It was a very good year.
source: the Van Trump report
It was a very good year.
One positive claim that has been touted loudly from the industrial monoculture crop fields over this past decade, or so, has been the more widely adopted no-till farming method. However, the no-till method goes hand-in-hand with herbicides. Only with liberal use of herbicides is tilling unnecessary.
With the emergence of super weeds, however, farmers are getting back to deep tillage as a method of weed removal. That means more soil erosion. Might a return to deep tillage also mean a return to seeds which could care less about their relationship to glyphosate?
Another approach or solution, is for the “emergence” of a new herbicide tolerant crop that would be resistant to both a choline salt of 2,4-D and glyphosate, called Enlist Duo from Dow.
As the USDA is considering the deregulation of corn and soybeans that will not be affected when sprayed with Enlist Duo, fifty Democratic members of Congress are speaking out against EPA and USDA approval of this new herbicide and its related genetically engineered crops.
Though constantly in flux, the USDA’s projections for the four largest commodities are all trending down this year. As a consequence, farmland prices and machinery sales are also impacted.
Some expect that this year’s corn crop may reach 14.5 billion bushels and yield around 173 bushels an acre. Last year, we had a record corn crop with 13.9 billion bushels.
The expected soybean crop in the U.S. is for 3.8 billion bushels with a yield of 46 bushels an acre. The previous soybean record was 3.4 billion bushels in 2009.
In addition, China, a largest consumer of DDG product, has stopped buying DDG which may contain GM traits they have not approved, causing a huge recent price drop in this niche corn export market product.
The oversupply and lower prices of corn and soybeans also makes it very doubtful that biofuels mandates (and subsidies) will be reduced by the EPA, since lobbyists have a strong foothold around those regions of D.C.
From the USDA…
Current USDA forecasts show declines in U.S. average farm prices for major U.S. field crops—corn, soybeans, wheat, and cotton—of 4 to 19 percent in 2014/15. For corn, soybeans, and wheat, this would be the second consecutive year of declining prices. Soybean prices are forecast to decline the most in 2014/15, based on an expected record U.S. crop, combined with ample supplies from Brazil and Argentina.
U.S. corn prices are forecast to fall 10 percent in 2014/15, after a 35-percent decline in 2013/14, also based on a large U.S. corn crop forecast and competition from other exporters like Brazil, Argentina, and Ukraine. U.S. wheat prices are forecast to decline about 4 percent in 2014/15, despite the forecast for smaller U.S. supplies, due to adequate supplies from both traditional and Black Sea wheat exporters.
Although smaller cotton crops are forecast for China and India—the top two global producers—a larger U.S. crop is expected to lead to a fifth consecutive year of rising global cotton stocks and a 12-percent drop in U.S. prices in 2014/15.
It is a real treat in this modern day and age to actually be invited over to a neighbor’s house for dinner, and we were lucky to find ourselves in that position recently.
Somehow, late in the meal along with the strawberries atop the Ben and Jerry’s ice cream, the discussion revealed that our neighbor makes his own soy milk. He was really enthusiastic about it, bringing out his machine to show us (similar to the one in the video below) and also bringing out his bag of organic soybeans which he orders online from a farmer-supplier in Iowa. He said that it costs him about 50 cents worth of organic soybeans to make one batch, which is a great savings over store-bought soy milk.
Who knew there was so much hope in the world only a block away from my house?
Just in case this topic is as unfamiliar to you as it was to me, I’m posting two videos to demonstrate how easy it is to get started making your own soy milk, or almond milk.
In the video below, P. Allen Smith shows us how to make soy milk, both the old way – on the cookstove, and then he also shows how to make it by using a soy milk machine.
Then, in this next video, Dani Spies demonstrates how to make almond milk, which looks even easier than making soy milk.
If you snoop around Youtube and the internet, you can also find how-to videos on making oat milk, hemp milk, coconut milk, rice milk, and other plant based milks.
These milks are touted by all who would like to see humans transition to more plant based diets, plus they give you control over the taste, amount of sugar, and additives as compared to commercial products.
