K.M. Note: I’m not sure how many prominent agricultural economists spend their summer on a farm, but Dr. Walter P. Falcon of Stanford does. Last summer I asked him if I could repost his writing with his summer observations here on b.p.a. and he granted me permission to do so. This year he’s done another writing and he was kind enough to notify me (as I requested) and offer it for publication here. Personally, I love his insights because they come from such a unique lifetime perspective.
“Stuck in the Mud: Stanford’s Scholarly Farmer on the Soggy Fortunes of Midwest Growers” Farmer’s Almanac, Part II by Walter P. Falcon (July 16, 2013)
My wife and I are again spending the summer on our farm in Eastern Iowa. I am fourth-generation from land just a mile away, first settled by the Falcon family in 1858. My wife is also fourth-generation, from the farmstead we now own. Our land is a medium-sized corn, soybean, and cow and calf operation in the heart of a very rural Iowa county—though Starbucks is only seven miles away! Summers here provide a pleasant change from my day job, which is as Farnsworth Professor of International Agricultural Policy at Stanford University. It helps when teaching agriculture to have one’s feet in the soil. In 2013, “in the mud” is a more appropriate phrase.
My farm notes from 2012 chronicled the problems of farming during one of Eastern Iowa’s most severe droughts. Because of high temperatures and low rainfall, it was a truly miserable production year for farmers—made only mediocre financially rather than miserable—by the widespread use of crop insurance. Drought affected many states, and last year the national federal subsidies on crop insurance were nearly $15 billion, more than the total that was spent combined on all of the other farm-related programs in the federal Farm Bill.
But what a difference a year makes. We have gone from one of the very hottest and driest years on record to one of very coldest and wettest. For Iowa, it was the wettest spring ever, eclipsing the 1892 record. The riskiness of farming is something to see in real time; it is also very instructive to listen as farmers talk about coping with uncertainty. Listening to them is not very difficult if one is prepared to invest a bit of time. In most rural areas, there is typically a restaurant, diner, or some other slightly disreputable place where farmers gather for early morning coffee. For our group, it is the old limestone store in Waubeek—the limestone having been hauled by horses in 1868 from nearby quarries at Stone City, the historic home of Iowa’s most famous painter, Grant Wood. What have not changed from last year are the watery coffee, the stale cookies, and the energetic exchange of farm tales—mostly true, occasionally coarse, and sometimes more than a little embellished.
As with last year, the talk is about weather—though now the signs have all been reversed. Last spring it was dry; this spring it was wet. It rained and rained and rained. During the critical planting period of April, May and June, it rained in significant amounts in our area for 40 days. We received 21 inches in total, as compared with less than 8 inches last year. Much of it came in torrents, leading to significant erosion, runoff, and flooding. Moreover, the weather was cold. The local weather station reports that average temperatures for May and June were about 6 degrees cooler than in 2012, which is huge as those kinds of comparisons go.
Farmers have had plenty of time for morning conversations, since the fields were so wet there was not much else to do. They commiserated about a lot of things, and here are some of things I heard and learned. Virtually everyone said planting had been delayed at least three weeks beyond the first week in May, the date most think is their optimal planting time. Perhaps a quarter said that the delays were so bad that they were shifting some fields from corn to soybeans, since the latter typically do better than corn if planted in June. Everyone spoke of having fields with low spots that would simply go unplanted, or if planted, were flooded out with zero yields expected. (And everyone was checking the fine print of their crop insurance policies to determine coverage for land that could not be planted due to weather, so-called “prevented” acres.)
The temperatures were so cool that corn seeds often lay in the ground and rotted or only germinated partially. They talked about the merits of re-planting—the costly process of “tearing out” what had already been planted to replace it with new seed. The calculus of that decision is complicated, since it involves further delays in the crop cycle and, at a minimum, the cost of new seed and tractor fuel. New corn hybrids cost up to $100 per acre, depending on the special traits that have been stacked into the seeds, thus putting seed costs on par with those of nitrogen fertilizer. All farmers grow genetically modified corn, and those who initially had paid extra for the more expensive, drought-resistant seed seemed more resigned—“the cost of doing business”—than angry.
There was also great concern about fertilization this year. Agronomists have been urging farmers to put nitrogen into the ground (called side-dressing) when plants needed the nutrient, rather than prior to planting, to help prevent nitrogen losses due to runoff or into the atmosphere and groundwater. My neighbors know that nitrogen runoff is a problem, but as one put it, “this year we are screwed; because of the rain, we can’t get back into the fields with supplemental nitrogen.”
The number of rainy days was totally frustrating for livestock farmers as well, most of whom also grow alfalfa for forage. There was barely a sequence of dry days long enough to make hay. The quality of the alfalfa diminished, as it grew tall and coarse. On our farm, we actually baled hay on the 4th of July. The lateness of this first cutting will mean the loss of at least one, and possibly two, later cuttings. The latter, of course, are the most valuable in terms of quality and price per bale.
