Drifting into highway safety

 

I wouldn’t be surprised if Niagara County commuters are battling carpal tunnel syndrome. It’s been a winter of white-knuckle driving as it seems like every day, for weeks on end, we’ve had to grip our steering wheels like we’re trying to squeeze the juice out of them when navigating our snow-covered rural roads.

 

That’s no fault of our plow drivers, who I count as the best in the USA and Canada. They’ve been busting their butts, plowing and carving at all hours.

 

We’ve received plenty of snow. But, that’s not the problem. Snow is manageable. Wind, on the other hand, is difficult to keep up with. A snowplow can make a pass and, on the return trip, it can look like the road was never touched. Winds in excess of 15 miles per hour, with many days seeing gusts above 30, have been the norm the winter, leading to significant drifting and whiteouts…and countless accidents.

 

This was most dramatically seen earlier this week when an eight-car pile-up happened in Gasport. It started with a two-vehicle head-on, but quickly devolved into more as incoming drivers had zero visibility. A video of the aftermath can be found on Facebook, shared by someone who was in the accident. Luckily, she wasn’t hurt and just one person was taken by ambulance. But, if you’ve seen the video you know that’s a miracle – the carnage was jaw-dropping.

 

Those reading this column who are of a certain vintage likely don’t recollect the roads being like this years ago. Even then, with vehicles less capable of handling the roads (before the era of SUVs, all-wheel drive, and trucks in abundance), the drives seemed less stressful. That’s because they were: Snow used to accumulate in large drifts rather than drifting across the road.  

 

It all goes back to past farming practices. At one time, there were more -- and smaller -- farms. In 1954, there were 4.78 million farms in the United States, averaging 242 acres in size. Those farmers used hedgerows as boundaries for either their property or fields of differing use. Those hedgerows became windbreaks and prevented blowing snow from spreading all across the land.

 

Fast forward to 2025. Because of the ongoing transformation of America away from an agrarian society, coupled with developments in farming technology and economics, it takes fewer farming enterprises than it once did to feed the masses. There are now 1.8 million farms in the US and they are much larger. Today’s operations purchased those smaller ones that dominated days gone by and added them to their property portfolios. By doing so, there is less of a need for property-delineating hedges. And, with a focus on larger, single-crop fields, there is less of a need for crop-dividing strips of trees.

 

Just as I did with plow drivers, I’m not going to fault farmers for our predicament. It’s an unintended consequence of an entirely different industry and economy. Every hedgerow equals a loss of revenue. In a state like this in which it’s difficult to do business, let alone a business the health of which hinges entirely on the prospect of good weather, the same business the profits of which are decimated by things such as federal milk policy, literally every single penny matters. Theirs is a struggle most of us cannot relate to.  

 

To make the roads safer, it will take local and state governments working with those farmers.

 

You certainly can’t ask farmers or local road crews to put up snow fences. We have too many roads. Niagara County alone has a whopping 1,700 miles of pavement. Can you imagine the man hours it would take to fence even a fraction of that? 

 

Living snow fences, like the aforementioned hedgerows, are the answer. They worked when my parents were kids. They worked when I was a kid growing up on a farm road. And, these fences don’t have to be trees.

 

With the development of the state budget underway, Albany should create voluntary incentive programs for farmers in troublesome areas to plant windbreaks. Incentives are necessary because we can’t ask someone to forgo revenue from abandoning fair-sized strips of arable land. 

 

Some states grant significant property tax deductions for the use of windbreaks. Indiana, for example, assesses windbreaks at a rate around $1 per acre. Farmland in New York is assessed at an average of $4,150 an acre. If we had a $1 assessment here for land repurposed as public benefit, imagine the participation. 

 

Other states pay outright for windbreaks. Minnesota gives farmers $1,000 an acre to leave corn stalks standing in 12 row increments through April (when done over a mile stretch of road that is one acre). That contract runs in one-year installments, and allows for use of other barriers, so a farmer isn’t bound if he chooses to alternate crops. The state’s Department of Transportation keeps this focused, in terms of safety and cost, on a few thousand specific trouble zones that are adjacent to state highways.   

