Posted on 05/01/2008 6:38:59 AM PDT by Uncle Miltie
LINTON, N.D. – A portion of Ernie Roehrich’s farm hasn’t been plowed for two decades: It’s part of a federal program that pays landowners to idle land for conservation.
Payments from the Conservation Reserve Program have helped during lean times. And wildlife – especially pheasants – have flourished on his century-old family farm in south-central North Dakota.
But lured by high commodity prices, Roehrich and thousands like him nationwide are opting out of the program – and even paying penalties to exit early.
“I’m all for conservation,” Roehrich said. “But the market is the market – farmers are businessmen, too.”
The decision on whether to allow more land to be taken out of the nation’s biggest private-lands management program is dividing consumers, farmers, hunters and conservationists. It could put millions of acres now used by ducks, deer or pheasants into crop production.
Some worry the long-term price is too high. Others welcome the switch, saying it could hold down food prices.
Elizabeth Schulz of Bismarck said her grocery bill has increased by more than $200 a month, and she’d like to see more dormant crop land seeded this spring.
“Milk, gas – everything is going up, and it seems like it’s going up every day,” said Schulz, a mother of two. “I think they should use that CRP to plant more food. The more land to plant means there would be more food and the prices would go down.”
U.S. Agriculture Secretary Ed Schafer, a former North Dakota governor, said he plans to make a decision in August or September on whether to allow “penalty-free release of land” for the 2009 crop year.
“While he did say ‘no’ to this year, he didn’t say ‘hell no,’ to next year,” said Bill Roenigk, the chief economist at the National Chicken Council.
Roenigk also is chairman of Alliance for Agriculture Growth and Competitiveness, a group representing beef, poultry, pork, grain and feed industries, which has been lobbying the Agriculture Department since 2005 to allow landowners to pull out of CRP contracts without penalty.
“We need all the land we can get and yields as good as we can get to meet all the needs,” Roenigk said. “No one envisioned we’d max out crop land in our lifetime, and nobody ever envisioned ethanol taking off like it did.”
CRP, which started in 1985, dolled out about $1.9 billion to landowners last year, said John Johnson, deputy administrator for farm programs for the Agriculture Department’s Farm Service Agency. It pays a nationwide average of about $50 per acre annually.
In mid-April, there were
34.6 million acres enrolled in CRP, down about 2 million from a year ago, Johnson said. Contracts on another 1 million acres are set to expire this year, he said.
The program currently is authorized at 39.2 million acres, or about 10 percent of U.S. crop land.
“Opening up CRP will help address the problem caused by ethanol,” said Ray Atkinson, a spokesman for Pilgrim’s Pride Corp., the nation’s biggest chicken processor. “But we’re addressing the symptom instead of the problem – the root of the problem is that we are increasingly burning food for fuel.”
ping
I’m not saying the sky is falling, but this is a little bit like how we got into the Dust Bowl. During WWI, commodity prices were sky high. Farmers plowed as much land as they could. Prices came down afterwards, and fields eventually lay bare and open, a bad drought came along, and Voila! Dust clouds a mile high.
We need to be honest and start calling this what it really is... WELFARE.
Another unintended consequence of the Sierra Club and other earth-worshipers. Not drilling for oil in ANWAR and off our coasts is going to kill a lot more wildlife in the USA than drilling would have. The enviro-nazis’ chickens are finally coming home to roost, and the Congress should also be held accountable for the current mess in fuel and food supplies. There are definite consequences of our spineless politicians sell-out to the Gaia religion.
“I’m not saying the sky is falling...”
Yes you are.
There was an epic drought during that period as well CC_G.
I’m in favor of allowing..*gasp*...more production of foodstuffs, I am an outdoorsman but America as a whole needs to produce more just to be competitive.
I also think they should be smart about doing so, some land is more productive then other land so let’s not rip up everything and call it “done”...
Coming from a farming background, I have to be careful when voicing the pure economic facts about farm subsidies.
Yeah, the family farm is a great place to raise children with character (because of the workload).
But if you can’t make a living doing it, then according to harsh economics, your labor would be put to better use elsewhere.
Any subsidies that keep you working on the farm are detrimental to the economy because of lost opportunity cost. Not to mention the unfairness of forcing people to subsidize your lifestyle choices.
What amazes me is that people are actually surprised when other people react to incentives in a rational manner.
Well, I did mention the drought. It was a central part of the problem. But, as you say, people need to be smart about their use of the land. We’ve come up with government policies that encourage people to grow fuel instead of food, or to let lands lie unused rather than productive. All I’m saying is that some of the “solutions” to our current situation may create unintended consequences.
