▶ 0:15:26>> good afternoon. Senator klobuchar will be with us in just a few minutes. The only thing we have to do around here is vote. We have a lot of people down there doing a second vote right now. But I know you all are busy and there is just so much going on right now as we wrap up this week. So I think we are going to go ahead and get started.
▶ 0:15:50It is my privilege to call the hearing to order and I think our colleagues and witnesses for taking the time to be here today. Today we will consider three perspectives from expert witnesses regarding the need to reauthorize critical components of the U.S. grain standards act, which are set to expire at the end of september.
▶ 0:16:12From farmers to consumers, our nation's partners, our nation's agriculture system relies on the critical weighing and inspection services provided by the U.S. department of agriculture's federal grain inspection service, and partner agencies across the country. These services facilitate the timing marketing of high-quality U.S. grain into the U.S.
▶ 0:16:39Market place and helps set the U.S. apart as a trusted, consistent, and reliable source for the world's grain needs. Mr. friant, Mrs. mikesh and Mr. wipf, did I get that right? Wpif? You are like me, you are being called everything. Wipf.
▶ 0:17:11Your testimony today will help inform us as to how we can best proceed. We appreciate the --. The best ideas come from the ground up. We will be also be working with usda to ensure the grain shane continue to receive quality service and usta has the authority and flexibility it respond to any issue that may arise.
▶ 0:17:39I look forward to working with ranking member klobuchar, members of the committee, and the stakeholders who rely on U.S. grain standards functioning properly to ensure a timely bipartisan reauthorization of this act. Thank you all again for being here today. As I said, senator klobuchar will be with us in just a little bit. And so.
▶ 0:18:20We will go ahead though and proceed with our introductions. Yeah. I was just about to introduce Mr. friant.
▶ 0:18:45Sen. Klobuchar: Just a few words. Sorry, but we were doing our caucus event, and I am also going to have to leave a little early, but I am really excited you are having this hearing, Mr. chairman. And the focus on the grain inspection system, I would especially like to welcome Mr. nicholas friant from chan hassett, minnesota, who is joined here today by his daughter claire as well. Where are you? Thank you.
▶ 0:19:16Sen. Klobuchar: Good school experience there to bring home. What did she say? Yeah, exactly. Before we begin, I would like to underscore how damaging usda's recently announced reorganization could be to american agriculture. I truly appreciate senator boozman is having a hearing. We are going to hear from the deputy secretary tomorrow because we had little analysis, zero consultation.
▶ 0:19:48Sen. Klobuchar: Amid all of this a hearing on grain standards may seem unusual but this statute and the services provided by the federal grain inspection serve as a critical role in the U.S. and global marketplace for grains and oilseeds, and we have had bipartisan support for working on this issue in the past and plan to have that keep happening in the future. Any lapse in this authority which is set to expire at the end of september will only create more of -- more uncertainty for farmers.
▶ 0:20:20Sen. Klobuchar: Though the grain standards act was first enacted in 1916, the current grain inspection system was born out of the 1970's when the credibility of the U.S. agricultural exports was seriously called into question following a series of scandals in the private inspection system.
▶ 0:20:38Sen. Klobuchar: While american farmers were producing high-quality grain, private individuals and companies tasked with inspection resort changing customers abroad through intentional miss grading, inaccurately weighing grain and even bribe early -- bribery. Following those events congress created the federal grain inspection system to return integrity to the U.S. brand.
▶ 0:21:01Sen. Klobuchar: The official usda certificate of inspection and weighing helps ensure american farmers are getting a fair price and guarantees international customers can trust the products they are buying, whether it is from minnesota with our soybeans, or rice from arkansas.
▶ 0:21:21Sen. Klobuchar: Since this time with various updates the trust associated with the certificate has become the gold standard for international customers and has made american farmers a premier supplier of high-quality grains and oilseeds. And these export markets have been a bright spot in our economy in recent decades.
▶ 0:21:43Sen. Klobuchar: And with all the uncertainty going on with tariffs, it is more important than ever we maintain the integrity of our grain inspection system today and I look forward to working with you, Mr. chairman, to do just that as we begin to work together in a bipartisan way to reauthorize legislation.
▶ 0:21:59Chair Boozman: I am going to go ahead and introduce Mrs. kia mikesh, and senator hogan will be along at some point. He is busy working hard to get the ag bill so that we can discuss it and hopefully get it voted out this week. She brings a wealth of knowledge and experience to the committee today. A north dakota native, Mrs.
▶ 0:22:28Chair Boozman: Mikesh is the third generation of her family's agricultural inspection and testing service. Her upbringing in the grain inspection field has continued to make her an asset to several industry organizations. Including her current roles as president and vice president of north dakota grain inspection. She is also chair of the fts advisory committee.
▶ 0:22:58Chair Boozman: Mrs. mikesh's understanding of leadership make her a fantastic representative to fine tune. I am grateful to Mrs. mikesh's willingness to share her testimony today. Finally, we are going to, um, I'm going to go ahead and introduce Mr. wipf. [laughter] Mr. wipf.
▶ 0:23:31Chair Boozman: Again, same situation as senator thune. He's one of our most active members. Mr. wipf manages a soybean, corn, and wheat farm in south dakota. I think your wife is with us. Good to have you here.
▶ 0:23:55Chair Boozman: Upon graduation from dorte university in iowa, he returned to the farm and lead their family business in expanding into alfalfa -- go ahead. [laughter] I just told them that you are busy running the place.
