The Farm Economy: A Problem For Us All

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Chart: a recent history of corn prices

By: Donald L Swanson

There’s a lot of talk these days about financial struggles on the farm. Chapter 12 filings by family farmers are increasing, and career farmers continue to leave for other opportunities.

So What?

Why should anyone care—urbanites and suburbanites in particular?

Here’s why: because the United States of America, and the rest of the entire world, need a constant and reliable supply of high quality food—that’s inexpensive.

Think of it this way:

  • there is nothing quite so regressive (i.e., disproportionate harm to poor people) as expensive food; and
  • there is nothing quite so ubiquitous across the span of human history as famine and food-borne diseases.

U.S. Farmers and Consumers

U.S. farmers are the epitome of efficient, reliable producers of high quality food at low prices, using ever-improving practices for efficiency and safety. Here in the U.S., for example, our farmers have managed to avoid such travesties as the contagion that’s devastating swine herds in the far east and the destructions of habitats that have occurred worldwide.

I know, I know:

  • Some people think cattle fart too much methane.
  • And some people don’t like others consuming meat . . . or dairy products . . . or anything processed . . . or anything that received an antibiotic against disease . . . or anything treated with chemicals . . . or anything that’s been encaged . . . or pasteurized . . . etc. . . . etc.
  • And some people insist that extracting ethanol from a kernel of corn for use as fuel (before feeding the rest of that kernel to livestock) is an inefficient waste.

That’s all well and good for us well-fed folk, who frequent grocery stores stocked with vast arrays of food choices. But such luxuries are not universal—even here in these United States.

So, news of trying times on the farm are a matter of concern to us all. We need our U.S. farmers to continue producing high quality and inexpensive food—for the good of the U.S. and the entire world.

A Diagnosis

Here’s the problem for today’s farming and for the future of producing high quality and inexpensive food:

–Prices farmers receive for their products are too low.

The recent-years chart of corn prices, shown above, illustrates the point:

  • 2012-era corn prices generally fluctuated around $6.50 to $7.50 per bushel, but
  • Corn prices from mid-2014 to the present generally fluctuate below $4.00 per bushel.

Now, $4.00 corn is an economic problem for farmers. And the reality is similar for other crops and for livestock and dairy producers.

Bankruptcy and Mediation Solutions

One solution that exists for family farmers is Chapter 12 bankruptcy. And that solution has been amended, recently, to include more farmers in its range of eligibility.

And mediation laws passed by states across the entirety of the U.S. farm belt are also helpful.

But bankruptcy and mediation are only partial—and exceedingly limited—solutions. The economic reality is that farmers must receive a reasonable price for their products, or they will be unable to continue. And neither bankruptcy laws nor mediation laws are able to change that reality.

Conclusion

What’s at stake, in today’s farm economy, is the future of efficient production of high quality and inexpensive food.

And that’s something of concern to us all.

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.

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