The hearing of subcommittee on general farm commodities and Risk Management entitled reviewing the state of the farm economy will come to order. Good morning and thank you for joining us, as we look into this critical aspect of our economy. Every one of us seated up here has heard from farmers in our districts about the bad farm economy. Commodity prices are low, input costs are rising and financial pressure is mounting on farmers across this country. While we hear so much about the booming state of the overall economy, our rural and farm economy continues to struggle. You cannot have a successful National Economy when such a vital component hurts the way our farmers are currently. The numbers paint a rough picture. Usda forecasts net farming level for 2019 to be only 77 of the annual average for 2000 through 2017. Its down 50 from 2013 alone. Inflationadjusted farm debt is the highest it has been since 1980 and the debt to asset ratio for farmers is rising steadily. This hearing offers a glimpse into how the economy has affected four particular farms in different parts of the country. These are four stories about what the downturn in the farm economy means to them. The 2018 farm bill provided certainty for farmers by reauthorizing commodity programs and continuing Crop Insurance. The farm economy is better off because the farm bill passed, but is that enough to fix the downturn in the agricultural economy . In Agriculture Policy circles we are always hearing about the 1980s, is the farm economy just as bad as the 1980s . Thats what we are here to find out. With he should not stand down just because Economic Indicators today dont look exactly like the run up to the 1980s. With err here to consider what can still be done to help struggle farmers and truly make this an economy that works for everyone. Thank you to all of our Witnesses Today for sharing your perspectives and i look forward to your testimony. I recognize Ranking Member thompson for his opening statement. Chairman, thank you very much and thank you for holding this important hearing to highlight the state of the farm economy. It doesnt seem like all that long ago we were in the midst of the great recession, but the agriculture economy was booming then. Unfortunately as those involved in agriculture know all too well markets are cyclical and Mother Nature is unpredictable. Now the rest of the economy is booming but for our farmers, prices have fallen lower and have stayed there longer than anyone could have predicted. To add insult to injury over the past couple years almost every region of the country has seen its share of widespread devastation from Natural Resources including hurricanes, floods, fires, droughts and even volcano i can eruptions. It was against this backdrop and in the face of the budget challenges that we wrote in 2018 farm bill. One of those challenges came in the form of our friends in the United States state who proposed to spend 700 million less on farm safety net than proposed by the house. I was proud of the work House Republicans did to finalize a conference report that not only protected the farm safety net but actually made improvements to farm policy. Despite these successes the current recession, the agriculture economy is a sobering reminder that farm policy while incredibly helpful does not make or farmers and ranchers whole. In talking to many folks in my district there are a lot of farmers who are either already getting out of the business or one bad crop away from being forced to call it quits. While there are many factors plaguing our producers that are well outside of congress control, there are some things that we could do now that might provide a modicum of relief. For example, our friends in the southeast who were impacted by hurricanes and other disasters in 2018, including one of our witnesses here today, anxiously await a sign that assistance might be on the horizon. Congress needs to quickly act to reach a compromise to help address the devastating losses so many experienced last year. Also this Congress Needs to ratify usmca, the United States mexico canada trade agreement which would provide some certainty for our farmers that our neighbors to the north and south will remain the two largest customers of our agricultural products. Its now up to Speaker Pelosi to allow ratification to move forward. Time is of the essence. Finally i want to say a sincere thanks to the witnesses who are here today. I know this is a busy time back home for all of you, but it is invaluable for members of this subcommittee to be able to hear your perspectives as we consider policies that directly impact you, your farm, your families. Mr. Chairman, i very much look forward to working with you this congress as we use the subcommittee to highlight the issues that are of vital importance to recall if aers and ranchers across the country and thank you again for convening this hearing and i yield back. Thank you. The chairman requests that other members submit their Opening Statements for the record so the witnesses may begin their testimony and to ensure that there is ample time for questions. I would like to welcome our witnesses. Thank you for being here today. At this time i will introduce our first witness. Mr. Matt huie, owner of huie barms in beeville, texas. He is the owner of huie farms in beeville texas and is my constituent from the 34th district of texas. Mr. Huie farms cotton, corn and sorghum and raises livestock. He has a degree of Agricultural Development from texas a m university and currently serves as the president of the southwest council of agri business. Mr. Huie is an active member of the south texas couldnt and grain association. Thank you for making time to testify about this very important topic. I would now like to recognize ms. Craig for an introduction of our second witness. Thank you, mr. Chairman. Id