▶ 0:24:23Chair Boozman: >> not too busy for a grain inspection hearing. Of all the super exciting topics we get to deal with here, but it is an important one. . Thank you for having today's hearing. I appreciate the chance as always to serve on this committee and to advocate on behalf of south dakota's farmers and ranchers and production agriculture is so important to our state.
▶ 0:24:50Chair Boozman: It is our number one industry and we are so grateful to have people represented like brandon wipf. He was in town with the south dakota soybean association and growers here just a few weeks ago. Thanks again for making the trip out to D.C. and representing our state's soybean growers.
▶ 0:25:10Chair Boozman: I think as you are starting to say, he served on the american soybean association board since 2017, held an appointment to the ag advisory council, spoke in support of U.S. agricultural trade on multiple continents and most recently appointed to a vacancy on the south dakota state senate. So, again, welcome. Good to have you here.
▶ 0:25:36Chair Boozman: They raised about 1200 acres of soybeans and on top of that corn and wheat and other things among his family. Engineer by training, correct? But making a difference on so many levels in south dakota agriculture and for the future of our state and country. So welcome back and we look forward to hearing from you and our other panelists today too on a subject that has a great importance and relevance to our state and a lot of states across the country. Thank you.
▶ 0:26:05Chair Boozman: Thank you. Mr. friant, you are recognized for testimony.
▶ 0:26:20Mr. Friant: German bozeman, ranking member close men -- thank you for the opportunity to appear before you to provide the perspective of the national grain and feed association on reauthorize in the U.S. grain standards act. I am nick friant, chairman of the grain grades and waits committee. We are proud to be a long time participant in U.S. grade export system.
▶ 0:26:47Mr. Friant: Since 1896, we've represented grain industry members and operate more than 8000 facilities. This includes farmer owned cooperatives and multinational grain exporters. Together we rely on a strong, consistent and transparent official inspection and weighing system to deliver confidence and value across the global supply chain. We urge congress to reauthorize the U.S. grain standards act in a timely and bipartisan manner.
▶ 0:27:14Mr. Friant: Doing so will provide certainty to farmers, grain handlers and international customers who depend on the integrity of the U.S. official grain inspection system. I want to focus on two core issues that are top priorities in this reauthorization. First, investment in grain grading technology to speed and improve the process and strengthening in the emergency waiver authority to ensure continuity and flexibility in grain export inspection services. The U.S.
▶ 0:27:42Mr. Friant: Grain inspection system has long set a global benchmark for quality and reliability. While the basic framework of grain standards has remained standard overtime, the international grain market has remained complacently and towed -- thus our systems much -- must evolve. Today we still rely on legacy technologies for determining grading factors that introduce value and fungibility.
▶ 0:28:09Mr. Friant: F tis must prioritize resource development and validation of modern grain grading technologies that improve accuracy, speed and consistency. The agency should actively collaborate with industry and academia to identify innovative tools that can reduce human error and improve gradient objectivity. Furthermore we believe that new technologies can help the agency drive efficiencies, reduce costs, and address staffing challenges it faces, all of which ultimately benefit U.S.
▶ 0:28:37Mr. Friant: Farmers, agro build -- agribusinesses and rural economies. Usta should allocate resources to expedite this process. N gfa and its members are willing to partner with usta and f gis to pilot and implement new technologies provided there is a clear pathway for scientific validation, standardization and deployment. We have worked with our partners on language for the U.S.
▶ 0:29:05Mr. Friant: Grain standards reauthorization act that will provide fts with necessary tools to focus resources on this issue. We encourage the committee to approve the proposal. The second area we encourage congress to address is the need for enhanced flexibility in issuing emergency waivers of official inspection requirements during service disruptions. The 2015 reauthorization included provisions requiring fgis to act transparency when official services are disrupted at export ports. Let me be clear.
▶ 0:29:37Mr. Friant: The U.S. industry strongly supports the requirement for mandatory official inspection weighing of export grain. It is fundamental to preserving market integrity and credibility of our supply chain. But during natural disasters or other force majeure events or in rare instances where buyers and sellers mutually agree to weigh inspection due to service disruptions, the act must allow for pragmatic flexibility. We recommend congress revise the act to clarify the definition of emergency and authorized fgis to authorize conditional vapors.
▶ 0:30:09Mr. Friant: Further it would be provided that the buyer and seller voluntarily agree the absence of an official inspection does not impair the transaction in such a waiver would not undermine the objectives of the act. Establishing a transparent and predictable contingency plan for future disruptions would provide exporters, importers and customers with the confidence the flow of U.S. grain can continue during unexpected challenges without compromising the overall integrity of the system.
▶ 0:30:35Mr. Friant: While I have highlighted two core priorities that we are ready to discuss elements of the act including advisory committee functionality, clarifying the use of user fees, and user fee cap performed. U.S. grains inspection system is a foundation of our country's reputation as a reliable agricultural supplier. Timely reauthorization of the U.S. grain standards act combined with the enhancements we have outlined today will ensure our inspection system continues to be the high expectation of U.S. producers and our global customers.
▶ 0:31:06Mr. Friant: As chairman of the ngfa's committee, I would like to express my sincere appreciation for your oversight and bipartisan leadership on this issue. We look forward to working with you to modernize and strengthen this vital act. Thank you for the opportunity to testify today and I will welcome your questions.
▶ 0:31:25Chair Boozman: Thank you. Mrs. mikesh.
