Animal welfare rules are dynamic

May 17th, 2007 Susan Crowell

Testimony before a House or Senate committee is not always the most scintillating reading. I’ve always marveled how legislators can stay awake during the most boring of hearings. I guess C-SPAN doesn’t zoom in on the sleeping sages.
But a set of statements presented May 8 to a House Committee on Agriculture subcommittee held my attention. The topic? The welfare of animals in agriculture.
There is a push to include specific animal welfare regulations in the 2007 farm bill, which may be why lawmakers called the hearing.
The topic is a tough one because, in the words of Gene Gregory, president of United Egg Producers, “it lends itself to emotion, unsubstantiated allegations and extremist tactics.”
“It’s also sometimes hard to know where concern for animal welfare ends and opposition to the very existence of animal agriculture begins,” he added.
I would argue that everyone – consumers and farmers alike – is concerned about animal welfare. But the gap between farm and nonfarm understanding about accepted livestock handling practices stretches wide from Manhattan to Malibu.
What’s unacceptable? I agree with renowned expert Temple Grandin: A good livestock producer will not tolerate abuse and neglect. A good livestock producer will not allow rough handling; throwing small livestock; beating an animal; or starving an animal. A good livestock producer provides shelter and properly euthanizes animals.
Grandin estimates that 75 percent of all livestock producers, truckers and slaughter plants do a good job of preventing abuse. But she also estimates 10 percent allow these abuses to occur frequently, and another 10 percent occasionally have problems with animal abuse.
That’s not good enough. Clearly, there is room for improvement and the industry would do well to shake out the bad apples.
Farmers could follow the example of United Egg Producers. The cooperative commissioned an unpaid advisory committee, made up of animal scientists, animal welfare experts, government officials and the American Humane Association, to review animal welfare standards and make recommendations for changes.
One of the most important was increasing the amount of space for each bird in caged production systems. Co-op president Gregory estimates that about 85 percent of the industry has implemented this and other recommendations.
And to use the UEP certified seal on their egg cartons, producers are subject to a third-party audit.
The science of animal welfare is still in its infancy. Producers will have to expect and accept changes as new research information emerges.
“Pulling together societal expectations and industry needs is a lesson in recognizing that guidelines for animal care benefit from being both science-based and dynamic,” testified Gail Golab of the American Veterinary Medical Association.
Those are words I hope the legislators, activists and producers heard.

What they said:

Farmers rally to draw attention to food origin labeling

May 10th, 2007 Other News

ROME, Ohio – The security of knowing where our food is produced was the focus of an informational rally at the North Union Farmers Market in Shaker Square in Cleveland April 14.
The Ashtabula, Lake, and Geauga County Farmers Union hosted the event on country-of-origin labeling (COOL) of food.
Law. “We shared information with consumers on the importance of country-of-origin labeling for beef, lamb, pork, fish, produce and peanuts. This law was part of the approved 2002 farm bill and has yet to be implemented,” stated Bryan Wolfe, a dairy farmer from Rome Township and president of the Ashtabula, Lake, and Geauga County Farmers Union.
State Sen. Capri Cafaro expressed strong support for the COOL legislation. She told vendors and shoppers at the farmers market that they have a right to know in what country and under what conditions their food is processed.
She is also supportive of the recent Ohio House of Representatives resolution co-authored by Rep. George Distel that encourages Congress to enact legislation providing for the funding and immediate implementation of the portions of the Farm Security and Rural Investment Act of 2002 dealing with country or origin labeling.
Incognito. John Kinsman, a dairy farmer from LaValle, Wis., and president of Family Farm Defenders, and John Peck of Madison, Wis., Family Farm Defenders executive director, participated in the rally dressed as Holstein cows.
Kinsman spoke on behalf of cattle, humans and pets on the need for food safety. Knowing the country of origin for food products is a major step in that process.
For more information on COOL or Farmers Union, contact Wolfe at 440-563-5473.

