Words of the Wise

A recent opinion article by George Mueller, a very respected dairyman from New York State, touched on many issues in “Dairy farming is facing a new dawn.”  As a fellow dairy farmer and self-proclaimed advocate for the industry and a blogger, I found this article exhilarating and a great piece to use here today.

Mr. Mueller is truly a visionary and a progressive dairyman.  His intellect, decades of farming experience, and common sense economics helped craft this opinion piece into a work of art.  Now what do I mean by that, and in saying that, am I not objective?  Yes, in a way I am, but the facts cited in the article are just those…facts, and they paint a picture of the dairy industry, the American problems we face today, and offer wisdom to readers across the board.  Let me share some of Mr. Mueller’s words with you.

In regards to adopting a quota system for the dairy industry, Mueller has this to say.

            We must get rid of this idea of gaining prosperity by cutting back on supply.

            It didn’t work when President Roosevelt killed pigs during the Great Depression. 

            It didn’t work by destroying perfectly good cars during the “Cash for Clunkers”  

            program. (Mueller, 2011)

If any of you cannot relate to more than the “Cash for Clunkers”, that is fine…just that example paints the picture Mueller is trying to create.  Reread those words again if you have to, and think of prosperity.  

Furthermore, in regards to policy and supply & demand in the dairy industry Mueller shares these thoughts.

            In this country, when world price dropped below our support price [milk], we quit             supplying the overseas market and sold to the government instead. Because of our             support price, even though it is very low, it still interrupts our supplying world   

            markets.

            We thus have a reputation for being an inconsistent supplier and a last choice when

            a world customer is seeking a dependable supplier of dairy products. (Mueller, 

            2011)

I couldn’t agree more—inconsistency costs money, and more importantly, trust.  In any industry, any organization, any household or relationship, inconsistency will cost you in the long run.  

Reference

Mueller, G. (2011, March 16). Dairy farming is facing a new dawn . Retrieved March 2011, 2011, from Progressive Dairyman : http://www.progressivedairy.com/index.php?option=com_content&view=article&id=6027:dairy-farming-is-facing-a-new-dawn&catid=49:management&Itemid=75&utm_source=E-newsletters&utm_campaign=6df80e3dcd-032211PD_Extra&utm_medium=email

Another Lesson from Harry Truman

“In the long view, no nation is healthier than its children, or more prosperous than its farmers,” President Harry Truman, (Laws, 2011).  I had to do a presentation in fourth grade on a historical figure, naturally I picked a president—I loved presidential facts and history.  So here I am 11-12 years later quoting Harry Truman once again.

There is a lot of truth in those words you see, “[…] no nation is healthier than its children, or more prosperous than its farmers.”  I found this quote in a recent article, Different farm bill for 'different times'.  As the discussion starts over the creation of the 2012 Farm Bill, Sen. Debbie Stabenow, chairman of the Senate Committee on Agriculture, Nutrition and Forestry, addressed USDA's Agricultural Outlook Conference on the importance and dedication required to the task at hand.  The senator compared the economic circumstances for farmers today to that of the Great Depression.  But in contrast, the next farm bill, the Senator pleaded, needs to build on principles rather than farm programs; and she, “[…] indicated she will work for smarter, simpler and streamlined farm programs.” (Laws, 2011)     

The national and state budget situations, as bad as they are, will positively influence this goal.  Recently, everyone is up in arms over budget cuts.  Last November, the American tax payers voted for less spending, but once THEIR organizations/affiliates are targets of budget cuts, they turn into hypocrites.  

I believe some of our most effective legislation can be enacted at this time.  The general public and mainstream media portrays agricultural subsidies as wasteful, and now the time has come for effective change.  Many farmers recognize the programs that don’t benefit them or the long term productivity of agriculture—more times than not they benefit land owners that enroll now non-producing farm land in conservation programs—robbing tax payers of funds that could be used in ‘smarter, simpler and more streamlined farm programs.’ 

The strength of the American and Global economy is very much influenced by the strength, and more so the stability of the American agricultural economy.  Comparatively, the devastating dairy situation in 2009 matched that of the American economy, did it not?  And how did we try to fix both, lots of stimulus money!  Did it work?  The real question, why did it happen and what policies and farm programs are truly needed?  Interestingly, the USDA has changed its direction on dairy program subsidies, focusing more on risk management, notably through Dairy Livestock Gross Margin Insurance, rather than the MILC (Milk Income Loss Contracts) that pay direct payments for lost milk sales income.  I believe this encompasses the ‘smarter, simpler, streamlined’ approach to farm programs, and agree with it. 