Personally, I like the idea because it counts as home cooking which means less packaging and less embedded fossil fuels – which are necessary for refrigerated milk distribution.
Perhaps it’s time to have your neighbors over for a dinner party so you can share your innovations in cooking with each other.
Though we always hear that there needs to be more investment in agricultural research, an agronomy student once told me that his professors are frustrated by the fact that nothing they can offer in the way of agricultural advice will be adopted by farmers unless it increases their profitability. And, usually that comes by way of reducing labor, increasing yields, or through policy.
We have a situation today where the efficiency of industrialized agricultural methods are being challenged because of ever rising input costs as well as ever growing global production competition as more and more of the developing nations adopt our industrial methods of production. Additionally, whereas the U.S. used to be the world’s corn exporting powerhouse, we’ve relinquished export market share since mandated ethanol policy went into effect.
In recent years, the agribusiness giants have done extremely well and many corn and soybean farmers have just ended a cycle of great crop incomes, too. We all know how well the S&P 500 has done in the past five years, but Deere has done even better:
In part recent farm-related profits have been due to government policies of direct farm payments and crop insurance, and in larger part, because of the biofuels mandates. But, it looks like that good time period is about to end. A recently released FAPRI study forecasts breakeven crop prices through 2023 for U.S. farmers.
Furthermore, during the five-year corn commodity price bull run we’ve just experienced, the profits went to the top half of producers, while the bottom half was left out; the top 10 percent of producers made 10 times the amount of profits than the bottom 10 percent.
Approximately 97 million acres of corn and 78 million acres of soybeans were planted in the U.S. in 2013. Let’s take a look at profitability from the farmer’s perspective by using data provided by Mike Duffy of the Iowa State Extension Service, who provides ongoing data updates for the input costs per acre to grow corn and soybean crops in Iowa. His data shows that the machinery costs for growing corn rose 420 percent in the 46 years between 1968 and 2014. The cost for seeds, chemicals, and fertilizers went up over 1000 percent. The yield in corn bushels per acre went up 77 percent for an overall cost per bushel increase of 347 percent over the past 46 years.
My chart below helps demonstrate the numbers:
And the following chart by Chad Hart of Iowa State helps us more in visualizing input costs versus returns of Iowa corn farmers (note the number of years that the average cost of production exceeds the corn price):
Hart included this commentary with the graph above, “When we examine the average return to a bushel of Iowa corn over the entire time period from 1972 to 2012, it is a positive 5 cents per bushel. However, if you looked at 1972 to 2011, the average return was negative.”
Whereas the input providers can set their prices, the farmer-producer is always at the mercy of the markets. What the farmer has the liberty to decide, however, is his/her choice of methods.
As for benefits, a major economic benefit for the corn and soybean farmer comes from taxpayer supported policy programs which help to ensure that production costs are met each year. The new farm bill offers even greater support to the farmer when prices fall, putting a high floor under prices. Unfortunately, today’s policy also encourages farming on marginal land because of a guaranteed profit to the landowner.
Then, there is also the labor saving benefit of today’s row-crop farmer. Compared to the old rotational grazing systems, the grain farmer’s time commitments have fallen dramatically, offering a better lifestyle and the opportunity to work off the farm for additional income.
What does this all mean and where is the corn and soybean farmer headed?
First, precision agriculture may be another method to increase production, but it comes with a large price both in dollars and in trust of the technology, creating a new set of risks and challenges. Second, integrating cover crops into cash crops can make row-crop farming more ecological and more productive in the long run. And, third, it is expected that by planting closer together, and by further improving genetics, crop yields per acre can continue to increase, but that, too, will come with higher input costs of seeds, fertilizer, and machinery for farmers – which brings us once again to the hamster on the wheel situation.
The farmer who can reduce his/her input costs and produce a product of value, such as providing organic products to answer consumer demand, may do well, and, the younger farmer demographic is looking into new alternatives and ideas which challenge the status quo. Perhaps this is all best summarized by a CNBC news headline that I spotted over the weekend, “There’s a growing discontent around farming in America.”