The week no words would come

May 10th, 2007 Susan Crowell

There are some weeks when writing a column is hard (OK, most weeks). There’s never a lack of things to write about, but making those topics interesting is the tough part.
WTO and international trade? After a while you just want to stuff it into a green box somewhere. (Or should that be an amber box?)
And who really wants to read farm bill update XXIV, anyway?
I’ve been known to go home and shove a legal pad at my husband. “Here. Write my column this week.”
It worked once. And wouldn’t you know, I got more positive comments on that column than anything else I’d written that year (did I mention I put my name on it?).
My crack research team (Oh, wait! That would be me!) has manilla folder upon manilla folder overflowing with column fodder. Some are neatly labeled, like “Rural-Urban Interface” and “25x’25″; other labels make sense only to the maker, like “Food Frenzy” or, my personal favorite, “Ethanol Brouhaha” (it’s a thick one!).
When I reached to the back of one of my file drawers today, I discovered a folder labeled “Brand New Column Ideas.” With a red exclamation mark on the label. Trouble is, I haven’t looked at that folder for at least five years.
The depths of these folders yield oddities I keep for some unknown reason: News release dated Jan. 17, 2001: Popular uses for WD-40 (keep snow from sticking to windows, snowshovels and windshields, and to remove gum from hair); Wall Street Journal clipping dated Oct. 2, 1998: A stash of aged cheddar cheese, a gold-medal winner, was stolen from a cheesemaker’s farm in North Cadbury, England.
Don’t ask me why I thought either would make a great column. Seemed like a good idea at the time. I’ve round-filed them now.
There is a University of Illinois news release from September 2000 with this headline: “Farmers tend to work long past typical retirement age.” Now there’s a shocker. Probably why it’s never made it out of the idea file.
And there’s a random quote from ag economist Luther Tweeten I scribbled on a scrap piece of paper: “Antagonists detract from following a coherent, rational policy to simultaneously raise productivity and protect the environment.”
(My favorite Tweeten quote, however, is emblazoned in my brain, not in any folder. I will never forget him looking straight at an Ohio farmer – who might have been whining just a little – and telling him to “sell the farm and get a life.”)
Last year, I judged several classes in the National Newspaper Association’s annual writing contest, including obituaries, agricultural news (no, I didn’t judge the classes we entered) and humorous columns.
One entry in the humor class was nothing more than a treatise about what was in the writer’s middle desk drawer. Thirty inches worth of what was in the writer’s desk. Lots of paper clips, little humor.
“What was she thinking?” I groaned as I read portions aloud to co-workers. “Surely you could find something more interesting to write about! Who really cares what’s in her desk?”
Then, today, after pounding my head against my laptop and walking around the building for the 41st time, I actually reached over and opened my drawer.
Let’s see. I have a little envelope of wooden nickels, a Lean Cuisine coupon that expired in 2004 …
(Farm and Dairy Editor Susan Crowell welcomes more column fodder from readers. She can be reached at 800-837-3419 or at

Origin labeling being resurrected

May 3rd, 2007 Alan Guebert

If you could save, say, $1,000 on the purchase of a new car or truck because it did not have a shatterproof windshield and side glass, would you cut the deal? Of course not; the safety of you and your family is priceless.
Profits and ignorance. Yet many ag businesses, farm groups and the federal government put a price on what you eat every day by promoting, lobbying and enacting food standards that do more to ensure their profits and your ignorance than provide public information and public safety.
Sometimes this price is as little as a penny per pound, the virtual nothingness researchers from five land grant institutions in 2003 estimated it would cost to implement country of origin labeling (COOL) for all food sold in the U.S.
COOL, remember, was a new element to the 2002 farm bill that mandated country of origin labeling for most retail food by Sept. 2004.
But big meatpackers, major livestock groups, some Congressional players and a reluctant U.S. Department of Agriculture worked together to keep COOL in the D.C. deepfreeze; it still has not been fully implemented.
In the dark. As such, American consumers are still in the dark – especially so for meat – when it comes to the country of origin for most of their food.
The silver bullet used by agbiz and their livestock allies to cripple COOL was – and remains – money: all complained it is too costly.
For example, a 2003 National Pork Producers Council-funded study concluded full implementation of COOL would cost producers $10.22 per head, drive down domestic consumer pork demand by 7 percent and slice U.S. pork exports 50 percent by 2010.
The study was a worse-case examination, but it – and other gloomy reports by USDA and food lobbyists – had best-case results: COOL was shelved for most foods sold here.
Revived. But COOL is now moving again for several reasons.
First, the 2002 farm bill is undergoing a rewrite and COOL proponents are again pushing Congress to make the law’s implementation a priority in 2007. (So far, however, the anti-COOL giants appear to be winning this second round, too.)
Second, the current pet food debacle – tainted Chinese wheat gluten in scores of U.S. dog and cat food brands – has again spotlighted the near powerlessness of under-funded, under-staffed and under-motivated U.S. food inspection agencies to keep tabs on the fast-moving, globalized food biz.
Third, even as the patchwork network of federal food inspection agencies becomes more overwhelmed by their growing tasks, other federal agencies are looking for ways to open the nation’s food import door even wider.
If it fails. For example, USDA continues to work on rules that will permit the U.S. to import over-30-month-old cattle from Canada, a practice that was halted when Canada’s first BSE-positive, or mad, cow was found in 2003.
USDA, Canada and multinational meatpackers insist the risk posed by these older cattle to American consumers is “minimal” and that imports should resume.
USDA is also working on rules that will permit:

