
    And we have concluded our questions for the first panel of 
our hearing. I want to thank all of you for being here. We 
again are going to reconvene at 2:00 p.m. or as soon as 
possible after votes, which hopefully will be at 2:00 p.m. And 
so we are adjourned until we call back in. Thank you.
    [Recess.]
    The Chairman. All right. The Committee will now come to 
order.
    And to introduce the first witness of our second panel 
today, I am pleased to yield to the gentleman from Illinois, 
Mr. Bost.
    Mr. Bost. Thank you, Mr. Chairman. I want to thank you 
all--to all the witnesses for being here today. But I am very 
proud to introduce a constituent and a longtime friend, and he 
was actually on my ag advisory board when I first came to 
Congress. Daryl Cates is currently serving as the President of 
the American Soybean Association. Daryl is a fourth generation 
farmer from Columbia, Illinois, who raises soybeans, corn, 
wheat, and double crop beans on his family farm with his 
father. He has been a true leader and a trailblazer in 
agricultural industry for now over 30 years and having served 
in multiple leadership roles with Illinois Soybean Association, 
the United Soybean Board and the American Soybean Association. 
Daryl, I appreciate you being here. I appreciate your 
friendship. I appreciate everything you have done for the 
Illinois 12th District and working with me and everything you 
have done for American agriculture. And we are glad to have you 
here today.
    Mr. Cates. Thank you, Congressman Bost.
    The Chairman. And our next----
    Mr. Cates. And it has been a privilege to be here and all 
the work that you do for us in southern Illinois. I appreciate 
it. Good afternoon----
    The Chairman. Hang on 1 second.
    Mr. Cates. Okay.
    The Chairman. From him, not you.
    The next witness is Mr. Patrick Frischhertz, owner of St. 
Louis Planting and Chairman of the American Sugar Cane League 
National Legislative Committee. Our third witness is Mr. Brent 
Cheyne, who is President the National Association of Wheat 
Growers. The next witness joining us is Mr. Craig Meeker, the 
Chairman of the National Sorghum Producers, and our fifth and 
final witness of today on this panel is Mr. Daniel McMillan of 
Southern Grace Farms. He is testifying on behalf of the U.S. 
Peanut Federation.
    So thank you all for joining us. And you each have 5 
minutes. The timer in front of you will count down to 0, at 
which point the time has expired.
    Mr. Cates, please begin.

     STATEMENT OF DARYL CATES, PRESIDENT, AMERICAN SOYBEAN 
                   ASSOCIATION, COLUMBIA, IL

    Mr. Cates. Good afternoon, Chairman Scott, Ranking Member 
Brown, and distinguished Members of the Subcommittee. Thank you 
for the invitation to provide testimony as you develop the 2023 
Farm Bill. My name is Daryl Cates, and I am a soybean farmer 
from Columbia, Illinois. I am testifying on behalf of the 
American Soybean Association in my current role as President.
    ASA represents more than 500,000 U.S. soybean farmers 
across the 30 primary soybean-producing states. Nationally, 
U.S. soybean farmers produced over 4 billion bushels on over 87 
million planted acres last year. I have a simple message to 
share with you today. Soybean farmers need your help in the 
next farm bill. We need help with two priorities in this 
Subcommittee's jurisdiction: protecting crop insurance and 
improving the Title I farm safety net for soybeans. We must 
protect crop insurance. Crop insurance is the most effective 
and important component of the farm safety net for soybean 
farmers. It helps us manage risk and secure operating credit 
from lenders each year. ASA urges you to protect crop insurance 
from harmful amendments that may arise.
    We must improve the Title I safety net. While crop 
insurance provides risk management when the crop is in the 
ground, Title I provides necessary protection beyond that 
period. A predictable, effective farm safety net is needed for 
the duration of the next farm bill. In a February report, USDA 
projected a 20.7 percent decline in net cash farm income in 
2023 relative to 2022. This is cause for concern for farmers.
    Soybean growers experienced firsthand the challenge of an 
ineffective safety net during the trade war with China in 2018 
and 2019. The largest importer of soybeans in the world is 
China. Even with ongoing efforts to diversify and open new 
markets, almost \1/3\ of all soybeans grown in the U.S. are 
destined for China. During the height of the trade war with 
China in 2018, U.S. soy stopped flowing to the Chinese market 
in our peak export period that fall. Soybeans prices dropped 
significantly. But we received no PLC benefits and little from 
ARC programs. USDA stepped in with an ad hoc temporary support 
to farmers. If a trade war that shrunk soybean demand by over 
30 percent hardly triggered the farm safety net provided in the 
current farm bill, it is difficult to envision a scenario that 
would provide meaningful assistance without significant 
improvements to the current reference price and program 
elements of ARC and PLC.
    Another challenge impacting the accessibility and 
effectiveness of the farm safety net is the significant 
disparity in recent soybean plant acres compared to base acres 
on which ARC and PLC benefits are provided. In 2022, soybeans 
were planted nationally on 87.5 million acres. By comparison, 
soybean base totals were 53.2 million acres. Over 30 million 
acres of soybeans were not protected by the soybean provisions 
of ARC and PLC in 2022. An option for farmers to voluntarily 
update program acres based on a more recent historical time 
period would provide soybean farmers, including beginning 
farmers, greater access to the soybean safety net.
    ASA urges improvements in the Title I farm safety net 
components of ARC and PLC for soybeans. Making improvements to 
the Title I farm safety net will require funding. We know that 
budget challenges are real and will be difficult to navigate. 
We appreciate that this Committee sent a strong bipartisan 
letter to the Budget Committee requesting funding for a 
successful farm bill reauthorization. ASA also led a letter 
included in my written statement to the Budget Committee signed 
by 400 organizations regarding the need for sufficient 
resources to write a meaningful farm bill. We ask that you keep 
agriculture in mind as budget discussions move forward on 
multiple fronts.
    I have highlighted only two areas of interest today given 
the Subcommittee's jurisdiction. Additional priorities can be 
found in my written statement.
    Thank you for hearing from farmers today. We appreciate 
your efforts to develop the 2023 Farm Bill and the opportunity 
to share testimony today.
    [The prepared statement of Mr. Cates follows:]

    Prepared Statement of Daryl Cates, President, American Soybean 
                       Association, Columbia, IL
    Good afternoon, Chairman Scott, Ranking Member Brown, and 
distinguished Members of the Subcommittee. It is a privilege to join 
you and offer testimony as you develop the 2023 Farm Bill.
    I am a soybean farmer from Columbia, Illinois, and am here today 
representing the American Soybean Association in my current role as 
President. Founded in 1920, ASA represents more than 500,000 U.S. 
soybean farmers on domestic and international policy issues important 
to the soybean industry and has 26 affiliated state associations 
representing the 30 primary soybean-producing states. Farmers produce 
soybeans in nearly every state represented by Members of this 
Subcommittee.
    Nationally, U.S. soybean farmers produced 4.28 billion bushels on 
over 87 million planted acres in 2022. Our soybean farmers help provide 
countless products needed and enjoyed by consumers, including healthy 
edible oils and other food ingredients, protein-rich livestock feed, 
and clean-burning biofuels, among others. A strong farm economy based 
on market opportunities for soy at home and abroad, an efficient 
transportation and infrastructure system that helps maintain 
competitiveness, and a safety net for challenging times, are all 
critical to our success.
    As the farm bill reauthorization process advances, we thank you for 
holding this hearing.
Farm Bill Priorities & Budget
    ASA's farm bill priorities released publicly in May 2022 were 
developed with significant input from farmers.
    In preparation for the farm bill reauthorization, ASA started the 
process of gathering feedback from farmers in 2021. Educational 
sessions for our board members and state soy affiliate staff were held, 
and an in-depth farm bill survey was administered to soybean growers. 
In early 2022, ASA held 12 virtual farm bill listening sessions--over 
25 hours--with interested soybean farmers and state soy affiliates 
across soy's 30-state growing region.
    Feedback gathered from the survey and listening sessions, combined 
with written comments and policy resolutions, contributed to ASA's farm 
bill priorities document, which is attached to my testimony.
    Much attention has been dedicated to the first priority item listed 
regarding the budget: ``Increased budget authority for the next farm 
bill is justified in this current environment marked by economic and 
geopolitical volatility. Additional resources are needed to address 
needs and interests throughout this comprehensive piece of 
legislation.''
    We appreciate that both the House and Senate Agriculture Committees 
recognize this and sent strong bipartisan letters to the Budget 
Committees acknowledging the needs and challenges in agriculture in 
recent years and the opportunity the 2023 Farm Bill provides to make 
meaningful improvements. ASA led a letter signed by 400 national, 
regional, and state organizations to Budget Committees with a 
consistent message, and this letter is attached to my testimony.
    Without a doubt, the Federal budget challenges are very real and 
complex to navigate. We ask that you keep needs in agriculture top of 
mind as budget discussions progress. Sufficient budgetary resources 
will be needed to craft a new bipartisan, comprehensive piece of 
legislation.
    ASA's farm bill priorities in this Subcommittee's jurisdiction 
include protecting crop insurance and its private sector delivery 
system and improving the farm safety net for soybeans. Other priorities 
outside of this Subcommittee's jurisdiction are also highlighted below.
Crop Insurance
    Authorized by a separate statute, crop insurance does not need to 
be reauthorized in conjunction with the farm bill. However, we 
recognize that amendments to crop insurance may be offered that have a 
positive or negative impact on farmers like me who rely on it every 
year to manage risk.
    In 2022, U.S. soybean farmers paid over $1.4 billion for crop 
insurance protection, according to USDA Risk Management Agency (RMA) 
data. This risk management program allows farmers to select coverage 
that meets our needs each year and responds in a timely manner when 
losses are triggered. The competitive private sector delivery system 
allows farmers to find the best service providers for our operations.
    ASA urges you to protect crop insurance from harmful amendments. It 
is the most effective and important component of the farm safety net 
and valuable in securing operating credit each year. This risk 
management tool must remain affordable and effective.
Title I Farm Safety Net
    While crop insurance provides risk management when the crop is in 
the ground, Title I provides necessary protection beyond that period. 
The 2023 Farm Bill presents an opportunity to address deficiencies in 
the Title I farm safety net that were revealed during recent economic 
disruptions. A predictable, effective farm safety net is needed for the 
duration of the next farm bill, especially when considering USDA's 
February 2023 Farm Income Forecast projection of a 20.7% decline in net 
cash farm income in 2023 relative to 2022.
    Soybean growers experienced firsthand the challenges of an 
ineffective safety net during the trade war with China in 2018-2019 and 
urge improvements in the Title I farm safety net components of 
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) for 
soybeans.
    Soybeans have long been U.S. agriculture's top export crop. Foreign 
markets were destinations for more than 50% of U.S. soy production 
through whole beans, meal and oil in the last marketing year, as is 
historically consistent in recent years. China is the largest importer 
of soybeans in the world, so our commercial export relationship with 
China is critically important. Even with ongoing efforts to diversify 
and open new markets, almost \1/3\ of all soybeans grown in the United 
States are destined for China under normal trade conditions.
    During the height of the trade war with China in 2018, U.S. soy 
stopped flowing to the Chinese market in our peak export period that 
fall. Soybean prices dropped significantly, but we received no PLC 
benefits and little from the ARC program. USDA stepped in with ad hoc, 
temporary support to farmers through the Market Facilitation Program 
(MFP).
    If a trade war that shrunk soybean demand by over 30% hardly 
triggered the farm safety net provided in the current farm bill--a 
Title I safety net that has been declining over the past 20 years in 
real terms--it is difficult to envision a scenario that would provide 
meaningful assistance without significant improvements to the current 
reference price and program elements of ARC and PLC. Adjustments to the 
soybean reference price and improvements to ARC would provide soybean 
farmers a more effective safety net.
    Another challenge impacting the accessibility and effectiveness of 
the farm safety net is the significant disparity in recent soybean 
planted acres compared to base acres, the historical acreage on which 
ARC and PLC benefits are provided.
    In 2022, soybeans were planted nationally on 87.5 million acres. By 
comparison, soybean base totals 53.2 million acres. Over 30 million 
acres of soybeans were not protected by the soybean provisions of ARC 
and PLC in 2022. While some of these soybean acres may have been corn 
or wheat base, for example, these other crops may not correlate well 
with the losses being experienced on the farm, such as during the trade 
war. Some beginning farmers have little base on their farms, and 
greater adoption of no-till conservation practices has enabled farmers 
to cultivate row crops in new areas that have no base. An option for 
farmers to voluntarily update program acres based on a more recent 
historical time period would provide soybean farmers--including 
beginning farmers--greater access to the soybean safety net.
    ASA supports these specific improvements to increase the 
effectiveness, accessibility, and reliability of the Title I farm 
safety net:

   Increasing the soybean reference price for calculating ARC 
        and PLC, which could be achieved through a statutory reference 
        price change, adjustments to the effective reference price, or 
        a combination of these

   Adjusting the ARC calculations

   Providing the option (not requirement) to update base acres 
        to reflect a more recent, defined period of time while allowing 
        new acres to enter the program.

    It is important to note that a combination of remedies to address 
these deficiencies is needed. For example, if an option to update base 
acres is allowed, it may not be exercised if the reference price for 
soybeans remains where it is currently set.
Additional ASA Priorities
    We appreciate the opportunity to share additional farm bill 
priorities outside of this Subcommittee's jurisdiction.
Trade
    The long-term success of U.S. soy abroad would not be possible 
without the foresight of Congress in creating public-private 
partnership programs at USDA to assist trade associations in promoting 
our products on a global stage. ASA is a longtime cooperator of these 
programs, particularly the Market Access Program (MAP) and the Foreign 
Market Development Program (FMD). Utilizing MAP and FMD funds, ASA has 
leveraged those dollars to increase market access, address technical 
barriers to entry, and create demand for U.S. soy. Trade promotion 
programs are helpful in diversifying and expanding agricultural 
exports; this is particularly important as we consider rising tensions 
with China, the leading export market for many U.S. agricultural 
products.
    A 2016 study commissioned by the U.S. Soybean Export Council shows 
that international marketing activities conducted on behalf of U.S. 
soybean growers increased soybean exports each year by an average of 
993,600 metric tons (MT), or nearly 5%. For soybean meal and soybean 
oil, the average annual growth over that period was estimated to be 
somewhat larger at 15% (808,600 MT) for meal and 24% (149,600 MT) for 
oil.
    These numbers translate to an additional $29.60 in export revenue 
per $1 spent on international promotion. At the producer level, that 
additional export revenue translates into a cost benefit ratio of 
$10.10 of additional grower profit per $1 spent on international 
promotion. While this research was undertaken in advance of the 2018 
Farm Bill, the results remain unchanged: International marketing 
activities contribute directly to increased exports and grower revenue.
    The programs authorized in Title III of the farm bill, from the 
Agricultural Trade Promotion and Facilitation Program (ATPFP) to 
international food aid programs, are important for the long-term 
success of U.S. soybean growers. For a full accounting of ASA's 
priorities in Title III, we would like to share ASA's prepared written 
statement \1\ that was presented to the Subcommittee on Livestock and 
Foreign Agriculture on April 6, 2022.
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    \1\ https://soygrowers.com/wp-content/uploads/2023/04/ASA-Written-
Statement-to-LFA-Subcommittee-on-Farm-Bill-Title-III-April-2022.pdf.
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    ASA supports doubling the minimum annual mandatory funding for MAP 
to $400 million and FMD to $69 million.
Check-off
    Over 30 years ago, Congress passed the Soybean Promotion, Research, 
and Consumer Information Act, creating the United Soybean Board (USB)--
an agricultural research and promotion program funded and managed 
directly by soybean farmers under the oversight of USDA's Agricultural 
Marketing Service. This program, also referred to as the soy ``check-
off,'' finances research, promotion, and education initiatives, all of 
which are aimed at improving yield, sustainability, and demand for U.S. 
soy products.
    I had the honor of being appointed by USDA Secretary Edward Madigan 
to serve on the first board of the United Soybean Board in 1992. Since 
then, I have been continuously impressed by the lengths to which USB 
has gone to ensure good stewardship of the dollars my fellow farmers 
and I have entrusted to the check-off.
    Check-off-driven initiatives have brought a return on investment--
$12.34 for every farmer dollar invested in the check-off--to growers 
like me, who are then better able to support our families, employees, 
and rural communities. Examples of check-off successes include the 
establishment of the soy-based biodiesel industry; development of high 
oleic soybeans, which have improved use in the food and industrial 
sectors; creation of the Soy Sustainability Assurance Protocol to 
verify use of sustainable farming practices for foreign buyers; and 
mapping of the soy genome. As a result of these successes and the 
check-off's farmer-led model and transparent governance, farmers are 
overwhelmingly supportive of the existing soy check-off structure: In 
the last USDA-led Request for Referendum in 2019, only 0.13% (just 
about \1/10\ of 1 percent) of eligible soybean farmers called for a 
referendum--many, many fewer than the 10% that would prompt a 
reconsideration of the check-off's structure.
    ASA urges protection of the check-off from harmful amendments in 
the farm bill to ensure continued success.
Conservation
    Soybean farmers are committed to improving soil and water and 
leaving the land better than they found it. ASA conducted a survey 
several years ago and learned that, on average, our growers implement 
14 conservation practices and spend more than $15,000 each year on 
conservation. On many farms, that is a substantial amount--especially 
during times like these with high input costs.
    For years, farm bill conservation programs have been in place to 
help farmers cover these costs and mitigate the risks associated with 
implementing new practices. Unfortunately, farmer demand for voluntary, 
incentive-based working lands programs like the Environmental Quality 
Incentives Program (EQIP) and the Conservation Stewardship Program 
(CSP) always outpaces available funding: Between 2010 and 2020, just 
31% of farmers who applied to EQIP and 42% of those who applied to CSP 
were awarded contracts.
    As you develop the next farm bill, we respectfully request the 
Committee's attention in adequately funding these programs to meet 
demand. ASA also encourages you to consider directing funding to 
programs and practices that address cropland soil quality and health, 
water quality and quantity, and that provide regulatory predictability 
and save input costs; to develop climate smart provisions that focus on 
total on-farm ecosystem services, not just additionality; to emphasize 
working lands programs over land retirement programs; and to consider 
incentives that encourage adoption of precision agriculture 
technologies, the use of which has a wide range of environmental and 
productivity benefits.
    We ask the Committee to work with appropriators to ensure NRCS--as 
well as other USDA agencies--has the staffing, training, and technology 
in place to fully implement these programs and deliver high quality 
service to its farmer customers. During Commodity Classic this spring, 
NRCS expressed eagerness to bring on staff quickly but also shared that 
it takes a multi-year time commitment to train staff adequately for 
farmer field visits. When the 2023 Farm Bill is enacted, we do not want 
it to languish in the implementation phase due to staffing concerns.
    Above all, we ask that you remember that, when it comes to 
conservation, there is no one-size-fits-all solution. Farmers grow 
soybeans across the country, from New York down to Florida and west to 
North Dakota and Texas. The farm bill's conservation programs must be 
flexible enough to accommodate this country's wide range of 
conservation needs, crops, soil types, farming practices, and weather 
systems.
    ASA looks forward to working with the Committee as conservation 
provisions are developed.
Energy
    The energy title provides important assistance for the development 
and production of biofuels--one of the biggest market opportunities for 
soy. In addition to environmental benefits, biomass-based diesel adds 
significant value to U.S. agriculture through increased demand for both 
soybean oil and rendered animal fats. USDA Rural Development energy 
programs, first authorized through the 2008 and 2014 Farm Bills, 
provide loan and grant opportunities for the development of renewable 
energy, including soy-based biofuels.
    ASA supports the continued authorization of energy programs that 
support soy-based biofuel production, like the Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance Program, which 
can provide loan guarantees of up to $250 million for development of 
advanced biofuels; and the Advanced Biofuel Payment Program, which 
assists advanced biofuel producers--many of whom drive rural economies 
through local investments and employment.
    In addition to biofuel-specific programs, ASA supports the 
continued success of the Rural Energy for America Program (REAP), which 
provides guaranteed loan and grant financing to agricultural producers 
and rural small businesses for renewable energy projects. While these 
projects can cover more than just biofuels, ASA is supportive of USDA 
funding that backs energy production grown by U.S. farmers. For 
example, last year an Iowa biodiesel facility received funding to 
retrofit a facility to generate an additional 15 million gallons of 
production--enough to power 22,000 vehicles annually. This plant 
supports local Iowa soybean growers as well as the surrounding 
community.
    ASA supports authorization of the Higher Blends Infrastructure 
Incentive Program (HBIIP) in the 2023 Farm Bill. Developed under the 
authority of the USDA Secretary, HBIIP provides funding to expand 
infrastructure to deploy biofuels nationwide for consumers. Providing 
additional availability for B20 and other biofuels blends will benefit 
both the consumer and the environment.
Biobased
    In addition to biofuels, the energy title also provides important 
resources for the bioeconomy through the BioPreferred Program, which 
celebrated its 20th anniversary last year. The BioPreferred Program 
supports bioproduct purchases for Federal agencies and contractors, as 
well as through the USDA Certified Biobased Products label.
    There are over 1,000 soy-based bioproducts, many of which were 
developed by the soy check-off and benefit from enrollment in the 
BioPreferred Program. These products, made with sustainably grown soy 
protein and oil, range from industrial lubricants and asphalt sealants 
to tires, paint, and artificial turf. Consumers and the public continue 
to increase demand for sustainably produced products; even Federal 
agencies and institutions, including NASA, the Pentagon, the 
Smithsonian, and Badlands National Park, utilize countless soy biobased 
products.
    There are economic and environmental advantages to using soy in 
manufacturing and consumer goods. Soybeans are renewable and abundant. 
As mentioned earlier in my testimony, last year U.S. growers produced 
over 4.2 billion bushels of soybeans, which has helped reduce America's 
dependence on foreign oil. Soy-based bioproducts also create jobs. 
Released in 2021, USDA's most recent report on the economic impact of 
the U.S. biobased products industry found American-made biobased 
products added $470 billion and over 4.6 million direct and indirect 
jobs to the U.S. economy.
    ASA supports reauthorization of the BioPreferred Program, and 
providing adequate funding will improve brand awareness and utilization 
of biobased products across the Federal Government.
Research
    Investments in research through Title VII are needed for the 
continued growth and innovation of U.S. soybean growers. Whether the 
research is carried out at land grant universities through the Hatch 
Act or through USDA's Research, Education, and Economics (REE) mission 
area (including the Agricultural Research Service, the Economic 
Research Service, the National Institute for Food and Agriculture, and 
the Foundation for Food and Agriculture Research), all the interlocking 
components of this title have an impact on soybean growers.
    Investments in research allow soybean growers to increase 
production and efficiency while ensuring a high-quality, affordable 
product for buyers and consumers. Investments can lead to new 
innovations such as soybean varieties better equipped to combat plant 
pests and diseases, improve nutritional content, adapt to a changing 
global climate, and increase yield without requiring increased inputs 
such as fuel and fertilizer.
    ASA supports increased investment in soybean-centric research--be 
that biobased products, input management, or new and stronger seed 
varieties. These will benefit not just soybean growers but the entire 
value chain.
Conclusion
    The 2023 Farm Bill is critically important to soybean farmers and 
many others. ASA supports an on-time, meaningful, comprehensive, and 
sufficiently funded 2023 Farm Bill.
    We appreciate your efforts to develop the 2023 Farm Bill and the 
opportunity to share testimony today. We look forward to working with 
you to craft meaningful legislation.
                              Attachment 1
ASA Priorities for the 2023 Farm Bill
May 25, 2022

    As the House and Senate Agriculture Committees lay the foundation 
for the 2023 Farm Bill, the American Soybean Association shares these 
initial priorities which will be further refined into more specific 
requests by early 2023. These priorities reflect feedback gathered from 
12 virtual farm bill listening sessions held this year, an in-depth 
farm bill survey administered to soybean growers in late 2021, and 
current policy resolutions.
General
   Increased budget authority for the next farm bill is 
        justified in this current environment marked by economic and 
        geopolitical volatility. Additional resources are needed to 
        address needs and interests throughout this comprehensive piece 
        of legislation.

   Congress should maintain the agricultural and nutrition 
        titles in the next farm bill.

   Review of USDA staffing, technological capabilities and 
        cybersecurity, and pathways for knowledge transfer should occur 
        to ensure readiness for farm bill implementation. Gaps should 
        be prioritized to receive appropriations or farm bill 
        implementation funding.

   Policy should support innovation in data collection, data 
        analysis, and internal data sharing between USDA agencies, 
        while emphasizing the confidentiality and nonpublic disclosure 
        of individual producer data.
Farm Safety Net
   Crop insurance is the most effective and important component 
        of the farm safety net and must remain affordable.

   The Title I farm safety net components of Agriculture Risk 
        Coverage (ARC) and Price Loss Coverage (PLC) programs must be 
        improved for soybeans. Strong consideration should be given to 
        increasing the soy reference price combined with an option for 
        farmers to update base acres. Planting flexibility must be 
        maintained.

   Marketing assistance loans must be maintained, and 
        consideration should be given to increasing marketing loan 
        rates.

   Program eligibility should not be restricted through means 
        testing.

   As a condition of receiving Title I and crop insurance 
        benefits, farmers are required to meet specific environmental 
        standards such as protecting water quality, wetlands or soil 
        health. These should be maintained but not augmented.

   If a standing disaster assistance program is created, the 
        financial protection provided by Title I programs and crop 
        insurance should not be reduced to fund the disaster program, 
        and it must not undercut or disincentivize participation in 
        crop insurance.
Conservation
   Conservation programs must remain voluntary, incentive-based 
        and flexible; one size does not fit all. Early adopters must be 
        fully eligible for conservation programs. Regulatory burdens 
        regarding program enrollment and adaptive management should be 
        reduced.

   While all resource concerns are important, funding should be 
        directed to programs and practices that address cropland soil 
        quality and health, water quality and quantity, regulatory 
        certainty and saving input costs. Funding should be directed to 
        working land programs over land retirement programs, and the 
        Environmental Quality Incentives Program (EQIP) should take 
        priority over the Conservation Stewardship Program (CSP).

   Conservation Reserve Program (CRP) acres should remain 
        approximately unchanged from current levels. Rental rate limits 
        should remain the same or increase. Haying and grazing 
        provisions should be revisited, both for mid-contract 
        management and under emergency scenarios.

   Climate-smart provisions should reward farmers for overall 
        ecosystem services provided and year-round ground cover, not 
        just additionality. Growing Climate Solutions Act provisions 
        should be included if not already passed.

   Incentives to encourage use of precision agriculture 
        technologies and specialized equipment to implement certain 
        conservation practices should be considered.
Trade
   The Market Access Program (MAP) and Foreign Market 
        Development Program (FMD) are successful public-private 
        partnerships which are cooperative, cost-share programs between 
        private industry groups representing farmers and USDA. Annual 
        funding should be doubled to $69 million for FMD and to $400 
        million for MAP.

   USDA's export credit guarantee program (GSM-102) and the 
        Facility Guarantee Program (FGP) should continue and be fully 
        utilized.

   International food aid programs should allow for increased 
        flexibility for monetization requirements.
Energy
   Authorization and funding for the Bioenergy Program, the 
        Biodiesel Fuel Education Program, and Biobased Market Program 
        (BioPreferred Program) should be included.

   When considering on-farm renewable energy programs, priority 
        should be placed on energy projects that utilize soybeans and 
        other crops.
Rural Development
   Statutory authority and funding should be provided for the 
        Higher Blends Infrastructure Incentive Program.

