Commodity prices are on the decline and will probably continue on that path until the election is over. But what will happen after the election – will there be more of the same or will there be change?
With the recent forecast of U.S. farm incomes hitting their lowest point since 2009, this year will be painful for agriculture.
Net farm income will drop more than 10% to probably less than 70 billion dollars, as predicted by the USDA. This is the third straight annual drop after farm proﬁts soared to all-time highs in 2013. This is not only taking its toll on land prices, but it is deflating our well-being.
Such a forecast reflects the continued slump in the U.S. agricultural economy brought on by bumper com and soybean harvest as well as existing large inventories, including wheat. This fall, U.S. farmers are expected to make record com and soybean harvests, adding to the hefty stockpiles that could further increase pressure on commodity prices.
The USDA projected annual crop receipts would fall about 4% to more than $180 billion this year amid declines in prices for major U.S. crops. Meanwhile livestock receipts are expected to drop about 10%, thanks to lower prices for most livestock production.
This could be a windfall for livestock producers, as feed costs continue to drop. But don’t get too complacent in your comfort zone, as it’s time to start forward pricing. Livestock numbers will increase, congruently with proﬁt margins, making for margins that can only be managed with a livestock marketing plan.
There is so much uncertainty regarding this year‘s election, that it’s going to be difficult to put a plan together, but whoever wins, I think you can be certain that government subsidies will be out of the picture. The days of farming the mailbox are over! This country can no longer afford to shore up every industry that hasn’t done a good job of managing its own business, be it ag, auto, financial, you name it.
In my opinion, bailouts are for losers. But if you or I lose, where‘s the government bandaid? Just as you and I have to stand on our own, so should the likes of every segment of our economy.
Just as the government isn‘t there for individual failure, it is there for the incompetent lack of will to work. Those people live better than the hard workers that can’t seem to make ends meet. Wouldn’t it be nice if we would elect a president that would ﬁx these inadequacies?
Agriculture is no different. It shouldn’t expect to be paid for not producing, doing a poor job of farming, or poorly managing risk management. Examples of this were Soil Bank starting back in the 50’s, the dairy cattle buyout in the 80’s, and more recently set aside acres and production quotas. Millionaires became multi-millionaires, while the hard working farmers that needed every increment at his disposal just to make a living were left holding the bag.
This is what so often happens when government sticks its nose in other people’s business. If the government would stick to that for which it was intended, to govern, the national debt could be wiped out and individual businesses such as farmers would stand on their own.
Is this what we’ve come to expect from our next president? That’s the question that will be on the ballot this year. In my opinion, the distinction between the two candidates is as clear as black and white. It’s either more of the same or make some major changes. Change would be as refreshing as a breath of fresh air.
Perhaps too much to ask for, but wouldn’t it be nice to even the playing ﬁeld, letting those that get dirt under their fingernails and muck on their boots compete competitively with the unattached rich socialite that has no more vested than his pocket book. Without regard for heart and soul, farming would be no more than a factory producing nuts and bolts. But farming is still more about a way of life than it is about the fruits of labor.
Like the spoils of a politician, the political patronage enjoyed by a successful candidate is to equate to that of a farmer. Without the passion of the presidency, there’s nothing more than a czar reining rough-shod over a periled America.
We shouldn’t let this happen, we have too much at stake — such as our farms.