Fight is on for piece of conservation pie

April 26th, 2007 Alan Guebert

Farm bill fights usually center on the legislation’s commodity title, the section that explains who, when and how farmers can tap the federal treasury should crop prices fall.
But with the key aggies in Congress already in tacit agreement not to overhaul the 2002 farm bill’s commodity program, the bigger battleground in the 2007 rewrite will center on the conservation title for two, interlocking reasons – money and ethanol.
The money being pushed for 2007 farm bill conservation programs is stunning. For example, on March 15, Rep. Ron Kind, D-WS, proposed doubling annual farm bill conservation spending – from about $2.7 billion now to over $5 billion – with his Healthy Farms, Foods, and Fuel Act, an alternative 2007 farm bill.
Kind’s plan, introduced simultaneously in the Senate, has 86 House co-sponsors.
Secretary of Agriculture Mike Johanns has a richer conservation plan, too. On April 10, he again touted his hope that Congress will streamline farm bill conservation programs and add another $7.8 billion to their pot over the next decade.
The irony of these ideas is that conservation spending is set to balloon if Congress does nothing more than photocopy the 2002 farm bill and re-title it “2007 farm bill.”
According to Congressional Budget Office numbers issued last January, baseline spending for 2012 commodity programs will be $9.75 billion, while conservation will get nearly $9 billion.
By comparison, the 2006 USDA baseline held $18 billion for commodity programs and $3.5 billion for conservation programs.
The biggest reason for the massive shift is ethanol’s price-raising impact. The bio-fuel boom is expected to cut spending for federal commodity price support programs by, as Carl Sagan might say, billions and billions.
Second, like the Congressional Budget Office, most farm bill watchers see this Democratically-led Congress more fully funding the Conservation Security Program (CSP), a 2002 Democratically-written farm bill program the White House and USDA handcuffed with complex rules and massive under-funding.
Indeed, CSP is the likely linchpin to 2007 conservation programs because farmers, if given a chance to participate in it, will love CSP because it requires no land retirement.
In short, if you farm your land according to a customized conservation plan, you’ll get CSP money.
But that underlying produce-and-get-paid idea as the centerpiece of USDA conservation efforts is abhorrent to Craig Cox, executive director of the private, nonprofit Soil and Water Conservation Society.
“In the future, we will be getting a lot less for our conservation spending,” Cox told a Washington, D.C. meeting in February, under an expanded CSP. “For professional conservationists,” he added, “this is outrageous.”
A more directed approach is better: “Use EQIP in a watershed-focused manner,” he advocates.
Ah, EQIP, USDA’s Environmental Incentives Quality Program. It’s the biggest conservation program you never heard of with nearly 140,000 participants covering 81 million acres nationwide.
Even more incredible, tens of thousands of farmers and livestock producers are standing in line to get a piece of today’s $1 billion-plus-per-year EQIP money to fund everything from irrigation to building manure structures to enhancing pastures.
And almost everyone – from Congress to the White House to the big farm groups – is pushing its expansion. Some, like Cox’s group, want to see EQIP’s budget rise to $2 billion per year.
To do so, however, means other USDA conservation efforts, like the Wetlands Reserve, need to be trimmed or eliminated.
Is robbing shrinking wetland protection programs to pay for more manure lagoons smart conservation policy?
Of course not, but just as the biggest farmers get the biggest benefits of commodity programs, so too are they lining up for the biggest slice of the fatter, juicier conservation pie.

