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Is the Glass Half Full or Half Empty?

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Farmers are among the most optimistic people on earth. They have to be in order to prevail through the challenges, changes, and disappoints that growing crops or raising livestock can bring. A future that shows little or no chance of making a profit for the next several years has many corn, soybean, and wheat farmers facing this future with less optimism and more grim determination.  Yet, facing a hall filled with thousands of the nation’s top farmers at Commodity Classic last week, Secretary of Agriculture Tom Vilsack sounded a note of optimism.

 

It was billed as his farewell tour since, by the next Commodity Classic, there will be a new Secretary of Agriculture running USDA. During his tenure, the former Iowa Governor has presided over some of the highest farm incomes and some of the lowest farm incomes of the modern era. While he will likely leave office with corn and soybean prices below where they were when he entered office, he painted a rosy future for US agriculture, “I am not willing to suggest that the sky is falling, because I don’t think it is. I am not pessimistic, because I think the world wants what we can grow and graze.”

 

But a strong US dollar, sluggish world economy, and the lack of trade deals with key customers have led to dismal farm export numbers of late. While all of this could change with a drought, flood, disease outbreak, or trade embargo, for the moment supplies are up and demand is down.

 

For some of us, all this has a very familiar ring.  The early 1980s saw record low farm prices, record high interest rates, a grain embargo, and sluggish economic conditions. Then, as now, there was a lot of talk about how the world wanted what we had. That was of little comfort to the thousands of farm families who lost their farms during that time. Hopefully lower interest rates and a better farm safety net program will keep that from happening this time.

 

“By the year 2050 we are going to have 9 billion people in the world, and we will have to ability to feed them.” I have lost track of the number of times I have heard this touted at farm meetings. At Classic, companies used it to justify their investments in new technology to increase and improve food production. Secretary Vilsack used it to justify his optimism about US agriculture.  While it is true and is something to consider, it is also true that many of the people farming today will not be farming in 2050. If things are not done to keep agriculture strong and producers profitable today, the production system may not be there in 2050.

 

Reducing trade barriers, taking restrictions off biotechnology, fostering economic growth, and lowering taxes are all actions that can be taken in the short term that will raise crop and livestock prices and put producers in the black. And, nothing will give a farmer a feeling of optimism more than making a profit on his production.

By Gary Truitt