 

These states have shown, quite successfully, that there is a cure for snowy roads that make our drives so dicey. We just need some local and state officials to hedge their bets with hedgerows, getting help from – and at the same time helping -- the ag industry.  

 

 

From the 22 February 2025 Greater Niagara Newspapers and Wellsville Sun

Alternatives to Tariffs: Part Four

 

I am not a fan of tariffs as public policy due to two flaws of theirs: They are a significant tax upon consumers and they do nothing to address the structural matters that truly impact the competitiveness of domestic producers that face threats from abroad.

For the past month in this column, I’ve been offering suggestions of public policy and investments that could provide the necessary support to manufacturers and, in turn, the US economy. The series concludes today with a look at cost certainty, specifically when it comes to taxes.

 

The so-called Trump Tax Cuts, more accurately identified as the Tax Cuts and Jobs Act of 2017 (TCJA), brought significant changes to business taxation, such as a reduction in the corporate income tax rate from 35% to 21%, an increase in the estate tax threshold, and modifications to the individual income tax system that reduced taxes for pass-through businesses.

 

Certain TCJA provisions related to corporations, globally engaged companies, and individuals (including the aforementioned pass-throughs) changed or started to phase out in 2022, which concludes with expirations scheduled for the end of 2025. Every one of those changes has resulted or will result in significant adverse impacts on manufacturers throughout the United States. According to studies commissioned by the National Association of Manufacturers, if all the expirable aspects of TCJA did sunset, manufacturers would be forced to cut 1.1 million jobs while $248 billion would be stripped from the gross domestic product.

 

The President and many Republicans are looking to extend all parts of the TCJA, while some in his party want to make them permanent and others among the GOP, the deficit hawks, might not be too keen on renewing them at all, which in a House of Representatives split 218-215, could spell the end of the TCJA.

 

Given that division, it might be somewhat of a tough fight but certain parts certainly do deserve extension, whether they concern research and development credits (especially given US manufacturers’ innovation race with China), the estate tax threshold (which impacts many factories -- and farms -- because many of those operations can be asset rich, in terms of machinery and property, yet cash poor), and the 20% pass-through deduction (S-corporations, partnerships, LLCs, and sole proprietorships account for 50% of total private payrolls in the United States).

 

An important component of the TCJA that does not need attention in 2025 is the corporate tax rate. It will stay at the lower 21% even as all of the TCJA expires. But, an act of Congress could cause it to increase. The future is never certain as, for example, presidential candidate Kamala Harris campaigned on taking it up to 28% as did Joe Biden before he was unceremoniously dumped by his party.

 

Those against keeping it at 21% claim it didn’t result in trickle-down economics because large corporations didn’t pass the savings on to their workers and the greater economy. It’s a false, failed narrative because they fail to realize that, by design, through intense lobbying of and crony capitalism by Republicans and Democrats alike, our nation’s tax code has loopholes galore that keeps the big boys from ever paying those taxes to begin with: 35%, 28%, 21%, it doesn’t matter to them, they’ll find a way out. For example, for the five years ending in 2022, Ford’s federal income tax rate was -0.2% while General Motors saw 1.3%.

 

It’s the smaller manufacturers – like the machine shops in your town, or my company – that actually pay corporate taxes and therefore see huge benefits across their entire food chain and practice trickle-down in all forms with the tax rate at 21%.

 

This aspect of the Trump Tax cut was a game changer for Confer Plastics in recent years. Having access to more of our money was a big reason why we became debt-free, were able to buy two molding machines without incurring debt, and could, at the same time, issue substantial bonuses to our whole team….giving us the best financial position, technology, and people to compete in this great big world.

 

Producers need certainty. Tariffs don’t provide that. They’re a temporary, variable, and somewhat emotional response to trade issues. Tax cuts, like those launched in 2017, are a more reasoned approach that look at cost factors that can be mitigated to allow our nation’s manufacturing base to hang with China and other powerhouses. They should be a part of our trade war weaponry, as should be the things that were mentioned in recent columns, like a culture around and protections for intellectual property, investment in energy, and the fostering of supply chains for minerals, metals, and rare earths.  

