What Farmers From U.S., Canada, Argentina and Brazil Are Asking and Saying

January 18, 2013 03:12 AM

via a special arrangement with Informa Economics, Inc.

Lack of moisture | Crop insurance | Hog confinement | Cotton acres | Argentine taxes | Ethanol

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The following are questions and comments I have received from farmers and others during a recent spate of speeches throughout the United States and Mexico:

  • Planting decisions. More and more farmers are leaving corn, soybean planting decisions to the last minute. Some said they want to wait until March 15 to see crop insurance program details before deciding on what to seed.

  • Crop insurance perspective. Several Midwest farmers had the same refrain: "This is the first time in decades that I received a crop insurance indemnity payment. If I add up all of the premiums I have paid over that timeframe, the government is still way ahead, so even though my insurance buy up is subsidized, it still rankles me to hear I am subsidized when my payouts are so far ahead of payins. I know it's insurance, but....

  • South American farmers look with envy at crop insurance program options for U.S. farmers. "We don't have similar programs where we farm," said one.

  • Less corn on corn ground in the US continues a development seen the past few years.

  • Biggest U.S. farmer concern: Lack of pre-planting moisture to date.

  • Frequent farmer question: Do you trust USDA reports on production and grain stocks, and demand projections?

  • A frequent US corn grower question about ethanol: Is the Renewable Fuels Program mandate for corn safe, and what will happen when it comes up for review?

  • Some cutbacks in U.S. cotton acreage ahead may never come back. One Georgia farmer said, "I've gone to way more corn and soybean plantings, and I sold my last cotton picker and I won't buy another new one. I like growing corn. Don't tell the Midwest guys, but it's a lot easier to plant, and a lot cheaper!"

  • Several big hog producers have indicated expansion plans this year in their area, in part on expectations China will step up imports of pork.

  • The cost of moving away from hog gestation crates is huge, with some farmers saying it means 25 percent less space for them to raise hogs. Some say they will change who they sell their animals to if their buyer asks them to change their production pattern.

  • Direct payments for 2013 crops. There are still doubts out in U.S. farm country about whether direct payments will be made on 2013 crops, despite a pledge by House Ag Chairman Frank Lucas (R-Okla.) recently that they will, indeed, be part of the 2013 safety net. Several farmers mentioned comments from Sen. Chuck Grassley (R-Iowa) and others that have made then wonder if direct payments will be in place. All farmers, however, know that the days of direct payments are numbered, eventually with the successful passage and signing of a new farm bill.

  • SURE: Is the Supplemental Revenue Assistance Payments Program (SURE) program available for 2013? Answer: No.

  • Shallow thinking. Some farmers admit that the discussion about a "shallow loss coverage" -- the first 10% to 11% of loss -- may not be the best thing for agriculture to be undertaking in the current budget-cutting climate in Washington. "After all, my auto and home insurance has a deductible," said one. Even some who support the program proposal admit farm groups and others should have used "another term" for the concept.

  • The business/equipment depreciation language in the recent fiscal cliff package brought this remark from one farmer: "I sure wish I would have known that was going to be in the package because I would have bought some more equipment in 2012."

  • Rural lenders say they are feeling very positive about their balance sheets and their farmer borrowers, noting many land purchases have involved little to no financing. That's in no small part due to the solid financial position farmers are in but also that they have kept debt down and the lenders themselves have limited exposure on farmland purchases.

  • Argentine taxes. From an Argentine farmer: "The government takes about a 70 percent bite out of my operations for taxes."

  • Cost of DDGs. From an Ohio hog producer: "The cost of DDGs has increased so much that I can't use it now, so I went to alternatives."

  • A question many raised: "What happens if the U.S. has another below-trend corn yield?"


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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