   Reliable broadband coverage remains out of reach for many in 
        rural America, yet it is essential for precision agriculture 
        technologies, farm efficiencies and community connectivity. The 
        Broadband-ReConnect program should align with the goals of 
        other broadband programs supported through the bipartisan 
        infrastructure law.
Research
   Increased investment should be provided in priority areas 
        strategic to soy interests.
Nutrition
   Opportunities to promote soy as a food ingredient should be 
        included.
                              Attachment 2
March 14, 2023

 
 
 
Hon. Sheldon Whitehouse,             Hon. Jodey [C.] Arrington,
Chairman,                            Chairman,
U.S. Senate Committee on [the]       U.S. House Committee on [the]
 Budget,                              Budget,
Washington, D.C.;                    Washington, D.C.;
 
Hon. Chuck Grassley,                 Hon. Brendan [F.] Boyle,
Ranking Minority Member,             Ranking Minority Member,
U.S. Senate Committee on [the]       U.S. House Committee on [the]
 Budget,                              Budget,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairmen Whitehouse and Arrington and Ranking Members Grassley 
and Boyle:

    As you develop the Fiscal Year 2024 budget in this farm bill 
reauthorization year, we write to express our strong support for 
providing the Senate Committee on Agriculture, Nutrition, and Forestry 
and House Committee on Agriculture with sufficient budgetary resources 
to write a new bipartisan, multi-year, comprehensive, and meaningful 
piece of legislation.
    Just as there are many pressures on the Federal budget, there are 
many pressures on U.S. farmers and others throughout the agricultural 
supply chain who provide food, feed, fuel, fiber, and other products to 
consumers across the United States and abroad.
    According to the U.S. Department of Agriculture (USDA), 
international sales of U.S. farm and food products reached $196 billion 
in 2022. The leading market for these products is marked with 
geopolitical volatility: China. During the trade war with China that 
began in 2018, U.S. agriculture endured significant market impacts, 
which unfortunately revealed gaps in the farm safety net. If a trade 
war with our largest trading partner hardly triggered the farm safety 
net provided in the current farm bill--a Title I safety net that has 
been shrinking over the past 20 years--it is difficult to envision a 
scenario that would provide meaningful assistance without significant 
improvements. Continuing rising tensions with this important trading 
partner underscore the need in the next farm bill for a more 
meaningful, predictable farm safety net and the need to invest more 
into trade promotion programs to help diversify agricultural markets.
    Market volatility with China is only one example of the many 
disruptions impacting U.S. agriculture during the life of the current 
farm bill. The Russian invasion of Ukraine, COVID-19 and other supply 
chain disruptions, non-tariff trade barriers erected by multiple 
countries, and devastating natural disasters have tested the 
effectiveness of current farm policy. Increased production input costs 
have as well, with USDA projecting that most expense categories will 
remain above their 2021 levels in 2023 both in nominal and inflation-
adjusted dollars. These projected high input costs, coupled with lower 
projections for many crop cash receipts, are cause for concern for farm 
country: USDA's February 2023 Farm Income Forecast publication projects 
a 20.7 percent decline in net cash farm income in 2023 relative to 
2022.
    Projections such as this, when realized, often result in financial 
stress and calls for ad hoc or supplemental disaster assistance to 
farmers and ranchers--that is, assistance outside of the farm bill. In 
fact, between 2018-2021, ad hoc assistance made up approximately 70% of 
direct farm payments due to challenges described above. Ad hoc 
assistance is necessary in times of need but is not a timely, reliable, 
or predictable safety net for farmers and ranchers. The upcoming farm 
bill reauthorization provides an opportunity to address very real needs 
in agriculture and rely less on off-budget ad hoc assistance.
    In addition to needs highlighted above, farm bill budget resources 
are needed for protecting and enhancing crop insurance to assist with 
volatile weather and crop loss, improving access to voluntary 
conservation incentives, addressing rural development needs, investing 
in research for innovation and competitiveness, providing opportunities 
to help the nation become more energy independent and food-secure, and 
supporting solutions to address logistics challenges.
    Sufficient budgetary resources will be needed to craft a new 
bipartisan, multi-year, comprehensive, and meaningful piece of 
legislation. As you work to build the Federal budget for Fiscal Year 
2024, we seek your support for providing sufficient resources to the 
committees to craft the next farm bill.
            Sincerely,

 
 
 
National Associations                Iowa Corn Growers Association
Agricultural Retailers Association   Iowa Farm Bureau Federation
Amcot                                Iowa Soybean Association
American Agri-Women                  Kansas Agribusiness Retailers
                                      Association
American Association of Crop         Kansas Association of Wheat Growers
 Insurers
American Association of Veterinary   Kansas Corn Growers Association
 Medical Colleges
American Bankers Association         Kansas Cotton Association
American Cotton Producers            Kansas Cotton Ginners
American Cotton Shippers             Kansas Farm Bureau
 Association
American Farm Bureau Federation      Kansas Grain and Feed Association
American Farmland Trust              Kansas Grain Sorghum Producers
                                      Association
American Feed Industry Association   Kansas Pork Association
American Pistachio Growers           Kansas Soybean Association
American Pulse Association           Kentucky Corn Growers Association
American Seed Trade Association      Kentucky Small Grain Growers
                                      Association
American Society of Agronomy         Kentucky Soybean Association
American Society of Farm Managers    Louisiana Agricultural Consultants
 and Rural Appraisers                 Association
American Society of Plant            Louisiana Bankers Association
 Biologists
American Soybean Association         Louisiana Cotton and Grain
                                      Association
American Sugar Alliance              Louisiana Farm Bureau Federation
American Sugarbeet Growers           Louisiana Independent Cotton
 Association                          Warehouse Association
American Veterinary Medical          Louisiana Rice Producer Group
 Association
AmericanHort                         Maine Farm Bureau Association
Aquatic Ecosystem Restoration        Maine Potato Board
 Foundation
Aquatic Plant Management Society     Malheur County Onion Growers
                                      Association
Association of Equipment             Maryland Bankers Association
 Manufacturers
Biotechnology Innovation             Maryland Farm Bureau
 Organization
The Breakthrough Institute           Maryland Grain Producers
                                      Association
Cherry Marketing Institute           Massachusetts Association of Lawn
                                      Care Professionals
Corn Refiners Association            Massachusetts Farm Bureau
                                      Federation
Cotton Growers Warehouse             Michigan Agri-Business Association
 Association
Cotton Warehouse Association of      Michigan Corn Growers Association
 America
Cottonseed and Feed Association      Michigan Farm Bureau
Council of Producers and             Michigan IPM Alliance
 Distributors of Agrotechnology
Crop Insurance and Reinsurance       Michigan Soybean Association
 Bureau
Crop Insurance Professionals         Mid-Atlantic Soybean Association
 Association
Crop Science Society of America      Midwest Council on Agriculture
CropLife America                     Midwest Forage Association
Delta Waterfowl                      Minnesota Agri-Growth Council
Ducks Unlimited                      Minnesota Area II Potato Council
Farm Credit Council                  Minnesota Association of Wheat
                                      Growers
Farm Journal Foundation              Minnesota Canola Council
The Fertilizer Institute             Minnesota Corn Growers Association
Global Cold Chain Alliance           Minnesota Crop Production Retailers
Hop Growers of America               Minnesota Farm Bureau Federation
Independent Community Bankers of     Minnesota Soybean Growers
 America                              Association
International Certified Crop         Mississippi Farm Bureau Federation
 Advisers
International Dairy Foods            Mississippi Rice Council
 Association
International Fresh Produce          Mississippi Soybean Association
 Association
National Alfalfa and Forage          Missouri Corn Growers Association
 Alliance
National Alliance of Independent     Missouri Farm Bureau
 Crop Consultants
National Association of              Missouri Independent Bankers
 Conservation Districts               Association
National Association of Landscape    Missouri Rice Council
 Professionals
National Association of State        Missouri Soybean Association
 Departments of Agriculture
National Association of Wheat        Montana Agricultural Business
 Growers                              Association
National Barley Growers Association  Montana Farm Bureau Federation
National Black Growers Council       Montana Independent Bankers
National Christmas Tree Association  Montana Potato Improvement
                                      Association
National Coalition for Food and      Nebraska Agri-Business Association
 Agricultural Research
National Corn Growers Association    Nebraska Cooperative Council
National Cotton Council              Nebraska Corn Growers Association
National Cotton Ginners Association  Nebraska Dry Bean Commission
National Cottonseed Products         Nebraska Dry Pea and Lentil
 Association                          Commission
National Council of Farmer           Nebraska Farm Bureau
 Cooperatives
National Council of Textile          Nebraska Independent Community
 Organizations                        Bankers
National Farmers Union               Nebraska Soybean Association
National Grain and Feed Association  Nebraska Wheat Board
National Grange                      Nebraska Wheat Growers Association
National Milk Producers Federation   Nevada Farm Bureau Federation
National Onion Association           New Mexico Farm and Livestock
                                      Bureau
National Peach Council               New York Corn and Soybean Growers
                                      Association
National Pork Producers Council      New York Farm Bureau
National Potato Council              New York Green Industry Council
National Sorghum Producers           Nezperce Prairie Grass Growers
                                      Association
National Sunflower Association       North Carolina Bankers Association
The Nature Conservancy               North Carolina Christmas Tree
                                      Association
North American Blueberry Council     North Carolina Cotton Producers
                                      Association
North American Meat Institute        North Carolina Egg Association
North American Millers' Association  The North Carolina Peanut Growers
                                      Association
North American Renderers             North Carolina Small Grain Growers
 Association                          Association
Pheasants Forever                    North Carolina Soybean Producers
                                      Association
Quail Forever                        North Carolina State Grange
Rural and Agriculture Council of     North Carolina SweetPotato
 America                              Commission
Society of American Florists         North Central Weed Science Society
Soil Science Society of America      North Dakota Corn Growers
                                      Association
Specialty Crop Farm Bill Alliance    North Dakota Grain Growers
                                      Association
Supporters of Agricultural Research  North Dakota Soybean Growers
 (SoAR) Foundation                    Association
U.S. Apple Association               Northarvest Bean Growers
                                      Association
U.S. Beet Sugar Association          Northeast Dairy Producers
                                      Association
U.S. Canola Association              Northeastern Weed Science Society
U.S. Cattlemen's Association         Northern Canola Growers Association
U.S. Durum Growers Association       Northland Potato Growers
                                      Association
U.S. Peanut Federation               Northwest Agricultural Cooperative
                                      Council
U.S. Poultry & Egg Association       NYS Agribusiness Association
U.S. Rice Producers                  Ohio AgriBusiness Association
U.S. Sweet Potato Council            Ohio Corn and Wheat Growers
                                      Association
USA Dry Pea & Lentil Council         Ohio Farm Bureau
USA Rice                             Ohio Soybean Association
Weed Science Society of America      Oklahoma Agribusiness Retailers
                                      Association
Wine Institute                       Oklahoma Cotton Council
State and Regional Associations      Oklahoma Farm Bureau
Agribusiness Association of Iowa     Oklahoma Grain and Feed Association
Agricultural Council of Arkansas     Oklahoma Seed Trade Association
Alabama Bankers Association          Oklahoma Sorghum Growers
Alabama Cotton Commission            Oklahoma Soybean Association
Alabama Farmers Federation           Oklahoma Wheat Growers Association
Alabama Soybean and Corn             Olive Oil Commission of California
 Association
Alaska Farm Bureau                   Oregon Association of Nurseries
Almond Alliance                      Oregon Bankers Association
Arizona Cotton Ginners Association   Oregon Cattlemen's Association
Arizona Cotton Growers               Oregon Dairy Farmers Association
Arizona Farm Bureau Federation       Oregon Farm Bureau
Arkansas Community Bankers           Oregon Hop Growers Association
Arkansas Farm Bureau Federation      Oregon Potato Commission
Arkansas Rice Federation             Oregon Wheat Growers League
Arkansas Rice Growers Association    Oregon Women for Agriculture
Arkansas Soybean Association         Oregonians for Food and Shelter
BankIn Minnesota                     Pacific Coast Renderers Association
Bluegrass Community Bankers          Pacific Egg and Poultry Association
 Association
California Agricultural Irrigation   Pacific Seed Association
 Association
California Alfalfa & Forage          Palmetto AgriBusiness Council
 Association
California Association of Wheat      Panhandle Peanut Growers
 Growers                              Association
California Bean Shippers             PennAg Industries Association
 Association
California Cherry Growers and        Pennsylvania Association of
 Industry Association                 Community Bankers
California Citrus Mutual             Pennsylvania Cooperative Potato
                                      Growers
California Community Banking         Pennsylvania Farm Bureau
 Network
California Cotton Ginners and        Plains Cotton Growers, Inc.
 Growers Association
California Farm Bureau Federation    Plant California Alliance
California Fresh Fruit Association   PNW Canola Association
California Grain & Feed Association  Potato Growers of Michigan, Inc.
California Pear Growers              Puget Sound Seed Growers
                                      Association
California Pork Producers            Red River Valley Sugarbeet Growers
 Association                          Association
California Rice Commission           Rhode Island Farm Bureau Federation
California Seed Association          Rolling Plains Cotton Growers
California Specialty Crops Council   San Joaquin Valley Quality Cotton
                                      Growers
California State Floral Association  Snake River Sugarbeet Growers
                                      Association
California Sweetpotato Council       South Carolina Corn and Soybean
                                      Association
California Table Grape Commission    South Carolina Farm Bureau
                                      Federation
California Warehouse Association     South Carolina Peach Council
California Women for Agriculture     South Dakota Agri-Business
                                      Association
Carolinas Cotton Growers             South Dakota Corn Growers
 Cooperative                          Association
Colorado Association of Wheat        South Dakota Farm Bureau
 Growers
Colorado Corn Growers Association    South Dakota Soybean Association
Colorado Farm Bureau                 South Dakota Wheat Growers
                                      Association
Colorado Potato Legislative          South Texas Cotton and Grain
 Association                          Association
Community Bankers Association of     Southeastern Cotton Ginners
 Georgia                              Association, Inc.
Community Bankers Association of     Southern Cotton Ginners Association
 Illinois
Community Bankers Association of     Southern Cotton Growers, Inc.
 Kansas
Community Bankers Association of     Southern Crop Production
 Ohio                                 Association
Community Bankers Association of     Southern Idaho Potato Cooperative
 Oklahoma
Community Bankers of Iowa            Southern Rolling Plains Cotton
                                      Producers Association
Community Bankers of Michigan        Southern Weed Science Society
Community Bankers of Washington      Southwest Council of Agribusiness
Connecticut Farm Bureau Association  St. Lawrence Cotton Growers
                                      Association
Corn Growers of North Carolina       Synergistic Hawaii Agriculture
                                      Council
Cotton Producers of Missouri         Tennessee Bankers Association
Dairy Producers of Utah              Tennessee Corn Growers Association
Delaware Farm Bureau                 Tennessee Farm Bureau Federation
Delta Council                        Tennessee Soybean Association
Empire State Potato Growers          Texas Agri-Women
Florida Agri-Women                   Texas Association of Dairymen
Florida Cotton Producers             Texas Corn Producers Association
 Association
Florida Farm Bureau Federation       Texas Cotton Ginners Association
Florida Fruit & Vegetable            Texas Farm Bureau
 Association
Florida Rice Growers                 Texas Grain Sorghum Association
Food Producers of Idaho              Texas Rice Producers Legislative
                                      Group
Georgia Agribusiness Council         Texas Soybean Association
Georgia Corn Growers Association     Texas Wheat Producers Association
Georgia Cotton Commission            Vermont Bankers Association
Georgia Farm Bureau Federation       Vermont Feed Dealers and
                                      Manufacturers Association
Georgia/Florida Soybean Association  Virginia Agribusiness Council
Georgia Fruit and Vegetable Growers  Virginia Association of Community
 Association                          Banks
Georgia Urban Agriculture Council    Virginia Cattlemen's Association
Grain and Feed Association of        The Virginia Christmas Tree Growers
 Illinois                             Association
Hawaii Farm Bureau Federation        Virginia Cotton Growers
Hop Growers of Washington            Virginia Crop Production
                                      Association
ICBA of New Mexico                   Virginia Farm Bureau
Idaho Alfalfa and Clover Seed        Virginia Grain Producers
 Growers Association                  Association
Idaho Grain Producers Association    Virginia Peanut Growers Association
Idaho Hay and Forage Association     Virginia Soybean Association
Idaho Hop Growers Association        Washington Association of Wheat
                                      Growers
Idaho Noxious Weed Control           Washington Farm Bureau
 Association
Idaho Nursery & Landscape            Washington Friends of Farms and
 Association                          Forests
Idaho Oilseed Commission             Washington Mint Growers Association
Idaho Onion Growers' Association     Washington Potato and Onion
                                      Association
Idaho-Oregon Fruit and Vegetable     Washington State Potato Commission
 Association
Idaho Pest Management Association    Western Agricultural Processors
                                      Association
Idaho Potato Commission              Western Alfalfa Seed Growers
                                      Association
Illinois Corn Growers Association    Western Association of Agricultural
                                      Experiment Station Directors
Illinois Farm Bureau                 Western Growers
Illinois Fertilizer and Chemical     Western Peanut Growers Association
 Association
Illinois Soybean Association         Western Plant Health Association
Independent Bankers Association of   Western Society of Weed Science
 New York State
Independent Banks of South Carolina  Wild Blueberry Commission of Maine
Independent Community Bankers of     Wisconsin Corn Growers Association
 Colorado
Independent Community Bankers of     Wisconsin Pork Association
 South Dakota
Independent Community Banks of       Wisconsin Potato and Vegetable
 North Dakota                         Growers Association
Indiana Bankers Association          Wisconsin Soybean Association
Indiana Corn Growers Association     Wyoming Ag Business Association
Indiana Farm Bureau                  Wyoming Bankers Association
Indiana Soybean Alliance             Wyoming Wheat Growers Association
 

CC:

Members of the Senate Committee on [the] Budget
Members of the House Committee on [the] Budget
Members of the Senate Committee on Agriculture, Nutrition, and Forestry
Members of the House Committee on Agriculture

    The Chairman. Thank you. Mr. Frischhertz?

STATEMENT OF PATRICK A. FRISCHHERTZ, J.D., GENERAL MANAGER, ST. 
  LOUIS PLANTING, INC.; MEMBER, BOARD OF DIRECTORS, AMERICAN 
SUGAR CANE LEAGUE, PLAQUEMINE, LA; ON BEHALF OF AMERICAN SUGAR 
        ALLIANCE; AMERICAN SUGARBEET GROWERS ASSOCIATION

    Mr. Frischhertz. There we go. Good afternoon, Chairman 
Scott, Ranking Member Brown, and Members of the Committee. 
Thank you for the opportunity to testify before you today on 
behalf of the American Sugar Alliance. It truly is an honor to 
be here.
    My name is Patrick Frischhertz. I was born and raised in 
southern Louisiana. My family grows sugarcane, soybeans, wheat 
in Plaquemine, Louisiana, where my wife and I are raising our 
two children. I currently serve on the Board of Directors for 
the American Sugar Cane League and our local Farm Bureau 
office.
    This hearing is timely and important for sugarcane and 
sugarbeet farmers because Title I of the farm bill represents a 
critical safety net for our farming families and the employees 
of sugar processors throughout the country. The U.S. sugar 
industry generates more than 151,000 jobs across 24 states and 
contributes more than $23 billion annually to the U.S. economy.
    American consumers also benefit from a high-quality, safe, 
reliable, and affordable source of sugar. That natural sugar is 
used as a sweetener, preservative, and bulking agent in 70 
percent of U.S. food manufacturing. Additionally, our industry 
meets some of the highest labor and environmental standards in 
the world. By continuing to improve our farming practices, we 
have made huge strides in efficiency and sustainability. As 
evidence, we have increased sugar production by 14 percent on 
eight percent fewer acres over the last 20 years.
    Today, I would like to make three quick points. First, 
American farmers are threatened by less-efficient, subsidized, 
dumped foreign sugar that usually sells well below the 
exporter's cost of production. This makes the world's sugar 
market the most distorted and unreliable commodity market in 
the world. Due to existing trade agreements, the United States 
is already the world's third largest importer, accounting for 
about 30 percent of U.S. need. Yet, as global supply chain 
disruptions from the pandemic and the war in Ukraine have 
taught us, we must not become even more dependent on foreign 
suppliers. This is why an effective sugar policy which 
maintains a strong domestic industry is essential to the food 
security of our nation.
    My second point is that sugar policy is structured to 
operate at zero cost to the taxpayers. It has operated at zero 
costs for 19 of the past 20 years, and is expected to do so 
again this year. USDA even projects the program to operate at 
zero costs for the next 10 years. That said, loan rates for raw 
sugar, refined beet sugar have not kept up with the rising 
costs of production. I can attest that its operating margins 
for producers are being squeezed due to the increases in input 
costs. For example, farmers today are paying 87 percent more 
for diesel and 141 percent more for fertilizer when compared to 
December of just 2018.
    The bottom line is that the current loan rate levels no 
longer provide a realistic safety net for our producers. Since 
the early 1980s, we have lost 68 processing facilities. We are 
saddened to see an additional facility in northeastern Montana 
closing down this year. This did not occur because of a weather 
disaster, but rather because high production costs make it very 
difficult to stay in business. Once a facility closes down, it 
does not reopen. Having low rates that are closer to the actual 
cost of production would provide a more effective safety net 
for our producers. As such, we would support examining how the 
farm safety net could be updated for all Title I commodities to 
better match actual operating costs for producers.
    My third point is our producers are exposed to severe 
weather disruptions. While farmers do have some insurance 
products available, those tools are not as well-developed or 
affordable as some other commodities. For sugarbeets policies 
are limited to yield-based coverage. They do not benefit from a 
revenue-based product. For sugarcane, the Hurricane Insurance 
Program has been an invaluable addition, but a prevented 
planting provision is needed. We would encourage the Committee 
to provide particular help to crops that might not have access 
to more successful crop insurance options.
    Additionally, our producers have participated in WHIP+ and 
ERP in the past. We are thankful that USDA is working with 
Texas sugarcane farmers and beet farmers on disaster aid. We 
are certainly receptive to new efforts to providing standing 
disaster relief in ways that do not undermine crop insurance.
    As a Louisianan, I would also like to make sure that all of 
our growers are eligible for disaster assistance, regardless of 
which mill they ship cane to. Sugar policy can provide an 
adequate economic safety net for American farmers at zero cost 
to the taxpayers. It is critical that strong policy remains in 
place to counter heavily subsidized and unreliable foreign 
sugar suppliers whose environmental and labor standards simply 
do not match up to our own.
    On behalf of more than 11,000 sugarcane and sugarbeet 
farmers in the U.S., as well as the employees in our processing 
facilities, I thank you for supporting sound U.S. sugar policy, 
and I look forward to any questions you may have.
    [The prepared statement of Mr. Frischhertz follows:]

 Prepared Statement of Patrick A. Frischhertz, J.D., General Manager, 
 St. Louis Planting, Inc.; Member, Board of Directors, American Sugar 
  Cane League, Plaquemine, LA; on Behalf of American Sugar Alliance; 
                 American Sugarbeet Growers Association
    Good morning, Chairman Scott, Ranking Member Brown, and Members of 
the Committee. Thank you for this opportunity to testify before you 
today on behalf of the American Sugar Alliance concerning the upcoming 
farm bill.
    My name is Patrick Frischhertz. I was born and raised in southern 
Louisiana and am a graduate of Louisiana State University and the 
Loyola University of New Orleans, School of Law. My family farm 
produces sugarcane, soybean, and wheat in Plaquemine, Louisiana--where 
my wife, Sara, and I are raising our two children, Elliott and Sophie. 
I currently serve on the Board of Directors for the American Sugar Cane 
League and as the Chairman of its National Legislative Committee. I 
also serve on the Board of Directors of the Iberville Parish Farm 
Bureau Office and as the Vice President of a family company that 
manages farmland in and around Iberville Parish.
    The U.S. sugar industry generates more than 151,000 jobs across two 
dozen states and contributes more than $23 billion annually to the U.S. 
economy (see figure 1. Map of the U.S. sugar industry).\1\
---------------------------------------------------------------------------
    \1\ Fischer, B., Herbst, B., Outlaw, J., and Raulston, J.M. (2022) 
``Economic Impact of the U.S. Sugar Industry,''Agricultural and Food 
Policy Center, Texas A&M University, June. (available at https://
sugaralliance.org/wp-content/uploads/2022/06/Sugar-Report.pdf)
---------------------------------------------------------------------------
    American consumers benefit from a safe, high-quality, reliable, 
sustainably produced,\2\ and affordable source of an essential 
ingredient in the nation's food supply. Sugar is used as a natural 
sweetener, preservative, and bulking agent in 70 percent of U.S. food 
manufacturing.
---------------------------------------------------------------------------
    \2\ See https://sugaralliance.org/producing-sugar-sustainably/
sugar-sustainably-sweet-stories.
---------------------------------------------------------------------------
    Our farmers, millers, processors, and refiners have built a strong 
and resilient supply chain for American sugar.\3\ Our product is stored 
and distributed from 90 strategically located facilities throughout the 
nation ready for delivery when and where needed according to the 
specifications required by our customers. Unlike some other food items, 
sugar was readably available on grocery store shelves throughout the 
pandemic. That success is attributable to U.S. sugar policy and the 
heroic efforts of our farmers and factory workers.
---------------------------------------------------------------------------
    \3\ We documented that supply chain resilience for American sugar 
supplies at our submission to USDA this past spring (available at 
https://www.regulations.gov/comment/AMS-TM-21-0034-0437).
---------------------------------------------------------------------------
    Outsourcing more of our sugar supply to other nations not only puts 
our farmers at risk, but also makes it even more difficult for our food 
companies to produce and supply the consumer products demanded by a 
growing segment of U.S. households that are looking for such things as 
sustainability and other environmental attributes in their food. Our 
industry meets some of the highest labor and environmental standards in 
the world. Using best practices and continuous improvement, our sector 
has made huge strides in sustainability, mainly through productivity 
gains in soil fertility, investment in advanced technologies, 
mechanization, improved beet seed and sugarcane genetics, and refining 
efficiencies. In fact, over the past 20 years, we have increased sugar 
production by 14 percent on eight percent fewer acres, through improved 
yields while lowering pesticide use.
    Many of the jobs and businesses generated and supported by the U.S. 
sugar industry are in highly vulnerable and economically distressed 
rural areas and urban areas where good blue-collar jobs have become 
harder and harder to find.
    This hearing is timely and important for sugarcane and sugarbeet 
farmers because Title I of the farm bill--the Commodity Title--
represents a critical safety net for our farm families and the many 
employees of sugar mills, processors, and refineries throughout the 
country.
    I will make four main points today.
    First, efficient U.S. sugar producers are threatened by less 
efficient foreign, subsidized and dumped sugar that usually sells well 
below the exporters' cost of production. This makes the world sugar 
market the most distorted, volatile and unreliable commodity market in 
the world (see figure 2. World's largest sugar exporters). There are no 
signs of that changing in the foreseeable future.
    Due to existing U.S. commitments under multilateral and bilateral 
trade agreements, the United States is the third largest importer in 
the world of this essential commodity, with those imports accounting 
for approximately 30 percent of U.S. needs. Yet, as the global supply 
chain disruptions resulting from the global pandemic, Russia's war in 
Ukraine and a variety of global climatic events have made clear, we 
must not become even more dependent on foreign suppliers for essential 
goods particularly for food, energy, computer chips, and the like. This 
is why an effective sugar policy, which maintains a strong domestic 
industry, is essential to the food security of our nation.
    Second, U.S. sugar policy is structured to serve American farmers, 
consumers, food manufacturers, and taxpayers as it operates no cost to 
the U.S. Treasury. U.S. sugar policy has operated at zero cost to 
taxpayers 19 of the past 20 years and is expected to do so again this 
year. USDA projects zero cost for the program over the next 10 years, 
as well. The one time in the past 2 decades the program did not operate 
at zero cost was due to Mexico's dumping of sugar onto the U.S. market 
at below Mexico's production costs, which the International Trade 
Commission unanimously held violated U.S. trade law. That problem has 
been effectively addressed to the satisfaction of all parties through 
the existing antidumping and countervailing duty Suspension Agreements.
    Nevertheless, the loan rates for raw cane sugar and refined beet 
sugar have not kept up with inflation nor the rising costs of 
production (see figure 3. Rising input costs). Operating margins for 
sugar producers are being squeezed each year, due to rising labor, 
fuel, seed, fertilizer, equipment costs and interest rates that affect 
both field and factory returns. Today our growers are paying 87% more 
for diesel fuel, 141% more for fertilizer, and 33% more for machinery 
compared to December 2018. And while some of those prices have come 
down marginally from last year, they still remain high and have the 
potential to rise again depending on global geopolitics. Current 
freight, rail, and ocean shipping rates continue to remain high and can 
be amplified by supply chain disruptions, such as those resulting from 
Russia's war in Ukraine. The bottom line is that if sugar were sold at 
the current safety net levels, most of the domestic industry would not 
be economically sustainable. The safety net must be increased in this 
farm bill for long term stability top provide secure supplies for 
American consumers.
    In addition, sugar farmers are worried about increasing challenges 
of managing weeds and crop pests with fewer crop protectants, the 
rising cost of labor and availability of guestworkers, the uncertainty 
caused by repeated wetland rules that do not seem driven by science but 
by politics, and difficulties in securing adequate truck and rail for 
handling for our product.
    The current loan rate levels no longer provide a realistic safety 
net for our producers. Since the early 1980's we have seen 68 
processing facilities close and most outside investors exited the 
remainder of the industry due to the high risk and low returns. It was 
our family farmers who stepped up to rescue the industry from further 
closures of their factories, mills, and refineries (see figure 4. 
Facility closures). Now many of those are struggling.
    We are saddened to see an additional processing facility in 
northeastern Montana closing down this year--not because of a weather 
disaster, but because the current economic environment with high costs 
of sugar production making it difficult to stay in business. Once a 
facility closes down it doesn't reopen, and it leaves behind workers 
that need to relocate and a town that has lost a large part of its 
economic and tax base.
    Having loan rates that are closer to our actual costs of production 
would provide a more effective safety net for our producers and provide 
a signal to our cooperatives and companies that during the next 
downturn in prices, the floor price will actually provide a meaningful 
portion of their production costs. As such, we would support examining 
how the farm safety net could be updated in the next farm bill for all 
Title I commodities to better match actual operating costs for 
producers.
    Third, sugarcane and sugarbeets, like most crops, are grown in 
areas that experience weather disruptions. While sugarcane and 
sugarbeets are resilient, risk protection is needed given the exposure 
to strong hurricanes, freezes, and frequent and more intense droughts 
or excess rainfall. Sugarcane and sugarbeet farmers do have some 
insurance products available to them, but those crop insurance tools 
are not as well developed or affordable as for some other commodities. 
For sugarbeets, polices are limited to yield-based coverage and do not 
benefit from a revenue-based product like other commodities, nor do 
they have enterprise units available for purchase. For sugarcane, the 
Hurricane Insurance Program (HIP) has been an invaluable addition, but 
a prevented planting provision is needed. Participation and coverage 
levels for sugarcane lag significantly behind other crops so better 
addressing sugarcane's unique perils would be helpful. Price election 
methods that are more closely tied to the futures prices for sugar 
should also be updated to better reflect current market prices.
    Sugarbeet and sugarcane farmers have participated in WHIP+ and ERP 
previously and are considering how their losses in 2021 and 2022 might 
be eligible for the most recent ERP program. We are thankful that USDA 
is working with Texas sugarcane farmers, who are also in D.C. this 
week, and beet farmers on disaster aid. Unfortunately, USDA estimates 
that only $3.7 billion is available for over $10 billion in disaster 
needs for 2021 and 2022.
    For those reasons and because this Committee has signaled an 
interest in developing additional risk management programs to 
complement crop insurance, we are certainly receptive to new efforts to 
provide standing disaster coverage in ways that do not undermine crop 
insurance and possibly even encourage greater participation and 
coverage levels. Under any standing disaster program, we would 
encourage the Committee to provide particular help to crops that might 
not have access to more successful crop insurance coverage options or 
for which the program has just not operated optimally. As a Louisianan, 
I would also like to make sure that all of our growers are eligible for 
disaster assistance regardless of what mill they deliver their cane to.
    Last, the current Title I sugar policy can provide an adequate 
economic safety net for American sugarcane and sugarbeet farmers, 
provided it is kept up to date and so long as there remains in place 
effective responses to foreign sugar-producing countries' subsidizing 
and dumping. Without those responses, we would effectively outsource 
our sugar supply to heavily-subsidized and unreliable foreign sugar 
suppliers whose environmental and labor standards simply do not measure 
up to our own. That would be the opposite of strengthening supply 
chains and contrary to providing a safety net to American producers. 
Under that scenario, farmers, consumers, and taxpayers would all lose.
    On behalf of the more than 11,000 sugarcane and sugarbeet farmers 
in the United States as well as the employees in our mills, processors, 
and refineries, I thank you for supporting sound U.S. sugar policy and 
strongly opposing harmful proposals that would undermine the success of 
this policy.
    We encourage and welcome the Members and staff of the Committee to 
visit our farms and factories. We look forward to working with you and 
other stakeholders committed to strengthening American food and 
agriculture as this Committee continues to hear from producers as you 
weigh options for improving the farm bill.
    Thank you for your consideration and your support for American 
sugarcane and sugarbeet family farmers. It is critical that the full 
Agriculture Committee repel attempts by special interests to weaken 
U.S. sugar policy and outsource American farms to Brazil, India, and 
other countries that heavily subsidize sugar production. I look forward 
to any questions you might have.