▶ 0:31:28Mrs. Mikesh: Good morning. Thank you chairman bozeman and ranking member klobuchar for prioritizing this important issue in working together to hold this bipartisan hearing. My name is kia mikesh and I am privileged to serve as president of the american association. I most of the vice president of north dakota grain inspection, third generation of my family to help lead the business.
▶ 0:31:53Mrs. Mikesh: We are agencies delegated by usta's federal grain inspection service to weigh and expect the nations grain. From the public agencies such as the state department's of agriculture of washington and alabama to private agencies like my own, members work alongside usta's fgis to provide essential support to the agricultural economy. The U.S. grain standards act authorizes this unique public-private partnership to carry out its uniform standards and export grain inspection mandate.
▶ 0:32:23Mrs. Mikesh: While fgis and certain state agencies way and expect every load of grain on an export vessel state and private agencies will conduct nine times as many inspections before grain ever reaches port. At all hours of the day and night our inspectors are at rail yards, grain elevators and in the lab. We worked to maintain trust in U.S. gate -- grain contract but also testing for toxins harmful to americans and livestock herds.
▶ 0:32:49Mrs. Mikesh: The export inspection mandate underlies official inspection but also allows uniform voluntary inspection system to provide trust in U.S. grain no matter whether it is destined for export or biofuels production. The significance of this system might not be obvious but it helps explain why america remains the world's leading agricultural exporter. Before the 1976 act our grain markets were inefficient and even chaotic. Markets did not trust U.S.
▶ 0:33:18Mrs. Mikesh: Grains and weights meeting producers earned lower prices abroad than the grain was worth. Today thanks to official inspection U.S. grain standards and quality are the gold standard of the world. Buyers will pay a premium for american grain giving our farmers and exporters a critical competitive edge. American standards are the universal reference for grain contracts. Even transactions that never touch our country ally -- rely on them.
▶ 0:33:42Mrs. Mikesh: Changes to the act should always be weighed very cautiously by the committee should also know that cracks are beginning to show and maintenance is required. Grain inspection has relied on the same technology for 100 years. As the ag supply chain has become more efficient inspection remains more reliant on a ever shrinking pool on inspectors. The lack of technological advancement is creating unnecessary costs to taxpayers come exporters, producers and our own agencies.
▶ 0:34:13Mrs. Mikesh: We have become the bottleneck. Without new technology the could be stark. The rigorous standards of today will be tomorrow's burden because we lack modern tools. On the other hand the efficiencies reached by grain inspection technology would reduce cost in the food supply chain and direct cost to taxpayers of maintaining the inspection system.
▶ 0:34:35Mrs. Mikesh: Barriers to new technology reflect the fact that official agencies have a near monopoly on the data and expertise necessary to develop technology but we are not r&d agencies nor venture capitalists. We need to be able to work flexibly to find solutions to our unique problems and foster the conditions necessary for investors to take risks in our field. Our dedicated staff has made a heroic effort to advance technology but they need more than resources.
▶ 0:35:02Mrs. Mikesh: They need flexibility that reflects the realities of the unusual small market for inspection technology. I urge the committee to reauthorize the act with a small modest toolbox of new authorities to speed technology development.
▶ 0:35:16Mrs. Mikesh: Specifically congress should clarify any statue of that you may leverage official agencies or r&d, provide other authority for inspection technology research and development and establish a modest dedicated funding account through user fees and appropriations to support the evaluation and deployment of new technology.
▶ 0:35:35Mrs. Mikesh: With these tools fgis can coordinate flexible partnerships with research institutions, technology departments, agencies and grain trade so that promising technologies can be developed outside government, validated in the real world and approved quickly once they reach fgis. This is an opportunity to modernize the most trusted inspection system in the world, ensuring it remains competitive cost effective and resilient.
▶ 0:36:00Mrs. Mikesh: I want to thank the committee for your ongoing support of american agriculture and the system that underpins it. I look forward to your questions.
▶ 0:36:11Mr. Wipf: Good afternoon chairman bo ozment, ranking member -- it's an honor to join you to testify on behalf of the american soybean association. My name is Mr. wipf and I am a soybean farmer from south dakota. I also have the privilege of serving on the board of directors of asa which represents over 500,000 soybean farmers.
▶ 0:36:39Mr. Wipf: Soybeans are the largest ag export in the U.S. and robust international trade is our priority for our industry. Market access and relationship maintenance would not be possible were it not for the trusted and reliable grain inspection and marketing efforts undertaken by the agriculture marketing services federal grain inspection service as authorized by the U.S. grain standards act. For most soybean farmers are made interaction with fgis and the U.S.
▶ 0:37:07Mr. Wipf: Grain standards are at a local grain elevator. When I deliver my soybeans to the elevator they are tested and consolidated into larger lots for eventual shipment. The grain standards determined the price a farmer like me receives and I know the official grain grades provide our international partners with the knowledge the commodities they receive have been assessed for quality, purity, moisture and soundness.
▶ 0:37:32Mr. Wipf: Recently the industry conducted a series of conversations with stakeholders across the soybean sector including farmers, inspectors, regulators come exporters and international buyers about the value and perception of fgis and the U.S. grain standards. While the full results of these conversations are still being evaluated initial feedback shows the value of the U.S. grain standards and federal inspection is extremely high for the soybean export value chain and for our international customers.
▶ 0:38:00Mr. Wipf: Global customers consider fgis to be the gold standard for grain grading. Inspections carry the weight of the U.S. government creating peace of mind for international customers and providing impartiality that private inspections may lack. Additionally the standards are simple and customers rely on that simplicity to mitigate risk. The ability to effectively hedge through futures markets is a key differentiator for U.S. origin soybeans. The long-standing simplicity of U.S.