The 4th is also the traditional benchmarking date for the corn crop. Historically, corn was supposed to be “knee high by the 4th.” But with new varieties of seed and early planting dates, corn is typically shoulder high. In 2013, however, it really was knee high and looking puny and yellowish. The 4th is traditionally also the start of the season for sweet corn—the best in the world! But it too was delayed by more than two weeks. The bit of good news is that the Japanese beetles, a fierce pest in 2011 and 2012 to both soybeans and home gardens, have yet to appear.
The flooding that accompanied the rain was huge. Iowa expects to lose substantial acres of corn because of flooded fields. Almost every farmer I know was affected in some way or another. The week after we arrived from California, for example, we had two severe storm warnings and one tornado warning in the first four days. The tornado blew around us, but the latter of the storms came in torrents. With the rivers running high, and with the soils saturated, flash floods happen almost instantaneously, as we experienced first-hand. Our large permanent pasture, summer home for the red Angus cow and calf herd, contains a medium sized creek. It quickly overflowed flooding the entire pasture. The cows and calves were understandably unhappy, bawling loudly and persistently, thereby triggering a 5 am rodeo in the rain as they got moved to the barn on higher ground. (Rodeos in the rain are not fun, however glamorous and intriguing the thought may be. There is always one calf….) But it was a good thing the move was made. For later in the morning, we saw that the flood had taken out 50 yards of fence, thus opening the pasture up to the adjacent highway. And for those interested, repairing creek fences is not a whole lot of fun either.
That same storm had countywide effects as well. The Linn County Fair was to open on June 26th, and unfortunately the fair grounds sit alongside the good-sized Wapsipinicon River. The storm had pelted areas upstream and the river was rising rapidly. There was a decision to be made. National and local weather service models projected a crest of 25 feet, which would mean four feet of water in the grandstand, and a small lake where the exhibits were to be. The fair was called off, and that is a BIG decision for a rural area. It affected almost every farm family, especially the farm boys and girls who had spent literally a year preparing their 4-H and F.F.A. (Future Farmers) projects—from livestock to sewing—for the competition. Everyone then waited in gloom for the fairground to flood. But it didn’t! The fair had been canceled for naught.
The forecasters had missed the river crest, and missed badly. What was estimated at 25 feet, turned out in fact to be 14.95 feet. Everyone thought that a miss by one foot was understandable, but that a miss by ten feet was sheer incompetence! They were relieved that the flood had passed, and bore no ill will against the fair committee. But the coffee conversations the next few days were blue about government forecasters. I cringed, given my day job, when one of my neighbors said, “those weather guys are even worse than the damned economists.” And that comment then triggered a lengthy conversation about the Department of Agriculture (USDA) forecasts for the size of the new (2013) corn crop.
Despite the wetness in the Midwest, the USDA at the time was predicting a record corn harvest for 2013. Farmers, who tend to be a bit myopic and to see and think the whole world is like their county, simply didn’t believe the numbers—neither the area nor the yield forecasts. Those estimates of a big crop were helping to drive prices for the 2013 crop down to about $5 per bushel for corn, relative to the $7 per bushel farmers had received during 2012 and the early months of 2013. Several of them argued that it was a deliberate attempt by the government to drive down prices. I suggested that it wasn’t what the government thought, but what markets believed that was important. But they had a point, because the markets couldn’t figure out the estimates either, with a great deal of day-to-day variation in prices based on weather assumptions, both in the U.S. and in China.
At last the rains finally broke and there was a week of dry weather. What happened in the countryside then was nothing short of amazing. Farmers, typically with help from their spouses and extended families, worked 24/7. Tractors, with lights, comfort cabs, and sophisticated GPS systems to do virtually all of the steering, pulled 16- or even 24-row planters; they were everywhere one looked. So much planting took place in those few days that fertilizer dealers were overwhelmed by the logistics of moving sufficient quantities of starter fertilizer into the countryside. During that one week alone, 56 per cent of Iowa’s entire corn crop was planted!
These notes are being written in real time, and what this year’s harvest will bring eventually is now anyone’s guess. At a minimum, the harvest will be late, which means that an early frost could be a very serious problem. Farmers now are beginning also to worry about late-season precipitation. (My wife is convinced that we have had our rain for the season, and that from now on we will see drought.) Farmers are not an optimistic lot when it comes to forecasting weather! But at this point in the season, most of farming is waiting.
My clearest conclusions from the last two years are about risk. Farmers and farming communities face lots of it, and in almost every direction they turn. (I smile inwardly every time I am told by neighbors, “I don’t see how you can live in California with all those earthquakes!”) Modern corn-belt agriculture is complicated, capital-intensive, and uncertain. That is why federal crop insurance is already such a key element in the new Farm Bill, and likely to become even more so in the context of future climate variability and change. Finally, anyone who believes that farming is done by those who can’t do anything else, or that farms are quiet, idyllic places, ought really to spend a summer on an Iowa farm.
Walter P. Falcon is the Deputy Director of Stanford’s Center on Food Security and the Environment (FSE); Stanford’s Freeman Spogli Institute for International Studies (FSI) Senior Fellow; Stanford Woods Institute Senior Fellow; and Helen Farnsworth Professor of International Agricultural Policy, Economics (Emeritus).
You may read Dr. Falcon’s writing from last summer here: Observations From an Iowa Farm by Walter Falcon