Posted on | March 4, 2014 | No Comments
Farmers Union was founded on the idea that farmers can work together to find power in numbers. That’s why 10 farmers and rural residents in Texas formed the Farmers Union in 1902. Whether farmers need to organize to receive better shipping rates for cotton, as those founding 10 did, or to start a cooperative that can process and market their crops and livestock, or to have a louder voice on legislative issues to regulate markets, farmers have been coming together through the NFU to have a larger say in the marketplace for more than 110 years.
As NFU continues to recognize the International Year of Family Farming, the month of March brings us to consider a very important part of our experience as farmers – the marketplace. Throughout the month we’ll feature guest writers on our blog who will discuss different aspects of the marketplace, ranging from competition, regulation, strategies and history. It will be an interesting conversation, and I urge you to offer your thoughts in the comments section of our blog.
Markets need to be competitive in order to be functional. Farmers, as consumers of many inputs and the producers of commodities, usually find themselves in the position of “price-takers” rather than “price-makers.” All too often, those prices are volatile and disconnected from readily apparent supply and demand forces.
Much of NFU’s legislative efforts are directed toward making sure that laws and rules are enacted that allow for a fair and free market, so that those with power cannot run roughshod over everyone else. This month will feature some viewpoints from leaders on those issues.
We’ll also hear from bloggers who are finding new and innovative ways for farmers to assert themselves in the marketplace. Food hubs, strategic partnerships and new customer bases are offering some promising avenues for farmers to excel in today’s market.
As our tagline says, NFU is “united to grow family agriculture,” and the preamble of our grassroots-adopted 2013 NFU Policy includes this passage:
“The loss of family farms and other independently owned businesses is not inevitable. We believe the accelerated march toward a vertically integrated production system must be reversed. This requires action to enforce and enhance antitrust and competition laws, strengthen the regulatory system and revitalize independently owned businesses and competitive markets.”
Let’s spread the word about the importance of the marketplace for family farmers during the month of March.
Posted on | February 21, 2014 | No Comments
Read the original post at agpolicy.org.
Exports are a big deal for agriculture, always have been and always will be. Of course, the mix of agricultural exports has changed over time. Tobacco exports back to the mother country have been replaced with worldwide exports of grains, oilseeds, livestock products and a host of other foods, some sent raw or in bulk, others highly processed.
Recent years have been particularly good for agricultural exports. Agricultural exports set a new record of $140.9 billion in Fiscal Year 2013. Agriculture Secretary Tom Vilsack commented, “The period 2009-2013 stands as the strongest five-year period for agricultural exports in our nation’s history.”
Last fall he encouraged Congress to pass a farm bill, partly as a means to keep up the “incredible momentum” of agriculture exports by continuing to fund trade promotions programs. The Agriculture Act of 2014 came through with funding for the Market Access Program. The 2014 Farm Bill also creates an undersecretary of agriculture for trade and foreign agriculture. Clearly, Congress and the Obama administration are fans of agricultural exports and are planning for continued growth in the value of agricultural exports
The question is: Will the value of agricultural exports during the time of the 2014 Farm Bill experience the remarkable growth that was chalked up during the tenure of the 2008 Farm Bill?
Let’s begin by asking a different question: besides the ethanol phenomenon, what is the most striking thing that happened to crop agriculture in previous 5 years? Yep, crop prices rose to levels that few thought were even remotely possible.
Next question: Were those mammoth crop price increases largely responsible for growth the value agricultural exports? In the case of grains (primarily corn and wheat) and soybeans, the answer is definitely yes.
Figure 1 shows the volume of corn, soybeans and wheat exports to be somewhat variable but relatively flat (line with long and short dashes). On the other hand, the value of exports (solid line) has exploded since the mid-2000s as has the price per metric ton (dotted line). The price and value of exports move together with few exceptions.
Corn and soybeans are the top two contributors to the total value of agricultural exports. Clearly, their export values in the years ahead will be highly influenced by their prices.
As column readers are aware, history tells us that multi-year periods of exceptionally high crop prices are usually followed by much longer periods of exceptionally low crop prices. If that is the case, Secretaries of Agriculture in future years may be explaining dramatic drops in the value of agricultural exports.
Of course, the similarity of trends in export values and prices for other categories of agricultural exports—especially the growing volume of highly processed exports—are not universally as strong as the trends in crop export value and crop price.
Still, it seems most likely that over the period of the next farm bill, the overall trend in the value of agricultural exports will point in the same direction as the overall trend in crop prices.
Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; firstname.lastname@example.org and email@example.com; http://www.agpolicy.org.
Posted on | February 18, 2014 | No Comments
by Kevin B. Shelley, Certified Crop Advisor and Wisconsin Farmers Union member
While the U.S. Department of Agriculture (USDA) reports a 40 percent decline in U.S. cropland soil erosion rates from 1982 to 2007, recent trends appear to challenge this progress. Record prices for corn and soybeans have diverted acres out of conservation programs and encouraged intensive production on a wide scale. Tree lines are cleared and wet areas drained, turning 120-acre farms into 120-acre fields. Innovations in tillage equipment, with supposed conservation intentions, appear to be encouraging more tillage and leaving less crop residue. Climatological data show changes in precipitation trends with more extreme rainfall events, apparently associated with climate change. In my 30-year career, serious gully erosion has never been more evident in several parts of Wisconsin. Nutrient runoff from farm fields in the Mississippi basin continues to be a major cause of hypoxia in the Gulf of Mexico.
Farms of all sizes and business organization have the ability to implement conservation practices. In my observation, family farms are uniquely suited to soil and water conservation. They can do so by employing crop and livestock production practices that focus on environmental quality as well as efficiency of production. Family-sized farms can recognize there is a competitive edge in practicing good stewardship, and may have a better ability than the largest farms to utilize ecologically based practices such as diverse crop rotations and integration of crop and livestock production. They often are more able and willing to implement and maintain field-based soil and water conservation structures such as grassed waterways or contour strips and terraces, and to develop and genuinely implement certified nutrient management and soil conservation plans. Due to their modest scale and greater hands-on management, they are often better able to match farming practices to the potentials and limitations of the landscape on which they farm. Family farms often recognize that by utilizing practices that build or improve the soil’s productivity, rather than exploiting or abusing it, profitability will be enhanced.
Another conservation practice gaining interest that fits nicely with intensively managed family-sized farms is the use of cover crops. Cover crops are planted to grow and cover the soil between harvest and planting of the primary cash and feed crops a given farm normally grows. Cover crops cover and protect the soil from erosion and prevent nutrient runoff during otherwise fallow or open ground periods. Other objectives for using cover crops include building soil organic matter and increasing biological diversity for soil conditioning and soil health; holding onto and recycling nutrients in the root zone, thus reducing leaching losses; adding nitrogen fertility if the cover crop is a legume species; suppression of weeds that would otherwise grow; possible crop disease suppression; and providing a source of supplemental forage for harvest or grazing if needed.
One example that can be used in the upper Midwestern states is frost-seeding medium red clover into winter wheat. Winter wheat is planted in the fall. Early the following spring, red clover seed can be broadcast into the small wheat crop while freezing and thawing causes cracks on the soil surface. The clover seedlings get started but don’t take off until the wheat is harvested in mid-July. Rather than having a weedy fallow period following wheat harvest, the clover can grow, suppress weed growth and biologically fix a stable source of nitrogen available for the following year’s corn crop. The clover can also be a source of hay for livestock feed if weather conditions allow a September harvest. Alternatively, annual species such as forage radishes, oats, barley or field peas will grow rapidly when planted in late summer to provide a cover crop following harvest of wheat or short-season vegetable crops.
Another example becoming popular in the dairy state is planting winter cereal rye following harvest of corn as silage. Corn silage leaves almost no crop residue remaining on the soil surface and it is a popular place for manure to be applied. Cereal rye can grow rapidly in early fall, establishing some soil cover to protect soil and hold nutrients against rainfall and snowmelt fall through spring.
To be economically beneficial, the cover crop species must be one for which affordable seed is readily available and seeding methods should be low-cost. Since they are generally planted for growth during sub-optimal times, and often with less precise planting methods, there are establishment risks. If not managed correctly, some cover crops can become weeds or hosts for insects or diseases themselves. A farmer needs to pay attention to soil-applied herbicide residues (from previous crops) and required planting intervals when planting a cover crop and/or using it for feed. There are sometimes issues associated with federal crop insurance products where use of a cover crop affects insurability of the primary, insured crop. In other words, there are economic risks and learning curves to successful adoption.
National Conference on Cover Crops and Soil Health
Fortunately, there are growing sources of information and expanding research programs to learn how to use and measure the costs and benefits associated with cover cropping practices. A National Conference on Cover Crops and Soil Health will take place this coming Tuesday and Wednesday, Feb. 18 and 19 in Omaha, Neb., where 300 invited researchers, educators, agribusiness professionals and farmers will come together to discuss obstacles to and opportunities for adoption of cover crops on U.S. farms.