Patrick Frischhertz, Louisiana sugarcane grower,
Representing the American Sugar Alliance.
Figure 1. U.S. Sugar Industry

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Figure 2. World's Largest Sugar Exporters: All Subsidize
Shares of Global Exports, 5 Year Olympic Average (2018/19-2022/23)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Data: Export data--USDA/FAS, November 2022; 2022/23 forecast.
          Prices--International Sugar Organization, Domestic Sugar 
        Prices--a Survey, May 2019.
          Subsidies--USDA/FAS attache reports, press reports, country 
        studies. May not add due to rounding.
Figure 3. Since 2010: Farmers' Costs Have Soared

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Data: Bureau of Labor Statistics (BLS), producer price 
        indices (PPI).
Figure 4. With Flat Sugar Prices Since 1985: More Than Half of U.S. 
        Sugar-Producing Operations Have Shut Down

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: American Sugar Alliance, 2022.

    The Chairman. Mr. Cheyne?

 STATEMENT OF BRENT CHEYNE, PRESIDENT, NATIONAL ASSOCIATION OF 
                WHEAT GROWERS, KLAMATH FALLS, OR

    Mr. Cheyne. I thank the Chairman, Ranking Member, and 
Members of the Subcommittee for the opportunity to testify and 
provide a wheat farmer perspective on the 2023 Farm Bill. My 
name is Brent Cheyne. I am a farmer from Klamath Falls, Oregon, 
where I operate a century certified farm with my son. We pride 
ourselves in creating a quality product, and my son is 
committed to carrying on the family business and the family 
tradition of working hard and being a good steward of the land. 
I also currently serve as the President of the National 
Association of Wheat Growers. NAWG is a federation of growers 
from 28 states that represent wheat producers' needs and 
interests in Washington, D.C. Our members feel it is essential 
to testify before the Subcommittee today.
    The importance of the safety net has played out on my farm 
as we have experienced severe drought in one of the driest 
grain-producing areas in the country. This year, we have gotten 
relief with moisture, replenishing our topsoil. However, thanks 
to years of drought, our subsoil remains dry. While we are 
thankful for the moisture we have received, major wheat-
producing areas like the Great Plains are experiencing a 
historic drought. Farmers throughout our organizations 
indicated that crop insurance estimators have been zeroing 
wheat acres throughout the plains, and the USDA is projecting 
the smallest winter wheat crop since the 1960s.
    Farming is a risky business, requiring a strong safety net. 
Wheat farmers rely on the certainty of the crop insurance 
program. In turn, the American people can depend on American 
farmers who are able to continue to withstand natural disasters 
and produce the most stable and affordable food supply in the 
world. NAWG's number one priority is protecting crop insurance. 
In my experience, crop insurance is vital to protect farmers 
and support businesses in rural America. Many banks are now 
requiring crop insurance in place before giving a loan. This 
ensures the farmers and small businesses that supply them are 
all protected.
    My farm utilizes a yield protection policy with a coverage 
of 80 percent. We have a stake in the premiums, and it helps 
protect us in case of a disaster or yield loss. NAWG requests 
that Congress make a significant increase to the PLC reference 
price, as well as enhancements to crop insurance. The statutory 
reference price for wheat has remained unchanged and has fallen 
far short of the cost of production since its introduction. 
Prices have now risen to the point where it would take a 62 
percent decrease or nearly \2/3\ of our price before being 
caught by the safety net of PLC. When prices fall that far, 
there is effectively no safety net at all for farmers.
    Cuts to crop insurance have already made it a less-
effective program. It is very expensive to obtain a desirable 
level of coverage. While I would like to insure my farm at 85 
percent levels, the premiums are so expensive that I have 
chosen not to be able to afford them. Congress should take a 
hard look at this issue and make the program more affordable at 
higher levels of coverage.
    The cuts made in 2014 led to a need for additional 
assistance. My written testimony shows the funding that went to 
wheat farmers through ad hoc programs. Those funds were 
necessary to make up for the shortcomings but were received 
long after the disaster took place. Wouldn't it be more 
fiscally responsible for us to use those funds in a 
predictable, effective manner?
    NAWG knows that our requests require money and appreciates 
the desire of Congress to be fiscally conservative with our tax 
dollars. However, the farming safety net makes up only \2/10\ 
of 1 percent of spending. The witnesses today joined with 400 
other agricultural organizations in a letter to the Budget 
Committee requesting more resources. It is essential that we 
make more investments in this farm bill to overcome these 
challenges.
    Wheat farmers across the country are experiencing high 
prices but at extreme risk. My written testimony shows that the 
impact of inflation, high interest rates, and severe drought 
are already having on farmers' bottom line. High prices are 
meaningless when there is nothing to harvest, which many 
farmers in winter wheat-producing areas of our country are now 
experiencing this year. We ask Congress to act now to enhance 
the safety net and move away from ad hoc programs.
    I thank you for the opportunity to testify before you at 
this hearing, and I look forward to your questions and very 
much look forward to working with you on the 2023 Farm Bill.
    [The prepared statement of Mr. Cheyne follows:]

Prepared Statement of Brent Cheyne, President, National Association of 
                    Wheat Growers, Klamath Falls, OR
    Chairman Scott, Ranking Member Brown, and Members of the 
Subcommittee, thank you for the opportunity to testify before this 
General Farm Commodities, Risk Management, and Credit Subcommittee. My 
name is Brent Cheyne, a farmer from Klamath Falls, Oregon where I 
operate a certified Century Farm with my son who will carry on the 
family tradition of working hard and producing a quality product. Thank 
you for holding this hearing today to discuss the 2018 Farm Bill and 
the changes we'd like to see in the 2023 Farm Bill.
    NAWG is a federation of 20 state wheat grower associations and 
industry partners that work to represent the needs and interests of 
wheat producers before Congress and Federal agencies. Based in 
Washington, D.C., NAWG is grower-governed and works in areas as diverse 
as Federal farm policy, environmental regulation, the future 
commercialization of emerging technologies in wheat, and uniting the 
wheat industry around common goals. Our members feel it is important to 
provide testimony before this Subcommittee today as we look forward to 
the reauthorization of the farm bill this year. This hearing is 
particularly timely as many of us here were at Commodity Classic last 
month discussing the needs for the upcoming farm bill.
Wheat Overview
    Nationwide, there are six different classes of wheat, each of which 
is grown for different uses in different geographic regions and 
climates, using a variety of agronomic practices, and facing different 
challenges. These varieties of challenges, uses, and growers make 
creating a one-size-fits-all program for wheat particularly difficult. 
In my home State of Oregon, there are just over 36,000 farmers 
operating over 15 million acres. My state grows Soti White wheat on 
over 700,000 acres making it the largest row crop grown in Oregon. Soti 
White wheat is used primarily in Asian-style bakery products as well as 
cakes and pastries.
    According to the April 11 crop production report from the USDA 
National Agricultural Statistics Service (NASS), all wheat planted 
areas increased by over 4 million acres. However, this information was 
coupled with an April 2 report from USDA NASS that noted that ``more 
than \1/3\ of the winter wheat was rated in very poor to poor 
conditions'' in Kansas, Texas, Oklahoma, and Nebraska. In other words, 
the largest area of winter wheat production is in bad shape. The report 
also noted that only 28 percent of the nation's winter wheat was rated 
good to excellent condition, the lowest figure since 1996.
    This hearing is of utmost importance as we keep those figures in 
mind. Under the current safety net, with those types of weather 
challenges impacting a significant portion of wheat farmers, many 
farmers will fall through the net. When falling from these heights, 
farmers will get injured. This testimony outlines the changes made in 
the previous farm bills, NAWG's requests for the 2023 Farm Bill, and 
lays out the economic conditions that make improving the safety net 
necessary.
Changes and Decreases to the 2014 and 2018 Farm Bill
    The 2014 Farm Bill made cuts to the overall spending of the farm 
bill, especially in the Commodity Title. When accounting for 
sequestration cuts, the 2014 [] Farm Bill eliminated a total of $26.8 
billion in spending, including $12.7 billion in the commodity title.
    These cuts widened the holes in the safety net that have allowed 
farmers to fall through over the last decade, leading to widespread 
calls for ad hoc disaster programs. Since the introduction of the 
Market Facilitation Program in 2018-19, disaster programs have spent 
far more than the original cuts to the 2014 Farm Bill, out of 
necessity, thanks to the shortcomings of the current safety net. 
Between the Coronavirus Food Assistance Programs (CFAP) and Emergency 
Relief Program (ERP) alone, wheat farmers received over $2.5 billion 
for an average of $850 million per year. These were needed programs 
that helped wheat farmers overcome a bad agricultural economy, low 
yields, and low prices.
    While these programs were extremely helpful and necessary, they did 
not come without challenges. Unlike Title I programs and crop 
insurance, ad hoc disaster programs cannot be counted on given their 
nature. They are often funded a year or 2 after the disaster, and it 
can take many months for USDA to roll out the program. This drag in 
payment timelines often threatens to put farmers experiencing disasters 
out of business. Further, the complicated nature of forcing the USDA to 
create a new program to address disasters makes the program itself 
complicated. Staff at the local Farm Service Agency (FSA) offices are 
often given a crash course in a complicated program and then have to 
explain it to the farmer. This uncertainty and inconsistency can cause 
headaches and confusion and impact a farmer's relationship with their 
FSA office.
    It is time that Congress lessened its reliance on ad hoc disaster 
programs and firms up the safety net to give farmers the confidence to 
produce the safest, most secure, and cheapest food system the world has 
ever seen.
NAWG Asks
    Since the fall of 2021, our membership has reviewed the [2018] Farm 
Bill programs and subsequent ad hoc programs through our internal 
committee structure and solicited individual grower feedback through a 
survey. These efforts culminated in our Board of Directors making 2023 
Farm Bill recommendations in the summer of 2022 and expanding upon 
those priorities at Commodity Classic early last month. This testimony 
will provide a reiteration of our major asks in the Commodity and Crop 
Insurance Titles and will justify these asks.
    NAWG's number one priority is protecting the crop insurance title. 
The economic challenges outlined below and the ad hoc programs over the 
last half decade demonstrate the short-sighted nature of cutting crop 
insurance as a budget saving tool. Further cuts will jeopardize the 
partnership between the Federal Government and the private insurance 
industry that delivers an essential risk management tool. We encourage 
this Subcommittee to avoid further cuts and even look at ways to 
enhance the program through better affordability.
    My farm is a great demonstration of the challenges that farmers 
face when it comes to crop insurance affordability. My son and I 
utilize a yield protection policy on our farm with coverage of 80 
percent. This means that in a qualified loss, we are only covered up to 
80 percent of our average production history (APH). In a year of total 
loss, only being covered up to 80 percent only goes so far in 
protecting our farm. While my son and I would like to elect a higher 
coverage, moving up to an 85 percent coverage level nearly doubles the 
premiums that we pay. This is unaffordable for us and many similar 
farmers. Paying for maximum coverage levels is usually far too 
expensive for most farmers. Congress should take a hard look at this 
issue and make efforts to increase the affordability of higher coverage 
levels.
    It's also important to understand that the crop insurance program 
is not just valued by farmers but the entire rural community. Many 
banks refuse to extend lines of credit without farmers enrolling in 
crop insurance. This is done as a form of protection for banks 
themselves. Crop insurance allows farmers to pay their bills to input 
dealers, seed suppliers, cooperatives, and buy groceries and local 
grocery stores, even in years where production or prices fall. Crop 
insurance is not just important to farmers, it's essential to the 
survival of rural America.
    One specific improvement NAWG is proposing is the separation of 
Enterprise Units (EU) by continuous and fallow cropping systems. 
Currently, farmers must combine fallow and continuous wheat acres. As a 
result, you can have a fallow APH and a continuous APH that are 
reported separately but must have a blended unit in an EU. This dynamic 
ends up hurting farmers in arid areas when crop insurance needs to be a 
safety tool for their protection. Our solution would use precedent 
language in previous farm bills that make changes to EUs to allow 
insuring wheat EUs by fallow and continuous while still offering a 
combined option. This legislation would benefit farmers and help them 
be better able to insure their wheat and their livelihood.
    In the commodity title, NAWG recommends a meaningful increase to 
the statutory reference price for Price Loss Coverage (PLC) and 
changing the parameters on the effective reference price calculation. 
These recommendations would allow for a stronger Title I program that 
can more effectively protect farmers, and better adjust to market 
conditions. This is especially important with the substantial increases 
in the cost of production. Using USDA's Commodity Costs and Returns 
data from October 3, 2022 (the most recent available), after factoring 
in overhead costs like labor, cost of living, and opportunity costs, 
wheat farmers lost $64.47 per acre. Meanwhile, wheat farmers didn't see 
a PLC payment because the Marketing Year Average (MYA) price was 
already inflating. Data for 2022 comes out next week and will likely 
show that wheat farmers lost even more money in 2022 despite the 
increasing commodity prices due to increases in inflation and input 
costs, which the testimony will delineate. With the MYA price projected 
at $8.90 per bushel, the $5.50 reference price means that wheat farmers 
would have to see a 62 percent decrease in prices before seeing a 
government payment. That's a precipitous drop. The effectiveness of the 
safety net is largely dependent on how big the fall will be. The 
statutory reference price established in the 2014 Farm Bill is outdated 
and doesn't work for this economy.
    Another area of focus in improving the Title I program would be to 
modify the parameters of the effective reference price. The effective 
reference price and its adjustment mechanism could be improved to 
provide a better safety net for wheat farmers. The current effective 
reference price is capped at 115 percent of the statutory reference 
price, with a maximum level of $6.33 per bushel for wheat. 
Additionally, the 85 percent factor on the moving average should be 
reexamined and increased to 90 or 95 percent. Overall, having an 
adjustment that takes years to occur is too slow with the current 
volatility of commodity markets and the ever-increasing cost of 
production and the Committees should consider making this mechanism 
more responsive to market conditions.
    We do not propose increasing the reference price to guarantee a 
profit for wheat farmers. It would simply mitigate some of the 
substantial risks involved in the industry and help protect from the 
serious increases in unavoidable costs that farmers face.
    While the cost of this farm bill will come under intense scrutiny, 
it is impossible to separate the cost of the ad hoc programs and the 
farm bill. The cuts made in previous farm bills created the need for 
these additional programs, at tremendous cost. As mentioned previously 
in my testimony, the CFAP and ERP programs alone provided an average of 
$850 million per year over 3 years, with CFAP providing almost $1.5 
billion in 1 year and ERP providing just over $1 billion over 2 years. 
If made permanent, these programs would cost over $8.5 billion on 
average over their 10 year lifespan. This does not even include the 
spending made in Market Facilitation Program (MFP) or the iterations of 
the Wildfire and Hurricane Indemnity Program (WHIP and WHIP+). 
Meanwhile, raising the reference price--for example--by $1 would cost 
$14.6 billion over that same 10 year timeframe according to some 
estimates. As we consider reauthorization, it is important we work to 
strengthen our farm bill safety net that provides timely, effective, 
and dependent protection.
    NAWG recognizes several of these priorities would require securing 
additional budget authority to craft the next farm bill. To this end, 
NAWG appreciates the Budget Views and Estimates letter that Chairman GT 
Thompson and Ranking Member David Scott sent to the Budget Committee 
last month. We thank their bipartisan leadership and echo many of the 
sentiments raised in that letter, in particular the need to update 
Title I, restore the effectiveness of our risk management tools to move 
away from ad hoc, and protect crop insurance. Following the Budget 
Views and Estimates letter, NAWG joined over 400 agricultural 
organizations requesting additional resources so that this Committee 
can write a farm bill that provides an adequate farm safety net for 
rural America. NAWG appreciates the desire of Congress to be fiscally 
conservative with our tax dollars. However, the farming safety net 
makes up only \2/10\ of 1 percent of Federal spending. In a world faced 
with increasing global hunger, massive increases in input costs, 
unprecedented market volatility, and large government expenditures, now 
is the time to invest in the farm bill, not limit agricultural 
spending.
Economics in Wheat Country
    Wheat farmers are currently enjoying a strong farm economy, 
although it has its challenges. Higher prices have bolstered cash and 
farm income in recent years, putting farmers in a decent position to 
weather economic storms. However, challenges in the form of inflation, 
interest rates, and weather are already impacting our growers as farm 
income is projected to decrease in 2023.
Prices
    Wheat farmers have been through a lot economically over the last 
decade, experiencing near record highs and lows in net farm income and 
prices, while dealing with trade and market disruptions thanks to 
COVID-19, trade wars, and the Russian invasion of Ukraine. The 
volatility has been coupled with multiple years of natural disasters in 
the form of drought, causing historically low production in spring 
wheat in 2021, followed by historically low production in winter wheat 
in 2022. Forecasts predict another year of historically low winter 
wheat production once again in 2023. The USDA is projecting the lowest 
yields in winter wheat since the 1960's. Currently, the agricultural 
economy is strong but is facing significant headwinds that have led to 
economists forecasting decreases in 2023.
    The past 2 marketing years have given wheat farmers much needed 
relief as prices have risen significantly. After seeing 6 straight 
years of low prices, low enough to trigger the already-too-low Title I 
Reference Prices, wheat prices have recovered to a point where wheat 
farmers can actually be profitable. This year, the MYA price is 
projected at a record $9.00, up from the 2021-22 MYA price of $7.60. 
These prices have given wheat farmers an opportunity to make valuable 
investments in their businesses. However, significant headwinds in the 
form of inflation, interest, input prices, and weather conditions 
threaten to, at least partially, negate these record prices.
Wheat Marketing Year Average Price

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Net Income
    These increases in prices are reflected positively in net cash 
income for farm businesses. Net cash income is the cash available to 
farmers to draw down debt, pay taxes, cover family living expenses, and 
invest. Thanks to these high prices, farmers have seen historically 
higher than normal net cash income.
Percent Change from 10 year Average of Farm Business Net Cash Income

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    From historically low cash income in 2015 to historically high 
income in 2021, increased prices, high yields, and disaster payments 
have helped wheat farmers survive those bleak years. However, as the 
charts below show, Net Cash Income is forecasted to not only decrease 
from historical highs in 2023 but come down to historical averages. 
This is due to the turbulence I have described in the agricultural 
economy. This volatility makes it difficult for wheat growers to plan 
into the future and have consistency in budgeting for and marketing 
their wheat crop.
Net Cash Income for Wheat

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Inflation and Interest Rates
    Like the rest of the economy, farmers have felt the belt-tightening 
pressures of increasing inflation and interest rates. Inflation, caused 
by increased government spending, supply chain pressures, monetary 
policy, and the war in Ukraine, hit the highest rate that young farmers 
have seen in their lifetime, the highest since the 1980's. The chart 
below from the Bureau of Labor Statistics shows the heights the 
inflation rate hit in late 2022. While inflation has eased somewhat, 
the economy still suffers from the highest inflation rate of the 21st 
Century.
12 Month Percentage Change, Consumer Price Index, Selected Categories, 
        Not Seasonally Adjusted

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          Source: U.S. Bureau of Labor Statistics.

    These inflation rates have shown themselves in numerous ways for 
farmers, but most notably in the additional costs of farm inputs. For 
example, one analysis that a wheat farmer in Southwest Kansas made on 
his own 308 acres of no-till fallowed wheat showed that the price per 
acre of crop protection tools more than tripled between 2021 and 2022.
    When multiplied across the entire 308 acres, this was an increase 
of $27,981.80. This is only one part of the story as fertilizer, labor, 
and equipment parts and repairs are not included in that estimate. 
These increased costs for crop protection tools are only a small 
fraction of the entire set of bills that wheat farmers are now paying.
    The increased inflation is coupled with increasing interest rates 
as the Federal Reserve has attempted to reduce inflation. The chart 
below from the Federal Reserve Bank of St. Louis demonstrates the 
abnormally elevated Federal funds rate at levels unseen since the 2008 
financial crisis. The Federal funds rate is the suggested interest at 
which banks lend money to each other set by the central bank.
FRED--Federal Funds Effective Rate

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          Shaded areas indicate U.S. recessions.
          Source: Board of Governors of the Federal Reserve System 
        (U.S.).
          fred.stlouisfed.org.

    The important difference between the recent increases in inflation 
rates and the previous highs in the 1980s and 2008 is the recent trend 
of near zero interest rates. Near zero interest rates make money more 
available and decreases the cost of obtaining loans. Farming is a 
business that often relies on operating loans. Meanwhile, the risky 
nature of agriculture, means their annual operating notes may run at 
higher interest rates than the rate at which banks lend to each other. 
This is demonstrated in the chart below from the Federal Reserve Bank 
of Kansas City.
Chart 1. Average Fixed and Variable Interest Rates on Agricultural 
        Loans *

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          * Average interest rate across all Districts with applicable 
        data. Includes Chicago, Dallas, Kansas City, Minneapolis, St. 
        Louis Districts.
          Note: St. Louis survey began Q2 2012. Chicago District survey 
        includes only fixed operating and real estate loans.
          Sources: Federal Reserve District Surveys of Agricultural 
        Credit Conditions.

    According to the Kansas City Fed, in the fourth quarter, ``Interest 
rates on farm loans jumped to decade highs as benchmark rates rose 
further. The average rate charged on agricultural loans at banks in 
reporting Federal Reserve Districts increased nearly 150 basis points 
from the previous quarter and were about 300 basis points higher than 
the same time a year ago. Rates rose to the highest level since 2008 
and pushed up financing costs considerably.'' On my farm, we were just 
quoted for our operating note at eight percent but were told that next 
year's rate would be over ten percent, something we have anecdotally 
heard across the country. Farmers that have enjoyed near zero interest 
rates now have to deal with the additional costs of capital and the 
increased prices thanks to inflation.
    Many farmers depend on these operating loans to continue to farm. 
Farming is not only risky, but also very expensive, with a new combine 
harvester costing almost $1 million. After years of near-zero interest 
rates on operating notes, these increased interest rates make it more 
expensive for farmers to use the capital they need to implement 
conservation practices, invest in new equipment, and stay in business.
Weather Conditions
    Agriculture is uniquely dependent on the weather. While other 
industries can continue to thrive through excess drought or rain, 
farmers' crops are completely dependent on the weather. The last 5 
years have put intense production pressure on both spring and winter 
wheat for farmers throughout the United States. The 2021-22 crop year 
saw the lowest all wheat production since 2003 and marked only the 
second time in fifty years that all wheat production failed to reach 
1.7 billion bushels. Meanwhile, 2022-23 is projected to be the smallest 
winter wheat crop since 1963 because of the significant drought 
conditions. The charts below show the drought monitors for August 2021 
and April 2023, respectively, demonstrating the intensity of droughts 
throughout various regions of the wheat growing area and its impact on 
both spring and winter wheat.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Conclusion
    As the House Agriculture Committee continues to have these hearings 
and begins drafting the 2023 Farm Bill, I look forward to working with 
the Members of this Subcommittee, their staff, and the other witnesses 
here today to help craft a farm bill that works for wheat growers and 
all of American agriculture. Farmers play a key role in helping sustain 
our rural communities and feeding the world. As the farm bill process 
continues, I would urge judicious and expeditious review of authorized 
programs and work to ensure a full reauthorization of farm bill 
programs prior to the expiration of the current farm bill on September 
30, 2023, so that producers have certainty about the structure of the 
safety net moving forward.
    We look forward to continuing to work with you to ensure a strong 
U.S. farm economy. Thank you again for this opportunity.

    The Chairman. Thanks, Mr. Cheyne.
    Mr. Meeker?

     STATEMENT OF CRAIG MEEKER, CHAIRMAN, NATIONAL SORGHUM 
                   PRODUCERS, WELLINGTON, KS

    Mr. Meeker. Thank you, Chairman Scott and Ranking Member 
Brown, for the opportunity to speak to the Subcommittee today. 
My name is Craig Meeker, and I am a sixth generation farmer 
near Wellington, Kansas, where I farm with my father, my wife, 
and my three children, who I hope to see as the next generation 
on our farm. We grow sorghum, wheat, cotton, corn, soybeans, 
and I raise a small cow-calf operation as well. I am honored to 
serve as the Chairman of the National Sorghum Producers Board 
of Directors. It is an honor to be here, and I hope my 
testimony as a farmer is helpful, and on behalf of NSP, we 
thank you.
    I would like to begin by giving a brief state of the 
sorghum industry. Sorghum farmers are facing exceptional 
drought and have been for multiple years now. During the 2022 
growing season in Kansas, parts of the state that usually 
receive 15" to 20" of annual rainfall have observed about 7" 
the entire year. The national average sorghum yield for this 
past year is the lowest our industry has had since the 1960s. 
While sorghum is drought-tolerant, it is not drought-immune, 
and we continue to experience erratic weather patterns, 
bringing intense drought to my region. In my rotation, each of 
my crops has a purpose and it provides benefits for the next 
crop. Sorghum functions as my resource-conserving crop due to 
its inherent drought tolerance.
    In addition to the historic drought impacting our 
operations, market volatility, inflationary pressures, high 
expenses, coupled with lower projections for crop cash receipts 
are only adding to the stress and uncertainty of agricultural 
production today. We are fortunate to have tools that can help 
sorghum producers through these extreme events beyond our 
control and in order to stay in business like Title I, crop 
insurance, and Congressionally authorized ad hoc assistance at 
various times. But due to the increasing severity of these 
challenges, we believe farmers and ranchers need a stronger 
farm safety net to provide predictability and certainty for 
producers and lenders.
    It is also clear that more resources will be necessary to 
enact a strong farm bill this year, and there is simply a major 
shortfall in the safety net funding. The cost of production has 
similarly increased, rising at nearly 50 percent and almost 100 
percent in other cases. While the changes in the 2018 Farm Bill 
have been helpful, given the level and speed at which costs 
have increased, statutorily, PLC reference prices are now far 
too low to provide effective support in light of many of the 
risks facing farmers in 2023.
    The same is true of marketing loans, which remain an 
important cash flow tool for farmers that are now much too low 
relative to the current risk. We are grateful for the wisdom of 
this Committee trying to tie in reference price to the market 
in the 2018 Farm Bill, as it will create some improvements to 
the level of certainty and confidence of sorghum farmers. 
However, given spiraling costs of inputs, there is need for 
improvements, and we strongly believe sorghum reference price 
should be adjusted upward to provide a relevant safety net.
    Crop insurance is vital for sorghum farmers, and, when 
available, the tool has been critical in helping us manage the 
ongoing drought conditions decimating the Sorghum Belt. 
Availability of products and rating, however, have very real 
local impact on plantings, and we believe the Committee can 
take measures to improve this area. For example, due to 
sorghum's ability to deal, withstanding short periods of 
drought and heat better than most other crops, farmers tend to 
deploy sorghum more aggressively when production outlook is 
bleak. This fact exposes the crop to extra environmental 
stresses and high-risk situations as a result. Sorghum 
transitional yield suffer, as do product ratings cost to 
participate compared to other crops.
    Fortunately, RMA announced a new crop insurance option last 
year for our irrigated sorghum farmers. It is now available for 
the 2023 growing season. The option benchmarked sorghum to corn 
at a higher guarantee for less money and will be available as a 
pilot for farmers in certain counties in Kansas, Oklahoma, and 
Texas. We continue to work closely with RMA and look forward to 
working with this Committee to build upon these efforts to 
provide meaningful solutions to sorghum farmers.
    Backing out of the big picture, sorghum is always competing 
for acreage to supply our growing market. Most of the 
competition is with soybeans and corn in the North and cotton 
in the South. With respect to cotton in the South, options are 
available for higher levels of coverage and higher levels of 
premium cost-share that aren't available to sorghum. We would 
like to achieve parity. Sorghum needs the ability to buy 
insurance products at similar high levels to compete for acres. 
We believe this option will serve farmers and foster usage for 
better resources and times and produce that opportunity for 
producers.
    I am thanking this Committee for all that you have done and 
all that you will do in the future, and we look forward to 
working with you and being a resource. Thank you for your time.
    [The prepared statement of Mr. Meeker follows:]

