Chart says a lot about current farm policy

David Kenyon has a chart that he says ought to be a fixture in every agricultural economist's briefcase. The chart compares total exports of U.S. corn, wheat and soybeans from 1975 to 2000. As you might expect, there are peaks and valleys for each commodity, given the vagaries of weather and farm programs.

"But, if you look at these lines, there is no trend up," says Kenyon, marketing specialist with Virginia Tech. "They are flat. And if you put the last five years in there, they're still flat."

Speaking a few weeks ago at the Southern Region Agricultural Outlook Conference in Atlanta, Kenyon said he "almost got shot" when he tried to discuss the implications of the chart when Congress was deliberating the current farm law.

"You may remember that the 1996 farm bill was sold to farmers largely on increased exports," he said. "We were going to export our way right out of this problem."

As luck would have it, the United States had just experienced a surge in corn exports, primarily because of purchases by China. "I think China gave us a sucker punch," Kenyon noted. "They came in and bought all this stuff and then just disappeared." Since that time, U.S. grain exports have been on a downward slide. After reaching 2.2 billion bushels the year Freedom to Farm passed, U.S. corn exports have ranged from 1.5 billion to 1.98 billion bushels.

"And, if we hadn't gone to the marketing loan, what would they have been?" he asked, referring to the farm bill provision that allows growers to put their crops in the CCC loan and redeem them at the adjusted world price.

"So, in the coming debate, I would have a chart like this in my briefcase," said Kenyon. "And when farmers get too caught up in believing all this stuff that exports are going to bale us out, you can ask them `What structural changes are you expecting that's going to change this trend of the last 25 years?'"

Kenyon told his audience, which consisted mostly of agricultural economists, that he believes the best hope for improving grain prices is to keep exporting more chickens, turkeys, pigs and beef, which will consume more grain.

"A lot of countries are enjoying higher incomes," he noted. "We know what happens when they have higher incomes - they eat more meat. We can export more value-added meat products.

"We should be talking about that instead of bulk commodity exports. That's not going to be our salvation in terms of these really low prices we have right now."

On another note, Agriculture Secretary Dan Glickman raised more farmers' hackles when he said the next farm bill should contain "targeted, counter-cyclical" income support for producers.

Few growers would argue with the counter-cyclical portion of that statement, but the targeted aspect has come to be seen as a code word for shifting income support to small, family farms and away from the much-maligned corporate farms.

About the best that can be said for Glickman's comments is that after Jan. 20 they will carry even less weight than they do now.

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