8 July 2009
O
Ohio’s Country Journal
PINION
Livestock producers have major stake in commodity program
Ohio’s Country Journal Staff
800-686-8299 • 614-273-0465
ByDARyLLE. RAy While the big boys are indeed very adequate reserve stocks of corn and soy- Fax 614-273-0463
With all of the challenges faced by the much affected by difficult times, in terms beans with sensible price bands, livestock
1625 Bethel Road
livestock sector over the last several years of the number of livestock producers producers would have been better able to
the last thing they needed was a 250% affected, cow-calf and moderate-sized factor in feed cost changes into their budg-
Columbus, OH 43220-2071
increase in the cost of the grains and dairy and hog operations stand out. ets. And, while they certainly would have
www.ocj.com • E-mail: ocjstaff@ocj.com
oilseeds they use as feed ingredients com- With the exception of dairy, livestock seen higher feed costs in the face of
ing at the same time as they faced a dra- operations have not received the same increased demand for corn to make
production Department
matic increase in fuel costs. kind of attention by farm programs as ethanol, the presence of reserves would
Editor KYLE SHArP
But that is what has happened. At the major crops. have protected livestock producers from a
same time as feed costs have increased, the While livestock output adjusts more tripling of costs.
ExT. 207, ageditor@ocj.com
prices received by producers for their ani- readily than the aggregate of major crop The markets certainly would not have
Managing Editor KIM LEMMON
mals have decreased. The U.S. average output to reduced prices and, thus, been as reactive to the spring floods of
price for cattle, all beef, was $90.80 per cwt. arguably have less need for “commodity 2008 in the presence of a storage program
ExT. 209, ocjstaff@ocj.com
in September 2006 — when the price of programs,” livestock producers have long that could have provided corn and soy-
Assistant Editor MATT rEESE
crops began to increase — and by March pointed to, and often bragged about, the beans in the case of a reduced crop.
2009 the price had fallen to $78.50 per cwt., fact that there are no programs for meat These past two years have dramatically
ExT. 210, mreese@ocj.com
a 14% decrease. In that same time period, animals similar to the federal support pro- illustrated the risks livestock producers run
Accounting/ SHErYL JOHNSON
calves fell from $135 per cwt. to $104 per grams for major crops. in the absence of a crop reserve program.
cwt. and hogs, all, fell from $48.90 per cwt. But not having livestock commodity- As a result, it seems to us that livestock pro-
Circulation ExT. 201, sjohnson@ocj.com
to 44.20. like programs and not being affected by ducers would want to support a sensibly
Web Developer Jamie Banbury
This combination of higher feed prices commodity programs are two different designed and consistently administered
and lower output prices has caused wide- things — a distinction that many livestock stock reserve program that could provide
Ext. 203, jbanbury@ocj.com
spread survival problems for livestock and producers often ignore. Just as livestock them with a stable range of feed costs.
Marketing specialists
dairy producers. The most visible casualty profitability is affected by normal fluctua- With a reserve program, at the same
is Pilgrim’s Pride, one of the major broiler tions in feed prices, it is also greatly affect- time that livestock producers would be HEATHEr HETTErICK
integrators, but it does not end there. ed by changes in grain prices caused by protected from wildly gyrating feed costs,
419-303-4667, heather@ohioagnet.com
Pilgrim’s Pride has terminated producers farm programs — sometimes positively, crop producers could earn more of their
or reduced the number of grow-outs sometimes negatively. income from the market during times
LOrI LAWrENCE
allowed, putting a large number of indi- There is no doubt that farm legislation when stock is added to the reserve 614-395-9513, llawrence@ocj.com
vidual farmers in trouble. since the 1996 institution of direct pay- instead of being dependent upon massive
Countless dairy, turkey, hog and cattle ments and the marketing loan program, government subsidies.
Published by
producers have also seen their financial coupled with emergency and counter-cycli- The price experiences of the past two
AGrICOMMUNICATOrS INC.
existence threatened or destroyed after the cal payments, enabled livestock producers years following the tens of billions of dol-
hefty margins of a few years ago turned for years to purchase grain and oilseeds at lars spent to prop up crop incomes in
Publisher BArT JOHNSON
seriously negative. prices well below the cost of production. many of years since 1996 makes this an ExT. 205, bjohnson@ocj.com
In the case of cattle and hog producers, But that same legislation left livestock ideal time to re-evaluate the operation and
prices received by cow-calf operations and producers more vulnerable to severe purpose of farm programs.
