Farmers — masters at dealing with weather, price and farm policy uncertainties — are caught between a rock and hard place not of their own making.
Talks regarding the 2018 farm bill are in their infancy, but the immediate concern involves foreign trade. The Trump administration is no fan of the General Agreement on Tariffs and Trade, which has opened doors to both Canada and Mexico. A deal involving southeast Asian nations is dead as the administration moves to strike deals with nations one-on-one and not regional.
The promise of record soybean acres this growing season leaves questions about how strong bean prices will be. The corn market has shown strength in recent weeks, but few expect a surge. Holstein beef producers have been hard hit by Tyson's decision to stop processing dairy beef for an undetermined time. Dairy and hogs are emerged in mire. Land values, for the most part of slid up to 10 percent and pressure builds to reduce farmland rents.
Uncertain times come and go.
The cattle boom of the 1880s was buried under the weight of severe winters on the range that killed thousands of cattle; the prosperity seen in the World War I years ended with surpluses and economic collapse in the Roaring 20s; and the food and fiber demand seen in the second world war dried up shortly after rationing ended.
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It's good to reflect on the responses to past crisis.
Cattle barons learned the wisdom of storing up winter forage and providing shelter. The Great Depression produced farm programs targeted to control production and better protect family farmers from the viciousness of markets. The Land Bank of the 1950s took acres out of production and commodity loans helped stabilize farm finances.
The policy that was proved ill-equipped to handle the 1980s disaster when overextended farmers watched interest rates soar, land values drop and foreclosures tore rural America asunder. The roots of the disaster grew in the 1970s-era Soviet Union grain embargo and actions designed to control the inflationary threat.
The United States proved itself to be an unreliable supplier of commodities, which helped give rise to South American competitors.
Are we slip-sliding in the same direction?
Although the North American Free Trade Agreement created at least as many losers as beneficiaries, it did indeed open agricultural trade. The Trump administration has reasonable grounds to adjust the 20-year-old deal. Negotiators must be careful not to throw out the baby with the bath water. The multi-nation southeast Asia proposed deal had its faults, but also the promise of opening new commodity markets.
It's outright rejection opens the door to China and other competitors.
The upcoming farm bill negotiations should be heated. Many lawmakers seem interested in decoupling food assistance programs from the legislation. Others insist that now is high time for the government to get out of agriculture — a position that once was the mantra of the American Farm Bureau. Consumers see the billions paid out in insurance premium subsidies question why the landed deserve such gifts.
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History provides ample proof that farmers and farming is remarkably flexible. The dominance of small grain in the years after the moldboard plow turned over sod ended with declining yields and disease problems. Soybeans once planted as a forage crop grew to be a major industrial and feed commodity. The corn-soybean rotation dominance seen in the past few decades may change as researchers seek a third crop to eliminate mono-culture.
There is but one constant — farmers continue to be more or less powerless in the market. The I'll take what you'll give me attitude remains to the detriment of family farmers and rural communities that depend on them. If power was transferred to producers, the uncertainties that bedevil rural America would be sharply reduced.