▶ 0:38:28Mr. Wipf: Grain standards have allowed for the development of extensive futures and derivatives markets for U.S. products that promote true price discovery. The U.S. soybean industry has a strong relationship with fgis and when issues arise we can maintain the integrity of those standards. Most recently the U.S. soy industry worked with fgis to remove soybeans of other color as an official grade determining factor under the U.S. standard for soybeans.
▶ 0:39:01Mr. Wipf: This was due to a rising occurrence of s boc resulting from a new soybean seed variety that had a tendency to produce off-color seeds. This had no impact on the protein, oil or quality but farmers like me were being penalized because of the color. In response to the rise in sboc, fgis conducted a study on the functionality of protein and oil content of soybean samples containing varying amounts of sboc. The results found no significant differences in the protein or oil content comparative samples not containing this phenomenon.
▶ 0:39:32Mr. Wipf: What marketing concerns did remain and fgis took multiple -- to remove sboc from the U.S. standard for soybeans. In july 2023 a final rule was issued removing sboc as a grade determining factor for U.S. soybeans, a win for soybean farmers an example of industry collaboration.
▶ 0:39:52Mr. Wipf: Changing the sample benefited's clarity and ensuring our trading partners knew that no matter what they were still receiving the soybeans they required. Reauthorization of the U.S. grain standards act is vital for the continued success of U.S. soy in the international marketplace. On behalf of asa I think the committee for the timely attention to the expiring provisions.
▶ 0:40:18Mr. Wipf: We appreciate the opportunity to share the importance of the fgis system and look forward to working with this committee to reauthorize the grain standards act this year. I look forward to your questions.
▶ 0:40:27Chair Boozman: Leader thune.
▶ 0:40:30Sen. Thune: I will be very brief. We have other members here who want to ask questions but if I could just say, I think we all recognize the importance of promoting U.S. agriculture on the world stage, which is why we must use every available tool to facilitate our national trade to support farmers, grain processors and exporters.
▶ 0:40:53Sen. Thune: As the united states engages and continues to engage in negotiations with trading partners, we need to ensure U.S. grains are seen as reliable and high-quality products by foreign buyers. The federal grain inspection process works to maintain these standards so that our grain remains a reliable purchasing option. Mr.
▶ 0:41:13Sen. Thune: Wipf, could you explain in your view what impact on soybean markets in south dakota and across the country would happen if the grain standards act is allowed to expire?
▶ 0:41:26Mr. Wipf: Customers that buy from us do sell under the auspices of these rules. And if those are allowed to lapse or if the funding for them is compromised, I think it would compromise the confidence that international buyers had in what they are purchasing from us. So we urged timely reauthorization.
▶ 0:41:48Sen. Thune: A follow-up to any on the panel. By providing impartial inspections and weighing services, fgis created a transparent and trustworthy system. We can all agree that system reduces the chances of price disparity and eliminates quality discrepancy. I would say this to all of you, you have seen the federal grain inspection service contribute to global grain price discovery and what would be the potential consequences for national markets if fgis services lapsed?
▶ 0:42:24Mr. Wipf: Uncertainty is kind of a way of life in agriculture when you depend on the weather. But we try to do as much to remove uncertainty as we can. We understand those of the same priorities for international buyers. Any time you buy anything from a shirt to a car to soybeans you want to know what you are getting. If you know both of those things you have a good relationship. So these rules are imperative to the continuation of our good relationships abroad.
▶ 0:42:55Mrs. Mikesh: As part of my position I work a lot with different associations to host trade groups that are coming over from all across the globe and part of my presentation is going over what actually is the official grain inspection and the services that we do. What we do is unlike anywhere else in the world. After I am done with this hour-long presentation, the sparkle in her eyes, I know that sounds crazy but they get so excited to buy our grain.
▶ 0:43:27Mrs. Mikesh: And the assurances that they are going to receive what it is that they are paying for. They are always extremely impressed by what our system is.
▶ 0:43:33Sen. Thune: Perfect, thank you.
▶ 0:43:39Mr. Friant: We have heard a couple times, the international buyer holds the U.S. certificate as the gold standard. They want that when they buy from exporters. So if we lose the ability, the integrity of that certificate, it really hurts us is being recognized as a reliable supplier of quality grain.
▶ 0:44:02Sen. Thune: We want to have people excited to buy, so thank you Mr. chairman.
▶ 0:44:09Chair Boozman: Senator hyde-smith.
▶ 0:44:17Sen. Hyde-Smith: We knows that those who buy U.S. grain must trust our grain inspection system functions properly. We know how important that is and I certainly appreciate all of you willing to testify today and give us some insight on that.
▶ 0:44:35Sen. Hyde-Smith: But this trust is a functional system and ensures that farmers, merchandisers and users all know they are operating within a system that is transparent, that is consistent, and it is science-based. I hear regularly from farmers and grain elevator operators in mississippi who rely on the grain inspection system to protect the value of their grain and to ensure that they are competing on a level playing field with everyone else.
▶ 0:45:06Sen. Hyde-Smith: The grain inspection advisory committee plays an important role in helping advise the federal grain inspection service navigate the technical and policy challenges of implementing the grain standards act. Mr. friant, I agree with your testimony that the grain inspection advisory committee serves a critical role in advising fgis, and I appreciate your service and commitment on that committee and your enthusiasm as well.