    Prepared Statement of Craig Meeker, Chairman, National Sorghum 
                       Producers, Wellington, KS
Introduction
    Thank you, Chairman Scott and Ranking Member Brown, for the 
opportunity to testify today before the Subcommittee on General Farm 
Commodities, Risk Management, and Credit. My name is Craig Meeker and I 
am a sixth generation farmer near Wellington, Kansas, where I farm with 
my father, wife and three children. We grow sorghum, wheat, cotton, 
corn, and soybeans, and we raise a small cow-calf herd. I am a graduate 
from Wichita State University. Previously, I served as Chairman of the 
National Sorghum Producers' (NSP) Legislative Committee, and I am a 
graduate of the Leadership Sorghum program. Today, I serve as the 
Chairman of the NSP board of directors to which I was first elected in 
2018. I am humbled to be here today, and I hope my testimony as a 
family farmer and on behalf of NSP will be helpful to you as you begin 
work crafting the 2023 Farm Bill.
State of the Sorghum Industry and our Economy
    Farmers across the Sorghum Belt like me must contend with limited 
annual rainfall throughout our semi-arid region and that is why 
sorghum, which is drought and heat tolerant, is such an excellent fit 
for the economic sustainability of our operations. However, sorghum 
producers are currently facing exceptional and prolonged drought and 
have been for multiple years now. For instance, during the 2022 growing 
season in Kansas, parts of the state that usually receive 15-20" of 
annual rainfall only observed a little more than 7" of rain the entire 
year. The national average sorghum yield was the lowest our industry 
had seen since the 1960s, and in a survey to our producers many of them 
expect to contend with drought again in the 2023 growing season.
    In my rotation, each one of my crops has a purpose and provides 
benefits for the next one. Sorghum specifically functions as my 
resource conserving crop due to its inherent drought tolerance and 
ability to produce with minimal inputs. But while sorghum is drought-
tolerant, it is not drought immune, and we continue to experience 
erratic weather patterns including intense drought in my region. In 
addition to historic drought impacting our operations, market 
volatility, inflationary pressures and higher expenses, coupled with 
lower projections for crop cash receipts, are only adding to the stress 
and uncertainty of agricultural production today.
Efficacy of the Farm Safety Net
    We are fortunate and thankful to have tools at the ready that can 
help sorghum producers through these extreme events beyond our control 
in order to stay in business, including Title I, crop insurance, and 
Congressionally-authorized ad hoc assistance that has been provided at 
various times. However, due to the increasing severity of these 
challenges, we believe farmers and ranchers need a stronger farm safety 
net to provide predictability and certainty for producers and lenders.
    It is also clear that additional resources will be necessary to 
enact a strong farm bill this year as there is simply a major shortfall 
in safety net funding compared to historical levels. For brief context, 
the 2008 Farm Bill had a safety net baseline of $85 billion. Adjusted 
for inflation, that figure would be roughly $121 billion in 2023 
dollars, nearly double what the current baseline is today. Cost of 
production has similarly increased, rising at least 50 percent in most 
cases and upwards of 100 percent in others.
    We strongly agree with this Committee in its recent Budget Views 
and Estimates letter from March 9, 2023, that timely investment now 
into the farm safety net--which accounts for a modest \2/10\ of 1 
percent of Federal spending--provides enormous economic returns for 
rural communities and our national economy while helping to avoid 
costly and unbudgeted ad hoc programs from having to fill the gaps over 
the next 10 years.
PLC Reference Prices
    Right now, the farm safety net is not adequate. While the changes 
in the 2018 Farm Bill have been helpful, given the level and speed at 
which costs have increased, statutory PLC reference prices are now far 
too low to provide effective support in light of the many risks facing 
farmers in 2023. The same situation is true of marketing loans, which 
remain an important cash flow tool for farmers but are now much too low 
relative to current risk. We continue to believe the sorghum reference 
price and marketing loan rates must be adjusted upward to remain 
relevant to U.S. sorghum farmers as we work to maintain productivity 
through extremely turbulent times.
    The good news is with stronger commodity prices over the 2020, 2021 
and 2022 crop years, at least, the level of support provided by both 
ARC and PLC will be enhanced. We are grateful for the wisdom of this 
Committee in tying the reference price to the market in this way. It 
will create some improvement to the level of certainty and confidence 
of sorghum farmers. However, given spiraling costs of inputs, there is 
work to be done on improvements in this regard. To reiterate, we 
strongly believe the sorghum reference price needs to be adjusted 
upward to provide a relevant safety net.
    As you know, Title I policies have generally been decoupled from 
production since 1996. This is policy we support as we would never want 
to put USDA back into the position of dictating what is planted where. 
We also caution against the creation of any base updating models that 
will influence production against market and agronomic demands by 
incentivizing farmers to build base rather than plant for the needs of 
the market and the needs of their farm.
Crop Insurance
    While Title I is mostly decoupled from plantings to maximize 
planting flexibility, there are other programs that serve different 
purposes that are narrowly tailored to production on the farm while 
still entirely market-oriented. I am speaking of the Crop Insurance 
Program, which is a program we very strongly support. In fact, sorghum 
producers bought crop insurance on 77 percent of their acres over the 
last 5 years, and the tool has been absolutely invaluable in helping us 
manage the ongoing drought conditions decimating the Sorghum Belt. It 
is based on market prices in the year, so it does not have any kind of 
distorting effect. It is also based on premium cost share so farmers 
have serious skin in the game. Availability of products and rating, 
however, can have a very real local impact on plantings, so there 
remains some more work to be done to improve in this area.
    For example, drought-tolerant, resource conserving crops like 
sorghum should be rewarded under the program. Due to sorghum's water-
sipping qualities, the crop can offer farmers flexibility with their 
groundwater resources where sorghum is grown under irrigation. Sorghum 
also promotes soil health in rotations that benefit subsequent crops.
    However, due to sorghum's ability to withstand short periods of 
drought and heat better than most other crops, farmers tend to deploy 
sorghum more aggressively when the production outlook is bleak. This 
exposes the crop to extra environmental stress. So, in effect, sorghum 
transitional yields, which are proxy yields for a farmer's individual 
yield history when first transitioning to a crop he or she has never 
grown before, ultimately suffer and become an obstacle for sorghum 
production as well as for groundwater resource management.
    Fortunately, in November 2022, RMA announced a new crop insurance 
option for irrigated sorghum farmers that is now available in the 2023 
growing season. The option will be available as a pilot program to 
farmers in select counties in Kansas, Oklahoma, and Texas over the 
Ogallala Aquifer. We continue to work closely with RMA and look forward 
to working with this Committee to build upon these recent efforts that 
provide meaningful solutions for sorghum farmers.
Program Parity
    Backing out to the big picture, sorghum is always competing for 
acreage to supply our markets, which are growing and demanding more of 
this product as a resource conserving ingredient. Most of that 
competition is with soybeans and corn in the northern portion of the 
Sorghum Belt and cotton in the South. For corn and soybeans, their 
rating is simply better in many places for reasons stated above. This 
is something we are working on and being creative to address, to the 
benefit of all farmers, whatever crop they grow. With respect to 
cotton, there are options available for higher levels of coverage at 
higher levels of premium cost-share that are not available for sorghum 
where we also need to work to achieve parity. Sorghum needs the ability 
to buy insurance products at higher levels like this to compete for 
acres. Again, we believe this option will serve all farmers and foster 
a better use of resources over time.
    Knowing that this Committee is looking at ways to address 
predictable weather disasters through improvements in the farm bill, we 
suggest that providing a special cost-share policy for sorghum is a 
worthy pursuit. From a sorghum perspective, this option could help 
address our parity and acreage competition concerns and provide a more 
predictable and timely level of protection against widespread weather 
disasters compared to ad hoc assistance programs like ERP.
    There are a lot of details that would need to be considered in 
fashioning these policies and NSP staff stand ready to work with you on 
these very important matters. We want policy that is improved for 
sorghum producers, and really all producers who are putting it on the 
line each year to make a positive difference for this world.
Conclusion
    Mr. Chairman, in closing, I want to thank you again for the 
opportunity to testify and to let you know that our farmer members of 
the National Sorghum Producers appreciate the task you have before you. 
While we have focused on aspects of Title I and crop insurance today, 
these farm policy cornerstones have significant impacts on other 
important areas to our industry like research, rural development, 
bioenergy, trade promotion and market development--all important pieces 
to a larger puzzle that underscore the value of the farm safety net and 
its central necessity toward ensuring farmers like me and my family are 
able to continue to farm from one season to the next.
    Thank you again for the opportunity to testify today, and we look 
forward to working with the House Agriculture Committee and our fellow 
commodity organizations to make meaningful improvements to the farm 
bill.

    The Chairman. Mr. McMillan, you are a long way from Berrien 
County, but let's see what you have to say.

   STATEMENT OF DANIEL T. McMILLAN, PRODUCER, SOUTHERN GRACE 
FARMS, ENIGMA, GA; ON BEHALF OF UNITED STATES PEANUT FEDERATION

    Mr. McMillan. Chairman Scott, Ranking Member Brown, and 
Members of the Subcommittee, thank you for the opportunity to 
appear before you today to provide the peanut producers' 
perspective on the 2023 Farm Bill. My name is Daniel McMillan, 
and I am an eighth generation farmer from Enigma, Georgia. I am 
here today representing the United States Peanut Federation.
    My family has weathered much over the course of our 250 
years as American farmers. The COVID-19 pandemic triggered a 
series of events on our farm. Since 2020, we have seen supply 
chain disruptions, inflation on key farm inputs, and labor 
shortages. Prior to 2020, the peanut industry was already in 
the throes of difficult variables such as low prices, much of 
which was a result of trade issues, a reduced market in China, 
and a non-tariff trade barrier in the European Union, followed 
by the United Kingdom.
    In addition to the financial impact of low market prices 
and increased input costs, peanut farming requires high-cost 
specialized equipment on top of traditional equipment. This 
specialized equipment is extremely expensive to purchase and 
maintain, resulting in additional financial stressors on our 
farms.
    Dr. Stanley Fletcher of Abraham Baldwin Agricultural 
College and Professor Emeritus at the University of Georgia has 
developed and maintained a peanut-representative farm from 2001 
to today. We currently have 22 representative farms spread 
across the country. Dr. Fletcher reviewed the peanut 
representative farm's crop year 2021 cost of production as 
compared to 2022 costs and found a significant increase. The 
total cost of production increase per ton from 2021 to 2022 was 
26 percent. Prior to the 2021 representative farm update, the 
peanut reference price of $535 per ton provided an effective 
safety net for growers. However, according to Dr. Fletcher, the 
reference price has not been a functional safety net since the 
2021 crop year. Total variable input costs such as seed, 
fertilizer, and fuel have increased 33 percent when comparing 
2021 to 2022. Our 2021 cost of production was $546 per ton, and 
Dr. Fletcher reports our 2022 cost of production at 
approximately $668 per ton.
    In my home area, we saw fertilizer costs double from 2021 
to 2022. Some products tripled in costs. Currently, fertilizer 
prices are changing week to week, preventing us from making 
informed management decisions. Crop protectant prices remain 
high, which can pressure farmers to look for cheaper options, 
sometimes to the detriment of the crop. Labor costs continue to 
increase, and we are still facing cost increases and business 
disruptions resulting from problems with the supply chain.
    We have seen 6 month delays in mechanical repairs for 
tractors and trucks. Due to the short supply of tractors, even 
rental tractors have become scarce. We saw costs for one of our 
rental tractors rise from $2,000 per month in 2019 to $3,500 a 
month in 2023 for the same tractor. These are all increases 
that make it difficult to plan and budget.
    I am proud to be an American peanut grower because of the 
high nutritional value peanuts provide to our nation and world. 
Peanuts are one of the cheapest sources of protein for 
consumers and contain 19 essential vitamins and minerals. Not 
far from our farm is a processing facility for MANA Nutrition. 
MANA is a nonprofit organization known for the production of a 
ready-to-use therapeutic food through its fortified peanut 
paste.
    My family and peanut growers across the country want to be 
a part of the solution for hunger in the world. But what do we 
need from the 2023 Farm Bill? First, the U.S. Peanut Federation 
supports an increase in the reference price in the 2023 Farm 
Bill. Growers, shellers, and buying points are unified in their 
support of the Price Loss Coverage Program as included in the 
2018 Farm Bill with a reference price increase. While the 2018 
Farm Bill's Price Loss Coverage Program has worked for peanut 
growers, the rise in input costs and costs of production 
necessitates a reference price increase if this program is to 
remain relevant as a farm safety net.
    Second, the U.S. Peanut Federation supports a voluntary 
base update that includes growers with and without peanut base 
acres.
    Thank you for the tireless work you are doing on the 2023 
Farm Bill. My family greatly appreciates your support of the 
American farmer. You have provided farmers the safety net that 
has helped our farms to survive. The safety net is one of the 
many tools that made it possible for me to have a future on our 
farm after I finished college because, quite frankly, without 
it, there might not have been a farm to come back home to.
    Thank you for allowing me to testify today.
    [The prepared statement of Mr. McMillan follows:]

  Prepared Statement of Daniel T. McMillan, Producer, Southern Grace 
    Farms, Enigma, GA; on Behalf of United States Peanut Federation
    Chairman Scott, Ranking Member Brown, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to provide the peanut producers' perspective on the 2023 Farm Bill. My 
name is Daniel McMillan. I am an eighth-generation farmer from Enigma, 
Georgia. We grow peanuts, cotton, timber, some fruit crops, and raise 
cattle. Our family operates a peanut buying point in our small 
community, and we are part owners, along with 195 other peanut 
families, in a shelling facility.
    I am here today representing the United States Peanut Federation 
(USPF). USPF is comprised of the Southern Peanut Farmers Federation, 
the American Peanut Shellers Association, and the National Peanut 
Buying Points Association. The Southern Peanut Farmers Federation 
includes the peanut grower organizations in Georgia, Alabama, Florida, 
and Mississippi.
    My family has weathered many events over the course of our 250 
years as American farmers. Throughout this time, we have seen several 
wars, the Great Depression, natural disasters, high interest rates in 
the 1980's, and a national pandemic--on top of the simple, every day 
challenges of each growing season.
    The COVID-19 pandemic triggered a series of events on our farm. 
Since 2020, we have seen supply chain disruptions, inflation on key 
farm inputs, and labor shortages. Prior to 2020, the peanut industry 
was already in the throes of difficult variables such as low prices--
much of which was a result of trade issues; a reduced market in China 
and a non-tariff trade barrier in the European Union (EU), followed by 
the United Kingdom (UK). The EU and UK are some of our premium markets. 
(see Attachment A)
    In addition to the financial impact of low market prices and 
increased input costs, peanut farming requires high cost, specialized 
equipment on top of traditional equipment such as tractors, trucks, 
cultivator, plows, etc. This specialized equipment includes:

   Peanut Pickers

   Peanut Diggers

   Peanut Carts

   Peanut Lifter

   Peanut Reshaker

   Twin Row Planters and Layoff Rigs

   Dedicated Sprayer Rig

    This specialized equipment is extremely expensive to purchase and 
maintain resulting in additional stressors on our farms.
    Dr. Stanley M. Fletcher, Professor of Policy at the Center for 
Rural Prosperity and Innovation at Abraham Baldwin Agricultural College 
and Professor Emeritus at the University of Georgia, has developed and 
maintained peanut representative farms from 2001, prior to the 2002 
Farm Bill, to today. We currently have twenty-two representative farms 
(see Attachment B) spread across the country. They cover all of the 
peanut areas from Virginia to New Mexico.
    Since the 2018 Farm Bill, we have seen inflation increase 
significantly. Dr. Fletcher reviewed the peanut representative farms' 
crop year 2021 cost of production as compared to 2022 costs and found a 
significant increase. The total cost of production increase per ton was 
26.31% percent from 2021 to 2022. Prior to the 2021 representative farm 
update, the peanut reference price of $535 per ton provided an 
effective safety net for growers. However, according to Dr. Fletcher, 
the reference price has not been a functional safety net since the 2021 
crop year. Total Variable Input Costs (TVIC) inputs such as seed, 
fertilizer, fuel, crop insurance, etc., have increased 33.48% when 
comparing 2021 to 2022. (see Attachment C). Our 2021 cost of production 
was $545.97 per ton, and Dr. Fletcher reports our 2022 cost of 
production at approximately $668 per ton.
    I would like to provide anecdotal evidence supporting the 
representative farms Cost of Production analysis. In my home area, we 
saw fertilizer cost double from 2021 to 2022. Some products tripled in 
costs. Currently fertilizer prices are changing week to week preventing 
us from making informed management decisions. Commonly used fertilizers 
include diammonium phosphate (DAP), Potash, and Urea. When comparing 
the 2021 and 2022 crops, our farm saw the following increases in price 
for basic fertilizer needs:

------------------------------------------------------------------------
                            2021 Price per Ton      2022 Price per Ton
------------------------------------------------------------------------
              DAP                   $714.60               $1,209.60
           Potash                   $425.60                 $956.25
             Urea                   $528.60               $1,281.25
------------------------------------------------------------------------

    Crop protectant prices remain high which can pressure farmers to 
look for cheaper options sometimes leading to the detriment of the 
crop. Labor costs continue to increase. We use H-2A workers and have 
seen a 14% increase in labor costs through the recent U.S. Department 
of Labor Adverse Effect Wage Rate (AEWR) changes. We are still facing 
cost increases and business disruptions resulting from problems with 
the supply chain. This past week, we went to a local parts store to buy 
a bundle of small metal sweeps for a field cultivator. A simple wear 
part cost $2 each in 2021 but today is $6 each. We have had up to 6 
month delays in mechanical repairs for some tractors and trucks. Due to 
the short supply of tractors, even rental tractors have become scarce. 
We saw costs for one of our rental tractors move from $2,000 per month 
in 2019 to $3,500 per month in 2023 for the same tractor. These are all 
increases that make it difficult to plan and budget.
    I am proud to be an American peanut grower because of the high 
nutritional value peanuts provide to our nation and world. The Peanut 
Institute has released data highlighting the health value of peanuts in 
reducing heart disease, Alzheimer's disease, Type 2 diabetes, and some 
cancers. Peanuts, one of the cheapest sources of protein choices for 
consumers, contain 19 essential vitamins and minerals. (see Attachment 
D)
    Not far from our farm is the processing facility for MANA 
nutrition. MANA is a nonprofit organization known for the production of 
a ready-to-use therapeutic food (RUTF) through its fortified peanut 
paste. MANA has recently expanded their facility in Georgia. MANA's 
mission statement is ``We are here to end malnutrition.'' My family and 
peanut growers across the country want to be part of the solution for 
hunger in the world.
    What do we need from the 2023 Farm Bill?
    First, the U.S. Peanut Federation supports an increase in the 
reference price in the 2023 Farm Bill. Growers, shellers and buying 
points all support the Price Loss Coverage Program as included in the 
2018 Farm Bill with a reference price increase. While the 2018 Farm 
Bill's Price Loss Coverage program has worked for peanut growers, the 
rise in input costs and cost of production necessitates a reference 
price increase if this program is to remain relevant as a farm safety 
net.
    Second, the U.S. Peanut Federation supports a voluntary base update 
that includes growers with and without peanut base acres. While the 
2014 Farm Bill allowed for base updating for peanut growers that 
already had base on their farms, it excluded many young farmers and new 
production areas. Our economists estimate that a voluntary base update, 
using the latest 5 year Olympic average, will include approximately 
112,000 peanut acres nationally. (see Attachment E)
    I would like to thank the Committee Members who have worked on 
prior farm bills and those of you here today for the tireless work you 
currently are doing on the 2023 Farm Bill. My family greatly 
appreciates your support of the American Farmer. You have provided 
farmers a safety net that has helped our farms to survive. The safety 
net is one of the many tools that made it possible for me to have a 
future on our farm after I finished college. Quite frankly without it, 
there might not have been a farm for me to come back to.
    Thank you for allowing me to testify today.
                              Attachment A
U.S. Shelled Peanut Exports 2016-2022

------------------------------------------------------------------------
Total Shelled                 Calendar              Marketing
    Peanut         Unit         Year      Quantity     Year     Quantity
------------------------------------------------------------------------
 World Total      1 Peanuts        2016    624,625    2015/16    572,783
                      MTSHL
 World Total      1 Peanuts        2017    437,000    2016/17    472,565
                      MTSHL
 World Total      1 Peanuts        2018    447,409    2017/18    450,687
                      MTSHL
 World Total      1 Peanuts        2019    471,564    2018/19    424,054
                      MTSHL
 World Total      1 Peanuts        2020    630,108    2019/20    609,340
                      MTSHL
 World Total      1 Peanuts        2021    457,368    2020/21    532,575
                      MTSHL
 World Total      1 Peanuts        2022    431,268    2021/22    431,573
                      MTSHL
------------------------------------------------------------------------

U.S. Peanut Exports (MTSHL)
(2016-2022 Calendar Year)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: Foreign Agricultural [Service].
U.S. Peanut Exports (MTSHL)
(2016-2022 Marketing Year)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: Foreign Agricultural [Service].
                              Attachment B
Areas Represented by the 22 United States Representative Peanut Farms

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              Attachment C
United States Peanut Cost of Production
Stanley M. Fletcher, Professor of Policy, Center for Rural Prosperity 
and Innovation, Abraham Baldwin Agricultural College; Professor 
Emeritus, University of Georgia

    The U.S. peanut representative farms development started in 2001 
prior to the 2002 Farm Bill. These representative farms have been 
maintained for 20 years and have been extensively utilized for peanut 
policy in each farm bill. These representative farms cover all the 
peanut areas from Virginia to New Mexico based on production share as 
seen in the map. If a state production share equals to a partial 
representative farm, a whole farm was developed for that state. These 
farms were updated during the summer of 2021 with 2021 cost of 
production. Due to the recent peanut production in the Northeast 
Arkansas/Southeast Missouri, a new representative farm is planned to be 
developed during 2023.
Areas Represented by the U.S. Peanut Representative Farms

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    A cash flow analysis is performed to indicate what the cash flow is 
required to produce a ton of peanuts. The cash flow costs are divided 
into three categories: TVIC (total variable input cost), QVIC (quasi 
variable input cost-whole farm cost allocated to a crop acre) and loan 
payments. A peanut farmer has three different loans during the crop 
season. They are the operating loan, an equipment loan, and a land 
loan. Over the years of updating the representative farms, it has been 
found that producers not able to cover all their cash flow cost have 
been rolling the deficit into their land loan and that percentage has 
been increasing over time.

                 Table 1. U.S. Peanut Cost of Production
------------------------------------------------------------------------
                                           2021 U.S. Rep  Potential 2022
                                             Farm COP           COP
------------------------------------------------------------------------
Expected Yield                            2.38 tons/acre  2.38 tons/acre
TVIC \1\                                    $713.52/acre    $952.41/acre
QVIC \2\                                    $388.33/acre    $439.30/acre
Total Variable Cost (TVC) = TVIC + QVIC   $1,101.86/acre  $1,391.71/acre
Loan payments (equipment and land notes)    $198.91/acre    $198.90/acre
Total Cost = TVC + Loan payments          $1,300.76/acre  $1,590.61/acre
Total Cost per Ton                          $546.54/ton     $668.32/ton
------------------------------------------------------------------------
\1\ Seed, fertilizer, micronutrients, lime & gypsum, inoculants,
  chemicals, wild hog, cover crop, growth regulators, custom
  application, consultants, irrigation fuel, tractor fuel, drying,
  cleaning, hauling, check-offs, crop insurance, and interest on
  operating loan.
\2\ Taxes, accounting/legal, fleet liability insurance, repairs
  maintenance and supplies, truck fuel & lube,phone, utilities, DTN,
  GPS, apps, labor cost and land rent.

    Based on the U.S. representative peanut farms, the average total 
cash flow cost per ton for the 2021 peanut crop was $546.54/ton. Given 
the significant increase in the 2022 cost of production, Texas A&M AFPC 
reported selected input cost increase and FAPRI's inflation factors for 
the other input costs were utilized to adjust the 2021 cash flow costs 
by the expected increase in input costs. The projected 2022 peanut 
total cash flow cost to produce a ton of peanuts is $668.32/ton.
                              Attachment D
The Nutritional Value of Peanuts
Background
    Peanuts are botanically classified as a legume, being an edible 
seed enclosed in a pod.[1] However, because of its 
composition, peanuts are also described as nuts for nutritional 
purposes. According to the Agricultural Marketing Resource Center, the 
total U.S. peanut production in 2021 measured 6.4 billion 
pounds.[2] Of that, about 60% was used for peanut butter 
production, while about 15% was crushed for peanut oil.[2] 
Peanuts and peanut butter account for close to \2/3\ of all nut 
consumption in the United States.[1] Dollar for dollar, 
peanuts and peanut butter are less expensive than almost all nut and 
meat proteins. Pairing the affordability with a very long shelf life, 
peanuts and peanut butter are excellent staples for most pantries. 
Studies have consistently shown that peanut products, when eaten daily, 
can significantly decrease the risk of heart disease and 
diabetes.[1, 3, 4] They also satisfy hunger, help manage 
weight, and promote health.[1] Peanuts and peanut butter are 
nutritious, affordable, and sustainable. A serving of peanuts is 1 
ounce, or a handful, and a serving of peanut butter is 2 tablespoons.
Peanut Per Capita Consumption

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: USDA & Census Data. Excludes Peanut Oil.
Nutritional Value
    Peanuts contain a variety of compounds that promote health 
including protein, heart-healthy fats, fiber, micronutrients, and 
antioxidants.
Protein
    A 1 ounce serving of peanuts--about a handful--is considered a good 
source of protein based on the United States Department of Agriculture 
Standard Legacy. Peanuts and peanut butter provide 7 grams of high 
quality, plant-based protein.[5] Protein is vital for 
growing children and adults, being integral for muscle growth, 
immunity, and bone development.[6, 7] Since the protein in 
peanuts is plant-based, it carries with it additional components 
promoting positive health benefits like fiber and unique bioactives, 
unlike animal protein.
Heart-healthy fats
    The 2020-2025 Dietary Guidelines for Americans suggests cooking and 
purchasing products made with oils higher in polyunsaturated and 
monounsaturated fat rather than butter, shortening, or coconut or palm 
oils.[8] More than 80% of the fats in peanuts are from 
heart-healthy unsaturated fats.[5] The American Heart 
Association recommends replacing saturated fats for poly- and mono-
unsaturated fats to lower risk of cardiovascular disease and 
inflammation.[9]
Fiber
    Peanuts are a good source of fiber, which promotes digestion, heart 
health, and blood sugar control.[5] Over \1/3\ of the 
carbohydrates in peanuts is fiber and according to the 2020-2025 
Dietary Guidelines, more than 90 percent of women and 97 percent of men 
do not meet recommended intakes for dietary fiber.[8]
19 vitamins and minerals
    Peanuts and peanut butter contain more than 19 vitamins and 
minerals that are integral to growth, development, metabolic function, 
and immunity.[5] These micronutrients work by multiple 
mechanisms and are likely having synergistic effects on health status. 
Peanuts and peanut butter are excellent sources of niacin, molybdenum, 
and manganese and are also good sources of folate, copper, and vitamin 
E.[5]
Antioxidants
    Research has identified numerous types of bioactive compounds in 
peanuts and in their skins that may add functionality and health 
benefits beyond basic nutrition.[1] For example, 
antioxidants like resveratrol and p-coumaric acid have been associated 
with improved vascular function, better cognition, and lower stress and 
anxiety.[10, 11] These and other bioactive nutrients have 
been recognized for their disease-preventive properties and are also 
thought to promote longevity. Packaged together with vitamins, 
minerals, healthy fats, protein, and fiber, peanuts are a complex plant 
food that promote health and wellness.

 
 
 
                               References
 
    1. Arya, S.S., A.R. Salve, and S. Chauhan, Peanuts as functional
 food: a review. J. Food Sci. Technol., 2016. 53(1): p. 31-41.
    2. Agricultural Marketing Research Center. Peanuts. 2022.
    3. Aune, D., et al., Nut consumption and risk of cardiovascular
 disease, total cancer, all-cause and cause-specific mortality: a
 systematic review and dose-response meta-analysis of prospective
 studies. BMC Medicine, 2016. 14(1): p. 207.
    4. Becerra-Tomas, N., et al., Nut consumption and type 2 diabetes
 risk: a systematic review and meta-analysis of observational studies.
 Am. J. Clin. Nutr., 2021. 113(4): p. 960-971.
    5. USDA. Standard Legacy, Peanuts. 2022; Available from: https://
 fdc.nal.usda.gov/fdc-app.html#/?query=peanuts.
    6. Devries, M.C. and S.M. Phillips, Supplemental protein in support
 of muscle mass and health: advantage whey. J. Food Sci., 2015. 80
 Suppl. 1: p. A8-a15.
    7. Shang, N., et al., Protein and Peptides for Elderly Health. Adv.
 Protein Chem. Struct. Biol., 2018. 112: p. 265-308.
    8. U.S. Department of Agriculture, Health and Human Services.
 Dietary Guidelines for Americans, 2020-2025. 9th ed. 2020.
    9. Lichtenstein, A.H., et al., 2021 Dietary Guidance to Improve
 Cardiovascular Health: A Scientific Statement From the American Heart
 Association. Circulation, 2021. 144(23): p. e472-e487.
    10. Parilli-Moser, I., et al., Consumption of peanut products
 improves memory and stress response in healthy adults from the
 ARISTOTLE study: A 6-month randomized controlled trial. Clin. Nutr.,
 2021. 40(11): p. 5556-5567.
    11. Thaung Zaw, J.J., P.R. Howe, and R.H. Wong, Long-term effects of
 resveratrol on cognition, cerebrovascular function and cardio-metabolic
 markers in postmenopausal women: A 24-month randomised, double-blind,
 placebo-controlled, crossover study. Clin. Nutr., 2021. 40(3): p. 820-
 829.
 

                              Attachment E
2023 Peanut Potential Base Increase Comparing 2019 Base
    The sum of the Olympic average of 2018-2022 certified acres minus 
2019 commodity base by county.*
---------------------------------------------------------------------------
    * Negative numbers are reported as 0 in the calculations.

