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Rural Route #8

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The view from

Cliff-Perhaps most non-farming Americans would rather hear soft and fuzzy stories from a mythological farm in a children's book or from their families' histories than be reminded that our food supply depends on business-like producers locked in a complex web of forces ranging from weather to national policies to high technologies to Wall Street money to corporate bidding to the law of supply and demand. Politically driven public policies, both in place and proposed, include energy, food safety, environmental protection, health care and water resources, just five arenas where the general public intersects with farmers and ranchers.

One harsh truth is that the federal government plays a heavy-handed role in key and controversial facets of agriculture. Take ethanol. A lot of people, mostly hard core conservatives, don't believe that taxpayers should subsidize ethanol by paying a blenders' subsidy of 45 cents a gallon. The opponents also think that ethanol causes unnecessary corn to be grown for non-food purposes. Maybe farmers shouldn't be allowed to raise clothing, or medicines or candles or flowers, or to sell any product to any entity without pre-approval from the social police.

For the record, the U.S. Department of Agriculture was looking at a huge pile of available corn as of March 1 of 7.69 billion bushels, of a 13.13 billion bushel crop in 2009, with 1.9 billion bushels expected to be left over by the time next harvest is underway. And, farmers were expected to plant 88.8 million acres of corn this spring. And, ethanol is expected to take up 4.3 billion bushels during this year. Sadly, my marketing service says now that corn prices will probably fall well under $3.50 a bushel. So, if your corn flakes don't come down in price soon, don't blame Mr. Farmer. In the category with ethanol are seed and food and other industrial, which will share an additional 1.3 billion bushels. One can see that food is not a major direct user. Corn for animal feed (chickens, dairy, beef, hogs) is a big item and that takes up 5.6 billion bushels. Exports are expected to take care of 1.9 billion bushels and ending stocks should be 1.8 billion bushels, and that's where the low prices are largely going to come from, because that is a lot of corn, roughly six bonus, surplus bushels for every man, woman and child in America.

The last run up in crop prices was not caused totally by ethanol, despite what the grocery manufacturers said. Most of the top dollars were the result of long positions only in commodity index funds which were mostly unregulated. They tracked oil prices and when oil would go up, so would the other commodities that fund managers chased to maintain portfolio holdings in their stated proportions. Often, crude oil was 80 percent of these funds. When oil climbed to $140 a barrel, the other commodities went up with it. There were many speculator dollars chasing limited barrels of oil and limited bushels of grains. Farmers didn't engineer what happened, but they did gain some cash beyond what they normally do. Economists figured that ethanol took corn prices from the sub-$2 a bushel sink to about $4.50. Oil pushed wheat and soybeans and corn to those rarified highs that did hurt dairy, chicken and beef cattle operations.

Higher fuel and labor costs and greed were the main causes of groceries rising, because usually the feed or ingredients components are a very small percentage of the retail cost of say, a box of breakfast cereal. Prices for farm products are now back to normal bleakness.

National policies do affect farmers. Energy is everything to agriculture. If there is a carbon tax ahead, farmers will be lucky to cope at breakeven with such taxes. Natural gas is more than a fuel for home heating and making California electricity and keeping wind turbine farms going when there is no wind or too many turbines are broken down. Natural gas is a prime ingredient in the manufacture of many fertilizers, including anhydrous ammonia, a valuable form of nitrogen, which all plants need in order to be healthy and thus produce grain.

Without fertilizer, people will starve while farmers go broke, a sad crescendo of converging negative forces. Farmers really need to be heard in any energy policy debate in all available forums or venues. They actually have to work with it, not just talk about it incessantly.

Farmers employ people, and they and their families (the whole business population) will have to have health insurance from somewhere, somehow. That is not theory any longer. If farmers are either happy or angry about it, they have a right and a duty to talk about it. National issues are also ag issues, and often of late, non-farmer advocates have attacked agriculture's animal care, food safety, energy use, crop use, use of genetically modified seeds, use of chemicals to control weeds and insects, and water use, to name just some. I shall not ignore in this column a bigger picture by pretending this is Hee Haw. To do so would help certain activists stifle dissent; consumers and taxpayers would be denied fuller information needed for a healthier democracy.



Copyright 2010 The Wabaunsee County Signal-Enterprise, Alma, Kansas. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2010 The Wabaunsee County Signal-Enterprise Alma, Kansas. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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