 

 

 

From the 15 February 2025 Greater Niagara Newspapers and Wellsville Sun

Alternatives to Tariffs: Part Three

 

 

Editor’s note: This is the third in a four-part series

 

In recent weeks, this column has addressed the flaw with tariffs while offering a short list of big things that should be addressed to ensure the long-term viability and global competitiveness of USA-based manufacturers.

 

In the first column I discussed matters around intellectual property. Last week, I wrote of the importance of investing in energy. This week, the focus is on fostering a supply chain for resources that manufacturers need.

 

Over the course of his presidency, and especially towards the end of it, Joe Biden levied a large number of duties upon China, among them a 100% tariff on electric vehicles, 50% duties on polysilicon imports and semiconductors, and 25% tariffs on lithium-ion EV batteries and tungsten.

 

Biden said it was because of the predatory nature of China and Chinese manufacturers and how they, working in unison, undercut US producers. That’s true to point; after all, I experience it literally every day at Confer Plastics as we battle copycat products from China. But, he needed -- and now Trump and Congress need  -- to take a deeper dive…as in deep into the Earth. For almost all of those products that Biden went after, China can make them much cheaper than the USA can primarily because they have the supply chains that provide materials needed for manufacturing.

 

Consider the following:

 

Various semiconductor technologies need gallium and germanium. There is not a domestic supply chain for gallium and China controls 98% of the global supply. The US produces just 2 tons a year of germanium while importing almost all its needs from China which turns out 85,000 tons annually. 

 

Lithium-ion batteries are made of lithium, nickel, cobalt, copper, and graphite. Despite having large reserves, the US produces less than 2% of the world’s lithium and almost two-thirds of our economy’s needs come from China. The US imports about $2.5 billion of nickel every year, while only mining 17,000 tons of the material which is shipped overseas for further processing. The US ranks 13^th in the world in cobalt production with the output having decreased in recent years. The US rates highly in copper (5^th), but production was down 11% in 2023 and dependence on imports is increasing every year, especially as electrical demand rises. Graphite is not acquired in the US, yet our economy needs 76,000 tons of it a year. 

 

The US hasn’t supplied any of its own tungsten – used in electronics -- since 2015 and we import $236 million of it annually, with China being the largest source.

 

Then, there are numerous rare earths – 17 elements used in the production of high-tech goods. 60% of rare earth mining and 85% percent of its processing is under the control of China.

 

The federal government needs to fixate itself upon these significant disadvantages and ensure access to these important resources.

 

President Trump understands this. That’s why just days ago he mentioned rare earths and minerals in his public style of negotiations with Ukraine, continuing talks that he actually began with that nation’s leader, President Zelensky, last fall, well before our election. He has openly said that in exchange for US aid in terms of weapons and cash Ukraine should grant us access to those inputs, something Zelensky is happily onboard with.

 

That’s a start, but it’s also a huge gamble – and a huge investment of time and hopeful patience -- to bank on supply chains in war torn regions and nations under duress. We need to engage our peaceful neighbors, too.  

 

We get, and should continue to get, many minerals and metals from Canada. They account for $47 billion of US mineral imports, which exceeds China’s deliveries to us by a whopping $20 billion. We need to overcome the damage done in recent weeks with the hubbub over the threatened trade war. And, it should be noted USA-Canadian political relations weren’t the healthiest even before Trump – Biden was cold and distant with Canada. We’ve got a lot of work to do, knowing Canada is important to us and we to them.  

 

And, we’ve got a lot of work to do to develop a domestic supply, the ultimate in reliability and prosperity.

 

The reserves for many of those resources are here. We just have to get them and finish them. And, it has to be done wisely, with proper stewardship of the environment – one reason that we’ve abandoned these supply chains is how dirty it can be to extract and process what is extracted from the Earth. America has very bright minds and we continue to develop them in our best schools and universities, and our innovative nature and private and public investments can find the right and just ways to access and deliver what industry needs.  

 

Minerals are the building blocks of everything in the universe – including industry. Let’s put significant political momentum behind building a better supply chain. By not mining and processing the minerals and elements we need, our manufacturers, our economy, and our national security will be threatened by China and other countries for the long haul.  

 

 

From the 08 February 2025 Greater Niagara Newspapers and Wellsville Sun