▶ 0:45:35Sen. Hyde-Smith: But given the technical nature of the grain standards and the weighing systems, the advisory committee's role is essential in ensuring that fgis actions continue to facilitate the export of the world's highest quality grain grown by producers in mississippi and across the country. Are there any recommendations you might make to improve how fgis incorporates the advice and counseled by the advisory committee into the agency's decision-making process?
▶ 0:46:06Sen. Hyde-Smith: Is there something you would like to suggest today while you have our attention that we can listen to you on?
▶ 0:46:12Mr. Friant: Appreciate that. The advisory committee is near and dear to my heart having served three times and participating as a member of the public as often as possible. And it has been a great public opportunity for industry and service providers and producers for public record to talk about the needs of the agency.
▶ 0:46:35Mr. Friant: We have seen good work come out of that and we have some recommendations in our testimony around how we can ensure that members are appointed to the committee in a timely manner. One of the areas the committee has struggled with over the last handful of years his folks have a turk -- three year term limit and they roll off and new folks are not nominated in time to be seated on the committee.
▶ 0:46:59Mr. Friant: So we want to see some provisions around how existing members can stay on the committee, until if their time expires at three years until a new person has been appointed and nominated to serve and replace that person on the committee.
▶ 0:47:13Sen. Hyde-Smith: Makes sense that you need that accountability. I have a little more time left. I would like to highlight the importance of protecting the trade surplus in the united states that has historically maintained grain and oilseeds. While overall agricultural trade surplus has evaporated into what usta now projects to be a $49 billion deficit in 2025.
▶ 0:47:41Sen. Hyde-Smith: Grain continues to be the bright spot for agriculture. In fact america enjoys $65 billion of trade surplus on U.S. grains and oilseeds. Very exciting. This is a credit to our farmers who continue to grow the highest quality grain in the world and it is a credit to our transportation system, our infrastructure, including the critical american waterways, highways and rail systems of how we ship this out.
▶ 0:48:11Sen. Hyde-Smith: It is a result of decades of diligent work to develop and to grow these markets and to protect these markets. Mississippi farmers contribute significantly to our country's grain production particularly through rice, soybeans and corn. These crops are exported down the mississippi river and through the gulf of mexico -- the gulf of america, let me get that right.
▶ 0:48:38Sen. Hyde-Smith: Ensuring we maintain the integrity of our inspection system is paramount importance to me, especially when it relates to our export markets. This question is for all of you. What are some of the challenges we face with grain exports, and what can we do in the grain standards act result there is to help overcome those challenges? I am a little bit over, but if you guys are allowed to answer that right now.
▶ 0:49:04Mrs. Mikesh: Thank you for the question. One of the things you will likely hear each of us talk about is the need for developing technology. One of those reasons is down at the exports, the port locations, there is not consistency of the volume that there used to be. I remember when I was younger, it was always harvest time at harvest time. We had to staff up for that and then usually there was natural attrition then you would get through the summer's.
▶ 0:49:34Mrs. Mikesh: Because of just how the market has changed, there are a lot of ups and downs as far as volume. One thing we really think that could help in maintaining consistency is bringing forth more technology within the grain inspection system so that we can rely on this technology and more consistency among people. That is something we think could really help.
▶ 0:50:01Sen. Hyde-Smith: Thank you.
▶ 0:50:03Mr. Wipf: The only thing that comes to mind for me is as farmers have added on farm storage for grain it has changed the profile of when that grain has come to market. If there are areas where the government can target funds to help farmers in certain areas to plus up their storage and maybe make it a little more predictable, and then also education for farmers. Because using that storage effectively doesn't happen by accident. You do have to know what you are doing so I think there is an educational piece there too.
▶ 0:50:34Sen. Hyde-Smith: Very good point.
▶ 0:50:37Mr. Friant: I think just a timely and bipartisan reauthorization of the grain standards act. It ensures the continuity of that program. And to agree with Mrs. mikesh, we have talked about it for a couple years now, technology. What technology can we adapt and adopt for grain graining is paramount.
▶ 0:50:59Sen. Hyde-Smith: What kind of technology are you referring to?
▶ 0:51:02Mr. Friant: We've been looking out a lot of possibilities but I think the biggest one, and frankly, I have been hearing about it since the first day I walked in over 20 years ago, it is visual imaging technology. To be able to look at a grain sample and say what is the level of damage.
▶ 0:51:22Sen. Hyde-Smith: Gotcha. Very important. Thank you, Mr. chairman.
▶ 0:51:30Chair Boozman: Senator hogan.
▶ 0:51:31Sen. Hogan: Thank you. I didn't get here right at the beginning but I definitely want to take two minutes to talk about kia, from fargo, north dakota. What did you do to your body from north fork's? There he is. But I want to welcome you both.
▶ 0:52:01Sen. Hogan: Just to make sure if somebody didn't bring it up sooner, that kia is third generation in the grain inspection business, which is pretty cool. Vice president of the grain inspection and president of the weighing agencies at a very young age, I must say. Pretty awesome. Her grandfather steve adams began his career at north dakota grain inspection.
▶ 0:52:29Sen. Hogan: Shortly after its founding in 1968, I think it is pretty awesome that you are following in your grandfather's footsteps. I am pro-grandpas, and pro- grandkids following in grandpa's footsteps. So is the chairman. You can tell by looking that he is a grandpa too, just because he looks real happy, not because he looks real old.
▶ 0:52:52Sen. Hogan: But it's so awesome that you are here, and obviously it is very important, along with your colleagues as far as the grain inspection service. I am actually going to shift gears a little. I thought senator hyde-smith, who was in the cattle business, had great questions on the grain side. Obviously knows agriculture.
