Back in 2001, we estimated that Brazil could bring 200 to 300 million acres of land into agricultural production—an area equal to the US acreage involved in major crop production. Two years later the, USDA Foreign Agricultural Service, (FAS) estimated that over time the potential added production acreage could be closer 420 million acres.
At the same time that the US Senate overcame a procedural hurdle in moving the 2012 Farm Bill from the Ag Committee to the Senate floor, the dependence of the commodity title on crop/revenue insurance continues to attract media attention.
In early October, Senator Richard Lugar of Indiana, author of the Conservation Reserve Program (CRP) in 1985 and Chair of the “Senate Agriculture, Nutrition, and Forestry Committee in 1996” when Freedom to Farm was adopted, announced the introduction of a farm bill proposal that would save “$40 billion in USDA Cuts to Help Meet Federal Deficit Reduction Goals.” The bill was co-sponsored by Rep. Marlin Stutzman, also of Indiana.
As we are writing this column, 2,153 people have become ill from an E. coli outbreak that is centered in Germany, 22 have died and approximately 30 percent of the reported patients have contracted hemolytic uremic syndrome (HUS). The species (serotype) of bacteria responsible for this outbreak is E. coli 0104:H4 which is a non-104:H7 STEC (Shiga Toxin producing Escherichia coli).
We have seen it coming. We have even written about it in this column.
But, it was still a shock to read it in the New York Times, “federal farm subsidies, long decried by policy makers as wasteful and antiquated but protected by powerful political interests, appear to be in serious danger.” That is, going beyond eliminating specific excesses in farm programs during “these good times” to permanently eliminating farm programs in total.
We recently ran across a belt buckle from the 1980s that read, “The American Farmer Feeds the World.” For many producers, that statement underlies much of what they do from their on-farm decision making to the policies they support.
For most of us of a certain age, the experience of the agricultural sector in the 1980s is seared into our minds. The average value of all US farmland had relentlessly increased from $82 an acre in 1954 to $823 per acre in 1982 - the best land was selling in the vicinity of $3,000 per acre. Beginning with the explosion of the export markets in the early 1970s, US farmland prices increased at double-digit rates from 1973 to 1981.
There was a time when one could legitimately argue that there was a lack of scientific agreement over the issue of the role of humans in global warming and even whether we were in a cooling or warming period. Today, the question is a settled one.
Over the years as we have talked to farmers about their
health care coverage, we find that they fall into four groups. A large number of
farmers have a spouse who works in town and has access to health insurance
through an employer-paid group insurance program. When asked, these farmers
often acknowledge that the health insurance coverage is more important than the
The causes of the quick run-up, peak, and current price of grains and oilseeds that is well above the levels of just five or six years ago are of interest to many. In the US the farm sales of crops increased from $122 billion in calendar year 2006 to a forecast of $173 billion for calendar year 2010. Crop farmers are hoping that the underlying causes indicate a shift to a new plateau in prices, well above the prior plateau that began in the early 1970s. Livestock producers, having been hit hard by the sharp feed price increases of the last couple of years, are hoping that prices will become more predictable. A number of grain importing nations have been leasing land or looking into leasing land in developing nations as a means of protecting themselves against a surge in prices like the one they saw from 2006 to 2008 and beyond.
The last three columns have dealt with issues relating to contracting in the poultry industry, as described by C. Robert Taylor and David A Domina in a report they "prepared for the Joint US Department of Justice and US Department of Agriculture/GIPSA Public Workshop on Competition Issues in the Poultry Industry, May 21, 2010, Normal, AL,"
The issue of universal—or near universal—health care has been in the news for much of the last year as the Obama administration has been seeking to fulfill a promise made on the campaign trail. The Senatorial election in Massachusetts, the State of the Union message, and the discussion between the President and the Republicans in Congress has forced a re-evaluation of how far health-care reform should go and what measures could be taken.
The current situation in production agriculture reminds one of the writers of this column, Harwood, of a question he often heard in his former profession as a country parish pastor. The question: “Is there a shortage of clergy to serve the churches?”
Our last two columns have taken a look at the role of agricultural policy in increasing food security and thus reducing the number of people who experience chronic hunger in developing countries. In our survey, we have identified policies that have had the effect of reducing the level of food security for many consumers and small-scale agriculturalists and pastoralists in developing countries.
One of the pleasures of our job is the opportunity to get out of the office and speak to farm organizations. We enjoy listening to what farmers from various parts of the country are experiencing and thinking. Last winter we began to hear stories of price problems in the dairy industry.
Every spring brings its own risks for what is undeniably a risky profession. That being said, it seems to us that the challenges farmers face this year are greater than normal.
The first challenge is fertilizer. With fertilizer prices headed to the sky last summer, some farmers decided to protect themselves against even higher prices by contracting ahead for this summer’s prices. As we all know, prices went south and what might have been a wise decision leaves some farmers facing unusually high input costs. For those farmers it will take ideal weather and extraordinarily high yields to take some of the sting off those high costs.
Secretary of Agriculture Tom Visack wants to ship a portion of the money promised to farmers in the 2008 farm bill to child nutrition programs. Pitting identified farmers with gross sales over $500,000 against children participating in nutrition programs puts farmers at a definite public relations disadvantage. No one is against feeding children, least of all food producers.
The mere positing of such a “choice” suggests that agricultural policy is quickly approaching a crossroad—a crossroad that agricultural commodity policy has been moving toward for a couple of decades.
Major changes in crop programs are usually accompanied by uncertainty on the part of farmers. The late passage of the 1996 Farm Bill and its radically new provisions had farmers scratching their heads as they struggled to understand AMTA payments (Agricultural Market Transition Act) and the Marketing Loan Program with its Loan Deficiency Payments and Marketing Loan Gain provisions.
By way of contrast, farm bills, like the 2002 legislation, that make only incremental changes are taken in stride. Farmers, along with their bankers and CPAs, know what to expect and the uncertainty is low.