Farm Bureau blasts horse slaughter ban

March 15th, 2007 Janelle Skrinjar

WASHINGTON – Horse slaughter is an issue that cuts to the core of agriculture and it has farmers looking anxiously to their legislators for help.
Ohio Farm Bureau headed to Washington D.C. March 6-8 to encourage their congressmen to vote against a bill banning horse slaughter.
No other option. One of the reasons for opposing the ban is the legislation doesn’t provide an alternative.
“It does not address what will happen to the horses at the end of their useful life,” said Phil Greenisen, Columbiana County Farm Bureau president.
The proposed law does nothing to provide horse welfare and eliminates a humane option for unwanted horses, according to Kelli Ludlum, American Farm Bureau lobbyist.
Each year in the U.S., about 100,000 horses are processed at three plants. Mahoning County Farm Bureau President Dave Kenreich said no one knows what will happen to those horses if slaughter isn’t an option.
Precedent. In addition to concerns about horse welfare, Farm Bureau members also argued that banning horse slaughter could lead to the same laws for cows, hogs, goats, chickens and other livestock.
Marilyn Ruprecht, Knox County Farm Bureau president, said the country needs animal livestock for everything from ethanol to the new farm bill.
“We consider this basic to animal agriculture. If you’re willing to throw this out, what’s next?” she said.
Ludlum said banning horse slaughter would reduce the value of all horses by about $350 each.
Last time. In 2006, lawmakers in the U.S. House of Representatives disagreed with the Farm Bureau’s arguments. A bill to ban horse slaughter passed by a vote of 263-146, although the legislation later died in the Senate.
New legislation for banning the practice has already been introduced this year.
“Last year, we got outworked,” said Bob Peterson, Ohio Farm Bureau president.
Constituents who opposed the bill didn’t call their congressmen, but those in favor of it got their message through loud and clear.
Ludlum said one of the bill’s main supporters is the Humane Society of the United States, an animal rights organization.
She added that animal rights groups are using the proposed horse slaughter ban to set a precedent for stopping the slaughter of an animal for reasons other than health and safety.
Ohio leaders. House Republican Leader John Boehner, R-Ohio, who voted against the bill last year, doesn’t hold much hope that Congress will change its mind in 2007.
“There’s a lot of members who won’t stand up and do the right thing,” he said. ” This is going to be a very big problem, but you can’t explain that to suburban America.”
U.S. Rep. Zack Space, D-Ohio, a member of the House Agricultural Committee, said agriculture is a business and business decisions shouldn’t be based on sentimentality.
“There’s no room for something like that in farming,” he said.
But lawmakers like U.S. Rep. Jean Schmidt, R-Ohio, feel differently. Schmidt, who also sits on the House Agriculture Committee, favors the horse slaughter ban because a friend had horses stolen for slaughter.
Policy. American Farm Bureau policy opposes any legislation that gives animal rights groups the authority to establish standards for farm management.
“They should be brought under rein and not dictate the way farmers do their business,” said Glenn Smith, Trumbull County Farm Bureau president.
For Farm Bureau presidents like Jo Ann Murtha of Hocking County, the proposed horse slaughter ban has more than just face value.
“If we lose that (the vote), the farm bill, nothing else makes sense,” she said.
(Reporter Janelle Skrinjar welcomes feedback by phone at 800-837-3419, ext. 22, or by e-mail at

Thoughts from Washington

March 15th, 2007 Janelle Skrinjar

U.S. Rep. John Boehner, R-Ohio, on …
The 2007 farm bill: Better prices lately have meant less spending, so it’s likely there will be less money to go around this time.
Immigration reform: New legislation should include a guest worker program.
Horse slaughter: In 2006, Boehner voted against the bill banning horse slaughter in the U.S.