We have already realized our children are not as healthy as they could be, and have thus started working towards reducing childhood obesity.  It is now time, in the midst of national and state budgets crises and the formation of the 2012 Farm Bill, to apply the same philosophy to farm programs—funding for prevention measures and correction—and live up to Harry Truman’s truth.    

   

Reference

Laws, F. (2011, March 4). Different farm bill for 'different times'. Retrieved March 6,       2011, from   Western Farm Press: http://westernfarmpress.com/government/different-farm-bill- different-times

        

 

Changing Farm Structure and the EPA

Where to begin—there are so many areas that impact this general topic, Environmental Regulation (I will refer to this as Env’t Reg) pressure on agriculture.  But we must all remember this fact: the large majority of farming operations in the United State are owned and operated by families and thus are not publicly traded companies/organizations. 

   

I have looked at many articles on this topic and there are many approaches to take and subtopics to cover to truly understand the severity and shear headache of dealing with the impacts of ever increasing and costly env’t regs.  For this post, (and for the purpose of not losing my readers), I will look at just one reference.  

Many in defense of large farms, Concentrated Animal Feeding Operations (CAFO), or ignorantly referred to as “factory farms,” illustrate the high standards of environmental quality they uphold.  This point is verifiable, as these operations (CAFOs) have their own set of env’t regs.  Thus, in most cases, many activists and environmental agencies have claimed that increased env’t regs are focused on the larger farms and thus lessens the burden on smaller farms.  In various ways this is true, as farm size does mandate differing compliance levels, but there are many standards that have to be met industry wide.  Here is the catch, and where farm size depends on your financial ability to meet these general evn’t regs.  In simple terms, larger farms can distribute the installation costs of needed apparatuses to meet standards over more producing units and thus having less impact on their margins and bottom lines.  Interestingly, the University of Nebraska-Lincoln’s Agricultural Economics Department concluded the following after their extensive look at the Environmental Regulations and the Exit of Small Hog Farms.

            Empirical results show that environmental regulations had a negative and statistically significant effect  on the supply of hogs from small and as well as large farms, and on the number of small hog farms. The negative effect provides indirect evidence that regulations induced a greater shift in the marginal cost curve for large farms than for small farms. Stated differently, the negative effect implies that environmental regulations significantly affected the entry and exit of U.S. small hog farms thereby contributing to the changing structure of the U.S hog industry during the period 1994- 2006. (p, 21,22).

 Changing Structure                For many involved in agriculture, this is very apparent, but for those in the general public, it seems to be even more apparent and certainly increasingly misunderstood.  What many see as a shift to “factory farming” is seen by the actual farmers/producers as a shift towards a more efficient means of operating through the advantages of size and a “means of survival.”  Production cost pressures are constantly increasing in agriculture.  Energy, feed and other inputs have always existed.  But in the last 20 years costs associated with env’t regs have emerged and have (in many ways negatively affected) the bottom lines of farmers industry wide. 

This topic is far from being completely covered and will be addressed in future blog posts.  The issue(s) are very complex, but need to be presented—as they bite the hand that feeds you!

Reference

Nene, G., Azzam, A. M., & Schoengold, K. (2010). Environmental Regulations and the Exit. Retrieved Feb 27, 2011, from Faculty Publications: Agricultural Economics: http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1107&context=ageconfacpub

The Farmers' Cabin Fever

It’s that time of year…in regards to winter weather…it’s the beginning of the end, and the nice days are merely a tease.  The end of this week means a lot to farmers here in New York, the annual Farm Show in Syracuse.  Just in time, as a matter of fact, to get farmers out of the barn, house and shop to do what they love best…shoot the bull and gossip (at the same time learning new farming tips).  

Farming schedules are dictated by the weather and there is a natural instinct in farmers every spring to get on the tractor and go to the field.  The New York Farm Show is a stepping stone to rejuvenating this drive.  By getting out seeing the newest and coolest equipment, talking to friends, acquaintances and people in general, farmers industries wide, get the seed of motivation planted in them.  When they get home after the event, many are a whole new person.  Before long they are getting jobs done they have been putting off most of the winter because there was really no reason to tackle them.  Many spend the winter months doing the tedious work of taxes, crop planning, year beginning balance sheets, tending to the cows (for dairy farmers), playing catch up (as always) and for some, seasonal butchering.  But now they find themselves out in the shop changing oil, replacing plow shears, greasing all the equipment and adjusting the drill and corn planter. 