 
                                                              Peanuts
 
Alabama.................................................        2,096.41
Arkansas................................................       29,048.31
Colorado................................................            0.08
Florida.................................................       21,136.11
Georgia.................................................       22,269.77
Indiana.................................................            0.93
Louisiana...............................................        1,271.54
Minnesota...............................................            0.62
Mississippi.............................................        6,085.41
Missouri................................................       15,748.29
Nebraska................................................           97.64
New Mexico..............................................              --
North Carolina..........................................       12,103.49
Oklahoma................................................              --
South Carolina..........................................        2,867.58
Texas...................................................           70.87
Virginia................................................              --
                                                         ---------------
  Grand Total...........................................      112,797.05
 


    The Chairman. All right. At this time, Members will be 
recognized for questions in order of seniority, alternating 
between Majority and Minority Members in order of arrival for 
those who joined us after the hearing convened. You will be 
recognized for 5 minutes each in order to allow us to get to as 
many questions as possible.
    I am now going to yield to Chairman Thompson for the first 
5 minutes.
    Mr. Thompson. Well, I thank the Chairman for yielding. And, 
gentlemen, thank you for being here. Thank you for your 
leadership, and thank you for your written testimony and your 
oral testimony.
    I am going to repeat a question I asked on the first panel 
to get your take on this question. Many of you mentioned 
Federal crop insurance in your testimony. And, as you well 
know, there has been attempts in Congress to gut the program by 
imposing AGI means testing, payment limits, et cetera, 
including through an amendment to the debt ceiling bill filed 
just this week. Can each of you speak to how these kinds of 
proposals would impact the crop insurance program as a whole 
and your operation in particular? We will start with Mr. Cates.
    Mr. Cates. Well, the crop insurance is vitally important. 
There is no question. I remember when I started farming, we 
didn't have crop insurance. And if I would have had a 2012 back 
when I started farming, it would have been a disaster, 
especially with all the loans that I had taken out to be able 
to farm. It would have been very hard to go forward during that 
time frame. So it is very crucial that we keep the crop 
insurance intact, and it is just something that we need to be 
able to go forward and to be able to guarantee.
    Mr. Thompson. So some of these, what I consider to be 
misguided, attempts to implement just adjusted gross income 
means testing or payment limits, if that was to go in place, 
what kind of an impact would that have on you and on the 
industry?
    Mr. Cates. I think it would have a big impact overall on 
all farmers, especially when you do have payment limitations 
because, I mean, there are larger farmers that even though they 
are larger and have more income, they also have greater risk 
because of their largeness so it is important.
    Mr. Thompson. Yes. Thank you.
    Mr. Frischhertz?
    Mr. Frischhertz. Thank you for the question. So for 
sugarcane in particular, we are not eligible for ARC or PLC. 
But the sugar program, sugar policy acts as our safety net, and 
without that, we do not have sugarcane to farm on our property. 
We will be exposed to heavily subsidized dump sugar prices that 
are well below the cost of production. We do utilize ARC for 
our soybeans that go into our fallow ground. And as a young 
farmer just getting into farming, I can't borrow money without 
these insurance options. Without them, I am sunk.
    Mr. Thompson. All right. Thank you. Thanks for reflecting 
on the sugar policy because that also in a misguided way comes 
under attack. Our U.S. sugar industry is all family-owned, so 
we are going to support foreign families or American farm 
families? So thank you.
    Mr. Cheyne?
    Mr. Cheyne. Thank you, Mr. Chairman. Our take on it is 
instead of listening to any cuts into the farm insurance 
program, we should actually actively be advocating for 
strengthening and improving all aspects of the crop insurance 
program. As we look at historical weather patterns or 
potentially, if you can believe the long-range forecasters, and 
I am sure we all do, the Wheat Belt, the Great Plains could be 
set for another weather pattern like the Great Depression and 
the Dust Bowl. So as this potentially unfolds, our farmers are 
under greater peril because in wheat we have six classes of 
wheat grown the width and breadth of the nation. And any cuts 
to crop insurance would be disastrous to the American farmer 
and the food supply, food security, and I am afraid ultimately 
national security.
    Mr. Thompson. Very good.
    Mr. Cheyne. So therefore, we would urge you to please do 
everything you can to help the farmers before you here today 
make a good program better.
    Mr. Thompson. Very good. I don't have much time left, but I 
do want to check with our last two witnesses. Mr. Meeker?
    Mr. Meeker. Keep it short and sweet. If it wasn't for 
Federal crop insurance, I wouldn't be the sixth generation 
farm. My family's farm is in Sumner County, and there is 
probably no chance of the seventh generation that is at home 
right now being able to take over.
    Mr. Thompson. That pretty much says it all. Let's go Mr. 
McMillan.
    Mr. McMillan. Yes, I don't know that I can add much to that 
that these gentlemen haven't covered. But it is a crucial part 
of the overall safety net that we have. Our priority is the PLC 
program, but we need crop insurance. Like the gentleman just 
said, we probably couldn't get an operating loan if we didn't 
have crop insurance to show them.
    Mr. Thompson. Very good. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Chairman.
    The chair now recognizes Ms. Brown for 5 minutes.
    Ms. Brown. Thank you, Mr. Chairman. As I did with the first 
panel, I would like to start out with a question for the group. 
During our full Committee hearing, we have discussed the rising 
cost of inputs at the farm gate and how those costs ultimately 
affect food prices at the grocery store. What are the 
predominant inputs required for growing your commodity? And can 
you give us an idea of input price increases and any 
corresponding price availability? And I would like to start 
with Mr. McMillan and work my way back. All of you, but I will 
start with Mr. McMillan, please.
    Mr. McMillan. Yes, I am sorry. You are asking about our key 
inputs, and what was the last part of your question?
    Ms. Brown. The input prices increases and corresponding 
price availability.
    Mr. McMillan. Yes, so our key inputs are anything from 
seed, fungicides, and crop protectants are a big part of our 
inputs. Our cost of production has increased significantly, and 
that is why the cost of production needs to be tied to the 
reference price, and we need to see that reference price 
increase.
    Mr. Meeker. Some of my crop inputs would be fuel and 
fertilizer, of course, labor. The labor market is a huge part 
of my input cost as well. Those predominant prices have gone up 
anywhere from 100 to 300 percent. My cash price has not done 
that. And when I go to the grocery store--I get to luckily do 
most of the grocery shopping at our house. And when I go to the 
grocery store with the list that my wife provides for me, it 
hits me at about that same amount, too. And it is devastating. 
It has been devastating in my community at the grocery store 
and at the farm level. And we would love to engage with you on 
how there can maybe be some corrective measures taken by this 
Committee and the full Committee.
    Mr. Cheyne. Using the USDA's total cost of production, the 
average cost of production over the past decade was $7.12 a 
bushel. Meanwhile, the wheat reference price is $5.50, and the 
FSA loan rate is $3.38 a bushel. I think we can draw a little 
bit of a conclusion what is going on there. Where I farm in the 
Klamath project, my power cost can hit $126 an acre for 130 
bushels of wheat and poor-cutting alfalfa crop. My irrigation 
district going in, it will be $85 an acre next year. I just 
paid 49 a pound for spring wheat seed. It is going to be late 
going in. It is not going to stool, it is not going to tiller. 
It will be 200 pounds of seed at 50, over $500 for fertilizer. 
And there are times with interest and the rising cost of fuel, 
you begin to wonder why you even bother. But I love doing it, 
so I will bother.
    Ms. Brown. Thank you.
    Mr. Frischhertz. Like most have said on this panel, it is 
labor, fuel, diesel, and input costs, fertilizer. I could speak 
directly to our farm. From 2021 to 2022 we spent from right at 
$127,000 to over $250,000. And that is just in 1 year. Our 
potassium went from $330 all the way up to over $1,000 a ton. 
Labor, like everywhere, is difficult to come by these days. It 
is a tight labor market.
    But one note I would like to make, as commodities, we are 
price takers, not price makers, so we are at the beg and mercy 
of the market.
    Mr. Cates. And everybody has pretty well said a lot. The 
same thing for me. My input costs are fuel, the seed, 
fertilizer, everything--fertilizer has more than doubled from 
last year, a year ago. Our seed price has gone anywhere from 20 
to 35 percent higher, diesel fuel has almost doubled from what 
I was paying 2 years ago. And so according to the University of 
Illinois, the cost of production for soybeans, break-even is 
$12.39. That is at least in Illinois. I cannot speak for the 
rest of the country. And, all of us, because we are so 
widespread, the cost of production for different farms can vary 
from that price.
    Ms. Brown. And I see my time has expired, so I will have 
other questions for the record. Thank you, Mr. Chairman. I 
yield back.
    The Chairman. Thank you, Ranking Member Brown.
    And you have all hit on this a little bit, but I want to go 
back just again and reiterate this. So you were talking about 
soybeans, and you said the average cost of production is 
$12.39. And according to my records, the reference price is 
$8.40 and loan is $6.20. And if we could, I know you don't have 
a reference price on sugar. What is the loan rate on sugar?
    Mr. Frischhertz. I believe it is 19.75.
    The Chairman. Okay. And as we go down the path, wheat, do 
you know the average cost of production in the country, Mr. 
Cheyne?
    Mr. Cheyne. I was having difficulty hearing. Could you 
please repeat the question?
    The Chairman. For wheat, what does it cost you to produce a 
bushel of wheat?
    Mr. Cheyne. Our cost of production we figure is about $7.12 
a bushel.
    The Chairman. Okay. And reference price being $5.50 and 
loan is $3.38 on wheat, is that correct?
    Mr. Cheyne. Yes, but $5.50 on wheat, right.
    The Chairman. $5.50 reference price, but loan would be 
$3.38. And I assume that few people will use loan anymore 
simply because the values are so low. Is that----
    Mr. Cheyne. That is correct.
    The Chairman. Is that correct? And so Mr. Meeker, for your 
crops what is the average cost of production and reference 
price?
    Mr. Meeker. Well, I only prepared for sorghum today so I 
can't talk to all of them.
    The Chairman. Okay.
    Mr. Meeker. I could text Dad. He could probably get me 
pretty quick, but for sorghum, it is----
    The Chairman. Well, just give it to us on sorghum.
    Mr. Meeker. For sorghum it is a $5 break-even, really 
close.
    The Chairman. Okay.
    Mr. Meeker. I can get you closer to that if you want, but 
$5 is a pretty good break-even cost.
    The Chairman. No----
    Mr. Meeker. Our reference price is $3.95. And the loan rate 
in Sumner County is $3.99 per hundredweight----
    The Chairman. Do you----
    Mr. Meeker.--which is far below the cost of production.
    The Chairman. Okay. But your loan rate is $3.39?
    Mr. Meeker. Per hundredweight.
    The Chairman. Okay.
    Mr. Meeker. Not per bushel.
    The Chairman. Okay. I got you.
    Mr. Meeker. I would have to do----
    The Chairman. That explains why my numbers didn't make----
    Mr. Meeker. Yes, so I would have to do some figuring here. 
I couldn't get to the website where it figured it by bushels.
    The Chairman. Yes. Yes. So I will spend a little more time 
with you, Mr. McMillan. You mentioned that across peanut 
representative farms the cost of production per ton increased 
26.31 percent from 2021 to 2022. You also state total variable 
input cost increased 33.48 percent and that reference prices 
haven't been a functional safety net since the 2021 crop year. 
Now, you are an eighth generation farmer and your family has 
weathered a lot of events over the last 250 years. That 
reference price on peanuts, $535 a ton, loan is $355 a ton.
    Mr. McMillan. Yes, sir.
    The Chairman. Do peanut farmers use loan anymore with that 
price as low as it is?
    Mr. McMillan. Yes, sir. I mean, I believe that----
    The Chairman. You do still----
    Mr. McMillan.--the Marketing Loan Program is used by a lot 
of peanut growers.
    The Chairman. At the same rate that it was 5 years ago or 
10 years ago?
    Mr. McMillan. Yes, sir.
    The Chairman. Okay.
    Mr. McMillan. I mean, and potentially, that could be looked 
at for an increase.
    The Chairman. All right.
    Mr. McMillan. We have looked at it with an economist, and 
we think that the most beneficial thing for growers is a 
reference price increase. And that is what would help them the 
best.
    The Chairman. Okay.
    Well, can you expand a little further on how you and future 
generations will be affected if we don't increase reference 
prices and improve that safety net? And I also want you to 
explain why we should have a voluntary base acre update.
    Mr. McMillan. Yes, so if we don't have----
    The Chairman. And I have a minute.
    Mr. McMillan.--an increase in the reference price--and let 
me just say, we really don't want to be reliant on a safety 
net. We don't want to be in that position, but we need it. And 
if we don't have an increase in the reference price, what is 
happening with that deficit that we have from $535 to $668, 
that is being rolled over into land loans. We are using up the 
equity that we have in our equipment. Eventually, it is going 
to catch up with us, and we aren't going to be able to stay in 
it very much longer.
    And then for the base update, we would like to see those 
new growers that are in Florida, Arkansas, Missouri, these new 
areas, and even in my own state, if there are growers that 
haven't had the chance to get base, see a voluntary base update 
from growers with and without base.
    The Chairman. All right. Thank you all for your testimony.
    I now recognize Ms. Davids of Kansas for 5 minutes.
    Ms. Davids of Kansas. Thank you, Mr. Chairman. And thank 
you to our witnesses this afternoon and our witnesses on the 
earlier panel as well. I represent the 3rd District in Kansas, 
and the 3rd District is home to small-, medium-sized family 
farms, urban and rural areas, everything from hobby farms to 
poultry producers, specialty crops, some row crops. And then, 
of course, the State of Kansas grows a lot of commodities that 
support not just our country, but the entire world.
    And I am wanting to better understand Title I programs and 
the tools that are being used. We have heard some of that 
today. And as I am kind of talking to folks at home and 
learning, I definitely have heard a lot about the ways that 
USDA programs work or maybe sometimes don't. And we have heard 
a bit about them today, ARC and PLC, and those are administered 
by the Farm Service Agency. I am wondering if you all could 
talk to me a little bit more about that. In the 3rd District, 
we have a consolidated Miami and Johnson County Farm Service 
Agency. It is in Payola and they help tons of people. And I 
also know that they are having a hard time finding staff. They 
are doing as much as they can to help people, but there are a 
lot of folks who are retiring. That institutional knowledge is 
leaving. And, that also means the newer folks are taking on 
increased workloads.
    I am curious. Mr. Cates, if you could talk a bit about--
because you mentioned a bit about this in your testimony, in 
your farm bill priorities about us considering USDA staffing 
and then the technological capabilities. Could you just kind of 
expand on that a little bit and talk to us about the FSA 
offices and appropriate levels of staffing and that sort of 
thing?
    Mr. Cates. Staffing at NRCS and at the Farm Service 
Agency--luckily in my county--well, NRCS is short-staffed in 
both counties that I farm in Monroe and St. Clair County. And 
the FSA agency, both have positions that they need but are told 
that they cannot hire at this point. Luckily, we have a good 
enough staff that we are getting it done, but they are both 
short-staffed. And the NRCS is very short-staffed and have 
concerns with the new conservation programs that have been 
initiated back in December with that bill, whether or not with 
such shortage of staff if that money can be appropriated in a 
timely manner to get the conservation programs done that need 
to be done in that time frame.
    Ms. Davids of Kansas. I saw a lot of heads nodding, and I 
was going to move on, but I think I will probably--because I 
wanted to talk some about the reference pricing and base acres 
and that sort of thing. But if others want to chime in on this 
and then I will follow up with like written questions to you 
all.
    Mr. Meeker. So thank you for the question, Ms. Davids, and 
thank you for what you do for this service for the State of 
Kansas. I appreciate that. I fall in Congressman Estes' 
district, but thank you for your work in the Kansas City area.
    The FSA offices, they are overwhelmed, quite frankly. And 
because of ad hoc disaster assistance and other CCC funds that 
have gone through the offices, they have been overwhelmed. It 
is pretty hard for them to do the things that they typically do 
every day or should be doing every day, and it is hard for them 
to get through that work list when you have so many of these ad 
hoc disaster programs or other programs that are coming in. I 
would love to see some sort of a disaster program that is 
predictable that comes through the farm bill that is part of 
their normal working daily things and have a smaller reliance 
upon ad hoc and other emergency disaster assistance. I think 
that would do very well.
    And the technology, I can see what my dad is doing today on 
the farm with my phone. I can do a lot of things with FSA from 
my phone, too, and I would appreciate that opportunity.
    Ms. Davids of Kansas. Oh, awesome. And I will absolutely 
follow up with additional questions. Thank you. I yield back.
    The Chairman. The chair now recognizes Mr. LaMalfa for 5 
minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. And thank you to our 
panelists for coming in here for our round two here today. It 
is very important we get to the bottom of what you are facing 
and as we help to shape the farm bill with that. Our listening 
sessions around the country have been pretty helpful as well.
    So I want to come to Mr. Cates there. I have a question 
here on the testimony you submitted. A USDA report did project 
a 20 percent drop in net cash farm income in 2023 relative to 
2022. So is that as an equal component of price of your 
commodity or costs that continue to go up? And all ours 
skyrocketed in 2022. How would you explain the 20 percent drop 
in net cash?
    Mr. Cates. It is going to be a combination of both input 
cost to us and also the drop in the commodity prices.
    Mr. LaMalfa. So equally both?
    Mr. Cates. Yes.
    Mr. LaMalfa. Yes. All right. I have the same input costs as 
you all with farming rice in California, so our fertilizer 
tripled last year, fuel doubled, and I am a rice seed grower, 
so I don't complain about seed prices as much. But it is the 
same for them. To produce that seed, they have to recoup to get 
it back from you all to buy the seed, too.
    What do you think--and just go across the panel if you 
wish--on our energy policy in this country that obviously our 
fuel comes from gas and diesel but also where our energy is 
used to produce nitrogen, fertilizer, et cetera. Do you want to 
just whistle down the line there, each give you 10 or 15 
seconds on that?
    Mr. Cates. Yes, our energy prices are definitely having an 
impact on our cost of production, as you said, with the 
fertilizer cost, so that depends on fuel. Our diesel prices 
have increased, so it is definitely a huge impact on our energy 
price.
    Mr. LaMalfa. What should the United States be doing about 
energy?
    Mr. Cates. We definitely need to be able to try and lower 
the energy cost somehow.
    Mr. LaMalfa. Right.
    Mr. Frischhertz. For sugarcane in particular, we are all 
very proud to say that we use the sugar rind, the rind of the 
sugarcane to run our mills as a renewable source of energy, and 
it is something that that helps keep us going and keep us very 
sustainable. As everybody's going to mention on the panel, yes, 
diesel costs have eaten into margin. This has made it very 
difficult. Anything that can be done to help that would be very 
welcomed.
    Mr. LaMalfa. Okay. Mr. Cheyne?
    Mr. Cheyne. I believe that the fuel and fertilizer costs 
are really hurting us and hurting us badly. My suggestion would 
be, I think this nation is capable of getting some type of like 
a small-scale Manhattan Project off the ground where we could 
get environmentally friendly fertilizer plants here in America 
close to the source where they need to be used and get these 
products out to the American farmer. And I think we can do as a 
nation a much better job than what we are, just food for 
thought.
    Mr. LaMalfa. Yes, sir. All right. I am going to end it 
right there on that question. Mr. Cheyne, do you want to talk 
to me about your particular situation in your basin there with 
water supply?
    Mr. Cheyne. Well, sir, I think you are one of the more 
well-versed people I know, but our situation in the Klamath 
Basin is very, very unpleasant. We have over 200 percent of 
snowpack. We are going to get maybe 60 percent of our 
irrigation allocation because of the Endangered Species Act. We 
are told that the ESA is the law of the land. I have come full 
circle where I look at the ESA as the flaw of the land. And 
while it is, our resource of irrigation, water is being taken 
for the Endangered Species Act----
    Mr. LaMalfa. From the Klamath Project with agriculture in 
mind directly.
    Mr. Cheyne. On the Klamath Project, yes, sir.
    Yes, being directly denied the resource. And we are being 
told by agencies in the Federal Government that we have no take 
because the ESA allows it to be taken.
    Mr. LaMalfa. So you are not out anything. They just get to 
come in your house and take your stuff, but since it is ESA, it 
is not considered actually a taking.
    Mr. Cheyne. Correct.
    Mr. LaMalfa. Yes, that is----
    Mr. Cheyne. That is a perfect analogy.
    Mr. LaMalfa. Yes. So you faced this in 2020--well, the last 
3 or 4 years of having your water----
    Mr. Cheyne. Yes.
    Mr. LaMalfa. Well, in 2020 they want to take the water mid-
season after you were planted, and we were able to help get you 
through that season last year----
    Mr. Cheyne. Yes.
    After our crops are already dead, they make the decision to 
give a little bit of water.
    Mr. LaMalfa. Yes.
    Mr. Cheyne. I guess I feel better now that I have given up 
all hope.
    Mr. LaMalfa. I will yield back, Mr. Chairman.
    Hang in there. God bless you.
    Mr. Rouzer [presiding.] Don't ever give up hope.
    Mr. Bishop, you are recognized.
    Mr. Bishop. Thank you very much. Let me thank all of you 
for appearing today. You have been very, very helpful and very 
frank, and you have covered a lot of the areas that I wanted to 
raise with you.
    Can I get you to just in a general sense talk about the 
process that a producer has to go through to fulfill 
eligibility requirements like demonstrating that a producer has 
met the adjusted gross income limitation, actively engaged 
requirements? Is it a straightforward process? If each of you 
could just tell me how that impacts your areas. Start with Mr. 
Cates if you would quickly.
    Mr. Cates. I guess can you repeat that? I didn't quite hear 
it all.
    Mr. Bishop. I was wanting to know how the process that a 
producer, one of your commodity compatriots, has to go through 
to fulfill the eligibility requirements. I know that the 
eligibility requirements you have to demonstrate that you have 
met the adjusted cost gross income limitation, that you are 
actively engaged, that it is actively engaged. And those 
requirements for eligibility, are they straightforward or do we 
need to do something in the farm bill to try to clarify it?
    Mr. Cates. In my area, I think it is pretty 
straightforward, the eligibility for the termination of our FSA 
programs.
    Mr. Frischhertz. Yes, I would echo that. It seems pretty 
straightforward. Honestly, we go to the CPA and work very 
closely with them and then turn that in to FSA.
    Mr. Cheyne. I think they are very straightforward. I am 
fortunate that I have a very good staff at my FSA office. I 
would just throw out the only flaw I see in reference to her 
question, State of Oregon, we got 36 counties, but I think we 
are down to maybe five FSA loan officers. The one servicing my 
county has a 4 hour drive one way. So if we want to get any of 
our new next generation farmers involved, I would suggest that 
we look into staffing and sustainability in the staffing 
because you just get a really high-quality person trained, they 
get headhunted by a private bank, and we are back to ground 
zero.
    Mr. Meeker. The paperwork seems to be pretty 
straightforward for us.
    Mr. McMillan. I agree with these gentlemen. And our FSA 
office helps us out very well.
    Mr. Bishop. Well, I serve on the Appropriations Committee, 
and staffing is an issue that we hear about, as well as the 
technological upgrades for the Department. Do you have any 
comments? I think I have heard you in response to Ms. Davis 
talk about that. But I guess you pretty much laid it out that 
it is understaffed. And you need to take full advantage of new 
technologies, and that would be helpful. Is that correct? I see 
all of the head nods.
    But tell me about the input prices. The economic conditions 
for your commodity obviously has changed since the 2018 Farm 
Bill. So your energy prices, I assume, are impacting your 
business. Tell me about the input increases, and how do you 
think we can actually accommodate that in the farm bill? Price 
loss when you got prices high, but input prices are up. So how 
do we need to factor that cost of input into the farm bill that 
will give you the safety net that you need?
    Mr. Meeker. The problem isn't today. The problem is 
probably a year or 2 from now when we have low commodity prices 
with still high input prices. That is when there is going to be 
a real issue. And you are probably not going to be seeing many 
people my age that would be testifying and definitely younger--
--
    Mr. Bishop. What about margin protections? Is that an idea 
that you think would work?
    Mr. Meeker. There are some ideas with margin protection. We 
have looked at it with the sorghum industry, and we haven't 
found a good fit yet. But that is something that we are going 
to continue to actively work on. But again, I think the issue 
is going be coming in the future, not today.
    Mr. McMillan. For peanuts, I think that the Price Loss 
Coverage Program works really well. And when you factor in--or 
the framework is very well if we have a reference price 
increase. And when you factor in the cost of production with 
that reference price, then that protects us really well.
    Mr. Bishop. Thank you. I think my time has expired.
    Mr. Rouzer. Mrs. Miller?
    Mrs. Miller of Illinois. Yes, thank you to everyone for 
coming out for this hearing. And I want to say, Mr. Cates, it 
is so nice to have a fellow Illinoisan here and a fellow 
soybean producer. So in the last panel and also this panel, we 
have been talking about the importance of our insurance 
protections. And I was wondering if you could discuss how crop 
insurance has benefited you on your farm.
    Mr. Cates. It is been a huge benefit, especially to make 
sure that there is some protection in case of a weather 
disaster. There has been in my own particular--almost every 
year, I used crop insurance--we have some kind of weather event 
in the spring that I have to come back and either replant some 
corn or some soybeans, and so I am using my crop insurance to 
help pay for that replant. And the biggest thing is in case of 
a huge weather event like we had in 2012, if it wouldn't have 
been for my crop insurance, it could have been a true disaster 
in making sure that you could put a crop out the following 
year.
    Mrs. Miller of Illinois. Thank you. I would like to say 
that crop insurance gives us the courage to go on another year, 
doesn't it?
    So also in light of inflation being on the rise, you have 
all shared how input costs are skyrocketing to a painful place 
and then with the Federal Government raising interest rates. 
What I am worried about is that credit could potentially become 
too expensive for producers. So would you each share with me if 
you have any ideas, how do you feel this will impact the 
agricultural community? And how can we begin to prepare a 
safety net for farmers now? Mr. Cates, would you like to go 
first?
    Mr. Cates. Yes, the rising interest rates is definitely--
especially for beginning farmers going to be huge. I mean, just 
my operating loan from Farm Credit right now has jumped to 8\1/
4\ percent.
    Mr. Frischhertz. As a younger farmer really just starting 
out, it has been a major hurdle to overcome with rising 
interest rates. We will see younger farmers not have the 
ability to purchase the equipment they need to really enter the 
industry. It could be a big hurdle for most.
    Mr. Cheyne. Interest rates are becoming a significant 
problem in farm country. I had loans a couple of years ago that 
were at three percent. My banker and I actually got along. Now 
they are at ten percent. We are not seeing eye to eye so much.
    Mrs. Miller of Illinois. That is painful.
    Mr. Meeker. Access to credit is a huge thing for me on my 
operation. Federal crop insurance allows me to access that 
credit. It allows me to leverage what I know my production is 
to manage my risk. It is the largest risk management tool I 
carry in my toolbox Federal crop insurance, and it helps me 
mitigate some of that risk of interest. However, as we see 
rising interest rates, it is going to be the ones that have the 
financial stability and ability who will be able to continue to 
farm, not the ones that have to use lending as an option. And, 
my dad has a different checkbook than I do. My dad is liable to 
still be farming, and I will be looking for a job in town 
again. And my dad is 70. I am 40. I think I have a lot more 
opportunities to farm physically than my dad does, but his 
checkbook allows him to farm a lot longer than mine does.
    Mr. McMillan. Yes, I will just echo something that he just 
said. As credit becomes tighter, I may be looking for something 
else to do. And I don't know that folks my age will be able to 
continue to farm. And then that is a food security issue.
    Mrs. Miller of Illinois. Thank you. And, my husband and I 
are farmers, so I feel your pain.
    And then, Mr. Cates, one last question real quick. Trade is 
out of this Subcommittee's jurisdiction, but do you support 
increased investments in trade promotion programs such as MAP 
and FMD?
    Mr. Cates. Definitely. It needs to be doubled. With the MAP 
at $200 million, and when you take inflation into 
consideration, we are only really getting about--compared to 
what it was in the beginning, $113 million out of that is 
compared to what it was in the beginning, 18, 20 years ago. So 
yes, it definitely needs to be increased because that FMD and 
MAP program is what will help secure future trade in areas in 
case we have another situation like what happened with China.
    Mrs. Miller of Illinois. Yes, and we don't want to be left 
behind. Thank you.
    Mr. Rouzer. The gentlelady's time has expired.
    Ms. Budzinski?
    Ms. Budzinski. Thank you, Mr. Chairman. And thank you, 
Ranking Member. I appreciate it. And thank you to the panelists 
for being here today. I was hoping I could ask you a little 
different question, but just to get your thoughts on it, which 
regards young farmers. I have an Agricultural Advisory Council, 
and I am in central and southern Illinois and that help 
provides real feedback to me as we are in these farm bill 
negotiations and having these hearings. One of the things that 
I heard from the very first meeting was the need to create more 
of a pipeline and bring new people, young people into 
agriculture. And I know you have talked a little bit about some 
of the challenges that current farmers are facing, but as we 
are trying to attract the next generation of farmers, what we 
can be doing. And last week, I was really proud to help 
reintroduce the Young Farmers Success Act (H.R. 2728), along 
with our gracious Committee Chairman G.T. Thompson, which works 
to expand Public Service Loan Forgiveness Program for certain 
farmers. And I am also working on other legislation to expand 
access to young and beginning farmers as well. I would 
appreciate your thoughts on what we can do to entice more 
individuals to go into farming.
    Mr. Meeker. Access to credit through FSA would be an 
incredibly important tool. For me, it was not something that 
was actually a viable tool for me to use because how I entered 
into the operation. By the time I needed to start securing 
those loans that were of consequence to the operation, I had 
already been in farm production for more than 5 years, so I was 
no longer a young or beginning farmer. However, I was still a 
young and beginning farmer in the real terms. And so I think 
looking at how we maybe evaluate and we maybe look at how those 
rules are written, that might be a really good option.
    I am a child of the 1980s. I saw my dad in the 1980s farm 
crisis. I don't want to be that for my children, and access to 
credit and making sure that they can just--excuse me.
    Ms. Budzinski. Take your time.
    Mr. Meeker. It is an important thing to have young 
generation on the farm, and we need to figure out how we can 
continue to entice the young generation to the farm and not 
export the greatest generation that we have, and that is the 
next one.
    Ms. Budzinski. Thank you.
    Mr. Cheyne. I would urge a complete overhaul of the FSA 
Beginning Farmer Program. It, like me, has gotten old, and it 
is tired. It needs an upgrade. As a casual observer of the 
program from a safe distance, a young farmer gets just enough 
money out of the program to get in real trouble real fast, and 
the rug gets jerked out from under them at warp speed. And if 
they had an adequate capital to get up and running on their 
feet and going, I think we could manage to get some real 
success stories. As it is, when they get the rug jerked out 
from under them, that generation has lost agriculture, that 
skill set, all that knowledge. It just goes to town and it is 
lost. So I would ask you to conserve some of your money to give 
that program a complete overhaul.
    Ms. Budzinski. Thank you. Anyone else on the panel? I 
appreciate your candor and your stories, personal sharing, your 
thoughts on that. I had one other question. I know we have 
talked a lot about crop insurance, but I think something that, 
Mr. Cheyne, I think you mentioned during your testimony was 
just the impact more largely for rural communities and the 
importance and the connection between fully investing in our 
crop insurance program and what that means more largely to our 
rural communities. I think you mentioned banking and access to 
extending lines of credit, what that might mean, though, more 
broadly. If any of you might be willing to speak to that, the 
impact and the importance of crop insurance for our rural 
communities.
    Mr. Cheyne. Well, as many farmers get in debt with their 
vendors, it is before we know that we have a disaster on our 
hands. When we get that insurance payment, we are able to get 
our bills paid. Not only does that keep us whole, we keep our 
vendors whole, so it gives a ripple effect out through the 
community, and it is a stabilizing hand on the community. And I 
think that is of paramount importance because the PLC safety 
net, the price has to fall by almost \2/3\, 62 percent. And by 
the time, I am used to watching disasters unfold, but by the 
time you fall that far, you might have a heart attack and be 
gone before the net catches you, so it is too much, too little, 
too late.
    Ms. Budzinski. Okay. Thank you. I will yield back. Thank 
you.
    Mr. Rouzer. I thank the gentlelady.
    Mr. Finstad, you are recognized.
    Mr. Finstad. Thank you, Mr. Chairman.
    And first of all, Mr. Meeker, thank you for reminding me 
why I am doing this. And I am a little jealous. I am the fourth 
generation farmer in our farm raising the fifth, but you are 
the sixth going on the seventh. That is awesome. And really, 
that just solidifies what we are doing here and why we have to 
get this right. We have to make sure that we write a farm bill 
for the farmer by the farmer. And again, it is not for you and 
I. It is for our kids. It is to make sure that the John Deere 
tractors keep farming my farm for generations to come.
    And so thank you all. We have had really an awesome 
opportunity to have ten amazing witnesses today come to talk to 
us about what the family farm looks like. And it looks 
different. Each one of you describe something very different. 
And for us, that diversity and that uniqueness is what really 
makes farm country amazing. And really, just the honor for us 
to work in the most honorable, noble profession that this 
country has, and that is farming. So thank you for being here 
and representing your commodities.
    I am a corn and soybean farmer from southern Minnesota. I 
raise corn, soybean, and kids. And I am just really, really 
honored to be here and to have you here in front of us. I did 
some math. As a farmer, commonsense farmer, I like to play 
around with numbers and try to figure out how do I get to that 
next generation of farm succession planning? And so if I look 
at reference prices $3.70 for corn, $8.40 for soybeans, I just 
quickly looked up my local co-op, my July corn right now is 
$6.16. July beans is $14. I look at break-even, $5.10 for corn, 
$12 for beans, doesn't take a math genius to figure out that we 
are pretty tight. Reference prices, this Title I, what is this 
ARC and PLC we talk of? I haven't seen this or heard of it. I 