▶ 0:53:18Sen. Hogan: But I want to ask what y'all are hearing about from our farmers and ranchers in terms of grain sales. In our part of the world obviously there are carbines, soybeans grown on the crops. And for those younger producers they have to sell off the combine or lose contracts. We are hearing concerns, whether it is corn or soybeans or other crops.
▶ 0:53:48Sen. Hogan: So just talk to us about what you are hearing in terms of marketing those crops and just any ideas you have along those lines to make sure we are not only well-informed but doing whatever we can to be helpful. Kia, we get to start with you because you are from north dakota, then we go to south dakota out of deference to the majority leader, then nick, you are the cleanup hitter.
▶ 0:54:15Sen. Hogan: You look like a cleanup hitter, like you could put it out of the park.
▶ 0:54:18Mrs. Mikesh: Thank you so much for that question. Grain sales are not something that is within my expertise. However, I have been very proud of all the grain inspection agencies like ours help make sure that there is consistency in the grading that is done.
▶ 0:54:37Mrs. Mikesh: So if you are in north dakota and there is a grain elevator selling their soybeans or corn and it is going out to the pn w, they are meeting consistency of when they are having it rated at the origin versus destination. That is something that is paramount to make sure that you are able to sell your grain properly and give you the best outcome that you can have. So from my perspective that is one thing that I would do.
▶ 0:55:02Mr. Wipf: I will start by saying I was not invited here because of my expertise on getting it right. Some days you feel like a hero and some days you just don't. Discussions amongst farmers about the sales that they make are sometimes, it is a difficult topic because it comes down to how much money you are making. When you grow up on a farm you don't talk about that. We are taught to be very humble about things and so when you get it right you maybe don't talk about that, and when you really blow it -- .
▶ 0:55:35Sen. Hogan: An aggressive farmer is a guy who looks at the other guy's shoes and not his own.
▶ 0:55:42Mr. Wipf: You go to the coffee shop and you talk more about the things you have gotten wrong than right. So I'm on a learning curve just like everybody else. I am about 15 years in now is a farmer and every year I learned something a little more. Basically the thing I try to tell younger producers is layoff as much risk as you can because there is no server -- no shortage of uncertainty in our business.
▶ 0:56:09Mr. Wipf: The ability to use futures markets which rely on the issue before the committee today to hedge that risk, I cannot stress the importance of that enough.
▶ 0:56:17Sen. Hogan: Tell me how you are marketing your crop this year.
▶ 0:56:22Mr. Wipf: I am probably 40% to 50% sold.
▶ 0:56:26Sen. Hogan: You did that earlier in the year?
▶ 0:56:28Mr. Wipf: Yes. We are in the middle of wheat harvest right now. Taking a quick trip to D.C. right now, but no, we're fine. We're looking at a really big corn crop potentially coming in.
▶ 0:56:44Sen. Hogan: Are you having trouble moving that crop?
▶ 0:56:47Mr. Wipf: No. I might not like the price I'm getting right now.
▶ 0:56:52Sen. Hogan: That is not a function of the inspection service?
▶ 0:56:55Mr. Wipf: No. I'd love to be able to sit on it and wait or maybe a little better price but we see a big crop coming this fall and we will need all the space on our farm available for that.
▶ 0:57:08Sen. Hogan: So you are moving the wheat and not having trouble getting that contracted?
▶ 0:57:14Mr. Wipf: No.
▶ 0:57:15Sen. Hogan: But you are making room for real crop with the idea you may hold it?
▶ 0:57:20Mr. Wipf: Yes. Corn in particular is a high-volume crop. You want to keep that combine moving. If you are at the elevator waiting you don't get much done.
▶ 0:57:30Sen. Hogan: Ok.
▶ 0:57:34Mr. Friant: I am not sure how the cleanup hitter is going to follow that one up.
▶ 0:57:39Sen. Hogan: Boy, you see it directly in terms of buying crop and what farmers are doing. What are you seeing?
▶ 0:57:46Mr. Friant: In my role I don't deal with the buying and selling. They call me when they have a problem with the quality or the grain standards act or trying to manage inventory and storage. So when I have market questions I candidly walk over to the trading floor and talk to them.
▶ 0:58:08Sen. Hogan: Last time you did that what did they tell you?
▶ 0:58:11Mr. Friant: They told me to go away. [laughter] stay in my lane. But I think that is the beauty of the U.S. grain standards act. Whether it was riding the truck with my dad to deliver lumber in my hometown or when I was grading grain into a pickup, kansas -- U.S. number two soybean was the same. U.S.
▶ 0:58:40Mr. Friant: Number two was the same anywhere. And that consistency that we heard about, that is how the international and domestic market uses it for price discovery. So we know it is going to be the same and that is the beauty of the U.S. standards. It doesn't matter where you are at in the U.S. or most world buyers. You know you are getting U.S. number two soybean and the full backing of that federal grain inspection certificate.
▶ 0:59:07Sen. Hogan: One final question. Are we doing a good job on the consistency, and are other countries doing a good job on consistency or is that an advantage we have on international markets?
▶ 0:59:20Mr. Friant: I would say yes, we are doing a very good job with consistency. As we have shared in our testimonies, there are things particularly around testimony that would help efficiency. Overall I think we are doing a very good job. That is why we continue to say today and always that U.S. certificate is the gold standard. I think we are probably biased on this panel that we are better in the U.S.