The conference, sponsored by the Howard G. Buffet Foundation and the USDA Sustainable Agriculture Research and Education (SARE) program, will offer a free live broadcast and local forums to some 200 sites across the United States on Feb. 18. Find a forum location near you. The forums are open to anyone who would like to hear about and discuss the prospects for cover crops and soil health improvements on American farms and ranches. The broadcast will begin at 9:00 a.m. CST for participants from the Eastern, Central and Mountain regions of the United States. The broadcast will be re-streamed at 10:00 a.m. PST for participants in the Pacific region or further west. Attendees are encouraged to RSVP and arrive 30 to 45 minutes ahead of time for check-in and introductions. There is no cost to participate, but please contact the site you plan to attend to register and confirm both the location and other program details. Providing an RSVP will help host locations make adequate accommodations. Each forum will feature a live-streamed video broadcast of the opening sessions. Following the broadcast, discuss with fellow forum participants how cover cropping can build soil health, improve yields, curb erosion, manage pests and build resilience into your farming system.
The broadcast will feature:
- Howard G. Buffett, Howard G. Buffett Foundation
- Jason Weller, USDA-National Resources Conservation Service Chief
- Ray Gaesser, American Soybean Association president
- A panel of expert producer-conservationists:
- Dave Brandt (Ohio)
- Gabe Brown (N.D.)
- Dan DeSutter (Ind.
- Clay Mitchell (Iowa)
Following the broadcast, discuss with fellow forum participants how cover cropping can build soil health, improve yields, curb erosion, manage pests and build resilience into your farming system.
Posted on | February 14, 2014 | 1 Comment
By Jeremy Peters, American Farmland Trust
The modern conservation movement has its roots in the Dust Bowl era of the 1930’s when harsh winds swept soil from parched Midwest fields and created towering clouds of dust that plagued the country. Hugh Hammond Bennett, the father of the modern soil conservation movement, dramatically threw open the curtains of the room in which he was delivering testimony on soil erosion before Congress to reveal a sky darkened by an approaching dust storm. That powerful demonstration of the dust bowl’s magnitude was evidence enough to convince Congress to take action.
The Soil Conservation and Domestic Allotment Act was passed which offered technical assistance to family farmers, ”to preserve and improve soil fertility, promote economic use, and diminish the exploitation and unprofitable use of the national soil resources.” As a result, family farmers began working to conserve the soil and natural resources decades before any of today’s environmental laws like the Clean Water Act or the Clean Air Act were passed.
With a world population expected to exceed 9 billion individuals by 2050, family farmers all over the world are being challenged to produce more from the land than ever before. At the same time, the resource base is under greater pressure with urban population centers encroaching on prime farmland, farmland encroaching on forestland and so forth. In the U.S. alone, we lose farmland at a rate of one acre every minute. Adding to the complexity is a changing climate where stronger storms and deeper droughts create greater unpredictability for farmers. Indeed, providing for 9 billion people while also maintaining healthy soil, clean water and abundant wildlife habitat is going to be a challenge.
Just as they did following the dust bowl, family farmers can respond to that challenge. But just like in the 1930’s family farmers cannot do it alone. It will require decisive action and support from policy makers to ensure family farmers remain on their land and adopt sound farming practices. It will also require continued investment from the private sector to promote innovation and efficiency so that more can be produced in a way that respects scarce resources like water, fuel and fertilizer. And it will require everyone addressing the causes and impacts of climate change.
As leaders and organizations all over the world recognize the International Year of Family Farming, now is the time to continue supporting family farmers so that both the land and future generations are sustained for decades to come.
Jeremy Peters is Director of Federal Policy for American Farmland Trust and is on the U.S. executive committee for the International Year of Family Farming.
American Farmland Trust is the nation’s leading conservation organization dedicated to protecting farmland, promoting sound farming practices and keeping farmers on the land. Since its founding in 1980 by a group of farmers and citizens concerned about the rapid loss of farmland to development, AFT has helped save millions of acres of farmland from development and led the way for the adoption of conservation practices on millions more.
AFT’s national office is located in Washington, DC. Phone: 202-331-7300. For more information, visit www.farmland.org
Posted on | February 14, 2014 | No Comments
Read the original post at agpolicy.org.
The Agriculture Act of 2014 (2014 Farm Bill) is divided into 12 titles covering commodities, conservation, trade, nutrition, credit, rural development, research, forestry, energy, horticulture, crop insurance and miscellaneous. In this column, we take a look at some of the elements of Title I – Commodities.
