The Perfect Storm
As the northeast begins to clean up and assess losses in the aftermath of Superstorm Sandy, the unpredictability of Mother Nature is again on full display.
This severe weather event is just one recent example of the types of uncertainties our farmers face day in and day out, and it serves as a compelling argument for the importance of ensuring that our farmers have the tools they need to succeed in feeding our nation.
Unfortunately, the current lack of farm policy, coupled with high farmland prices, is not only worrisome to established farmers, but could also discourage young people from getting involved in agriculture.
Congress failed to pass a new farm bill before the Food, Conservation and Energy Act of 2008 expired September 30, disappointing farmers and legislators alike.
Said David C. Erickson, a farmer from Knox County, Illinois in his testimony on Capitol Hill, "The biggest drawback is the late fall, early winter time-frame when new leases are signed and arrangements are made for the coming growing season … It's difficult to do that if you don't know what type of government programs will be available. It may in some cases prolong that process or people will have to make decisions based on best knowledge at the time."
And now, high farmland prices may discourage those considering a career in agriculture with little to no start-up capital.
In Iowa, for example, farmland rental rates shot up a record 20 percent this year, according to recent U.S. Department of Agriculture findings. About 60 percent of farmland is rented in Iowa.
Because of this price increase, a new, potentially dangerous trend in agriculture is emerging: farm rent auctions.
Public bidding wars are driving up prices and locking farmers into multiple-year contracts they can't afford. Other landlords see what rents are bringing at auction and want the same.
"Agriculture needs young people to stay interested," Pam Johnson, president of the National Corn Growers Association said in a recent interview. "It boils down to economics. They need to be able to make a good living."
Between the high cost of fuel, farmland and other inputs, record weather events, and a lack of certainty in farm policy, we could be witnessing the making of another perfect storm. And this one's headed straight for the U.S. economy.