Local farmers and producers gathered at the Monsanto facility outside of Huxley last Friday for the first Ag True Blue Event educational seminar. Sponsored by South Story Bank and Trust, the event attracted more than 50 people, who gathered to hear talks about ag markets, ag law changes and information from Iowa’s secretary of agriculture.
Looking ahead at agricultural markets
Steve Reese, owner of Sciota Trading in Ames, spoke about what farmers can expect the corn and soybean markets to look like for the coming year. He said the past three years have been “extremely profitable” for farmers, with good corn and soybean prices, and high land values.
“These are the days we’ll tell our grandkids about,” Reese said.
However, he urged farmers to be cautious because things could go back to the way they were when the markets fell in 2008.
Corn futures didn’t perform the way experts predicted last year and the amount of world corn on reserve is low. In recent years, producers have been increasing the amount of corn that is grown, but the amount on reserve has not been increased. He said we have been “on the razor’s edge of someone going hungry,” but there is some cushion now.
“We shouldn’t be worried, but we should be concerned about it,” Reese said.
Each February, the United States Department of Agriculture holds an agriculture outlook conference and announces what they expect yields to be for the coming year. Reese said if they are looking at 165 bushel/acre yields, with approximately 93 million acres planted and a 2.5 billion bushel carry-out, prices will be lower than they were this past year.
Unlike corn, the world soybean carryover is large, with normal levels of South American crop. The 2013/2014 soybean crop has cause for concern for Reese because of the cancellations on selling out.
In closing, Reese told those attending that if the prices are good today, they should sell their crop rather than risking having to sell it for a lower cost at a later date.
New agricultural laws will impact farmers
Roger McEowen, professor of agricultural law at Iowa State University, talked about the changes in laws that will take effect as a result of the American Taxpayer Relief Law that was signed earlier this year, as well as Obamacare. The changes include the number of people who can be covered under certain plans and passive vs. non-passive income in terms of rental property.
McEowen advised those attending the seminar to seek help from someone who knows about the law changes so they can better understand how their operation will be impacted.
Insight from secretary of agriculture
Iowa Secretary of Agriculture Bill Northey was the final speaker during the seminar. He talked about how agricultural trade is important on many levels. He gave the example of a chicken. In the U.S., a majority of the population prefers white meat, while Asians prefer the chicken’s dark meat. People in other countries even consume the chicken feet.
“We take each part of the animal and sell them to people who want them,” Northey said. “No one will pay as much for those parts as the people who want them.”
With 450 million hogs in China, and pork making up 75 percent of the Chinese people’s diet, the Chinese need corn and soybeans to feed those animals. Sixty percent of soybeans traded in the world end up in China.
“China is a big player in this market,” Northey said.
Northey also talked about California’s efforts to make it so eggs cannot be brought into the state that are not produced the way they are in California. The state wants caged chickens to have “flap room,” so they can move about in the cage. The King Amendment, as U.S. Rep. Steve King’s two amendments in the House’s Farm Bill are called, would prevent this from being put in place.
“It could start with eggs, but if it doesn’t stop with eggs, it could be detrimental,” Northey said. He doesn’t want to see California start a trade war with the rest of the country.
When asked if the Farm Bill will continue to be pushed down the road, Northey said he sees the House and Senate coming together for parts of the bill, but they are not clear on other parts. The King Amendment is one of those parts that has delayed the approval of the bill. Northey said there was not enough time to work out the details of the amendment and clarify the wording so it does not lead to varying interpretations. The SNAP program is another issue causing delay, with each side wanting different levels of funding allocations.
“The Farm Bill is a mess and it should have been taken care of by now,” Northey said. As of now, the current farm bill has been extended through Jan. 31. Northey said he hopes Senate and House of Representative members are out talking to their constituents, so they can come to a conclusion by the end of next month.