For many, getting into the field and working the ground, fertilizing, planting and spreading manure is practically a sport.  There is competition in many farm communities to be the first one to be plowing, planting, etc…and it goes on with mowing hay and chopping corn later in the year.  The red-blooded American farmer embodies the American dream and has unparalleled work ethic.  

On a more serious note, events such as the New York Farm Show do more than just motivate, they provide much needed time to get away from the farm work and get some unseen therapy.  Sadly, according to New York Farm Bureau Vice President Eric Ooms, as of January 2010, statistics from New York Farm Net, a not-for-profit organization that runs a free assistance program for distressed farmers, show that suicides are on the rise in the state.  2009 was a devastating year for dairy farmers all across the United States and since then it has been exceptionally hard to recover.  So with this in mind, as little as the event may seem to the general public, such on goings as the New York Farm Show come at an opportune time during the year when EVERYONE is notably tired and sick of the weather.  (Meat Trade News Daily) 

Reference

USA-Tragedy of Farmers Suicide. (2010, January 28). Retrieved February 24 , 2011, from Meat Trade News Daily : http://www.meattradenewsdaily.co.uk/news/280110/usa___tradgedy_of_farmers_suicide_.aspx

Everyone wants a piece of the pie—and the pie just isn’t big enough!

One morning earlier this week I found myself attracted to an article in the local Syracuse paper discussing the rising corn prices.  To the average Joe—booorrrrinnng, but naturally for me, being the farm kid and agriculture major, I started to read it sipping my coffee at the nearby diner (after a long morning of barn work, I might add).  It’s main point— the corn surplus this year will be as low as it was in 1996, consequently from crop failures and drought from this past summer.  Other information, such as rising demand from the ethanol industry, and numbers were mentioned, such as the cost of corn might hit an all time high of $7.65.  So by then, my analytical mind was running at full throttle and my blood was starting to simmer—over the fact that, in many ways, environmental policy and a national thirst for energy and pleasure items will cost the poorest and most vulnerable the most—not to mention the economic health of the country.

Corn is used in almost everything—the big focus recently by consumer advocates seems to be on all the high-fructose corn syrup that is supposedly found in EVERYTHING.  Well, no kidding, we love sweets and this source of sweetener has emerged to be the most efficient.  At the same time, the government subsidized and regulated ethanol and bio-fuels industry is stuffing their faces with the commodity.  Yet still, dairy, beef, poultry, and hog producers are using corn to feed their livestock, like always.  Corn might as well be considered gold by standards today, it is not just a food source—it fuels the economy as well as our cars.

Now let’s look at the statistics, shall we.  The latest outlook at World Agricultural Supply and Demand Estimates published by the United States Department of Agriculture, February 9, 2011, figures that out of the total supply of 14.175 billion bushels of corn in the United States, 4.950 billion bushels will be used for ethanol production, which closely matches the 5.2 billion used for feed and residual and 6.35 billion for food, seed and residential use.  Even more so, the year’s surplus is projected to fall in at 675 million bushels, 5% of the starting supply amount, and the same as in1996, the last time we saw multi-year lows (World Agricultural Supply and Demand Estimates, 2011).  And you guessed it, corn prices are at near all time highs—adding strain to pocketbooks all across the already floundering U.S. economy. 

Again, 35% of the United States corn supply is being used to fuel our cars and meet federally mandated ethanol production and use—in the name of sustainability and preserving/strengthening environmental integrity.  While at the same time, feed costs are staggering for dairy and meat/egg production industries—adding to the cost of these products—those that actually provide tangible sustenance.  

Using a food source for energy can lead to devastating circumstances—and this should make perfect sense.  For further proof, it is projected by the United Nations that by the year 2050 there will be a World food shortage.  A comprehensive report outlines the statistics, but simply put, there will need to be a two fold increase in grain production to come close to meeting projected demand.  