▶ 0:59:48Mr. Friant: Than our foreign competitors, and I think there has been some studies that show the value of the U.S. certificate and the U.S. grain supply chain being reliable and consistent.
▶ 1:00:01Mrs. Mikesh: I would agree. I see that we are having consistency across the nation. However, in order to obtain that consistency it takes a lot of time to grade that grain. So when our team members are out at grain elevators, when I was younger I should say, I used to see it where a train would take a few days to load. That gives a lot of time for a grain inspector to sit there and pick through the grain, pick through each individual kernel.
▶ 1:00:33Mrs. Mikesh: Now we are sitting at grain elevators with a load of 115 railcars in under five hours. Even if you have multiple inspectors there, there is not a was a lot of space. So that is difficult as well. It is hard to keep up with the loading process and that is where technology can come into play and help as an aid for us to consistently grade that grain as well as help places like cargo and farmers so that they can help -- keep their grain
▶ 1:01:03Mrs. Mikesh: Moving at a fast pace.
▶ 1:01:03Sen. Hogan: Thanks again to all of you. Appreciate it.
▶ 1:01:07Chair Boozman: I was just going to say, don't take my word for it. I will tell you what I see at foreign ports when I visited there. --
▶ 1:01:19Mr. Wipf: I have seen the issues they deal with with our competitor cargoes and they very much prefer unloading from a U.S. destination. Doesn't matter where, they know they are getting that consistent product because of our grading standards.
▶ 1:01:37Chair Boozman: Senator marshall.
▶ 1:01:44Sen. Marshall: I want to focus on trade for the first half and the tariffs get all the ink but the nontariff barriers are my biggest concern when it comes to agriculture. I want to ask some questions regarding how do our grain standards help us from nontariff barriers or do you have examples from when you think other countries have used that against us in one way or another, they are not accepting our grading system?
▶ 1:02:15Sen. Marshall: Maybe Mrs. mikesh, if you wouldn't mind starting.
▶ 1:02:18Mrs. Mikesh: Thank you. Yes, from what I see in my perspective with an official grain inspection is if there are complaints overseas about any shipments of grain, it is wonderful having the fgis and usta backing on that. Fgis has individuals that can work through that and since everything that we do, the paper we write on, the certificates we do is all considered federal property.
▶ 1:02:47Mrs. Mikesh: So as those questions come through we are able to kind of go backwards and see down to exactly when looking inside a container was done and what was found doing that. That is something that has been very beneficial for the trading partners across the seas that they know that they can figure out what is going on and it is a little more difficult for that to be used when we had a very good records of what happened for though shipments.
▶ 1:03:14Sen. Marshall: Despite that are there examples when they lower our grading system and reject our grains?
▶ 1:03:21Mrs. Mikesh: That is something I don't have expertise in.
▶ 1:03:24Sen. Marshall: That is fine. Mr. wipf, any comments.
▶ 1:03:28Mr. Wipf: I have heard conversations about sometimes a foreign buyer might have become accustomed to be getting a little better than what the grade actually is and then if you ever deliver at the great they feel they have a complaint. They describe what they wanted and they just described number one corn and you paid for number two corn. So it is nice to have this grading system to fall back on and say you want better? We have better. Let's have that conversation.
▶ 1:03:59Mr. Wipf: It is just that level playing field and good fences make good neighbors sort of rules that we can all agree on.
▶ 1:04:06Mr. Friant: I think we would make the case, and I have dealt with nontariff trade barriers, we make the case that is why we have the U.S. grain standards. U.S. grain standards help address some of those concerns. Whether it is damage or in sacs or other quality factors. It is why we have them. Mrs. mikesh made a great point, we have that backing if there is a complaint.
▶ 1:04:35Mr. Friant: There is an official process, fgis gets involved and a relook at the sample and provide an official report or a formal report. And in my experience, almost every single time we prove that we loaded what we said we were going to loan.
▶ 1:04:55Sen. Marshall: I want to put on my hat here and give you a chance to brag. I think there is a misconception that we are not testing grain, that we are not testing what we have milled. Let's focus on pesticides, that is the biggest concern. Just describe what we are doing and what those standards look like. What type of reassurance would you give my daughter, the mother of my two grandsons, that american grain is safe?
▶ 1:05:26Sen. Marshall: Maybe go in reverse order, Mr. friant to go first perhaps.
▶ 1:05:29Mr. Friant: Sure. I eat the products made out of the grain, I am happy to feed them to my family and my daughter is here today.
▶ 1:05:39Sen. Marshall: So far, so good.
▶ 1:05:42Mr. Friant: We have a really strong system here. Epa regulates, fda enforces. We have strong programs to ensure proper limits are set and are undeterred and we don't see those in our supply chain.
▶ 1:05:59Sen. Marshall: Ok. Mr. wipf.
▶ 1:06:02Mr. Wipf: My role as the farmer is really to understand the pesticide labels and make sure I am applying those right, and then to every extent I can, invest in the latest technology so that I am able to apply timely and properly. As long as I am doing that, that is the last stage I have, but I stand behind every bushel that I produce.
▶ 1:06:26Sen. Marshall: Then you take it to the elevator, then the grain is tested for residues.
▶ 1:06:33Mr. Wipf: I don't believe each load. I am not really sure at which point that happens. The ticket I get when I dump a load of grain they mainly deal with moisture, mainly things that deal with, will this grain spoil too quickly or stay in condition until it gets to the end customer. Perhaps there is somebody who can better address your question.