I’ve noticed new wheat fields in our area this past winter...with wheat at an all time high, who can blame the farmer for putting more land into production?...get it while you can...these high prices won’t go on forever.
“Plowing” in 2008 doesn’t bear much resemblance to plowing in the 1930’s.
So true....and as long as corporate farms are getting hundreds of millions in corn subsidies, you can bet those corporations will ‘kill the soil’ growing corn year after year in the same fields.
It was poor farming practice; the worst was tilling to a fine dust. The age of mechanized farming had just taken off to large scale during that period.
A whole lot of risk in farming.
For safety and security, give me a one man car beat in South Central LA ;^)
Wow! A farmer who understands economics, subsidies and externalities. You win today’s Norman Borlaug prize for intelligence in agronomy.
GOOD. Not all farmers will get off CREP. Many can’t afford it. The government paying them to keep their land fallow is the only way they can pay out-of-control property taxes. Those who are able to grow crops are PROBABLY going to make a profit at at, considering today’s prices.
““Plowing” in 2008 doesn’t bear much resemblance to plowing in the 1930’s.”
....you got that right...here’s how the neighbor does it...he burns the field with a herbicide that’s so hot the weeds from the first pass are already wilting by the time he makes his last pass...then he goes in with a 12 row no till planter or no till grain drill depending on the crop...every other year or so he’ll break the ground with a tillage tool.... the days of plowing and disking every Spring are in the past for the big operator....it’s chemical farming now with a corn, bean and wheat rotation.
Farms, particularly in the great plains, now uniformly engage in no-till or conservation tillage. While turning over the topsoil with a moldboard plow was once necessary to prepare a seed bed and to control weeds, it no longer is.
I'm not quite sure what a "corporate" farm is, but there are no direct production subsidies to farmers to grow corn.
Farmers for DECADES now grew up learning the lessons of the dust bowl. The Dept of Agriculture conducts classes in the newest planting methods for higher yeilds and less soil erosion...farmers ARE computer literate.
Lastly, there are environmental regulations in place now that didn't exist in the 1930's, including regs about hedgerows.
I doubt another Dust Bowl will be allowed to form.
How do you explain the continuous increases in yields from that 'killed' soil, even after decades of corn on corn?
The Farm Programs, as briefly described below, were designed and refined to provide the most plentiful food ever, at the lowest prices in human history, not to help the farmers.
If you care to read it, here is how, and it is a tribute indeed to the skilled bureaucrats who put it all together.
For the past 50 years or more the farm programs (really food programs, as they were designed primarily from the food available angle) have been carefully crafted and annually refined.
The final acreage allotments, price supports etc. aren’t put into place until the very last moment, so that the desired crop size can be more precisely met. The goal is to produce just enough excess food stuffs to keep the price down, but not so much as to drive too many farmers out of business in that crop cycle. .
Price supports are in place so that farmers can count on a certain ‘floor’ price for their crop, sort of a minimum wage. This money will allow them to plan to be in business for the next year.
Acreage allotments set by the USDA allow for a big crop, more than the consumers can use. As a result, there has always been a surplus, often a huge surplus, hanging over the market, keeping prices down, sort of a maximum wage.
Imagine some guy standing in your boss’s office asking for your job everyday, willing to work for just a bit less than you are. Not at the employment agency, but actually in your boss’s office, ready to take your job on a couple minutes notice. With that kind of situation, it’s going to be hard for you to ask for a raise, and it’s also hard for crop prices to rise significantly with the surplus that the government has arranged to be hanging over the market you compete in.
Fifty years ago, when this was just beginning, a lot of farmer didn’t enroll. As the years passed, these programs began to squeeze every farmer. It is now to the point where nearly every farmer in the United States is enrolled. Very few farmers have the financial resources needed not to enroll, because a particularly large crop can force prices so low they can be driven out of business within one crop cycle without the assurance of the government floor on prices for those enrolled in the program. That means that the government has control over nearly every aspect of crop size, how long the farmer will store his crop after harvest, and at what price he will sell it for.
All of the above is designed primarily to keep food stock supplies up, prices down, and food cheap for the consumer. Secondarily, it’s designed to keep farmers poor, so they will be forced to enroll in the program next year.
A quick trip through the Midwest, our breadbasket, will reveal the accuracy of the success of that Secondary target. Small towns, which rely on the financial earning of the farmers to survive, are poor. A trip through the countryside where the farmers actually live will show farm families who live a very simple life. I’m not asking you to feel sorry for any of them, anyone could move elsewhere. I did.
