North Dakota Editorial: High Crop Prices? It’s About Time

[JohnDeere 0]

High Crop Prices? It’s About Time

- source: The Forum, April 10, 2007

The dire cluck-clucking from urban America about high crop prices is getting tiresome in farm country. Spurred by corn demand for ethanol and world supply factors brought about by bad weather and planting intentions reports, commodity prices are higher than they’ve been in years. Producers on the Northern Plains and elsewhere are getting prices for their crops that cover the cost of production and generate a reasonable profit.

It’s about time.

Critics of rising crop prices whine that the cost of food will go up, too. They wring their hands with great concern over the impact high American crop prices will have on poor farming nations. They seem to have some sort of peculiar prejudice against using corn for ethanol because corn is food.

Enough already.

Farming is business, often big business. It’s capital-intensive and risky. The chances of bringing off a profitable crop are determined by variables such as weather and global markets. Farm support programs are designed to help farmers get through a crop year when the variables go bad. Keeping American farmers on the land is as much about food security as it is about maintaining viable rural economies.

Furthermore, the higher price for so-called program crops means the draw on the U.S. Treasury for farm programs is smaller. The counter-cyclical provision of the 2002 Farm Security Act is a market-oriented mechanism that pays farmers only when markets are low. When markets are high, payments are low or none. In other words, it’s a good deal for U.S. taxpayers when farmers can sell their crops in the marketplace at higher per-bushel prices.

We’re also hearing a rising chorus of complaints from the livestock industry, as costs for hog and cattle feeds rise. They protest too much. Prices for livestock, especially beef cattle, have been nicely high for several years and show no signs of a serious decline. Don’t believe it? Take a gander at the price of beef in your local store. For some cuts, it’s wise to consult a bank loan officer.

Nevertheless, we say, good for cattle producers. They, like grain growers, know what low prices can do to their individual operations and to the economies of small towns. It’s happy news that both sectors are enjoying relatively high prices.

The higher costs of all foods have more to do with rising costs of fuel, labor, regulation, land rent and demands of shareholders in the food processing and retailing industries than they do with cattle and corn. Farmers, too, are paying a lot more for fuel and fertilizers because of the sky-high price of petroleum and its byproducts.

Finally, even at higher prices for many corn-based and other foods, Americans spend less of their disposal income to eat than any other people on the planet. By any responsible measure, that cart of food from your local supermarket is a bargain.

From an the NEVC Newsletter FYI Newsletter Volume 13, Issue 5, April 10, 2007

[saniflush 0]

We’re also hearing a rising chorus of complaints from the livestock industry, as costs for hog and cattle feeds rise. They protest too much. Prices for livestock, especially beef cattle, have been nicely high for several years and show no signs of a serious decline. Don’t believe it? Take a gander at the price of beef in your local store. For some cuts, it’s wise to consult a bank loan officer.

This is TOTAL bunk! There are a LOT of hands that have to be filled with money between the farmer and the butcher.(if you can find a butcher) Beef cattle markets are higher than what they have been for quite some time but not as high as they should be IMO. Been there, done that! Still got family that tries to do that!

[JohnDeere 0]

We’re also hearing a rising chorus of complaints from the livestock industry, as costs for hog and cattle feeds rise. They protest too much. Prices for livestock, especially beef cattle, have been nicely high for several years and show no signs of a serious decline. Don’t believe it? Take a gander at the price of beef in your local store. For some cuts, it’s wise to consult a bank loan officer.

This is TOTAL bunk! There are a LOT of hands that have to be filled with money between the farmer and the butcher.(if you can find a butcher) Beef cattle markets are higher than what they have been for quite some time but not as high as they should be IMO. Been there, done that! Still got family that tries to do that!

What do you mean? Beef prices aren't high enough to turn a profit on cows?

[saniflush 0]

We’re also hearing a rising chorus of complaints from the livestock industry, as costs for hog and cattle feeds rise. They protest too much. Prices for livestock, especially beef cattle, have been nicely high for several years and show no signs of a serious decline. Don’t believe it? Take a gander at the price of beef in your local store. For some cuts, it’s wise to consult a bank loan officer.

This is TOTAL bunk! There are a LOT of hands that have to be filled with money between the farmer and the butcher.(if you can find a butcher) Beef cattle markets are higher than what they have been for quite some time but not as high as they should be IMO. Been there, done that! Still got family that tries to do that!

What do you mean? Beef prices aren't high enough to turn a profit on cows?

Beef prices to the farmers are not high enough. What one pays per pound for any beef in a grocery store has very little correlation to what the farmer made (or lost) for that animal. If there were, then there would be a lot more farmers!