When bidding my first, large freelance writing job decades ago, I telephoned an experienced friend for guidance. Should I bid low to get the work or high to make some real money, I asked. His two-step, can’t-lose advice was priceless.
Calculate your costs, he explained, then triple them. Submit that figure as your bid. Next, “Put a bottle of champagne in the refrigerator. Later, if your bid is accepted, pop the cork and celebrate. If the bid is rejected, however, pop the cork and in an hour you won’t care.”
Last year, 2004, was a pop-the-cork-and-celebrate kind of year. Record net farm income, $73.7 billion. Record ag export volume, 115 million metric tons. Record ag export value, $62.3 billion.
Over the top. Livestock, too, blew the doors off America’s barn. Milk averaged $16 per hundredweight, a record. Hog profits, at $22 per head, were five times greater than the average return for any year between 1992 and 2003. The only thing fatter than fat cattle prices were feeder cattle prices, both record-shattering.
Most grain producers turned lovely weather, short carryover supplies and a hungry world into huge crops and big profits. For example, the 754 grain farms in the University of Illinois’ Farm Business Farm Management program had an average – average! – 2004 farm income of $91,966.
Taxpayers. And let’s not forget the generous taxpayers of this great country who, oblivious to agriculture’s swelling fortunes, also sent U.S. food producers $15.7 billion in farm commodity, conservation and disaster payments.
Of course, as the Environmental Working Group loves to point out, Congress – with the assistance of agbiz-directed farm groups – has so ludicrously tangled that safety net that only 10 percent of all recipients pocketed 72 percent of the money.
Indeed, the fact that so many government billions went to less than 306,000 of the nation’s farming millions gives 2004’s otherwise pretty face a big black eye.
‘Look, feel, taste.’ More importantly, the narrowness of the benefits proves farm program critics right, notes John Hansen, president of Nebraska’s Farmer Union. The shift of U.S. ag policy that began with 1996’s Freedom to Farm is now complete: traditional price-supporting programs are “income transfer programs that look, feel, and taste like welfare programs to most observers.”
In 2005, Hansen adds, this “common perception (will) become the reality, which is the current structure of farm programs is politically indefensible and fiscally vulnerable …”
Already, mainline farm organizations suspect it; they know their free trade/market-oriented preaching is miles removed from their practice of grabbing Uncle Sam’s money.
In fact, last year’s record-smashing run didn’t prove them correct. If anything, it proved them wrong. Their 1996 and 2002 farm bill prescriptions – here comes the federal dollars whether you need them or not – betrays their sacred supply-and-demand, free trade tenets.
‘Faithlessness.’ The consequences of this faithlessness are evident. Fewer, bigger, richer farms; more, smaller, poorer farm communities. Supply chain, industrialized livestock production; red meat and poultry producers chained to packers and processors. Less soil and water conservation; more soil and water degradation.
And, woe to us all, the food security of nearly 300 million Americans balanced mostly on the pinhead of less than 200,000 full-time producers and fewer than a handful of global food processors.
Sustainable? This is not a long-term farm and food policy; it’s get-it-while-you-can heresy that cannot be sustained. Politics, agronomics and economics are stacked against it.
Moreover, everyone knows it. Washington knows it, yet farm leaders live in denial even as Congress draws a budget bulls-eye on farm programs.
Most farmers and ranchers know it, too. Their canary land prices are being pulled to the stratosphere by investor-favoring farm program payments and tax policies while working producers are being pushed aside.
And consumers know it, also. They are fueling today’s massive food imports by reaching outside America for quality and satisfaction.
So enjoy the champagne while it lasts because agriculture’s best year ever will be followed by a year in which America’s ag trade surplus will vanish, tumbling grain prices will require even greater farm subsidies and processors and packers will strengthen their grip over food, fiber and meat producers.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at email@example.com.)