I'm not much of a corn grower. It's a minor crop on our farm, but I was furious with an Associated Press article claiming that corn and ethanol are destroying acres and acres of grassland. It was clear the authors of the article have no farming background, and yet they pretended to create a "balanced" article. For those who understand agricultural policy and economics, the article was laughable.
I should start by giving my opinion of CRP. It is a great program, mostly. The government is "renting" land from landowners, and paying those landowners to keep it out of production. It makes great habitat for wildlife. It holds water during our spring melts. It keeps snow from blowing during our brutal winters. It really is a great asset in my area.
BUT, my county was maxed out at 25% CRP. Let me repeat that. 25% of the farmland in my county was in CRP, and our FSA office sent out a survey asking farmers if we would like that percentage raised to allow more acres to be enrolled in CRP. This was several year ago, when profits in farming were elusive, and farming was about minimizing losses instead of maximizing profits.
I sent back the survey with a firm "NO". If a landowner enrolls in CRP, it often means they have no need to live here, and continue to farm. I'm a fan of CRP, but there has to be limits. I want neighbors. I want farmland available to rent. There has to be a balance between CRP landowners, and actively farming landowners.
When the AP article spoke of grassland and CRP being used for corn production, I was reminded of the balance of land use. Currently those acres are needed for corn production. In a few years, those acres may end up back in grass, pasture or CRP. This is the cycle in agriculture. It has happened before, and the cycle will just repeated over, and over, and over again.
I also struggled with the AP article tying high corn prices to ethanol. Ethanol is a factor in corn supply and demand, but it's not the only factor. There has been price appreciation in nearly all commodities, from oil, to gold, to cocoa. Most commodity prices, especially corn, are off their highs, but there was a good rally in commodities. If you are going to blame one factor for high corn prices, then you'll have to find similar silver bullet reasons for gold, oil, cotton, and all other commodities. They don't exist.
As I begin working on 2013 analysis, and 2014 cash flows, it is obvious that profits in farming are once again becoming elusive. The cycle continues. I still have a powerpoint presentation I gave in 2003 titled "Can we afford to farm." I may have to bring that one out again for 2014.
Even though I'm not much of a corn grower, I still support ethanol. Alternative fuels deserve our support. I pay over $250 a year for a "wind energy surcharge" on my electric bill. That's just the one alternative energy subsidy I can easily calculate. I just keep reminding myself it's part of a bigger picture energy policy. There will always be short term adjustments, but they have to fit in the long term picture.
I should start by giving my opinion of CRP. It is a great program, mostly. The government is "renting" land from landowners, and paying those landowners to keep it out of production. It makes great habitat for wildlife. It holds water during our spring melts. It keeps snow from blowing during our brutal winters. It really is a great asset in my area.
BUT, my county was maxed out at 25% CRP. Let me repeat that. 25% of the farmland in my county was in CRP, and our FSA office sent out a survey asking farmers if we would like that percentage raised to allow more acres to be enrolled in CRP. This was several year ago, when profits in farming were elusive, and farming was about minimizing losses instead of maximizing profits.
I sent back the survey with a firm "NO". If a landowner enrolls in CRP, it often means they have no need to live here, and continue to farm. I'm a fan of CRP, but there has to be limits. I want neighbors. I want farmland available to rent. There has to be a balance between CRP landowners, and actively farming landowners.
When the AP article spoke of grassland and CRP being used for corn production, I was reminded of the balance of land use. Currently those acres are needed for corn production. In a few years, those acres may end up back in grass, pasture or CRP. This is the cycle in agriculture. It has happened before, and the cycle will just repeated over, and over, and over again.
I also struggled with the AP article tying high corn prices to ethanol. Ethanol is a factor in corn supply and demand, but it's not the only factor. There has been price appreciation in nearly all commodities, from oil, to gold, to cocoa. Most commodity prices, especially corn, are off their highs, but there was a good rally in commodities. If you are going to blame one factor for high corn prices, then you'll have to find similar silver bullet reasons for gold, oil, cotton, and all other commodities. They don't exist.
As I begin working on 2013 analysis, and 2014 cash flows, it is obvious that profits in farming are once again becoming elusive. The cycle continues. I still have a powerpoint presentation I gave in 2003 titled "Can we afford to farm." I may have to bring that one out again for 2014.
Even though I'm not much of a corn grower, I still support ethanol. Alternative fuels deserve our support. I pay over $250 a year for a "wind energy surcharge" on my electric bill. That's just the one alternative energy subsidy I can easily calculate. I just keep reminding myself it's part of a bigger picture energy policy. There will always be short term adjustments, but they have to fit in the long term picture.
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