▶ 1:07:00Mrs. Mikesh: This is something I am passionate about, making sure the quality of our grain is there. Some of the factors we look for that are important in respect to what you are discussing is mycotoxins.
▶ 1:07:15Mrs. Mikesh: Making sure that corn doesn't have aflatoxin or vomit toxin or wheat doesn't have ergot or vomit toxin or many other factors where they are safety factors to make sure that either the end consumer, whether that is a human or cattle, is going to be ok and be healthy through that.
▶ 1:07:37Mrs. Mikesh: One of the things that I see is that, I spoke a little in my testimony that exports are mandated to have quality inspection but nothing domestically is. So our entire official agency is done on mainly permissive work.
▶ 1:07:56Mrs. Mikesh: So even though it is not mandated under the grain standards act that the grain at the elevator in castleton, north dakota is done, the entire system finds that essentially mandatory in their own right. And so they require, the buyers will require the sellers to provide them with heavy testing. We have grades on every single railcar that goes out that shows those different damages that can be very toxic.
▶ 1:08:26Mrs. Mikesh: But then also doing mycotoxins on every railcar. That shows the commitment to safety in the industry.
▶ 1:08:32Sen. Marshall: Are you testing for pesticides as well?
▶ 1:08:35Mrs. Mikesh: We are not. That does go to a different level of grain inspections. We do more of the quicker analysis that they can do to buy and sell. But I know that fgis does pesticide revenue testing as well as other private agencies.
▶ 1:08:51Sen. Marshall: Ok. Did you want to add something? Nope? Ok. Thank you so much, chairman.
▶ 1:09:00Chair Boozman: Mrs. mikesh, your testimony highlights the request for official agencies to take place in research agencies. As the vice president of an official agency can you speak to the impact this would have on your family's business and the inspection agency as a whole?
▶ 1:09:17Mrs. Mikesh: Yes. We have seen over the years that fgis has worked hard to help technology get going but it is a difficult process. A few years back we went to an agricultural marketing summit, marketing services innovation summit and we were there fruits and vegetables and organics.
▶ 1:09:44Mrs. Mikesh: Everyone else was having a bit of been easier time finding technology to help aid in their inspection process and when people think your isolated area, you feel like maybe you are a unicorn and everything is more difficult for our area. We found that for grain, that was definitely true.
▶ 1:10:05Mrs. Mikesh: When you look at a tomato you can see things visibly, where we are looking at tiny kernels individually per rail for samples. There is a lot that has been going on in technology and there is a bottleneck in having the federal government the wall of testing or all of the analysis to determine if something is fit for purpose.
▶ 1:10:31Mrs. Mikesh: One thing we discussed in the advisory committee's new technologies will come through but you always have to make sure it is the same or better. That is difficult to do and takes time. One thing we have discussed is that official agencies could take on some of that in the beginning, say 80-90%, and when I was talking about mycotoxins, that is where you have seen the most evolution in technology, things that there is a scientific base that is outside
▶ 1:11:03Mrs. Mikesh: The official agency's purview. When you talk about visual grading, that is something there are very you that are experts in. Fgis being one as well as official agencies. We are able, we think official agencies would be able to take on a lot of that and help escalate the timeliness of getting technology approved, as well as being able to see real life examples that happen right away instead of figuring it out when something is already an -- approved.
▶ 1:11:37Mrs. Mikesh: Our agency provides services in nine states which is different types of damages, different types of corn, soybeans and geographic environments and we think that would be an added benefit for official agencies to help. >> very good. You outlined the successful and swift action by fgis and stakeholders to remedy soybeans of other colors issued a few years ago.
▶ 1:12:04Mrs. Mikesh: Can you speak to the need for this process to be adaptable to new seed technologies that expectation, consistency and quality worldwide?
▶ 1:12:15Mr. Wipf: The situation I highlighted with soybeans shows us the system worked. It is robust enough to deal with the curveball we hadn't seen before, and luckily we were able to work through the process. We are grateful we were able to do so and nothing was disrupted for farmers. It's important we continue to offer flexibility because of unknowns. We don't know what the next similar situation might be but I'm grateful the system worked.
▶ 1:12:45Chair Boozman: Very good. Mr. friant, you served many years on the grain inspection advisory committee. Can you share insight into the importance of the advisory committee and if the committee tackles the priorities you raised today?
▶ 1:13:03Mr. Friant: Very much so, the advisory committee has served an important function for the agency and for industry producers, official agencies, and the public forum to have the conversations and for fgis to hear from stakeholders, what do we need?
▶ 1:13:23Mr. Friant: I think one good success story, I want to thank senator hoeven, senator hyde-smith, dealing with fda actionable grain. That was something the committee brought, to the agency and said here are some concerns and some changes we would like to see happen.
▶ 1:13:44Mr. Friant: Fgis took those recommendations from the committee back, worked with fda and the support from senator hoeven and senator hyde-smith and we ended up with new directives and direction that has made it easier for the industry to manage. Truly a success story of how the committee worked and the agency took what was recommended and turned it into something actionable for the industry.
▶ 1:14:12Chair Boozman: Very good. Senator hyde-smith, do you have any other questions or comments? Well, thank you again, witnesses, for being here. You did a tremendous job. This was very helpful. This helps us understand how important it is for us to get work done and get this reauthorized.
▶ 1:14:39Chair Boozman: We appreciate the fact that you took time, especially when it brings you out of the field. And the record will remain open for five business days. Thanks to all the staff that works so hard to make this happen on both sides. With the outcome of the hearing -- with that, the hearing is adjourned.