don't know if we are sure what it is. Crop insurance has been 
the number one tool on our farm that has really provided me the 
opportunity from day one with the banker to end of crop, in the 
combine, marketing decisions. And that is what provides the 
opportunity to continue.
    So as we look at safety net, as we talk about crop 
insurance, as we talk about ARC, as we talk about PLC, my 
question, and I will start with you, Mr. Cates. What is it like 
to farm knowing that you do not have really an effective Title 
I farm safety net with the ARC and PLC where we are at right 
now? And what should the Committee do to focus on improving 
this in the future?
    Mr. Cates. It is a little scary knowing where we are at, 
and so that is why it is so important to get it right, right 
now, to be able to raise the ARC and PLC, get the program to 
the point of being able to get where we have to be able to--I 
am losing my thought here.
    Mr. Finstad. Probably reference pricing----
    Mr. Cates. Yes, the reference price.
    Mr. Finstad. Yes.
    Mr. Cates. We have to be able to get that at a different 
level where we are more competitive than where we are right 
now. That reference price for every one of us sitting here is 
way too low.
    Mr. Finstad. Yes. And I appreciate that comment. And if you 
just look at the conversation that we just had in regards to 
the inputs, look at the reference price, the break-even that I 
just talked about, we are already upside down.
    Mr. Cates. Right.
    Mr. Finstad. And when we talk about generational farms like 
Mr. Meeker and myself and all of us are working so hard to 
preserve, that makes or breaks a generational change of farm if 
you are upside down. You can only sustain that, obviously, so 
long, and especially from a young farmer perspective. So, I 
mean, I think this is something important, something that we 
have to get right in the farm bill.
    I have about a minute left here, so I will move along. Just 
quickly, just maybe kind of a yes or no up and down the line 
here. I hear from Minnesota farmers, the FSA loan size 
limitations haven't kept up with the rising prices. We talk 
about the inputs, we talk about farmland prices. The current 
cap makes it more difficult for farmers, especially beginning 
farmers, to access the FSA guarantee loans. So I guess just a 
quick yes or no up and down the line. Do you think that farm 
country would benefit from modernizing these limits in the farm 
bill?
    Mr. Cates. Yes.
    Mr. Frischhertz. Yes.
    Mr. Cheyne. Absolutely.
    Mr. Meeker. Yes.
    Mr. McMillan. Yes.
    Mr. Finstad. And I appreciate that. And I would just close 
with this. It hurts my heart a little bit to hear the shortage 
of staff on the FSA side. The USDA has 100,000 employees. I 
think we have a prioritizing problem, not maybe a staff 
shortage, so we can work on that. And I look forward to working 
with my colleagues here on that.
    Mr. Chairman, I will yield back.
    Mr. Rouzer. The gentleman yields back.
    Mr. Davis?
    Mr. Davis of North Carolina. Thank you so much, and to the 
Chairman and our Ranking Member, thank you for having us here. 
And to the gentleman from North Carolina, Mr. Rouzer, it was 
great joining you in eastern North Carolina with the gentleman 
from California there, so I just want to recognize you for 
that, and then on the forums.
    To our witnesses who are here today, it was great chatting, 
saying hello earlier, and thank you for being with us. And it 
is obvious as we hear not only the wisdom but the passion that 
you bring, and thank you for doing the Lord's work here.
    To ensure a robust agriculture sector in eastern North 
Carolina, we must strengthen the safety net for our soybean 
producers. In doing so, Congress must address the growing 
discrepancy between plant acres and base acres, which ballooned 
to 30 million acres last year. Now, Mr. Cates, what specific 
steps can Congress take to close the Agriculture Risk and Price 
Loss Coverage gap to assure soybean farmers that they will have 
protection in the event of a trade war with China or other 
unforeseen market shocks?
    Mr. Cates. Well, several things would be to increase the 
reference price, change the ARC so that it is more up-to-date, 
and we need to go ahead and be able to have a voluntary base 
update for the farmers that would also be beneficial to even 
those young farmers.
    Mr. Davis of North Carolina. Okay. In the most recent Ag 
Economy Barometer report cited input costs as the top concern 
for producers for the year ahead. In an inflationary 
environment, fertilizer costs are putting the squeeze on our 
farmers, as you mentioned in your testimony, Mr. McMillan. In 
your capacity representing the U.S. Peanut Federation, would 
you, Mr. McMillan, support initiatives to onshore the 
production of fertilizer to stabilize long-term prices and 
avoid dependence on strategic competitors if doing so would 
even mean higher prices in the immediate short-term?
    Mr. McMillan. I may have to get back to you in the written 
record on that question, but I do think something needs to be 
done about these increases that we are facing because, like I 
said in the testimony, we have seen prices double, even triple, 
and it is hard to move from one year to the other with those 
kinds of increases.
    Mr. Meeker. Could I speak to that, please?
    Mr. Davis of North Carolina. Please.
    Mr. Meeker. So I think I would love--I am not an energy 
guru by any stretch of the imagination, but I do know that the 
American spirit is that if you give us a challenge, we will 
meet that challenge and usually beat it. And I think it would 
be fantastic to unleash the ability of our economic energy--or, 
excuse me, of our domestic energy program to not only produce 
that domestic energy, but also the domestic fertilizer. And I 
think short-term, yes, you may have a price hike, but we have 
had an incredible price hike already. I mean, what is ten 
percent more really? Not much. But if we can have long-term 
sustainability with a domestic supply of energy and fertilizer, 
I would welcome that any day.
    Mr. Davis of North Carolina. Thank you for that. And, Mr. 
Cates, can you walk me through the consequences if Congress 
fails to provide adequate funding for the Market Assistance 
Program, the Foreign Market Development Program as tensions 
ratchet up with our trade competitors, including China?
    Mr. Cates. I think you are going to see a situation where 
it is going to be very harmful to the farmers and the future of 
farming or the next generation of farmers because without it, I 
think you are going to see the young generation not want to 
farm and that those that are in it could have difficulty 
continuing the farm.
    Mr. Davis of North Carolina. Well, again, I thank this 
panel, and I yield back.
    Mr. Rouzer. The gentleman yields back.
    Mr. Rose is recognized.
    Mr. Rose. Thank you. I appreciate our witnesses bearing 
with us today and being here.
    One of the core charters of this Subcommittee is risk 
management, and I want to talk a little bit about data privacy, 
which maybe is something we haven't talked about today, unless 
I missed it, Chair Rouzer. We have seen a number of high-
profile data breaches and cyber attacks in recent years kind of 
across the spectrum, but oftentimes targeting government. And I 
would like to ask each of you from the perspective of the 
producers that you represent to discuss how concerned you are 
with maintaining the privacy of your individual data and how 
important it is to make sure that USDA doesn't release private 
farm data without the consent of the producers that you 
represent. Would anybody liked to talk about that?
    Mr. Cates. Well, I think it is very important that the data 
be kept private, what is the farmer's data should be the 
farmer's, and it should only be up to that farmer if he wants 
to share that data.
    Mr. Rose. Anyone else want to weigh in on that?
    Mr. Frischhertz. Well, at this point, it is almost like 
farming on your phone. Before this Committee started I was 
checking on the tractors in the field right here, and it scares 
me quite a bit that one little breach on this phone could bring 
our operation to its knees. It is something of very high 
priority and, honestly, nobody has really tackled this issue to 
that point.
    Mr. Rose. As a follow-up, I would like to ask each of you 
to comment on how safe do you feel that your private data is in 
the hands of USDA? Do you feel confident about that? Is it----
    Mr. Cheyne. I guess I would say I, sir, am an eternal 
optimist. I would hope that my data is safe, the same way I 
would hope my bank is keeping the data on my money safe. It has 
real and lasting and meaningful value to me. And I didn't get 
all of that data compiled just so some schmuck could steal it 
from us collectively.
    Mr. Rose. Has anyone had a bad experience or know of one 
with respect to USDA-held data?
    Mr. Cheyne. I have a perfect track record in keeping it 
whole, and I hope to get retired with my record intact.
    Mr. Meeker. I don't have a specific issue, but I think that 
it is an issue that we probably ought to think about and 
address. We do a lot of things much differently than we did 20 
years ago, 50 years ago, and I think our thought process 
probably needs to be modernized across the board, whether it be 
with data security or financial lending from the FSA as well.
    Mr. Rose. Let's shift gears then. In March's Ag Economy 
Barometer published by Purdue--and I am a Purdue alum, so I 
picked this question out so I could say Purdue a couple of 
times, maybe fit it in three or four. Surveyed producers listed 
high input costs and rising interest rates as top concerns for 
farmers. Can each of you speak to how these issues are 
affecting your operations, and probably you have already to 
some degree covered this but with a specific reference to the 
support programs and the level of support that is currently 
available vis-a-vis the inflation that we have seen in those 
input costs?
    Mr. Cates. Well, like I say, with the rising interest 
rates, it is definitely a concern. I mean, I am in fairly good 
shape. The problem is, at the end of the year I have run out of 
money, and so to purchase the inputs for the next growing year 
usually in December, I am having to borrow operating. And like 
I said, every time the Federal interest rate goes up, guess 
what, my farm interest credit from Farm Credit interest rate 
goes up. I am at 8\1/4\. By the time December comes, I might be 
over nine percent interest for my operating loan, so it is a 
major concern.
    Mr. Frischhertz. Rising input costs, really they bring home 
the point that we need strong sugar policy in the farm bill. 
That is our safety net. Without it, we are sunk.
    Mr. Rose. Sure.
    Mr. Cheyne. Input costs are becoming a major headache. I 
have one bank that I deal with that is up to ten percent 
already on one line of credit. Some of my fuel and fertilizer 
has almost tripled the last couple of years. So yes, we are 
having to cut back, try to get less done with more. There are 
certain improvements that will not be made in a timely manner, 
and that is impacting the efficiency of the farmer. And that is 
the one thing we can really control, and it is being taken away 
just through attrition.
    Mr. Rose. And of course, you will just raise your prices if 
your input costs go up, right? All right. Thank you. I see my 
time has expired. I yield back.
    The Chairman [presiding.] The chair now recognizes Ms. De 
La Cruz for 5 minutes.
    Ms. De La Cruz. Thank you so much, Mr. Chairman, for 
hosting this important hearing.
    The farm bill isn't something that happens every year, 
which I think is good as it allows Congress the time to look at 
the policies in the past and see whether they have been working 
or not working. As a result, we are able to make good, informed 
policy changes to strengthen the farm safety net and support 
rural America.
    I look forward to working with my colleagues on the other 
side to help strengthen this industry and to support 
stakeholders across this industry with good legislation and 
specifically working with our farmers in Texas and across this 
country.
    Now, my question is really to everybody on this panel. I 
know in talking to producers in my area crop insurance is 
really critical. I come from an insurance background. That is 
my previous life being in insurance, and so I understand how 
important insurance can be. Now, for the most part, lenders 
require farmers to carry insurance, and generally, it works 
well. Could each of you briefly comment on the role crop 
insurance plays in your industries and the typical policy 
carried by your member?
    Mr. Cates. Well, I carry 80 percent on my corn and 70 
percent on my soybeans. It is critical for the crop insurance. 
I think one thing that would be helpful if we could have maybe 
a higher rate at a more advantageous cost factor to the farmer 
would be helpful. I think the big thing is, ad hoc is supposed 
to be for a major disaster, and I would rather see money spent 
into the crop insurance to maybe lower our premiums at a higher 
rate of insurance. That would be more advantageous than 
worrying about an ad hoc program and whenever just anything 
comes about.
    Ms. De La Cruz. Thank you. And I would like to hear from 
each of you what changes or improvements you think we can make 
in this specific area, and if you are a specialty crop, how 
insurance has been effective in your specialty crop.
    Mr. Frischhertz. So sugarcane, we are not eligible for ARC 
or PLC. There are insurance products available. Our farm did an 
analysis about 3 years ago and just found it to be too 
expensive for the coverage that is available and honestly just 
wasn't a viable option for us. The Hurricane Insurance Program 
has been invaluable for farmers, especially along southern 
Louisiana, but for our farm where we are located, it was just 
too expensive for the coverage available.
    Ms. De La Cruz. Thank you.
    Mr. Cheyne. Yes, on my farm we utilize an 80 percent yield 
protection coverage. I choose this because it is the highest 
amount I feel that I can afford. I would like to insure it at a 
higher level, but the premiums become too expensive for us to 
pay. So as others have stated, I think it would be very 
beneficial to strengthen the crop insurance program and 
eliminate the need for ad hoc programs down the road. And I 
guess I view it no different than a homeowner taking fire 
insurance out on a home. In a perfect world, we never need to 
use it.
    Ms. De La Cruz. Thank you.
    Mr. Meeker. For the sorghum industry, and especially in 
your district in south Texas, irrigated and higher rainfall 
areas have been 70 to 75 percent buy-up. The dryland areas such 
as the High Plains and the panhandle of Texas and western 
Kansas, eastern Colorado, more of a 60, 65 percent buy-up area. 
The higher-end buy-up is just price prohibitive. You wouldn't 
have recommended to any of your customers to buy product at a 
high rate if the return was never going to be there. So I think 
some of the ratings could be changed if we could look at how 
the ratings could be changed relevant to what production 
history is. I think there could be some ways that we can 
manipulate that and still keep the actuarial table sound.
    Ms. De La Cruz. Thank you. And in 6 seconds or less?
    Mr. McMillan. Well, I would just say quickly from peanuts, 
one thing that could be improved is the revenue protection. I 
believe it is tied to other oilseed commodities. It is not even 
tied to a peanut price. And if there were some way to tie it 
back to peanuts, I think it would work a lot better.
    The Chairman. Okay.
    Ms. De La Cruz. Thank you. I yield back.
    The Chairman. I am going to give a roster update before I 
go to Mr. Nunn. We are going to go Nunn, Carbajal, Johnson, 
Crockett. Everybody good with that? Okay. All right. Mr. Nunn, 
you are recognized for 5 minutes.
    Mr. Nunn. Thank you, Mr. Chairman. I appreciate that, and I 
appreciate the team being out here today. I know you have a lot 
of folks who are back at home working in the field doing the 
best they can. As my colleagues on the other side of the aisle 
and I very much agree is that providing an onramp particularly 
for young farmers, this next generation, I think it was talking 
about, Mr. Meeker, just the amount of technology that is in the 
field right now that agriculture is starting to change. And 
that is a lot of really good things, it is a lot of very 
exciting things, but also the barrier to entry into a farm or a 
community has also increased, and that makes it difficult for 
somebody who either wasn't born into it, didn't inherit it, or 
wants to come into it. And we want all those people to be 
successful across that board.
    So one of the things we have talked about for a while now--
and I think the chair has been a great leader on this--is on 
the Farm Service Agency's Small and Beginning Farm Program. I 
have heard time and time again now when I am out in the state 
and I talk with my young farmers how challenging this is both 
to navigate and what they are doing. But I wonder if each of 
you could speak to your individual industry's perspective on 
this, specifically the most significant impact we could do to 
either reform or help hone the Farm Service Agency?
    Mr. Frischhertz. Well, I was just nominated to the Board of 
Supervisors for our local FSA last week----
    Mr. Nunn. Right.
    Mr. Frischhertz.--have yet to fill out the paperwork. I 
will be happy to report back if I am invited back to speak to 
the Committee. But working with NRCS, I can say that we have 
implemented a number of conservation programs and worked very 
closely with our local NRCS office, and they have been great to 
work with. And without them, we would not have been able to 
implement that. But again, I will be happy to report back on 
FSA in a couple of weeks.
    Mr. Cates. I think one thing is that we still need to keep 
the county committees intact. We need that local control 
because those farmers in that county know what the situation 
is. And that is, to me, a very important step that we 
definitely need to keep.
    Mr. Cheyne. I feel fortunate that in my county we have a 
very, very good, high-quality staff. But in wheat country, 
there are some shortages out there. And as stated earlier, I am 
really worried about the loan program and the lack of loan 
officers. We had a couple of really good ones just get trained 
up, got headhunted by a private bank. So at some capacity, I 
don't know how you are going to figure out a way to pay him 
enough money that private industry can't take those prized 
employees away from you.
    Mr. Meeker. I think from a lending standpoint, the cost of 
production, the cost of equipment, the cost of capital is 
incredibly high, and I think limitations on the size and the 
scope of loans needs to be reevaluated. I had the--I don't know 
if it is the great fortune or misfortune to get to purchase a 
new piece of harvesting equipment this year, and I would have 
not qualified at the FSA office for a loan because of the value 
of the piece of machinery. I am fortunate to have a very good 
rural community bank that I am very confident in and am 
grateful for, but some communities and some of my producers in 
my association don't have that same luxury that I do. And so I 
think overhauling and modernizing where our lending is at and 
looking at the value of where we are at with equipment, inputs, 
cost of production I think needs to be reevaluated as opposed 
to just doing the same thing that we have always done.
    Mr. McMillan. I will just speak to some of your statements 
at the beginning. I wouldn't be here today if it weren't for a 
dad and an uncle giving me a hand up and allowing me to be a 
part of their operation. It is not something you just really 
get into. So, right now, I am not familiar with some of the 
programs that may help a young farmer, but going forward, those 
are things that I am probably going to need and need access to. 
And the better that can be, I think the more likely we are to 
have young farmers involved.
    Mr. Nunn. Well, Mr. Meeker, I would agree with you. I 
wouldn't know a lick about pigs if my mom hadn't shown me how 
to do it to begin with. So, hey, I want to thank you very much 
for being here. The things that I think we are learning in this 
is that your experience is really helping us identify where 
young farmers have the ability to bring a lot to this field 
going forward and finding onramps for them both in the credit 
for a first-time farmer, but also in the experience from a 
seasoned farmer really can be a great match. I appreciate you 
being here today. Thank you.
    With that, Mr. Chairman, I yield back.
    The Chairman. Thank you.
    And the chair now recognizes Congresswoman Crockett for 5 
minutes.
    Ms. Crockett. Thank you so much, Mr. Chairman, and thank 
you to each and every one of you for being here this afternoon 
to testify.
    When I was in Waco at our farm bill listening session, I 
heard a lot about the difficulty farmers are facing with high 
input costs, but I also heard a lot about how resilient farmers 
are. Farmers alter decisions from planting choices to 
harvesting techniques to overall farm management to adapt to a 
changing market. Most of all, I heard about farmers making 
alterations to survive in a challenging climate.
    As you all know, our planet is heating up, and now, we are 
not just facing higher temperatures, we are dealing with the 
changes in animal and plant behavior, soil characteristics, 
weather patterns, and so much more. I know our sugar growers 
and our sorghum growers in Texas are battling a terrible 
drought and don't have the water that is owed to us from 
Mexico. We all know that in the coming years more folks will be 
put in situations where they are trying to stretch our limited 
supply of water even further. Even so, many growers in my 
state, like farmers and ranchers across this country, are 
adapting to the harsher climate.
    Mr. Meeker, I appreciate what you said in your opening 
statement about how planting sorghum is climate-smart because 
it is resilient to drought. But if I understand correctly, your 
crop insurance rates aren't reflecting that. Let me be clear, 
we must maintain actuarial soundness, but I think there are 
ways to recognize the reality of our climate in our crop 
insurance policies. Look at health insurance companies where 
they have started to see reductions in premiums for wearing 
things such as health-monitoring devices. It is an actuarially 
sound decision and doesn't punish those who don't want to make 
the change. It just benefits those that are willing to adapt.
    I am glad we are having this hearing because it gives us a 
chance to start a dialogue. I learned so much from listening to 
the growers in Waco. So I want to let you in on what I am 
thinking so, hopefully, we can figure out our best approach. 
Crop insurance isn't a monolith. There are lots of different 
policies, so I wonder if there is room for some 
experimentation. Let me be clear, I would not suggest anything 
that isn't voluntary and incentivized-based. I wouldn't want to 
leave anyone worse off for continuing their current practice. I 
don't know if it is a study or an option we offer or incentives 
for private insurers, but I do know that from the testimony 
today that many of our commodity growers would benefit from 
more climate-aware insurance.
    I hope to explore this issue further with my colleagues, 
but it must be based on your input both here and following up 
with our offices. Working together, I think we can ensure 
American agriculture is both environmentally and economically 
sustainable for generations to come.
    So my question for each of the witnesses, starting with Mr. 
Meeker, is this: What factors of crops you grow or practices 
you employ are not accounted for by current crop insurance 
policies that you feel should be considered? Or if none, what 
should we be thinking about as we consider reauthorizing crop 
insurance?
    Mr. Meeker. Seventy-five percent of the acres of sorghum 
are raised using no-till technology, no-till methods. That is 
not documented anywhere in RMA data. That is just your yields 
have gone up and gone down with using that technology and that 
management style. We have had the opportunity to engage with 
the climate-smart commodities grant, and we are excited about 
that. We think that it is going to accentuate the attributes 
that sorghum has as a water-sipping crop and as a resource-
conserving crop, that we will be able to utilize that and 
showcase what our abilities are as a crop.
    But, I think there are some really good ways to look at the 
actuarial tables and look at where our yields have been at 
because diverted water from a higher-value crop and having some 
of those zeros taken away, I think that would be a really 
awesome opportunity. And RMA really hasn't had that ability to 
do that yet, and maybe through this Committee, we can ask RMA 
to have some of that flexibility.
    Ms. Crockett. Thank you so much. Is there anyone else? We 
still got about 30 seconds.
    Mr. McMillan. I don't know that this is taken into account 
with crop insurance or not, but one of the great things about 
peanuts is they are a very sustainable crop, and they use far 
less water, which is a very valuable resource, as you seem to 
know. They use far less water than a lot of crops. And so that 
is a really great thing about peanuts.
    Mr. Cheyne. Where I farm, I am an irrigated farmer. On the 
rare occasion I have water to grow a lot alfalfa hay, there is 
no effective coverage on alfalfa or grass crops.
    The Chairman. The gentlelady's time has expired.
    I now recognize Mr. Johnson from South Dakota.
    Mr. Johnson. Yes, I want to pick up where Ms. Davids left 
off just talking about FSA offices being overwhelmed, and since 
then, we have also talked about some staffing issues. And NRCS 
isn't the jurisdiction of this Subcommittee, but I would note I 
hear the same thing about NRCS offices, people working hard, 
trying to do their best.
    I guess I would ask you each of you gentleman, I mean, is 
there something about the application process for these 
programs that could be streamlined? Have we made things too 
complicated? Are they too cumbersome? Any thoughts?
    Mr. Cates. I sometimes think it is too cumbersome. I mean, 
a lot of times it takes anywhere from 6 months to a year for 
those of us that do have farmland in the hills to get a plan to 
do certain conservation practices. And I think that it 
definitely could be streamlined.
    Mr. Johnson. Well, on the FSA side, too, I mean, are they 
asking for information that maybe wouldn't have to be in the 
application?
    Mr. Cates. In my case, I haven't seen that.
    Mr. Johnson. Okay. Anybody else, thoughts?
    Mr. Frischhertz. I was going to say on the NRCS side in 
working through programs, a lot of times you have to identify 
fields and programs 2 to 3 years in advance, and having some 
flexibility could help implement that. So in sugarcane, we were 
a rotational crop in that we don't necessarily know when we are 
going to plow it out. It can go 3, 4, or 5 years in the field. 
So we might identify a field with NRCS and say we want to put 
this in cover crops 2 years in advance. Well, the yields in 
that field were fantastic. Why would we want to plow that out 
and plant a cover crop? Having that flexibility to roll it over 
to another year would be hugely beneficial for us.
    Mr. Meeker. I would say that from an FSA asking for 
probably data that they don't need, ERP phase 2 is probably the 
number one thing on my mind. The first thing that came to my 
mind with that, they don't need my income tax records. They 
have RMA data that tells them what has already happened. That 
is where the disaster was at. They knew there was a loss. They 
can utilize that.
    My direct competition, a lot of times their wife might work 
in the FSA office, and that would be pretty healthy information 
for their operation to have to know what my income status is 
compared to theirs when a land sale comes up. So I think there 
are some opportunities there that we could streamline that, 
again, go back using a program that already worked with ERP 
phase 1. And I have other areas of ERP phase 2 that are really 
detrimental to my operation. I don't want to bore you with that 
today at this time, but I would love to have conversations with 
anybody that would like to have those conversations of why I 
was excluded from ERP.
    Mr. Johnson. Well, and let's just dive into ERP phase 2, 
for any of you. I mean, how is that rollout going? I mean, what 
can you teach the Committee about where we are at?
    Mr. Cheyne. I think the rollout is going fine. I can speak 
for my area, my county, got good staff, good people, well-
trained, well-informed. I hear other stories from other 
producers in other areas that are the exact opposite of mine. 
FSA has been good. Over the years, there has been numerous 
times when I have had to remind the NRCS people that I manage 
my farm, not them, to the point of just saying not interested 
in your program, we are all done, goodbye.
    Mr. Meeker. Two weeks ago on the dashboard there was ten 
approved ERP phase 2 approvals. That is pretty pathetic. I am 
sorry, that is pathetic. There are a whole lot more than ten 
producers that have a need in this country. I don't know what 
it is now. I think some of the staff back here is trying to 
find that number for us. They will get it to you. But we have 
poor rollout. We have poor use of our time and our resources, 
and I would love to have a have a discussion on how we can make 
that better in the future. One hundred and twelve now, so they 
have gone up almost 100 percent, so that is pretty good, but I 
bet in 2020 and 2021, there was more than 112 people that had a 
problem, and that is detrimental to the farm gate.
    Mr. Johnson. Very insightful, gentlemen. Thank you, and I 
yield back.
    The Chairman. The chair now recognizes Mr. Carbajal for 5 
minutes.
    Mr. Carbajal. Thank you, Mr. Chairman. And thank you to all 
the witnesses that are here today.
    Mr. Frischhertz, can you talk about the weather and 
economic conditions that sugar producers have experienced in 
recent years, and what can Congress do to help strengthen the 
current USDA disaster program?
    Mr. Frischhertz. Well, what is wonderful about sugar is 
that it is grown in 24 states all across the country. You can 
have a drought in Minnesota and Texas and too much rain in 
Louisiana, and that is what we have been experiencing.
    What we really need is a better insurance product that can 
help us stand with hurricanes and what we are seeing 
particularly in Louisiana with hurricanes, but the value of our 
crops should reflect the value of the product. With number 16 
sugar price, essentially, we can bank on a more reliable 
product I guess is what I am trying to say. Whether the weather 
fluctuates so much from various places across the country, 
having a more flexible and unified crop insurance program could 
be very beneficial.
    Mr. Carbajal. Thank you, Mr. Cheyne, with climate being an 
ongoing issue in agriculture, take me through your process of 
how you as a producer go through in making decisions on crop 
insurance coverage.
    Mr. Cheyne. Well, for me, sir it has been pretty 
straightforward. I have been able to get a really good crop 
insurance agent. My son is handling it almost exclusively now. 
We are able to go and talk to the agent, figure out the price, 
the level of coverage, try to outguess Mother Nature, and put 
together a program that we feel we can afford and will give us 
the needed amount of security to stay in business if there is a 
failure. And I kind of look at it when I go in there, the 
insurance isn't to get rich off of. It is there to keep me 
whole financially to live to fight another day. And as long as 
the farm bill can continue to provide that assurance, I think 
there will be a big sigh of relief throughout the farm country. 
But to me, it has been a very straightforward and easy process.
    Mr. Carbajal. Great. Thank you for sharing. Mr. Cheyne, 
continuing, as you may know, California experienced severe 
storms at the beginning of this year. This caused flooding with 
several crops, including wheat. Can you share your perspective 
on how Title I commodity programs have functioned for producers 
during years in which quality problems arise?
    Mr. Cheyne. With Title I, yes, we are talking ARC and PLC 
here. The price has to fall 62 percent, nearly \2/3\, before 
that part of the safety net fills in. And if you are totally 
reliant on ARC or PLC, there are days you are going to feel 
like you are chairing the train wreck committee when you get up 
out of bed because you are wondering whether that net is going 
to catch you in time, whereas with the crop insurance, it is 
pretty immediate, very effective, rapid in payment, and it just 
gives an additional layer of security that is very, very much 
appreciated.
    Mr. Carbajal. Thank you very much. Mr. Chairman, I yield 
back.
    The Chairman. The chair now recognizes Mr. Rouzer for 5 
minutes.
    Mr. Rouzer. I thank the Chairman. And it looks like I may 
be the last one here for you today. And given that you have 
heard about every question in every which way, many pretty much 
almost identical or related to each other, I thought I would 
give each of you an opportunity to underscore perhaps the one 
thing that you really wanted to be asked about, whatever that 
may be, and/or the main point that you really want to stress 
and get across. And then to follow up that, as you answer, I 
would like to know, obviously, when we were crafting a farm 
bill--and I have been a part of a number of different farm 
bills in the past. I have had multiple lives in this town. It 
is all going to come down to how much money we have to work 
with, how much extra money or how much less money? What is the 
one thing, if you had to pick one thing that needed to be 
adjusted, I would love to know what it is. I think I know that 
answer, but I want to give each of you an opportunity to speak 
to it.
    Mr. Cates. I think probably for the soybean farmers it 
would be definitely to be able to increase the reference price 
and to be able to increase on a voluntary--base acres would be 
one of the most important things.
    Mr. Frischhertz. The number one takeaway for me would be 
that the sugar policy is vital to our nation and to our local 
communities and that we should really examine how the farm 
safety net could be improved for all Title I commodities.
    Mr. Cheyne. I think the big takeaway for me in this is in 
the last two farm bills, agriculture has given up, other 
programs involved in the farm bill have not. It is only \2/10\ 
of a percent spending. I am hopeful that the Congress can 
protect crop insurance and help us out on the reference price. 
Wheat industry views this as just a great way to not only 
protect the American farmer, but our food security and 
ultimately, our national security. Because food and security 
are so intertwined now, I would ask everybody involved to 
please not take your eye off that.
    Mr. Meeker. I would like to take the opportunity to say 
thank you for the budget estimate letter that was sent out. I 
appreciate that. It shows the need, and I know that there is a 
great need for added dollars into the baseline. And I 
appreciate you having us here today. Thank you very much. I 
appreciate the opportunity to testify on behalf of my commodity 
organization.
    I think our main focus is protecting crop insurance, 
maintaining the relevant safety net or making a relevant safety 
net. But as we develop a new farm bill, I would like us to make 
sure that we do not pick winners and losers between 
commodities. Let's let the natural market decide what crop gets 
planted. I am a diversity grower. I raise a lot of different 
crops. Sometimes market dictates what I raise. It is not just 
in my rotation. But I don't want government to dictate what I 
raise. I want the market to be able to dictate that.
    And then second, or third, just see how we can make that 
safety net relevant with an increased reference price. Thank 
you. And again, I appreciate the time.
    Mr. McMillan. I also appreciate the letter that was sent to 
the Budget Committee. There were a lot of good points that were 
made, and it shows that you all truly understand. And I 
understand y'all's constraints, too, that not everything can be 
done. But if we could have one thing, that--the PLC program, 
the framework works, but if we could have one thing, we need a 
reference price increase to have a viable safety net.
    Mr. Rouzer. Mr. Meeker, I think it was you that mentioned 
the high cost of equipment. Can you repeat what that specific 
piece was, a combine maybe? I can't remember. And then what the 
price was if you don't mind?
    Mr. Meeker. It was a cotton stripper, and it was $850,000. 
And if I would have ordered the same cotton stripper--I ordered 
that cotton stripper in November of 2021. Had I ordered that in 
November of 2022, that would have been over $1 million machine 
this year. So the cost continues to go up, and that cotton 
stripper purchase might or might not be some of the tax 
liability reasons why I have an ERP problem.
    Mr. Rouzer. Well, I have a theory, and then there are 
multiple contributors to increase of the cost, obviously, but 
you know, all this new emissions technology with the sensors 
and everything else and how you can't repair the equipment, you 
got to send it back to the dealer, and then they got you by 
the--well, anyhow, you know what I mean.
    The Chairman. We are going to hit the mute button right 
there.
    Mr. Rouzer. I went there. So, Mr. Chairman, I yield back.
    The Chairman. Before we adjourn today, I would like to 
invite the Ranking Member to share any closing comments she may 
have, Ms. Brown.
    Ms. Brown. Thank you, Chairman Scott.
    To our witnesses, thank you, thank you, thank you for 
taking time out of your busy schedules to be with us today. We 
truly appreciate your time and expertise. Your insights 
regarding the implementation of the 2018 Farm Bill provisions 
related to Title I and Title XI, along with everything else 
mentioned today, will inform us in drafting the 2023 Farm Bill. 
Working together, we can ensure that the farm safety net and 
crop insurance tools serves all America's farmers, ranchers in 
an equitable manner. And thank you again.
    Mr. Cheyne. On behalf of the wheat industry, thank you, 
ladies and gentlemen, for hearing what the farmers of America 
have had to say. Your help is appreciated.
    The Chairman. Gentlemen, I want to thank you for being 
here, and I want to leave you with a few words from the great 
philosopher, Mr. Jerry Reed, we have a long way to go and a 
short time to get there, but we are going to do what they say 
can't be done in this Committee.
    And with that said, under the Rules of the Committee, the 
record of today's hearing will remain open for 10 calendar days 
to receive additional materials and supplementary written 
responses from the witnesses to any questions posed by Members.
    This hearing of the Subcommittee on General Farm 
Commodities, Risk Management, and Credit is adjourned.
    [Whereupon, at 4:27 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
Submitted Letter by Hon. Shontel M. Brown, a Representative in Congress 
                               from Ohio
April 26, 2023