like to introduce to everyone mike peterson, a farmer from my district in northfield, minnesota. Mike farms about 800 acres of corn and soybeans with his wife kay and his two sons blake and shane. They also finished 1,200 hogs a year. In addition to their farming operations the petersons also have a welding and fabrication business and a kwofl driving range on their farm. Each year mike and his family play host to the dakota rice, corn and soybean growers annual plot tour, giving area farmers a chance to learn more about new corn hybrids and soybean varieti varieties. Hes helping his son shane start out his own operation with a focus on growing corn and soybeans at the highest levels of environmental stewardship. Mike is a proud fourth generation farmer and has previously been recognized as a rice county farm family of the year. Mike is an alum of randolph ffa, is a past president of Rice County Farmers Union and is a member of minnesota corn growers. Mike, thank you so much for being here. Now id like to recognize mr. Carbajal. It is my pleasure to introduce dan sutton, pove located in oceano, california. He is my skon stit went from the 24th congressional district. Dan has worked for pove for the last 18 years. He oversees the daytoday operations of pove including sales, marketing, accounting, operations and food safety. Currently he is the board member and past president of the san louis he is business poe county farm bureau. Has been selected as chairman of the california leafy greens Marketing Agreement advisory board. As you can see from his past and current experience mr. Sutton has played an extraordinary role in our local economy by working to represent our Central Coast growers and producers. I am glad to welcome dan to washington, d. C. Welcome, dan. I now recognize mr. Austin scott for an introduction of our fourth and final witness. Thank you, its my whoen for introduce a friend and farmer from my district, mr. Bart davis. He grew up in dell ron, georgia, home of the sun belt ag expo. He attended high school in worth county. When he was 18 he and his sister vicki lost their mother and father, they decided to stay in the family home and while vicki took care of the house bart took over the 500 acre farming operation that produced cotton, peanuts, wheat, soybeans, hogs and beef cattle. Today still there, they farm over 5,000 acres. Approximately 3,100 acres of cotton, 1,600 acres of peanuts, 300 acres of corn along with hay and cattle. Bart has the pleasure of working alongside his family daily. The family farm today consists of bart and his wife paula, their sons trey and jed and their daughter lakin. Bart is part owner in dell ron peanut buying point. He has served on the Georgia Cotton Commission board of directors, served as chairman since 2017. He is the director of the southern Cotton Growers and he also serves on the county committee for the local Farm ServicesAgency Office in georgia. He has a tremendous amount of knowledge about agriculture and i look forward to his testimony. Thank you all for introducing our witnesses. Before we begin testimony id like to thank the chairman of our full committee, mr. Peterson, for being with us today. Each witness will have five minutes, when one minute is left the green light will turn yellow as a signal for you to start wrapping up your testimony. Mr. Huie, please begin when you are ready. Chairman vela, Ranking Member thompson, members of this subcommittee, thank you for this opportunity to be here. As mr. Vela so aptly said, im a farmer and rancher and together with my wife and our three children we live near beeville texas and farming ranch in five counties of the coastal bend. Im honored to be mr. Velas guest, he so ably represents the 34th district where i live and appreciate him being the chairman of this subcommittee. Im honored and humbled to be in this room an with you as the ag leaders following such great traditions and i know what ag policy does and i appreciate the opportunity to be here. Along those lines, i would be remiss if i didnt recognize the extraordinary leadership of chairman peterson who i have known a long time and appreciate everything that he has done and continues to do for agriculture and also mr. Conaway and the work they did in completing the 2018 farm bill which serves as the groundwork for policy and production agriculture. Mr. Chairman, this hearing is timed so well because of all the things that you talked about in your opening. Ive gotten written testimony thats long and drawn out, im going to try to shorten that to three things to be quick. One is the farm economy in the coastal bend of texas is lousy. It is bad. 2018 was not a good production year, that was compounded by the fact that despite great a great mfp program by the administration, it only paid on production, so if you didnt have production, it did not pay. Im hopeful that that can be addressed here. 2018 follows tariff issues from from trade disputes, which drove the price of Crop Insurance down and, therefore, erodes the safety net as we work toward what our ability is to borrow and other things. For 2019 we look here at likely negative cash flows again, snls we make an extraordinarily large crop because we dont have a price market where we can get that done and weve got enormous exposure based on the value dropping in Crop Insurance. Despite Crop Insurance being a great tool when you have a systemic decline in price, we have a systemic decline in what were able to insure. The stakes have never been higher than they are right now. I didnt live through the 80s i did, but i was a very young man. I did live through the 90s, that was when i started farming. It was miserable, but i was so young i didnt know better and my wife and i, she worked in town as a banker and we managed to sneak by those first few years starting in 1998 and making it through 2002. 