Ethanol has been the straw that broke the back of the cheap food train, but it could have been just about anything.
With the introduction of ethanol, prices rose and farmers found an escape route from their predicament. No longer is there enough money and power in the farm program subsidies to keep them trapped. .
Farmers are now free to do what their hearts have desired to do for decades, produce enormous crops……. And then get paid for those crops by willing buyers who will pay a price that ensures a fair profit.
Now that the complainers about the farm program subsidies have gotten their wish, and the farmers don’t need to government programs, they are now complaining that food prices are too high. Seems we can not have both at once, low food prices and no government programs.
Rush has asserted that the most expensive commodity traded in the United State is ignorance. The ignorance, even here at Free Republic, about where and how our food is produced, and how it comes to our tables, and how the farm programs have affected our food supply and food prices is a good example of that assertion.
There isn’t an industry or a business with more than 100 employees in the country that has not received some type of financial incentive and that includes Agriculture, the nations #1 industry, #1 export business, and #1 most valuable infrastructure. Americans pay less/capita for food than any nation in the world (about 11.5% of annual income and people bitch about it. If the conservation of topsoil program is ended, the nations most valuable resource will suffer, but so be it if people want higher food prices, let it happen. Farmers will be forced to collaborate and at times withhold their products from the retail market until the urban population gets a taste of what happens when the 5 day supply of food on the shelf of supermarkets runs out. Some of you people need to cease condemning what has been so good (too good for many of you consuming more than your share) to the nation and to your personal pocketbook. Food is going higher and not just because of ethanol. Fuel, fertilizer and input costs have skyrocketed — so get ready to pay your fair share for food folks. It is gonna happen. Get a clue and look at the BRIC country economies.
Unfortunately there is very little risk in farming due to subsidies. I watch farmer after farmer who should be failing and going under be propped up by tax dollars.
If these guys were businessmen they would have lost everythign by now.
Many farmers know little about running a business and managing risk - they always have tax payers to fall back on.
They are paying 5-6k an acre for land right now in my area, it is the 1970s all over again.
Cue John Cougar’s Scarecrow...
This does not compute from an economics analysis.
Basic econ analysis: Why would the owner of the asset - the topsoil - reduce the capital value of that asset?
That would be like a rental property owner letting his building collapse just so he wouldn't have to incur upkeep costs and reap short term increased cashflow.
When they get hankering for a new truck or car, they'll work as electricians or millwrights for the various wood product plants here abouts.
The skill set required to be a farmer (mechanical wise) is also a skill set the free market compensates rather nicely
Looks like the joys of the free market to me. This will increase the crop size which will apply downward pressure to the prices and by opting out of a government largess program they’re reducing federal spending.
You left out the lack of crop rotation which destroyed the viability of the soil in the first place. If you’re not killing the land there’s nothing wrong with not deliberately growing on it, because something will ALWAYS grow in useful dirt, might be scrub grass (which is most of what these guys have been growing under the program) but it’s going to be something. It’s only when you drain the soil of all of one type of nutrients by not rotating crops that you wind up with dead dirt that will lay bare and open.
ABOUT THE DUST BOWL...
The boll weevil wiped out much of the cotton crop in the twenties. Because of a draught and because cotton was the only crop grown, the area became a dust bowl.
I am referring to the Conservation Reserve Program (CRP) that has done more to preserve the nations topsoil then any single venture the fed has ever invested in. Many farmers are opting out early from the program since the payment is minimal and still requires annual mowing. Land is coming out by the thousands of acres to return to row-crop production as farmers, for the first time in 30 years, have an opportunity to make more than the typical 1% on their investment. I find the snide comments from the urban folks with ideas of agriculture being consumption of supermarket products rampant with ignorance of what the industry is about. There is nothing wrong with farmers making a 3% return.
I forgot to mention that continuous row-cropping depletes the topsoil faster than new topsoil is formed. Erosion is the enemy — check the Mississippi River delta if you want to see where the topsoil is going.
Corporate farming is a term that describes the business of agriculture, specifically, what is seen by some as the practices of would-be megacorporations involved in food production on a very large scale. It is a modern food industry issue, and encompasses not only the farm itself, but also the entire chain of agriculture-related business, including seed supply, agrichemicals, food processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales. The term also includes the influence of these companies on education, research and public policy, through their educational funding and government lobbying efforts. "Corporate farming" is often used synonymously with "agribusiness" (although "agribusiness" quite often is not used in the corporate farming sense), and it is seen as the destroyer of the family farm. Two percent of all farms in the United States are owned by corporations or other non-family entities, but only half of those farms earn more than $50,000 per year.