  Hon. Austin Scott,
  Chairman,
  Subcommittee on General Farm Commodities, Risk Management, and 
    Credit,
  House Committee on Agriculture,
  Washington, D.C.

  RE: Request for a hearing on Minority and Socially Disadvantaged 
            Farmers and Ranchers in the Subcommittee on General Farm 
            Commodities, Risk Management, and Credit in the 118th 
            Congress.

    Chairman Austin Scott,

    As you consider additional hearings within the General Farm 
Commodities, Risk Management, and Credit Subcommittee jurisdiction 
during this 118th Congress, I write to ask you to allow Members an 
opportunity to hear from minority and socially disadvantaged farmers, 
ranchers, and stakeholders on farm bill issues. Our nation's strength 
in agriculture and as a people is in our diversity. We must acknowledge 
that this farm bill is for everyone: no matter what you look like, what 
you grow, or where you grow it.
    Over the last 6 years, we have seen nearly $70 billion in ad hoc 
payments to producers. This is $70 billion in addition to our existing 
farm bill safety net and disaster mitigation programs. These dollars, 
although welcomed by those who received them, have been distributed in 
an inequitable manner, favoring certain producers over others as has 
been confirmed by the Government Accountability Office.
    There were provisions in the 2018 Farm Bill that were an effort to 
allow socially disadvantaged farmers and ranchers to receive increased 
benefits under many USDA programs. Such programs included, but were not 
limited to crop insurance, disaster assistance, Farm Credit, and loan 
assistance. We need to hear from these farmers and ranchers to 
determine the effectiveness of those provisions as well as to hear 
where improvements need to be made.
    I urgently request that additional hearings be identified for the 
Subcommittee on General Farm Commodities, Risk Management, and Credit 
to ensure that Members have a forum to discuss minority and socially 
disadvantaged farmer and rancher priorities.
    I look forward to working with you on this critically important 
work.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Hon. Shontel M. Brown,
Ranking Minority Member,
Subcommittee on General Farm Commodities, Risk Management, and Credit.
                                 ______
                                 
                          Submitted Questions
Response from Tom Haag, President, National Corn Growers Association
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. For many corn growers, like myself, the foundational 
practice we use to increase soil health, reduce risk and increase our 
farms' resilience and profitability is conservation tillage. Today, 
about 72% of all row crop acres in the U.S. are farmed with forms of 
conservation tillage, which increases soil health by leaving more crop 
residue on the soil surface and more organic matter below the surface, 
reducing soil erosion and nutrient losses, while also reducing energy 
use and the related GHG emissions. This practice lowers our on-farm 
out-of-pocket costs while sustaining yields. In 1989, mechanical 
tillage using a moldboard plow or similar implement was in use on 75% 
of crop acres. Today those percentages have essentially flipped. About 
72% of row crop acres are in conservation tillage (37% under ``no-
till'', 35 % under ``strip-till'' or ``reduced tillage'' or similar).
    Another practice that is being increasingly adopted by corn 
growers, is cover crops. NRCS reports that between 2006 and 2016 the 
number of acres treated with cover crops grew from 2 million to almost 
20 million. This rapid growth in the adoption of cover crops is 
expected to continue as corn, soybean and pork grower groups have 
joined with NRCS and conservation organizations to double the number of 
corn and soybean acres in cover crops, to 30 million by 2030.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. We have suggested to Congress that two specific things be 
done to help us reduce risk through soil health and conservation 
practices. NCGA recommends that USDA be given direction to undertake an 
initiative to create and promote the use of a new conservation practice 
standard that could be called ``conservation weed management.'' That 
practice should provide for excellent weed control in the context of 
our use of conservation tillage while also minimizing the development 
of weeds' resistant to the herbicides that are critically important to 
the success and workability of conservation tillage. Once a new 
``conservation weed management'' practice standard is created, USDA 
should make that practice a priority for funding under EQIP, RCPP and 
related efforts. Second, we recommend that Congress direct USDA to 
revise and strengthen its current Interim Conservation Practice 
Standards program to allow for the more rapid and transparent 
development of conservation practice innovations and their 
incorporation into the USDA system.

    Question 3. What are the top three issues that Congress should 
examine more closely as it pertains to our existing commodity support 
programs?
    Answer. Corn growers are invested in developing forward-looking, 
market-orientated farm policies. NCGA's farm bill recommendations seek 
to make existing USDA programs more effective, efficient, and 
responsive through strategic investments and policy enhancements. Our 
top three recommendations for strengthening the commodity title are for 
Congress to increase the Agriculture Risk Coverage (ARC) County maximum 
payment rate above ten percent, increase the ARC-County coverage level 
above eighty-six percent, and to strengthen the Price Loss Coverage 
(PLC) effective reference price ``escalator.''

    Question 4. How has the economic and growing conditions effected 
your planting decisions?
    Answer. This year has brought growing conditions that could force 
changes from planting corn to another crop. From a cold and wet spring 
in the northern Corn Belt to spreading drought conditions, weather can 
influence the ability of corn farmers to get their crop planted and the 
productivity of the corn that is planted. As of June 11, 2023, the USDA 
estimates that 93% of corn is planted. While some additional corn may 
still be planted, there is a daily drop in expected productivity at 
this point that equates to about 1% of yield potential or about 2 
bushels per acre, per day in June. Given the estimate that 7% of corn 
is unplanted and the declining productivity potential, it is likely 
some farmers did face challenges that prevented them from planting any 
crop, or conditions forced a switch from corn to an alternative crop. 
Crop insurance policy parameters that reduce the revenue or yield 
guarantee each day during the late planting period can also impact corn 
farmer planting decisions in this situation. The USDA June Acreage 
report that will be released on 6/30/23 will provide better 
understanding as to how corn farmers final planting decisions differed 
from planting intentions.
    Compared to other industries, corn farmers are not as able to 
respond as quickly or straightforwardly to the impact of economic 
conditions when deciding what to produce. Most row crop farmers decide 
what to produce only once per year, and the agronomic and risk 
management benefits of sticking to a planned rotation have value when 
weighing economic conditions. Some corn inputs are available for 
farmers to purchase for the upcoming crop year before harvest of the 
current crop, prompting planting decisions to start 6 or more months 
ahead of planting. There is still flexibility to make changes, 
particularly if inputs are not already applied. The fertility needs of 
corn are greater than other crops and for 2023 are expected to be 46% 
of the operating cost of production for corn. Farmers who have already 
applied high-cost fertility inputs for corn ahead of planting are not 
likely to change their decision, except as a weather induced last 
resort.

    Question 5. What other resources does the USDA need to support 
producers, specifically in the technology space? What are those 
technology capabilities you want, but are not getting?
    Answer. Corn farmers have a proven track record of using innovation 
and technology to stay ahead of the curve when it comes to production 
and adoption of conservation practices. However, support from USDA 
would accelerate the adoption of precision agriculture practices across 
agriculture. NCGA supports the Precision Agriculture Loan Program Act 
(PAL) and the Producing Responsible Energy and Conservation Incentives 
and Solutions for the Environment (PRECISE) Act create promising 
avenues to do so by utilizing new and existing USDA programs to put 
cutting edge technology in the hands of more farmers.

    Question 6. The 2018 Farm Bill included a provision that provides, 
under certain situations, a one-time opportunity to update their Price 
Loss Coverage (PLC) program payment yield that would take effect 
starting with the 2020 crop year.
    Answer. Yields for harvested corn have been steadily increasing in 
the United States with USDA NASS data showing a national yield trend 
increase around 1.9 bushels per acre per year over the past 25 years. 
NCGA supported the update of PLC payment yields in the 2018 Farm Bill 
and has policy supporting the voluntary updating of program yields when 
applicable.

    Question 7. What is the process a producer must go through to 
fulfill eligibility requirements, like demonstrating that a producer 
has met the Adjusted Gross Income (AGI) limitation and actively engaged 
requirements? Is it a straightforward process?
    Answer. Corn growers who are existing customers with the Farm 
Service Agency (FSA) and other USDA agencies are used to filling out 
USDA forms to quality and certify eligibility for commodity, disaster, 
and conservation programs. USDA has improved customer service in recent 
years by posting fillable forms along with instructions on farmers.gov.
    Specifically, the CCC-941 form used to annually certify average AGI 
income is fairly straightforward for most producers, depending on the 
size and complexity of their operation. Producers are also required to 
have an AD-102 form on file for the Highly Erodible Land Conservation 
and Wetland Conservation Certification, which typically only has to be 
completed and filed once.
    In order to be considered ``actively engaged in farming'' and thus 
eligible for FSA commodity programs, producers and all legal entities 
must provide significant contributions to the farming operation. The 
farm operating plan which USDA uses for ``actively engaged in farming'' 
and other payment eligibility and limitation determinations can be a 
more complicated form and process, depending on the operation 
structure. Individual farmers are able to fill out the CCC-902 form and 
legal entities use the CCC-901 form.
Response from Shawn Holladay, Chairman, National Cotton Council
Question Submitted by Hon. Shontel M. Brown, a Representative in 
        Congress from Ohio
    Question. Even though my region of Ohio-11 may not have cotton 
fields, we certainly interact with the material later in the supply 
chain in the form of textile production.
    Given the presence of the textile industry in my district, it is 
important that the next farm bill has strong support for this sector.
    The Economic Adjustment Assistance for Textile Mills, or EAATM 
program, was originally set at a rate of 4 per pound of cotton used, 
but that rate fell to 3 in 2012 and has not been adjusted since.
    Mr. Holladay, can you speak to how EAATM funds have benefitted your 
members' mill operations, and the role that the program played in 
sustaining textile jobs in the United States?
    Answer. The ability of the U.S. textile industry to maintain its 
production and employment base can be attributed to the continued 
benefits of the EAATM. Supporting this program is now more important 
than ever.
    Despite the increased competition from imported textile and apparel 
products, the U.S. textile industry proved its resilience during the 
COVID pandemic by quickly shifting their manufacturing facilities to 
the production of PPE. Also, with increased concerns about the use of 
forced labor in the production of textile products in other countries, 
the U.S. textile industry and the trade arrangements in this hemisphere 
provide a safe and stable sourcing option for apparel and textiles.
    As you noted, one of the manufacturing facilities is in your 
district, and that facility is the largest cotton consumer-cosmetics 
plant in the world. When the pandemic began, the country didn't have 
enough testing swabs, and the facility in your district converted some 
of their equipment to produce almost one billion cotton swabs for 
[COVID] testing. This could not have happened without this program.
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. A good portion of my farmland has numerous undulated 
features, and we have been successful in the adoption of terrace 
systems that have significantly reduced erosion. We also plant sudan 
grass and cereal grains for our cover cropping which have led to 
increased soil moisture and yields.
    However, my conservation practices are reflective of the amount, or 
lack thereof, of rainfall I receive. In Dawson County, Texas, where I 
farm, we receive only 16" of rainfall on average per year and have been 
under extreme drought conditions for nearly 2 years. Due to the need to 
conserve available water during times of drought, I am often unable to 
carry about my full conservation plan. This is common in many areas of 
Texas and the Southwestern part of the U.S. that is heavily dependent 
on moisture for production
    While we should continue to incentive producer's adoption of 
conservation and climate smart practices, these programs must be 
locally driven with a clear understanding of the environmental and 
agronomic conditions facing growers from across the country.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. I think it's important that conservation programs 
prioritize working lands and provide a means to devote marginal 
production acres into long-term use.
    We are grateful the Administration is recognizing the 
sustainability practices of producers through the utilization of the 
Climate-Smart Commodities grant. The U.S. Cotton Trust Protocol, along 
with our partners at Cotton Incorporated, Alabama A&M, North Carolina 
A&T, the Soil and Waters Outcomes Fund, and Texas A&M, have received a 
$90 million grant from USDA that will financially incentive growers who 
adopt climate smart practices in cotton.
    It is critical that conservation funds, both provided by the 2023 
Farm Bill and the 2022 Inflation Reduction Act recognize the diversity 
of production practices across the cotton belt by rejecting a one-size-
fits-all approach. These funds should also reward, not penalize, the 
environmental contributions of those who have long time adopters of on-
farm sustainability practices.
Response from Aaron Flansburg, Chairman, USA Dry Pea and Lentil Council
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. Hello Representative [Sorensen], and thank you for your 
questions.

    Conservation and promoting good soil health are high priorities on 
our farm. I believe that healthy soil is necessary to achieve maximum 
yield potential. The way that I'm currently striving towards improving 
soil health begins with soil conservation practices. I need to maintain 
and build good topsoil to grow good crops!
    The area in which I farm is known as ``The Palouse,'' a hilly 
region with some of the best silt loam topsoil in the world. We 
consistently grow very high yielding dryland crops, including winter 
wheat, barley, canola, alfalfa, and of course pulse crops such as peas, 
lentils, and chickpeas. The hills present challenges that have been met 
by creative technological solutions, many of which I employ. But a 
steep hill is also considered highly erodible land. Conventional 
farming methods lead to heavy losses of topsoil in our area.
    As topsoil losses mounted, my dad employed conservation practices 
such as divided slopes, that is, planting a different crop on the top 
and upper portion of a hill than in the low ground and bottom part of a 
hill. We also put in soil retention ponds in a few places to slow the 
runoff. However, the biggest changes to our farming practices came 
within the last 10 to 15 years when we began to further commit to no-
till farming. Now, in a given year, we typically employ no-till 
practices on nearly 100% of our ground.
    This works for all of the crops that we grow. We rotate between the 
crops listed above every year, in what would typically be a 3 year 
rotation. This helps us to manage risk, as different crops may grow 
better given changes in weather patterns. It also helps us to mitigate 
price risk as markets fluctuate. Disease risk is also minimized by 
having different crops every year, and some repeated plantings may be 
as many as 9 years apart.
    Growing diverse crops from year to year helps to improve soil 
health by adding residue to the surface some years and avoiding low-
residue crops year after year. Soil is continuously improving by 
avoiding tillage, allowing for larger soil aggregate structure, 
improved earthworm activity, better water infiltration, and greatly 
reduced, if not nearly eliminated, water and wind erosion. However, 
there are many more farming methods I'm interested in adding to improve 
the health of the soil.
    One way I'm trying to change the way I farm is through an 
experiment with organic agriculture. This year, I expect to complete 
certification of 50 acres of organic farmland, with another 110 acres 
to be certified in 2025. I'm looking to reduce input cost by 
eliminating synthetic fertilizer, which has a detrimental effect on 
soil pH through acidification, and also harms soil fauna. Pulse crops 
play a role in this, as they do not require fertilizer, and some will 
actually fix more nitrogen in the soil than they use to grow, reducing 
fertilizer needs for the next year's crop in a conventional farming 
system, and eliminating the need to purchase fertilizer altogether as 
part of a regenerative system when used to build soil nitrogen and 
carbon in cover-crop mixes. I want to move closer to a healthy soil and 
surface ecosystem on my farm, which I hope will get me as close as 
possible to true regenerative agriculture. My long-term goal for this 
ground is to leave the soil health much better than I found it, 
maintain and build more topsoil, and gain as much control of input 
costs and market opportunities as possible.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. Our farm policies have been largely successful in promoting 
inexpensive food. Some of our historical conservation programs have 
also worked well. However, the promotion of diverse crop production 
systems has always been a weak point of the farm bill. Support for the 
biggest, most well-established commodities is important for the 
stability of our farms and domestic food security, but favoring them 
can come at the expense of healthier crop rotation, investment in those 
smaller crops, and ultimately, the health of the soil.
    Crops such as peas, lentils, chickpeas, and beans have an important 
role to play in soil health and improving the health of our population 
because they're high in protein and fiber, low in fat and 
carbohydrates, and nutrient-dense. They are grown on a much smaller 
acreage than our biggest commodities, but they play an important role 
in reducing water use and conserving soil moisture for the following 
crop year. They also have an extremely low carbon footprint. If 
Congress is serious about supporting crops that reduce greenhouse gas 
emissions throughout their life cycle, we must support the growth and 
consumption of pulses. We need more research dollars for pulses. 
Congress can also help us to drive demand through domestic marketing 
grants, and by continuing to support the development of foreign markets 
while pushing for open and free trade.
    Soil health and conservation are very important to me, but without 
consistent and dependable weather patterns, farming becomes an even 
higher risk industry. Higher risk leads to higher expense, and 
insurance programs become more expensive and more important. This also 
makes the farm bill more expensive. We need to incentivize cropping 
systems that reduce the need for chemical fertilizers, which are not 
only expensive, but also increase greenhouse gas emissions in their 
production, harm soil health, and increase soil acidification. We must 
promote the use of crops in rotation that reduce our reliance on these 
fertilizer inputs, and pulses are a critical tool to achieve this 
reduction. Pulses are the single most climate-smart food that we can 
grow.
    Pulses are also an important part of every cover crop blend that 
I've ever used, and I believe that cover crops need to be promoted by 
Congress to increase diversity, retain moisture, build soil health, 
increase nitrogen and carbon sequestration, provide pollinator and 
beneficial predatory insect habitat, and reduce fertilizer requirements 
for the next crop. However, it is expensive to grow cover crops, in 
that they must be seeded, which costs time, fuel, the purchase of seed, 
and wear and tear on equipment, without realizing a direct profit from 
the harvest of that crop. Some cover cropping systems equate to a year 
of fallow, from which no direct income results. If Congress is serious 
about promoting soil health and conservation management practices, 
there needs to be ways to incentivize the growth of cover crops and 
monetize them for farmers through an easily-accessible program. Perhaps 
it could be similar to the CRP program, but for a single year.
    There are lots of barriers to changing farming systems to improve 
conservation practices, whether it be the expense of choosing to forego 
a cash crop for cover crops, equipment changes, or market uncertainty 
associated with alternative crops. But for me, one of the biggest 
impediments has been lack of knowledge resources. As I began to move 
towards an organic production system on some acres, I found no local 
contacts that were able to help me. My search for information included 
reaching out to the NRCS and local conservation districts. At this 
point I've read six or seven books on alternative cropping systems, 
organic and regenerative agriculture, and have basically been 
experimenting on my own. Our specific area is almost entirely devoid of 
organic agriculture, and despite having two highly regarded ag. 
universities nearby, Washington State University and the University of 
Idaho, I haven't found information that would help me locally. I am now 
participating in a 3 year experiment with the U of I to establish and 
evaluate spring seeded cover crops, but this effort is still new in our 
area. I feel like the current governmental resources in my region are 
entirely lacking for farmers looking to develop organic practices. In 
terms of knowledge resources, I feel that I've been mostly on my own to 
gather information from books, online, or from a very limited number of 
like-minded farmers.
    I participate in government programs through the FSA, but NRCS soil 
health conservation programs seem mostly tailored to monitoring residue 
or establishing grassed waterways, and do not seem suited to monetarily 
rewarding no-till practices and crop rotation on their own. For this 
reason, I don't participate in any governmental conservation programs 
other than CRP, which I only employ in limited areas. I have worked 
with our local conservation district to receive grants for purchasing 
no-till drills, as well as payments for grassed waterways that do exist 
on our farm.
    Our commodity programs need revisions to prioritize risk management 
through diverse cropping systems. Going forward, I would also like to 
see a way that farmers who have already adopted conservation methods, 
such as no-till seeding, diverse cropping systems, cover crops, and 
even regenerative practices, will be able to capture incentives for 
these established practices, as opposed to only rewarding farmers who 
move away from more conventional farming. Those who are already moving 
ahead with their quest towards healthier farming practices should be 
rewarded for the strides that they have made! I feel like all of these 
conservation practices and more will need to be adopted on a much 
larger scale so that farmers can do their part to mitigate climate 
change, keep more growing plants with living roots in the ground for 
carbon capture and soil health, and be able to minimize the harm from 
warmer average temperatures and more extreme drought and storm events.
    Conservation of the soil resource and soil health are my top 
priorities for the long term on my family farm. I want to be able to 
leave the ground better than I received it for future generations. But 
despite all of my own efforts in this direction, I do need support. 
Some of that support is knowledge-based, some is financial, and some 
will come from a farm bill that prioritizes the voluntary adoption of 
practices that increase resilience and soil health. Supporting programs 
that nibble around the edges is not enough. If we agree that a warmer 
climate would be catastrophic to the future ability of the planet to 
support current agricultural production, then we must work together to 
meet that challenge with revolutionary thinking. Pulse crops are a part 
of that solution, and we need to grow many more acres and consume many 
more plant proteins. Conservation practices need to be easy to adopt 
and financially rewarding. Massive investment is needed to improve soil 
health and therefore increase its ability to store carbon. Regenerative 
farming practices need to be quantified, developed, incentivized, and 
implemented. We need to invest in knowledge resources for farmers to 
adapt to new practices that support resilience and soil health. The 
USDA needs to be able to implement these priorities as established in 
the 2023 Farm Bill.
    I sincerely appreciate the chance to respond to your questions. I 
hope that my answers can be useful to you and the House Agriculture 
Subcommittee.