Sen. Sen. Sherrod Brown, D-Ohio, on …
The 2007 farm bill: The administration needs to devote more money to the bill so it provides an adequate safety net for farmers.
Death taxes: Brown supports an exemption, not a repeal. He said if the government doesn’t receive those taxes, funding would have to be cut somewhere.
Immigration: There’s a chance of seeing a bill that doesn’t provide amnesty, but allows some path to citizenship.

U.S. Rep. Bob Goodlatte, R-Va., on …
The 2007 farm bill: Lawmakers need to figure out how to maintain a safety net for farmers, even in times of high prices.

U.S. Rep. Jean Schmidt, R-Ohio, on …
Alternative energy: Schmidt wants to reduce oil consumption by 20 percent over the next 10 years.
Horse slaughter: Schmidt favors a horse slaughter ban.
Death taxes: “I sympathize with you land owners who are trying to figure out ways to keep your farm.”

U.S. Rep. Zack Space, D-Ohio, on …
The 2007 farm bill: Space wants to see more funding than what’s been allocated to the bill.
Death taxes: Space is opposed to eliminating death taxes all together, but he is open to the idea of a cap, perhaps at $5 million.
Horse slaughter: Space is opposed to a horse slaughter ban.

Sen. George Voinovich, R-Ohio, on …
Immigration: Border security is important. The senator supported a bill for a guest worker program.
Alternative energy: “We’ve got to have a Sputnik-like commitment to doing it as soon as possible.”
The 2007 farm bill: It should “provide a sensible safety net for farmers.” Voinovich said money is the driving factor in the new farm bill.

U.S. Rep. Charlie Wilson, D-Ohio, on …
Horse slaughter: Wilson does not support the bill banning the practice.
Death taxes: “If we can get rid of the death tax, I’m all for it.”

(Reporter Janelle Skrinjar welcomes feedback by phone at 800-837-3419, ext. 22, or by e-mail at

Pa. farmers take message to Capitol Hill

March 15th, 2007 Other News

WASHINGTON – The 2007 farm bill was at the top of the list of topics that more than 150 farmers from across Pennsylvania discussed with congressional representatives in Washington D.C. as part of Pennsylvania Farm Bureau’s 2007 National Legislative Conference in March.
Pennsylvania farmers strongly encouraged Congress to continue its support of agriculture by incorporating many of the basic concepts from the current farm bill into the 2007 farm bill.
Unique. Pennsylvania Farm Bureau said some changes are needed to deal with agricultural challenges unique to Pennsylvania and the Northeast.
“The make-up of commodities and the nature of farm enterprises differ from other parts of the country. A one-size-fits-all approach to farm policy does not work,” said Carl Shaffer, state president.
Pennsylvania farmers stressed the need for a safety net for all producers, including the nation’s dairy farmers, who have been facing extremely difficult times. During 2006, the premium paid to dairy farmers was well below the cost of milk production.
Specialty crops. Pennsylvania Farm Bureau called for the inclusion of specialty crops in the farm bill.
“Funding for specialty crops, such as fruits and vegetables, needs to be incorporated in the 2007 farm bill with funding focused on research, safety, nutrition, marketing, competitiveness and sustainability,” Shaffer said.
Conservation efforts are also important.
“We believe it’s critical that conservation programs be directed toward production agriculture. We want to make sure that farm bill funding helps farmers establish practices that improve the environment, without taking fertile farmland out of production,” Shaffer said.
Strength. Farm Bureau noted that the 2002 farm bill, which is set to expire in September 2007, strengthened the U.S. economy by encouraging more than $62 billion in agricultural exports in 2005. In addition, current farm programs enable the U.S. to export production from one out of every four acres of farmland.
Farmers also discussed other issues with lawmakers that directly impact the profitability and future of farm families in Pennsylvania including immigration reform (that includes a viable and legal guest worker program) and reform of the alternative minimum tax.