I knew about no-till...it's been in use for years now with many crops...glad we are doing it.
However, when prices are up like now, the temptation to run corn on the same field 2 or more years in a row is done (not all farms).
With respect to subsidies, that is in the form of price support or 'no-till' contracts that are paid directly to farmers.
Ninety-eight percent of U.S. farms are family farms. The remaining 2 percent are nonfamily farms, which produce 14 percent of total agricultural output (fig. 3). Two features of family farms stand out. First, small family farms make up 91 percent of all U.S. farms. Second, large-scale family farms account for 59 percent of all production.
I have worked on many farms in my younger years, to include tobacco, corn, cattle, horses, hogs, poultry and vegetables to help out friends and their families and earn a little extra cash. Believe me, it's hard work and I do respect highly what farmers must know and do to keep the farm going. For family farms, farmers are a jack of all trades from chemists, accountants, mechanics, welders, carpenters, husbands and fathers.
I have worked 3 weeks straight on a farm from sun-up to sundown 6 days a week.....no problems sleeping at all those nights.
With genetically engineered corn now and improved tillage techniques (no-till and pre-m's), good weather, etc., the US had the largest corn crop ever even in 2007 though Minnesota and others suffered from localized drought. However, corn futures now are the highest ever. I do know that the basic fertilizers used last year by farmers for corn has gone from about $245 to $865 per ton.
I believe we’re talking past each other.
From a pure economics standpoint, it makes no sense for a farmer to devalue his capital by destroying it.
Of course,we must make room for the Prairie Dogs and Buffalo!
It is the nature of farming to lose topsoil. I follow your point, but that doesn’t change the fact that most farmers are barely able to capture a few % return on investment and must farm all of their available acreage. This results in loss of topsoil. Even no-till operations on steep ground still have significant erosion problems. The only way to replenish topsoil is through the CRP program.
So says Bill Roenigk, the chief economist at the National Chicken Council ! / sarc
CRP does not equal conservation. CRP is to pay farmers not to farm.
The land is not conserved, in fact it is in worse condition than actively used land. Frequently, CRP land is a thicket of noxious weeds.
“Crop rotation” is another urban myth. Yes, “crop rotation” was necessary in the past - mostly as an IPM measure to prevent weeds from becoming herbicide resistant or to control other pests.
But the idea that one crop uses nutrients and another doesn’t isn’t factual. The only crops that add something back to the soil are legumes, and they add only nitrogen.
Legumes need plenty of phosphorous every year to maintain peak growth potential. Moreover, P has to be added to the soil prior to the year of use - ie, if your crop will need 70lbs/acre of P this year... you better have put that down on your soil last year to make it available this year.
With modern pesticides, you can mono-crop land successfully year after year after year. Alfalfa is one example of a crop that isn’t rotated out but ever five to ten years.
This isn’t “welfare” per se.
The way this came about was that farmers were planting “fencerow to fencerow” from the 70’s and duck ponds, wallows, field edges in brush were being removed from vast areas of private land.
The various wildlife groups (especially the duck hunting groups) saw duck populations start to decline rapidly. They wanted farmers to leave the ponds/wallows, the brush at the edge of fields, etc as migratory waterfowl habitat. The farmers said “I’m not going to take that land out of production unless someone pays me.”
And that’s how CRP came about. People who didn’t own the land wanting to change the actions who did own the land.
In my neighborhood, virtually all CRP land is owned by someone who isn’t otherwise a farmer. Generally the land is held by suburbanites as a game hunting preserve.
If you’ll excuse my saying so, you seem to have issues with farming that go beyond the return of CRP land to productive use.
The notion that anyone is receiving price supports or direct production payments for corn is an urban myth.
Bingo. You’ve got it.
I see no end to farms and ranches getting sold to back-east urbanites (who know _nothing_ about farming) who are attracted by farms/ranches that have land in CRP.
When I look at a farm or ranch that has CRP-contracted acres, my first question is “When is the CRP contract up?”
Realtors look at me like I’m a martian with three heads. I want ranches to be advertised with AUM’s, not acres, in the grazing leases, I don’t give a rat’s rear end about CRP payments and what I am most concerned about is irrigation water, seniority of the water rights, whether there’s any noxious weeds on the place and who the neighbors are.
The subsidies allow overproduction of grain resulting in cheap food.
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