Critical policy issues affecting far mers are outlined in a special section included in this issue. ...................Inside
Information flowed as freely as milk when Illinois Farm Families field moms recently toured a Kane County dairy. .................................8
Net far m income this year could be the third highest on record, according to a director of industry research. .........................14
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Illinois Farm Bureau mission: Improve the economic well-being of agriculture and enrich the quality of farm family life.
CoBank researcher predicts more volatility, tighter farm margins Monday, August 5, 2013
BY DANIEL GRANT FarmWeek
Farmers’ risk management abilities could be tested in this and subsequent years. The possibility of a stronger U.S. dollar, large crop yields here, increased production competition around the world and the continuation of stagnant
For more Terry Barr comments, see page 14
Periodicals: Time Valued
economic growth could limit potential farm income. Meanwhile, lower crop prices combined with high input costs and the possibility of rising interest rates could squeeze farm margins to some of the tightest levels in years. “We’re in a period of realignment,” Terry Barr, senior director of industry research at CoBank, said last week during his keynote address at the Illinois Farm Bureau Commodities Conference in Normal. “And, as the markets realign, (farmers) need to have more risk management strategies in place,” he continued. “Net income should be strong this year. But market volatility will continue and with our growing
reliance on exports, it will expose agriculture to global policy shifts and add new risk.” U.S. farmers last year exported 53 percent of wheat, 45 percent of soybeans, 23 percent of pork, 17 percent of dairy products and 13 percent of corn, Barr reported. But expectations of a large corn crop this year — between 13.5 billion and 14 billion bushels — has taken the air out of the crop markets. But, even if the large crop is realized, it won’t eliminate wild swings in the market. “One good harvest won’t remove volatility,” Barr said. “It’s going to take two years of big crops to build inventories back up.” Stocks can be rebuilt quicker around the world due to higher yields and more land in production. World grain production since 2007-08 increased 18 percent, according to Barr. “We’ve seen countries move into the vacuum created by short corn supplies,” he said. “We’ve seen the emergence of a lot of competition.” Meanwhile, there could be
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Three sections Volume 41, No. 31
‘PUMPING’ POTATO, POPCORN, PUMPKIN YIELDS
Dean Pfeiffer of rural Bath checks an irrigation rig on his Mason County farm. Pfeiffer grows potatoes, popcorn, pumpkins and nonbiotech soybeans. Pfeiffer reported above-average yields for potatoes at about 400, 100-pound bags per acre. Pumpkins continue to develop with the crop about three weeks behind average. (Photos by Ken Kashian)
Scuse: Extension unlikely, SNAP separation ill-advised See CoBank, page 14
BY MARTIN ROSS FarmWeek
Acting USDA Deputy Secretary Michael Scuse recognizes “the resiliency of U.S. agriculture” — particularly coming out of a severe 2012 drought — and “what agriculture does for us as a people and an economy.” But “to keep that momentum going,” farmers need to manage their resources and “plan effectively,” he said. “They need the certainty — the certainty that would come with a five-year farm bill,” Scuse stressed. He blamed the current “lack of that certainty” on the House, which recently passed a stripped-down, “split” farm bill for conferencing with comprehensive Senate legislation. At last week’s Ag Transportation Summit, Scuse warned House leadership is unlikely to allow re-extending the 2008
farm bill in September and thus deemed fall passage of a comprehensive new farm bill crucial. He charged the House’s proposal to eliminate 1949 permanent ag law as a default farm bill option is an attempt to ensure “they’ll never have to do a Michael Scuse farm bill again.” That move would hurt dairy, trade, rural development, conservation, ag research and efforts to launch a job-generating “biobased economy,” while ignoring the fact that nutrition programs, a major target of House cost-cutting proposals, already are authorized through wholly separate legislation, Scuse warned. As for House leaders removing the Supplemental Nutrition Assistance Program
FarmWeek on the web: FarmWeekNow.com
(SNAP) from the farm bill, Scuse noted that “if they don’t do anything on nutrition, they don’t get any (food stamp) savings.” The Senate’s proposed trimming $4 billion from food stamp spending over the next 10 years. Politically, he argued producers at a current roughly 1 percent of the U.S. population “need that long-standing alliance between agriculture and nutrition.” “They need the engagement of the 99 percent of Americans who don’t farm today and who, in most cases, are many generations removed from agriculture,” Scuse argued. “Every American out there has a stake in this legislation. It includes food, it includes farms, and it includes jobs and policies.” At the same time, Scuse emphasized the See Scuse, page 2
Illinois Farm Bureau®on the web: www.ilfb.org