Ripple effect from ethanol boom is apparent in 10-year baseline outlook

March 15th, 2007 Other News

WASHINGTON – High corn prices are expected to bring major shifts in crop production the next two years, bringing an additional 8.4 million acres to corn in 2007.
Ethanol, derived mostly from corn, has become a driving force in the 2007 agricultural economic baseline prepared for the U.S. Congress by the Food and Agricultural Policy Research Institute.
Corn use for ethanol is expected to almost double in the 2007 crop year from that of the 2005 crop and could exceed 4 billion bushels, or 32 percent of the nation’s corn crop, by 2009.
Increasing ethanol production drives the corn price from a $2 per bushel average in the two previous crop years, to slightly above $3 per bushel in every year of the 10-year baseline.
Corn prices. Current prices are above those levels exceeding $4 per bushel.
“Those prices are higher than our projections, as the market encourages producers to plant more corn in 2007 to feed the growing ethanol industry,” said Pat Westhoff, Food and Agricultural Policy Research Institute analyst.
U.S. farmers have not planted 85 million acres of corn since 1949. The research institute projection of 86.7 million acres in 2007 fell midrange in current trade projections. The institute projects almost 90 million corn acres in 2008.
While corn gains acres, soybeans give up the most, falling to 70.5 million acres in 2007 from 75.5 million acres in 2006.
Wheat acres, most of which were planted this past fall, increased to 60.1 million acres in 2007, but are expected to drop in following years to 57 million acres by 2016.
University participants. The Food and Agricultural Policy Research Institute baseline was prepared by think tanks at the University of Missouri-Columbia and Iowa State University in Ames.
The University of Missouri maintains computer models of the U.S. agricultural economy. Iowa State tracks global markets.
Economists at other universities participate.
“So much depends on the price of petroleum,” Westhoff said. University of Missouri Food and Agricultural Policy Research Institute uses a baseline assumption that the oil price falls to $50 per barrel in 2016.
Forecasts on oil, interest rates and other macroeconomics come from the private forecasting firm Global Insight. The research institute assumes normal weather and continuation of present farm policies, including current biofuel incentives through the 10-year baseline.
Computer runs of 500 alternative scenarios show prices can be much higher, or much lower, than averages in the baseline, depending on weather, oil prices and other factors.
Taxes. “Current tax polices that support biofuel are slated to expire in 2008 and 2010,” Westhoff said.
“If the credits expire, the results could be sharply lower biofuel production, corn and soy oil demand and crop prices.”
The current outlook depends on the price of corn not becoming too high, removing profits from the ethanol plants. Baseline projections show ethanol production remains profitable; but increasing production and falling petroleum prices result in lower ethanol prices.
Lower ethanol prices and higher corn prices would squeeze projected margins for ethanol plants, eventually slowing growth in plant capacity.
High crop prices increase net income for grain farmers; higher feed costs cut profits of livestock feeders.
Net farm income. Overall, net farm income dropped $26 billion dollars in 2006 from a record high of $85 billion in 2004, with higher input costs largely responsible.
Net farm income could rise to $7 billion in 2007 to $66 billion and could remain above $60 billion in later years.
Cash receipts for cattle and calves reached a record $50.7 billion in 2006, but are expected to decline to $47.9 billion by 2010.
“As more expensive corn increased the cost of feeding cattle, feedlots bid down feeder cattle prices,” said Scott Brown, livestock analyst.
“This trend continues through the baseline, as feed costs remain high.”
Poultry. Poultry producers reacted quickly to higher feed costs, reducing production in the third quarter of 2006.
“Slowing growth in poultry is a rarity,” Brown said.
“Broiler production is expected to grow only 1.6 percent annually through the baseline, compared with 3 percent annual growth for the previous 10 years. Three years of profits for hog producers will end in 2007. The price of producing pork is expected to go up 6 cents a pound, or 16 percent.
“Food cost increases remain moderate in spite of higher grain prices. Annual growth in the food Consumer Price Index will average near 2 percent long term, near the general inflation rate,” Brown said.
While grain prices play a part in food cost increases, 80 percent of consumer food costs come from other factors, including labor, fuel and packaging.
Fruit and vegetable costs spiked in 2006 and are expected to continue high, given weather-related losses.
Cost of food eaten away from home outpaced home meals in 2005. This trend is expected to continue.
Federal spending. Federal spending for farm programs is lowered by higher grain prices.
Direct payments, counter-cyclical payments and marketing loans peaked at $16 billion in the 2005 crop year. Those same payments total $7.7 billion for the current marketing year.
Payments are expected to drop to $6.7 billion by the end of the baseline in 2016, with direct payments accounting for $5.3 billion.
The baseline, which will be used to analyze the 2007 farm bill, has been given to the Senate and House agricultural committees and U.S. Department of Agriculture.
Institutions cooperating in the analysis are: Texas A&M University maintains representative farm models to track impact of policy changes at the local level; Texas Tech University tracks the cotton trade; University of Arkansas follows rice production; and Arizona State University tracks fruit and vegetable markets.
Changes. The current ethanol boom required major additions to the Food and Agricultural Policy Research Institute models.
“We made lots of changes in our models to keep up with the rapidly evolving industry,” Westhoff said.
“U.S. energy policies may have a bigger impact on U.S. farm income than the farm bill.”