Aaron Flansburg,
Chair of the USADPLC.
Response from Kirk Satterfield, Chairman, USA Rice
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. Almost all rice grown in the Mid-South and my region in the 
Mississippi Delta is done so on a crop rotation. Rice farmers practice 
crop rotations to improve soil structure, enhance fertility, and break 
disease and pest cycles. Rice farmers employ precision nutrient 
management strategies to optimize fertilizer application, reduce 
nutrient runoff, and minimize environmental impact. Conservation 
tillage practices that disturb the soil as little as possible during 
planting and after harvest are common and help maintain crop residue 
cover on the soil surface. 100 percent of rice grown in the U.S. is 
irrigated. Precision-leveled fields are instrumental in improving 
water-use efficiency but also prevents soil erosion, slows down or 
eliminates water leaving the fields, reduces sediment runoff, and helps 
retain soil on the fields.
    Rice farms support approximately 45 percent of the North American 
wintering duck population. We close our drains and capture rainwater to 
create surrogate wetlands within the major Flyways of North America. 
The habitat co-benefits from rice are irreplaceable and necessary to 
maintain and enhance wildlife populations. Winter flooding of rice 
fields also has proven to reduce nonpoint source export by reducing not 
only the runoff volume but also the concentration of solids and 
nutrients in said runoff. This is in part due to the shallow waters 
providing a protective layer that buffers the soil from rainfall and 
reduces the flow of water across the field thereby allowing sediments 
and nutrients to settle and not be discharged as suspended solids. 
Foraging by migrating waterfowl also increases surface straw 
decomposition and fallow flooding increases nitrogen uptake during the 
next growing season.
    USA Rice has made a concerted effort to engage with USDA to ensure 
that working lands programs work for rice growers across all rice 
growing regions. The Environmental Quality Incentives Program (EQIP), 
Conservation Stewardship Program (CSP), and the Regional Conservation 
Partnership Program (RCPP) have practices and enhancements available 
for the methods listed above and are critical to rice farmers to carry 
out these vital conservation efforts.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. The Conservation Title should focus on the locally led, 
voluntary, incentive-based conservation model instead of a top-down 
regulatory regime. Conservation programs should provide options for all 
farmers to participate and should not incentivize a one-size-fits all 
model.
    There should be a priority on working lands programs like the 
Environmental Quality Incentives Program (EQIP) and the Conservation 
Stewardship Program (CSP) instead of set-aside programs like the 
Conservation Reserve Program (CRP) especially during times of potential 
global food shortages.
    Conservation programs should have the dual goal of not only 
incentivizing environmentally beneficial practices but also helping 
producers be more productive and economically viable while helping the 
rural economy.
    Rice is a unique crop in that cover crops traditionally do not 
work; however, we use shallow water flooding throughout the winter 
months that offers similar benefits in addition to creating habitat for 
migratory waterfowl and other wildlife, significantly increasing 
biodiversity.
    Partner-driven programs, such as the Regional Conservation 
Partnership Program (RCPP), work. USA Rice's partnership with Ducks 
Unlimited, the Rice Stewardship Partnership, has beneficially impacted 
more than 800,000 acres of rice and rice rotation ground and resulted 
in more than $108 million in additional conservation funding to rice 
farmers.
Response from Andrew Moore, President, U.S. Canola Association
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. Conservation is important to our farm and to U.S. Canola 
farmers. On our farm, we use no till production practices, per acre we 
utilize a five crop every 3 years crop rotation, and double crop all of 
our winter crops (Canola, Wheat, Barley, and Oats) followed by a second 
no-till soybeans, sunflowers, or a summer cover crop. We either allow 
natural cover to establish the winter before we plant corn or plant a 
cover crop to make sure we are growing something green year round.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. Using a broad brush to identify what can be established on 
a national level to encourage farmers to incorporate risk to increase 
soil health and conservation management practices is difficult to 
answer. Growing regions across the U.S. are dramatically different with 
unique potentials. For example, the Southeast U.S. has the potential to 
grow winter canola in the fall then harvest in the early summer, then 
immediately plant the second crop, soybeans.
    The Southeast is unique to the double crop production practices due 
to the mild climate during the winter. I believe that giving the 
opportunity for regions to develop conservation production practices 
that are unique to the area they represent is the best way forward. I 
am very familiar with Southeast production practices; however, my 
experience limits my scope of production practices for production 
practices in the Pacific Northwest, the Great Plains, the northern 
Midwest. Allowing regional experts to make recommendations to what 
makes sense for the producer will gain the greatest return on 
increasing soil health and increasing conservation management 
techniques.
Response from Daryl Cates, President, American Soybean Association
Question Submitted by Hon. Shontel M. Brown, a Representative in 
        Congress from Ohio
    Question. Can you talk about the different uses for soybeans, and 
any concerns about the availability of soybean oil to meet the 
increased demands?
    Answer. Domestically produced soybeans are used to produce the 
world's food, feed, fuel, and biobased products. When processed, 
soybeans are divided into protein and oil. Soybean protein 
(approximately 80% of the bean) is primarily used in livestock animal 
feed, but it is also an ingredient in plant-based foods, plastic 
composites, synthetic fiber, paper coatings, adhesives, and more. 
Soybean oil (the remaining 20% of the bean) is one of the most 
versatile natural oils because of its molecular structure and suitable 
fatty-acid profile. In addition to edible oil, soybean oil can be used 
to produce biomass-based diesel (biodiesel, renewable diesel, and 
sustainable aviation fuel) as well as a variety of other products 
(tires, tennis shoes, cosmetics, paint products, concrete sealants, and 
even golf balls).
    Looking specifically at soybean oil, an increase in the use of 
soybean oil for biofuels has led some to believe this could result in 
increased food prices. However, a recent study \1\ * by Dr. Jayson Lusk 
at Purdue University was very revealing. It considered the impact of a 
20% increase in soybean oil used in biofuels and found consumer food 
costs remain practically unchanged. The retail food price impacts were 
muted, as soybean oil is only a small share of the overall cost 
involved in producing retail foods. Further, increased soybean oil 
production led to more domestic soybean meal production. This meal, 
which is used primarily as animal feed, led to a retail price reduction 
for animal proteins. Overall, the study by Dr. Lusk found that the 
price increase of soybean-oil containing food was largely offset by the 
price decrease of protein-rich foods, leaving the overall ``food at 
home'' portion of the Consumer Price Index largely unchanged (an 
increase of 0.05 percentage point in the food at home CPI when 
considering a 20% increase in soybean oil demand for biofuels).
---------------------------------------------------------------------------
    \1\ https://ag.purdue.edu/cfdas/wp-content/uploads/2022/12/
report_soymodel_revised13.pdf.
    * Editor's note: the referenced report, Food and Fuel: Modeling 
Food System Wide Impacts of Increase in Demand for Soybean Oil, is 
retained in Committee file.
---------------------------------------------------------------------------
    ASA is sensitive to issues regarding the availability of our 
products. Fortunately, availability does not appear to be an issue for 
soybean oil. USDA forecasts that the U.S. will consume more soybean oil 
for biofuels next year. Yet, food use is expected to continue to remain 
nearly constant. Expansion in the soybean crushing industry is allowing 
more use of soybean oil for biofuels without detracting from the edible 
market.
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. In 2020, ASA surveyed soy growers who engage in 
conservation about the practices on their farms. Respondents indicated 
they use the following practices:

   Reduced tillage (70.21%)

   Precision agriculture practices, e.g., variable rate 
        application, precision irrigation, etc. (68.09%)

   Nitrogen inhibitor/split nitrogen management (63.83%)

   No-till/strip-till (55.32%)

   Cover crops (55.32%)

   ``4-R plus'' nutrient management (40.43%)

   Manure management (36.17%)

   Buffer strips (34.04%)

   Edge of field practices, e.g., bioreactors, saturated 
        buffers, wetlands, drainage water management, sediment basins 
        (27.66%)

   Other, e.g., in-field terraces, drainage tile, pollinator 
        habitat (6.38%)

    Clearly, the participation rates add up to much more than 100%--
many farmers ``stack'' practices, simultaneously engaging in many 
practices to implement a conservation plan that takes a comprehensive, 
long-term approach to soil health, risk reduction and resilience, and 
better yield. These strategies are paying off. Between 1980 and 2020, 
U.S. soy farmers have realized:

   60% irrigation water use efficiency improvement per bushel

   48% land use efficiency improvement per bushel

   46% energy use efficiency improvement per bushel

   43% greenhouse gas emissions efficiency improvement per 
        bushel

   34% soil conservation improvement per acre

    These changes have occurred while U.S. farmers have increased 
production of soy (bushels) 130% on the same amount of U.S. land. 
(Source: Field to Market National Indicators Report 2021) \2\ **
---------------------------------------------------------------------------
    \2\ https://fieldtomarket.org/national-indicators-report/report-
downloads/.
    ** Editor's note: the referenced report, Environmental Outcomes 
from On-Farm Agricultural Production in the United States, and its 
addendums are retained in Committee file.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. Congress can continue to provide sufficient resources for 
voluntary, incentive-based conservation practices through USDA's 
Natural Resources Conservation Service. Incorporating conservation into 
one's farm is important but can be cost-prohibitive in a farm economy 
with tight margins. Cover crops, for instance, can cost upwards of $30 
an acre to implement, and--especially in the first few years of the 
practice--yields (and therefore revenue) on those acres can take a hit. 
Trying new practices is inherently risky in agriculture, where you only 
get one chance per year to get it right. Thus, Congress continuing to 
provide financial and technical support to growers who want to try new 
conservation practices will be essential.
    Soybean farmers are avid participants in existing farm bill-
authorized programs like the Environmental Quality Incentives Program 
(EQIP) and Conservation Stewardship Program (CSP), which support 
conservation practice adoption on working lands. In 2021, ASA conducted 
a nationwide survey of soy farmers about the most pressing resource 
concerns on their farms and where farm bill conservation funding should 
be directed: The results indicated that the conservation title of the 
farm bill should prioritize programs and practices that address 
cropland soil quality and health, water quality and quantity, saving 
input costs, and providing growers with regulatory certainty (under the 
Clean Water Act, Endangered Species Act, etc.). Streamlining the 
enrollment and contract management process for these programs will 
further incentivize farmers to work with NRCS to literally encourage 
conservation at the ground level.
    It is also important to recognize that one size does not fit all in 
agriculture: Soil health will mean something different in Illinois than 
it does in Georgia or North Dakota. ASA supports flexible program 
offerings at NRCS that can meet farmers' needs across various crops, 
soil types, farming methods, levels of existing investments in 
conservation, and climate and weather conditions.

    Question 3. What are the top three issues that Congress should 
examine more closely as it pertains to our existing commodity support 
programs?
    Answer. ASA supports several improvements to increase the 
effectiveness, accessibility, and reliability of the Title I farm 
safety net:

   Increasing the soybean reference price, which could be 
        achieved through a statutory reference price change, 
        adjustments to the effective reference price such as removing 
        the arbitrary cap and increasing the coverage factor, or a 
        combination of these.

   Adjusting the ARC calculations, such as removing the 
        arbitrary cap and increasing the coverage level.

   Providing the option (not requirement) to update base acres 
        to reflect a more recent, defined period of time while allowing 
        new acres to enter the program.

    Question 4. How has the economic and growing conditions effected 
your planting decisions?
    Answer. U.S. farmers make significant investments and take on 
enormous risks to produce food, feed, fuel, and fiber for consumers 
domestically and abroad.
    Like all farmers, I have experienced higher input costs for several 
years. Those increased costs have, in turn, increased my borrowing 
needs. With higher interest rates, credit is also more expensive. 
Higher crop prices are also driving up my crop insurance premium costs. 
Farming is expensive, and farming has many variables that impact 
economic viability--including weather. Crop insurance is our most 
effective risk management tool and must not become strapped with farm 
bill amendments that weaken effectiveness or reduce affordability.
    In my written testimony, I highlighted deficiencies in the Title I 
farm safety net that were exposed during the China trade war. During 
that time, ad hoc assistance kept my farm afloat--not the Title I 
safety net. Without the extra programs, I would not be farming today. 
Having already experienced economic hardship under the current farm 
bill, we can all reasonably expect that economic disruption will occur 
again in the future. Preparing for these rough spells proactively with 
a reliable safety net is a much better approach than relying on ad hoc 
assistance from USDA or Congress.

    Question 5. What other resources does the USDA need to support 
producers, specifically in the technology space? What are those 
technology capabilities you want, but are not getting?
    Answer. ASA supports providing incentives to encourage use of 
precision agriculture technologies and specialized tools (such as 
deeper drills) to implement conservation practices. ASA has endorsed 
two bills that would be effective at getting these tools into more 
farmers' hands: the Precision Agriculture Loan Program Act of 2023 
(H.R. 1495) and the Producing Responsible Energy and Conservation 
Incentives and Solutions for the Environment Act (``PRECISE Act,'' H.R. 
1459).
    Precision agriculture equipment can directly benefit yield from 
accurate spacing, population rate, and limiting harvest loss; optimize 
applications of fertilizer and pesticides by reducing overlap, skips, 
and improving placement; save fuel through fewer field passes and more 
efficient harvests; and save water in irrigated operations with 
selective application and remote shutoff. Indirectly, this equipment 
can improve soil health and reduce soil compaction; improve water 
quality and reduce nutrient runoff; reduce net greenhouse gas 
emissions; help limit production on marginal fields and conservation 
areas; reduce weed resistance development; and lower energy use.
    Many of these tools require access to high-speed, wireless internet 
to be fully utilized, but broadband access continues to be unavailable 
in many rural areas. A United Soybean Board study published in 2019 
found nearly 60% of U.S. farmers and ranchers believe they do not have 
adequate internet connectivity to run their businesses, and the study 
highlighted direct links between connectivity-driven technology that 
farmers want to use and the sustainability of their operations. ASA 
applauds Congress for ongoing, significant investments in broadband and 
encourages prioritizing the extension of access to rural communities to 
facilitate access to precision agriculture technologies and their 
related production and sustainability benefits.

    Question 6. The American Soy Association has argued that the 
reference price for soybeans in Agriculture Risk Coverage (ARC) and 
Price Loss Coverage (PLC) is insufficient, and cited low prices due to 
the trade war, and more recently, higher operating costs.
    Can you give us a sense of what should be used as a standard for 
determining support levels? Is it cost of production, is it revenue 
levels, is it something else?
    Answer. Recent input prices, recent commodity prices, current 
program elements and deficiencies, as well as the intended purpose of 
ARC and PLC are several factors that should be considered when making 
improvements to ARC and PLC. In the end, margins are the most important 
metric for producers. However, input cost and use data is not as 
readily available as price and revenue data. Any metric used to 
determine benefits must use data that is transparent, timely, reliable, 
and representative.
    For soybeans, the current programs do not serve as effective safety 
nets when market disruptions occur, and they must be improved.
    The statutory reference price for soybeans has only increased twice 
in over 20 years and needs to be adjusted. Although an effective 
reference price (ERP) mechanism exists that adapts to price increases, 
the cap undermines that flexibility. Removing the arbitrary ERP cap 
would allow Title I programs to adapt to price and cost inflation. 
Either this approach, a statutory reference price change, or a 
combination of these would provide a more effective safety net.
    While adjusting the reference price is helpful, the impact is 
limited for many soybean farmers with the relatively low percentage of 
base acres that provides access to the farm safety net. As discussed in 
my testimony, there is a 34 million acre gap nationwide when comparing 
recent soybean plantings with soybean base acres, on which specific 
Title I benefits are provided. Having the option (not requirement) to 
update base acres to reflect a more recent, defined period of time and 
allowing new acres to access the farm safety net, combined with an 
increase in the soybean reference price and other ARC changes, would 
help farmers access a more effective farm safety net.

    Question 7. In a normal year, what is generally the price a farmer 
needs to receive for their soybeans to break even?
    Answer. In a piece published April 11, 2023, the University of 
Illinois' farmdoc Daily \3\ *** authors estimated the break-even price 
to cover total costs for soybeans at $12.53 per bushel.
---------------------------------------------------------------------------
    \3\ https://farmdocdaily.illinois.edu/wp-content/uploads/2023/04/
fdd041123.pdf.
    *** Editor's note: the referenced article, Risks for 2023 Grain 
Farm Returns, is retained in Committee file.
---------------------------------------------------------------------------
    For comparison, the reference price for soybeans is $8.40 per 
bushel. If the soybean farm safety net triggers under the current 
scenario, the economic situation in farm country is already past a dire 
state.

    Question 8. In your written statement, you shared your 
organization's priorities for this upcoming farm bill, which call for a 
review of USDA staffing and technological capabilities and 
cybersecurity, among other things.
    Please expand on why you suggest an assessment of USDA staffing.
    Answer. ASA has heard from farmers throughout soy country about 
their inability to access expert staff in USDA Farm Service centers and 
at the field level, especially at the customer-facing agencies NRCS and 
FSA. This has been a trend for some time but was compounded during the 
COVID-19 crisis when USDA offices closed their doors. Even today, 
offices offer limited visiting hours that are not compatible with farm 
work schedules or what can sometimes be extensive travel time to and 
from the farm. And, in our growers' experience, field visits have 
largely been delegated to third-party technical service providers. NRCS 
leadership recently relayed that, in 2022, the agency had 3,000 
vacancies; it had direct hiring authority for 1,500 staff but hired 
only 800 and retained only 500. We also learned it takes 3 years to 
properly train new staff to interact with a farmer in the field.
    I understand that NRCS has put in place an aggressive hiring 
strategy for the next few years to make up this gap and that the agency 
is revisiting its training protocol. ASA commends NRCS for the steps it 
is taking. While I am unaware of FSA's approach to addressing this 
issue or how far the problem extends to other USDA agencies, it is 
still frustratingly clear to our growers that current staffing is not 
meeting farmer demand. The new farm bill is likely to provide USDA with 
new authorities, and it is essential that Congress works to ensure USDA 
is prepared and equipped to manage farm bill implementation with 
sufficient staffing, training, and technology.
Response from Patrick A. Frischhertz, J.D., General Manager, St. Louis 
        Planting, Inc.; Member, Board of Directors, American Sugar Cane 
        League; on behalf of American Sugar Alliance; American 
        Sugarbeet Growers Association
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. We take an immense amount of pride on our family farm and 
have a multigenerational history of implementing conservation 
practices. One of the main issues for farmers in southern Louisiana is 
soil and nutrient run off. For over sixty years, our farm has 
implemented precision land leveling practices and water control 
structures to control water runoff and prevent soil erosion and 
nutrient loss. Through precision land leveling, we are able to manage 
the drainage grade of a field and slow the water from exiting the 
field. By slowing down the run off, we allow for the soil and nutrients 
to settle in place instead of being deposited in our waterways. We are 
also able to close unnecessary drainage ditches, which provides more 
area for cultivation and reduce weed pressure by eliminating entry 
points for weeds to enter the areas of cultivation.
    Our farm also implements cover crops during our rotational fallow 
years. Since sugarcane is a ratooning crop, we are able to harvest the 
sugarcane and the next crop will regrow from the roots--like a grass 
found on a baseball field. In Louisiana, we are able to harvest 3 to 5 
years of sugarcane from a single planting. However, the yield potential 
of each successive harvest falls until, eventually, it is no longer 
commercially viable. Thus, every fourth or fifth year, the crop in the 
field is plowed under to fallow for a growth cycle. During this fallow 
period, we plant two cover crops on the field to improve soil health, 
reduce soil erosion, and manage weed control. Our farm plants a 
combination of Austrian Winter Peas and Daikon tillage radishes in our 
fallow.
    These two crops are a great fit for our sugarcane operation 
because, as legumes, they produce their own nitrogen that remains in 
the soil after termination. They also provide an immense amount of 
organic matter for the soil when they are terminated and worked into 
the ground. These crops also directly grow and compete with rye grass, 
a threat to the following sugarcane crop. For our farm, this 
combination improves soil health and helps reduce pesticide expenses by 
out-competing problem weeds.
    Last, our farm implements a comprehensive nutrient management 
program. We are now using a variable rate potassium and lime applicator 
that, with precision soil analysis, allows our farm to maximize the 
benefit of our fertilizer investment by distributing the right amount 
at the right place for optimal yields. We also use a novel nitrogen 
fertilizer applicator with two nitrogen stabilizers. This nitrogen 
fertilizer applicators place the nitrogen on top of the sugarcane row 
and directly in the root zone of the plant. The two stabilizers used in 
our applicator ensure there is no air or water volatility. In 
Louisiana, we receive a substantial amount of rainfall. These 
stabilizers help bind the fertilizer to the soil, preventing nitrogen 
washout or leaching into our waterways and ensuring the nitrogen is in 
place for the sugarcane plant while it grows--subsequently improving 
yields and returns.
    We are a multigenerational family farm. Like many other farms, 
every agronomic practice we implement has a goal to improve our farm's 
soil and financial health for the present and future generations.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. Many conservation programs offered under the farm bill are 
not used by Louisiana sugarcane farmers due, in many cases, to the 
payment limits and AGI eligibility factors attached to the programs. As 
a result, most sugarcane growers are implementing soil health 
conservation practices without assistance from NRCS. This issue raises 
questions as farms in America continue to grow with consolidation 
across all commodities. One way to substantially increase the uptake of 
NRCS approved conservation practices would be to loosen AGI and payment 
limits for conservation programs.

    Question 3. What are the top three issues that Congress should 
examine more closely as it pertains to our existing commodity support 
programs?
    Answer. The costs of producing the food that America relies upon 
has been growing much faster than net farm income since the last farm 
bill. That is true for sugar and a host of other crops. We would 
support Congress examining the Title I program parameters, including 
loan rates, to more accurately reflect a viable safety net for all 
growers.
    Congress should continue to examine other countries' subsidies and 
attempt to level the playing field for all commodities. This is 
especially true for sugar, the most distorted commodity market in the 
world. World market prices are typically well above global costs of 
production because other countries subsidize production and dump excess 
supplies there. American farmers can compete with anyone on a level 
playing field, but our farmers cannot compete with foreign treasuries 
that distort the global marketplace.
    Congress should seek to improve the affordability and efficacy of 
crop insurance. That program provides the mainstay of most commodities' 
safety net. As weather patterns continue to strengthen, managing risk 
is probably the most important concern for most farmers. Having an 
effective and affordable crop insurance policy is essential to bottom 
lines and peace of mind. Unfortunately for sugarcane and sugarbeets the 
products offered by USDA-RMA are relatively expensive and fail to 
adequately cover the perils facing the industry.

    Question 4. How has the economic and growing conditions effected 
your planting decisions?
    Answer. Every year our family considers how to adjust planting and 
management of our owned and rented lands. We always keep the short-term 
bottom line in mind, but also keep a longer-range view on improvements 
to productivity and sustainability. For example, we have moved more 
acres from soybean production to sugarcane production over recent 
years, not because soybean prices have been bad, but because the 
weather and climate conditions have made it difficult to bring in a 
good soybean crop. On the other hand, sugarcane has been a more 
reliable producer for our region. If prices for sugar do return to the 
levels forecast by USDA and FAPRI over the next 10 years, we might have 
to reconsider our crop mix. Those low prices, unprotected by a 
modernized loan rate and a viable risk management policy, could put our 
operation in jeopardy under different scenarios.

    Question 5. What other resources does the USDA need to support 
producers, specifically in the technology space? What are those 
technology capabilities you want, but are not getting?
    Answer. Sugarcane and sugarbeet are approximately 2 million acres 
combined in the U.S. As small acreage crops, compared to feed grains 
and oilseeds, our industries lack funding from third party corporations 
to aggressively invest in industry specific technology. Therefore, we 
rely heavily on USDA's important work on plant genetic resources, 
genomics, and genetic improvement. Gene editing (CRISPR) and RNAi 
regulations need to be finalized so that important technology can be 
utilized. We would strongly advocate for continued resources for USDA 
to sponsor needed research across all its experiment stations.
    Our farmers are among the most progressive and efficient sugar 
producers on the planet, embracing new technologies that are both 
scalable and affordable. As we continue to use nutrient management 
tools, integrated pest management, drones, unmanned aerial vehicles, 
satellites, remote sensors, irrigation technologies and nanotechnology, 
we are excited about what advances can be made through artificial 
intelligence. Many of these tools will need internet and satellite 
connectivity. The demand for more data to meet climate objectives will 
require scientists to have appropriate data management platforms to 
support research and the implementation of these technologies.
    Sugarbeets are grown on 1.1 million acres in the U.S., and our 
farmers rely on multiple funding sources to address production 
challenges facing growers. Growers rely on seed companies, public 
research from USDA to universities, and grower and co-op-funded 
research to address a variety of challenges to their crop. USDA ARS is 
an important partner with eight ARS research stations across sugarbeet 
country. We need USDA APHIS to move forward expeditiously in its review 
and approval of the next generation of bioengineered sugarbeet seed. 
USDA should closely monitor prototype machines using lasers for weed 
control and provide support where it is appropriate. Our growers' 
greatest concerns also lie with the ability to retain current crop 
protection products and approve new ones in a timely manner. USDA's 
Office of Pest Management needs greater engagement with EPA to make 
sure growers have the tools they need.
    Sugarcane growers fund research partnerships with USDA ARS and 
universities for varietal development. Our growers would like to see 
additional funds to support the sugarcane research being done at the 
ARS Sugarcane Research Unit in Terrebonne Parish, Louisiana and the 
research station at Canal Point, Florida. ARS sugarcane researchers are 
currently working with ARS genetic specialists in Stoneville, MS, to 
expedite the release of new varieties of sugarcane with desirable 
traits that can thrive in our diverse growing conditions.
    Sugarbeet and sugarcane growers urge the Committee to provide 
funding to support the research, researchers, and the physical 
infrastructure needed by our vital ARS partners.
Response from Brent Cheyne, President, National Association of Wheat 
        Growers
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. I use conservation tillage on my operation and have been 
farming this way for over 35 years. In Oregon, we have dryland and 
irrigated wheat production, and farmers are most concerned with 
maintaining their soil health and maintaining the soil in place on the 
farm and protecting it from wind and water erosion.
    I also farm using a diverse crop rotation that includes wheat, 
alfalfa, barley, and sometime oats. This rotation allows me to keep the 
alfalfa in the ground for 7 years and results in keeping the ground 
covered almost the entire year between the wheat and alfalfa.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. It is important the farmers are recognized for the 
conservation practices they have been implementing for many years. 
Voluntary conservation programs are important to help farmers undertake 
new practices or try out something new on a portion of their land, but 
it is that existing conservation be recognized for the ongoing 
management and investment it takes to maintain those practices. 
Congress could look at more maintenance payment for ongoing 
conservation management practices.

    Question 3. What are the top three issues that Congress should 
examine more closely as it pertains to our existing commodity support 
programs?
    Answer. Within Title I, Congress should examine is making a 
meaningful increase to the reference price in PLC. The current $5.50 
reference price is far too low to provide an effective safety net. 
Farmers would have to lose over 30 percent of their current price to 
trigger the PLC reference price. This effectively makes PLC no safety 
net at all. Further, wheat's average cost of production according to 
the USDA over the past decade is $7.42, far higher than the reference 
price. Costs have increased by 38 percent over the past decade, while 
the reference price has remained the same. It's imperative that 
Congress address this issue.
    When looking at the Crop Insurance Title, NAWG would request is to 
make crop insurance more affordable at higher levels of coverage. The 
current costs of the crop insurance premiums make it unaffordable for 
many farmers to select higher coverages. Our farm utilizes an 80 
percent coverage level. While my son and I would like to opt for 85 
percent coverage, the increase in premiums is much higher than the 
increase in protection. This is a problem for many farmers across the 
country.
    Similar to increasing the reference price, another Title I issue 
for examination would be the reference price escalator that makes the 
effective reference price. Congress should look at modifying the 
parameters of the effective reference price to allow it to be more 
flexible with increased prices. The current effective reference price 
is capped at 115 percent of the statutory reference price, with a 
maximum level of $6.33 per bushel for wheat. While the effective 
reference price currently falls below statutory reference price for 
wheat, it could come into effect in the mid-2020's. However, the 
current 85 percent factor on the moving average should be reexamined 
and increased to make the effective reference price more responsive. 
Consideration should be given to increasing the factor to 90 or 95 
percent. Alternative reference price inflators like the prices paid, 
interest, taxes and wages (PPITW) or Consumer Price Index (CPI) should 
be taken into consideration. Overall, having an adjustment that takes 
years to occur is too slow with the current volatility of commodity 
markets and the ever-increasing cost of production and the Committees 
should consider making this mechanism more responsive to market 
conditions.

    Question 4. How has the economic and growing conditions effected 
your planting decisions?
    Answer. Wheat farmers across the country look at the economic and 
weather conditions in their area every year when making planting 
decisions. In addition, farmers frequently look at the prices of 
different commodities when determining what to plant. Right now, soft 
red winter wheat is seeing an increase in production thanks to 
increased double cropping. Meanwhile, farmers are also highly dependent 
on the weather. Wheat is often viewed as a drought resistant 
alternative to other crops. Finally, the economics of crop inputs can 
also determine what farmers plant and what practices they implement. 
For example, if fertilizer gets too expensive, farmers may withhold, or 
change the crop they choose to plant. Farmers across the country look 
at all of these factors and more when making the determination of what 
to grow and how to grow it.

    Question 5. What other resources does the USDA need to support 
producers, specifically in the technology space? What are those 
technology capabilities you want, but are not getting?
    Answer. One thing that would be helpful in the technology space 
would be to allow for e-signatures for FSA forms. That would allow 
farmers to complete paperwork in the field and not have to travel into 
an office. If you're in an area like mine where the FSA office is far 
away, this can save valuable time and effort for both the FSA staff and 
farmers.

    Question 6. In your testimony you mention that your farm is a great 
demonstration of the challenges farmers face when it comes to 
affordability of crop insurance. How can Congress help with the 
affordability aspect of crop insurance?
    Answer. As mentioned previously, NAWG recommends increasing the 
affordability of higher levels of coverage of crop insurance. Crop 
insurance premiums are made on an actuarial basis, meaning that farmers 
payments are determined by the risk of growing a specific crop in a 
specific area. Premium payments are made by farmers with the Federal 
Government sharing part of the cost. NAWG requests that Congress 
considers increasing the Federal cost-share for crop insurance 
premiums.
Response from Craig Meeker, Chairman, National Sorghum Producers
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer. Members of the National Sorghum Producers (NSP) are early 
adopters of many conservation and regenerative soil health practices 
for generations. That's because the bulk of sorghum production occurs 
in the High Plains region of the Central U.S. Nearly 1 century ago this 
region experienced cataclysmic weather events we know today as the 
American Dust Bowl. In response, our farming practices over the decades 
since have continuously improved and we have adopted practices at 
industry-leading rates of reduced tillage up to full no-till, 
diversified rotations, nutrient management, rotational grazing where 
feasible, and other environmental enhancements to add resiliency 
against highly eroding wind, heat, and drought. On my farm in south 
central Kansas I also utilize cover crops but recognize the practice 
carries enhanced risk for production the further south and west you go 
in the U.S. as water resources become increasingly scarce. 
Alternatively, farmers in the Southern High Plains who consistently 
deal with drought conditions utilize sorghum in place of traditional 
cover crops because of its high residue and ability to efficiently 
utilize water better than most other crops in order to maintain yield 
and profitability.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. NSP wishes to thank Congress and this Committee for efforts 
to rightly recognize the conservation and sustainability efforts of 
U.S. farmers across the nation who work to feed and fuel Americans 
every day efficiently and cost-effectively. We also appreciate efforts 
in tandem with NRCS following the 2018 Farm Bill to specifically 
recognize sorghum's sustainable attributes in diversified rotations. 
NRCS announced in 2021 additional language concerning the definition of 
a ``resource-conserving crop'' and a ``resource-conserving crop 
rotation'' under Conservation Stewardship Program ``. . . to be more 
inclusive of all crops that could be resource conserving and fit within 
the purpose for which the definition was crafted.'' Specifically, NRCS 
updated these definitions to include ``a non-fragile residue or high 
residue crop or a crop that efficiently uses soil moisture, reduces 
irrigation water needs, or is considered drought tolerant,'' giving 
sorghum a strong foothold in this program. NSP stands ready to work 
with this Committee to further promote sorghum in resource-conserving 
rotations across the nation.
Response from Daniel T. McMillan, Producer, Southern Grace Farms; on 
        behalf of United States Peanut Federation
Questions Submitted by Hon. Eric Sorensen, a Representative in Congress 
        from Illinois
    Question 1. Can you elaborate on your conservation methods that you 
use to increase soil health, risk reduction and resilience, and for 
ultimately increasing yields?
    Answer.

  a.  Crop Rotation--helps mitigate pest pressure, lowers our reliance 
            on pesticides and maximizes yields.

  b.  Terraces and contoured rows for erosion control.

  c.  Grass borders around fields along with grass waterways in highly 
            erodible areas.

  d.  Rye cover crop for grazing.

  e.  Grid soil sampling to conserve and efficiently use fertilizer.

  f.  We use Irrigation mobile applications to conserve water.

  g.  We leave residue (commonly called ``peanut hay'') in the field.

    Question 2. What can Congress do to support farmers who decide to 
incorporate this risk reducing soil health and conservation management 
practices?
    Answer. Although these practices are beneficial for soil health, 
they can be costly to implement. It would be helpful if there were 
programs that incentivized implementation of these practices. For 
example, the Conservation Stewardship Program (CSP) should be fully 
funded and expanded.

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