With ever vanishing land resources, eroding consumer confidence in food sources (GMOs for example), increasing use of food sources for bio-fuels—it makes perfect common sense that the current trends need to be altered and misconceptions corrected to provide the necessary insurance against this devastating fate.  

Time matched with ever improving advances in production efficiency can only do so much.  Policy and cultural norms will be the deciding factors, more or less.  So my advice to you—think about your consumption of goods that originate from corn.  For example, there is a sign on your local gas pump that says something to the tune of “contains 10% ethanol.”  And though not all ethanol is produced solely from corn, 35% of the U.S. stockpile is used in its production.  Also, take a look at how many of your food sources contain a corn derived ingredient.  Now, consider all the other foods you consume that are indirectly linked to corn, not to mention plastics, etc.  How big is your piece of the pie?   

Supply and Demand, it is a very simple concept—now through Mother Nature into the model—it just got a lot more unstable, right?        

         

Reference

"World Agricultural Supply and Demand Estimates ." 9 February 2011. United States Department of Agriculture . 13 February 2011 <http://www.usda.gov/oce/commodity/wasde/latest.pdf>.

No Winter Wonderland

No doubt, this has been a hard winter in the Northeast.  As reported by the Associated Press (2011) this week, "Farmers in Connecticut alone have lost at least 136 barns, greenhouses, sheds and other structures as snow measured in feet, not inches, accumulated while January passed without a thaw."  The article goes on to share that 85,000 chickens were killed in one such collapse, and 25 dairy cows were killed in another while 200 were saved (The Associated Press, 2011).

These incidences are tragic to their farm owner's--family men and women.  In many cases, when such tragedies happen, they can put the farm operation out of business if insurance is not set in place accordingly, or at the very least take years to recover.  I can personally account of such hardships that has fallen on my family and our neighbors.  In February of 2004, our central region of Pennsylvania was hard hit with an ice storm after a winter of accumulating snow fall.  Our dairy free stall barn collapsed in one corner on that fateful Saturday and neighboring farmers and friends spent 5 hours shoveling off the roof before more damage was done.  But that was not the end.

The next afternoon, as my uncle and our one farm employee were ushering the cows into the holding area for milking, they heard the trusses crack above the milking parlor.  Before long they were up on the roof shoveling again.  We had not bothered shoveling this portion the day before because the snow was slowly falling off, though not as fast as usual.  But the straw that broke the camel's back came earlier in the afternoon--the snow on the bank barn roof that hanged above the parlor finally fell onto the designated surface--and the snow still didn't fall off like it was supposed to.  So there they were shoveling in a frenzy to save the parlor.  It was not to be, within 20 minutes the trusses gave way and the nightmare we were trying to prevent came true.

Like most communities in a time of need, ours found their way to our farm that afternoon, shoveling the rest of the snow off the roof and cleaning up the parlor to return it to working order.  The hours rolled on the and cows grew increasing anxious.  We opened the holding area back up to the rest of the barn, but no more than a few animals moved.  Routine is very important with dairy cows and they knew it was time to get milked.  So the girls waited and waited.  Instead of being milked on schedule at 3 PM, they didn't get the chance until 10PM--and milking took an hour longer due to the cows lengthened time since the morning milking.  We all milked by construction lights and in between make-shift support beams.  Even more tiring, we only got a few hours of rest in between before we were back out at 4 AM to milk again--to keep the girls on schedule.

It was a stressful and scary time for my family, but the support we saw from neighbors was overwhelming.  The wife of that employee I talked about went to the store and spent the rest of the afternoon with my mother making snacks and coffee and the like for the 20 plus extra workers we had on the farm that day.  The local contractor gave us planks and poles needed to jack up the ceiling, and servicemen from the dairy supply company spent their Sunday afternoon rebuilding the pulsation lines and other milking equipment.

Yet we were one of the lucky ones.  Our farm lost no animals that weekend and had sufficient insurance to completely repair the milking parlor within 3 weeks, as well as the free stall barn by the end of the following summer, but not without a fight.  There are farm families out there that have not been as lucky--they have struggled for years until they have recovered, and some never had the chance to.  In any case, a barn fire or collapse has a long impact on those that they affect, such as the death of a loved one or a divorce--where life as you know it has changed substantially.   

References

The Associated Press. (2011). Farmers Watch Harsh Winter Crush Their Livelihoods. NPR. Retrieved from http://www.blogger.com/post-create.g?blogID=6314721199989313412