It’s time to put exports 6 feet under

March 15th, 2007 Alan Guebert

While most farmers and ranchers spent February focused on rising futures and cash grain prices, the U.S. Department of Agriculture churned out facts, figures and reports that received scant notice.
USDA’s data, however, contained critical insight to 2007 and beyond and raised important points for policymakers to ponder.
The most detailed and interesting numbers arrived Feb. 14: USDA’s Agricultural Projections to 2016, an annual publication of 10-year estimates (but not official forecasts) of acres, income and prices served up by department’s Economic Research Service.
Guesses. Because the report’s decade-long estimates cannot possibly predict 10 years of changes in weather, economics or policy, its out-year numbers are little more than guesses. Its near-year numbers, however, contain some remarkable projections.
For example, Feb. 14, USDA guessed 2007 planted corn acres at 86 million, or 7.4 million over 2006’s planted acreage. Four-point-six million of that boost, the service projected, comes at the expense of soybeans – 75.6 million acres in 2006, 71 million in 2007.
Anyone with any inkling of today’s corn market dynamics would say both those numbers are far too light. Everyone expects more corn and less beans than USDA.
Turns out, so does USDA.
Adding acres. March 1, Chief Economist Keith Collins, in an address at USDA’s Outlook Conference, tacked another million acres onto the Feb. 14 number. Officially, USDA now foresees 2007 corn acres at 87 million, the most since 1946.
Big acres and good weather means a big crop; USDA estimates 12.2 billion bushels will be harvested this fall, making 2007’s crop a record. (Got storage?)
But that huge supply, according to USDA, will still fall 300 million bushels short of demand.
As such, Collins guesses 2007 corn crop prices could average $3.60 a bushel, another record, or 40 cents more than 2006’s estimated average price.
Carryovers. The 10-year forecast also contains some unbelievably low corn stocks carryovers for the coming years.
For instance, USDA pegs carryover – the amount of corn left in storage each Aug. 31 – this year at 935 million bushels or, given daily usage, about 30 days’ supply.
Aug. 31, 2008, though, corn carryover from this year’s anticipated record production will fall to but 19 days’ usage. In 2009, carryover will drop to 18 days; then to just 16 days in 2010.
If USDA is anywhere near correct, stocks-to-use ratios of 5 percent or less means three things.
First, $3-plus corn will be the price benchmark for years to come. USDA agrees; it sees corn price averages of $3.50 for 2007, $3.60 for 2008 and $3.75 for 2009.
Second, with near-zero carryovers, any planting, production or harvest hiccup will send feed, food and fuel prices skyrocketing at neck-breaking speeds.
And third, with stocks of America’s chief food and feed grain balanced on a pinhead, Congressional aggies should at least discuss the possibility of including a modest (farmer-owned?) grain reserve in the 2007 farm bill to ensure domestic supply and stable prices.
That idea is even more necessary given the current grain export picture.
Exports. March 1, Secretary of Agriculture Mike Johanns boasted, correctly, that 2007 ag exports would rise $9.3 billion over last year to give the U.S. its “fourth year of back-to-back (export) records. Two-thirds of this (2007) increase,” he continued, “is due to the grain and oilseed sectors.”
Odd, isn’t it, that after decades of export-directed, big crop-cheap grain farm bills, that last year’s short corn crop and higher corn and soybean prices would deliver the all-time record.
As such, it’s clearly time for 2007 farm bill writers to put 6 feet of dirt over exports-are-everything farm programs of the past that have clobbered both farmers and taxpayers for years.