Beginning with the 1996 Farm Bill, crop farmers have been provided with—in one form or other—direct payments based on historical yields and acreage. The total amount of the direct payments has been in the vicinity of $5 billion a year (for background on these payments see http://agpolicy.org/weekcol/703.html).
These payments were decoupled from production and paid whether prices were high or low. The rationale was that decoupled payments would not distort production decisions and would be more in line with the rules of the World Trade Organization. In the early years, when prices were low, they provided farmers with some additional operating capital, though prices were below the cost of production.
With the growth of the corn-for-ethanol industry providing a source of expanding demand for corn, prices more than tripled. With prices well above any measure of the cost of production and farmers making record profits, the $5 billion in direct payments became a public embarrassment and politically unsustainable. The first portion of the 2014 Farm Bill repeals direct payments effective with the 2014 crop year, but allows the continuation of the payments for the 2013 crop year.
For upland cotton, the bill provides transition payments to producers of upland cotton in light of the repeal of direct payments, the ineligibility of cotton producers for PLC or ARC, and the delayed implementation of STAX (a program designed for cotton). The transition payments will be made with respect to the 2014 crop year to upland cotton producers with cotton base in the 2013 crop year, and with respect to the 2015 crop year to upland cotton producers with base in the 2013 crop year and who are located in counties where STAX is not available for that crop year.
With the potential for commodity prices to fall well below the highs of recent years, the 2014 Farm Bill requires farmers to make an irrevocable choice between two programs for counter-cyclical price protection: Agricultural Risk Coverage (ARC), and Price Loss Coverage (PLC). The choice is in effect for the 2014 through 2018 crop years. If a farmer makes no choice, the farmer is automatically enrolled in PLC. The election can be made crop by crop, except when a farmer chooses individual ARC coverage over county ARC coverage. In that case all covered crops are enrolled in ARC.
“If all producers on a farm make an election to receive ARC, then ARC payments are required to be made to producers on the farm when the Secretary [of Agriculture] determines that, for any of the 2014 through 2018 crop years, actual crop revenue is less than the ARC guarantee for a crop year” (Agricultural Act of 2014 Managers’ Statements - http://tinyurl.com/nw9qqae).
The “ARC guarantee for a covered commodity in a crop year is 86 percent of the benchmark revenue, which for county coverage is the product obtained by multiplying the average historical yield for the most recent 5 crop years, excluding the high and the low [the Olympic average], by the [Olympic average of the] national average market price received by producers during the 12-month marketing year for the most recent 5 crop years.”
Payments for a crop for which ARC was chosen are paid on 85 percent of the farm’s base acres plus any former cotton base acres planted to the crop. These payments are capped at 10 percent of the benchmark revenue.
If the producers on a farm elect to receive ARC payments based on their individual farm revenue rather than county revenue, two things happen. Unlike those who choose the county revenue ARC, they cannot participate in the PLC for any crop. And, the payments are paid on 65 percent of the base acres plus former cotton base acres planted to a covered crop. This has the effect of reducing the number of farms in the top half of a county’s revenue earnings per acre that would choose to participate in the individual ARC.
The PLC program operates much like the previous counter-cyclical-payment program with a fixed reference price—known as the target price in the 2008 Farm Bill—for each covered crop. When the season average price for any covered crop falls below the reference price (see last week’s column for the numbers), farmers are paid the difference between that crop’s reference price and national season average price times the farm’s payment yield times 85 percent of the base acres for the covered crop and former cotton base acres planted to the covered crop. The farm’s payment yields can be updated to 90 percent of their average 2008-2012 yields.
While “all producers on the farm have a one-time opportunity to elect either PLC or ARC for each crop on the farm on a commodity-by-commodity basis, with the exception that if a producer elects individual-level ARC, the producer must elect individual level ARC for all crops on the farm, they must annually sign-up to participate in the program that was elected.”
As the Conference Committee Managers write, “[the] FSA [Farm Service Administration] has always had an annual signup into available programs, which is simply a decision to participate in a given year. Absent an annual signup, producers may well fail to notify FSA of ownership changes, complete AGI certifications, and other information required to be provided by the producer to FSA. The signup period is the one time each year where producers are certain to complete all of the necessary records and forms.”
For covered commodities, crop farmers can still participate in the nonrecourse marketing assistance loan program. Should prices fall that far, the loan deficiency payment remains in effect for the period of the 2014 Farm Bill.
Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; firstname.lastname@example.org and email@example.com; http://www.agpolicy.org.keep looking »