2002 we barely got by. We had to move banks, we had to do a lot of Different Things. Thats part of the reason im here today. I understand how important farm policy is and i appreciate washington stepping in in those times and helping us because thats how we survived. Historically when weve seen moves like we have like we have now where you have a decline in price, you also have a decline although slower in input costs. That has not been the case in this current environment. Input costs have continued to rise, the rest of the economy is doing well, so as our input costs have risen due to tariffs, due to industry consolidation, due to all other things in the economy booming, were still trying to sell stuff for the same price we sold stuff for 30 or 40 years ago, none of our input costs reflect that. Third, i want to be clear that i think additional action will be required from this committee, from this congress and from this administration. I think if the tariff war, trade war, ends tomorrow, this dispute will not be resolved. These prices, the bins are full, the warehouses are full, theres not a system in place to move that stuff out. Weve got a world glut of grain. Everything about history would tell us that this will not be resolved tomorrow. There are things you can that are on the table right now in terms of disaster talk, about making some corrections to mfp, that language exists here in the committee, were hopeful that that can move forward and i think we need to be talking loudly about another mfptype program, whether its done through the administration or through this committee, but there are some things about that program that need to be made more equitable as we move forward. Mr. Chairman, again, the farm economy is complex, trade policy, labor, ultimately this comes down to farm profitability and that is where this committee has excelled in the past. I appreciate the opportunity to be here and i appreciate the opportunity to visit with you about this. Thank you. Thank you, chairman vela. Thank you for the opportunity to testify here today. The last five years have been incredibly challenging on our farm and on farms across the country. In 2018 median net farm income in minnesota was at its lowest level in the past 23 years. In southern minnesota we are entering our sixth Consecutive Year of growing corn at or below the cost of production. Strong soybean yields and fair prices had kept many farmers profitable until the trade disputes with china took its toll on the markets last year, no you our problem with oversupply is only getting worse. With the continuing slump in Commodity Prices, Financial Stress continues to grow. Farm debt is at an all time high and most farmers a know from burnt through their equity they built up in the good years leading up to 2014. We are now seeing a big increase in the number of chapter 12 bankruptcies in minnesota. Unless we get our markets back and the prices rebound i feel many more farmers will be forced out of business. In addition to our current challenges with low prices, market consolation and the increase of monopolies on the supply side has caused input cost toss rise dramatically. The cost of seed corn, soybean seed and fertilizer even when adjusted for inflation have each doubled since i started farming fulltime in 1996. While we are more productive now than we have ever been, the increased input cost has outpaced the gains we have made in productivity. On our farm we have adopted methods to cut our input costs, the usage to levels that puts us on par with the most efficient operations. We plant cover crops, use no till and zone till analogy practices which reduce weed presser and cut down chemical costs and usage, with he pair that with precision fertilizer application which helps further reduce fertilizer costs and cut down on fuel usage. With he also dont grow late season hybrids to keep our drying costs low on our corn hybrids. All together these practices reduce our Carbon Footprint and put us in a better position to survive in this tough farm economy, however, we simply dont have the cash flow we need to install practices that will further improve our productivity, efficiency and stewardship. The reality is despite all weve done to adjust to tight margins and low prices, theres just no way to be profitable with the market scenarios facing the American Farmer today. Im currently enrolled in a Farm BusinessManagement Course at South Central college. Our adviser provides us data and management assistance so we can find the best economic scenarios. Even with his guidance and expertise, were faced with an economic scenario thats hard to present to a lender. Like most farmers, id prefer a fair price in the market, but during periods of low prices im grateful that we have a farm safety net to fall back on. For the last five years ive been en vold in the arc county program which at least offsets some of our losses. Im not only at the ammersy of the markets but im at the mercy of the weather. The federal Crop Insurance program is critical in helping me manage risk on our operation. Last year a tornado and strong straightline winds came through and knocked down about 85 of our corn crop. Without Crop Insurance indemnity that loss would have been devastating to our operation. As farmers we can handle a slump in Commodity Prices and volatile weather, but we cant prepare for the situation that was brought on by our trade disputes last year. I will be the first to admit that i originally supported the effort to secure better trade agreements and to hold bad actors accountable, but the approach to these trade disputes has caused damage that im afraid will take us decades to overcome. The market if a sill tags payments helped last year, but i feel if policymakers are going to continue to affect our markets we may need to look at some sort of supply managemen