Ohio’s Country Journal is not responsible for more
feeder pig producers usually get hit the price spikes than prior years because
Daryll E. Ray holds the Blasingame Chair of
than one incorrect insertion of an advertisement
hardest and earliest as calf and feeder pig grain reserve programs and their price-
Excellence in Agricultural Policy, Institute of
and will rerun in a later edition or cancel charges on
Agriculture, University of Tennessee, and is the direc-
prices are bid downward reflecting the moderating effects were eliminated in
the incorrect part of the ad which is in error only.
tor of UT’s Agricultural Policy Analysis Center
deteriorating profitability of cattle and hog the 1996 legislation.
(APAC). Contact Ray at 865-974-7407 dray@utk.edu
no copy of a questionable nature knowingly will be
finishing operations. If the United States had maintained
or www.agpolicy.org.
printed. also, this publication will not be respon-
sible for any misunderstanding or losses which
may develop through its advertisement. We reserve
Despite critics, research clear on food inflation
the right to censor or reject and to determine what
is questionable or objectionable advertising.
ByRICktOLMAN, CEO, NAtIONALCORN focus on this miniscule component rather broad mandate, but an allowance.
G
Copyright, 2009, agriCommunicators inc.,
ROWERSASSOCIAtION than the bigger question of the driver of Ethanol critics argue that doing so
As the folly of the food vs. fuel fiasco the other 80% to 90% of food cost increases poses a major shortfall of availability of
Ohio’s Country Journal. no part of this publication
becomes clear, serious damage has been
may be reproduced in any form or by any means,
not linked to corn provides sleight of hand corn in the next five years, because
mechanical, photocopying, or otherwise, without
done to the critical relationship between that would make David Blaine or Penn ethanol production will require an
the express written permission of
the nation’s farmers and the people that and Teller proud. increasing amount of corn.
agriCommunicators.
turn these resources into finished food Their most recent attempt to keep this Actually, this is a good thing —
products for consumers. Even more evi- comedy of errors on the media stage is a because thus far expanded ethanol pro- ohio’s Country Journal (issn 1082-
dent is that the Grocery Manufacturers pair of non-peer-reviewed works of fiction duction has come from record corn pro- 7854) is published semi-monthly 24
Association is now driven by a philosophy that they dare to call studies. Both are done duction gains. The real experts say we times a year by agriCommunicators, inc.,
without vision. by members of what should be called the are on the precipice of yield growth 1625 bethel Rd., Columbus, oh 43220-
According to the Kiplinger Ag Letter, Cheap Corn Coalition (GMA, the Turkey here-to-for unseen by man. If we are
2071. periodicals postage paid at
“the food vs. fuel protest against ethanol is Federation and the American Meat going to see yields grow worldwide,
Columbus, ohio, and additional mailing
proving to have little merit,” noting that Institute). They boldly state that raising the and have the capacity to make 17 bil-
offices. posTMasTeR: send address
even though corn use for ethanol rose 40% allowable limits of ethanol in gasoline to lion gallons of ethanol in the United
changes to ohio’s Country Journal, 1625
last year, and corn supplies were tighter 15% will result in higher commodity costs States within 20 years with no change
bethel Rd., Columbus, oh 43220-2071.
than expected, the price of corn dropped. for livestock, poultry and food producers, to corn acres, this seems like a win-win
editorial and advertising offices are locat-
In fact, ag commodities from corn to and higher food prices for consumers. One for family farmers and energy belea-
ed at the same address. annual subscrip-
veggies to meat make up only 20% of con- study was directly funded by GMA, the guered Americans.
tion price is $14 per year. ohio’s Country
sumer food costs. The Congressional other the Turkey Federation. If GMA and its Don Quixote cohorts
Journal reserves the right to edit or refuse
Budget Office goes even further, reporting This centerpiece of their argument is can’t reform themselves, the American
all material which might be objectionable
that ethanol’s impact on 2008 corn prices fallacious because the current proposal public at least deserves to know the evil
in content or appearance. no material
amounted to less than one percentage before the EPA would allow a move from dragon they are concocting is really a
contained within ohio’s Country Journal
point of the total 5.1% rise in food prices 10% ethanol blends up to 15% blends in windmill with the capability to power
may be reproduced or used without the
last year. Their ability to keep the public
prior approval of ohio’s Country Journal.
markets where it makes sense. It is not a this nation. It’s time to let the fantasy go.
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