I first started reporting on agriculture in the late 1980s when corn prices varied little from the $2/bu. range. In addition to writing about agriculture, I also did a fair amount of farm photography. Often, I’d frame up a potential photograph of a corn grower beside his equipment, and decide not to take the picture, because the farmer looked far too serious or uncomfortable.
Whenever that happened, I’d typically say something like, “okay, now think $4 corn” – and then take the picture. When doing so, I’d at least get a little upturn in the lips, as the farmer sometimes took on a somewhat dreamy look, which made for a much more appealing, interesting photo.
Nowadays, I wonder what number I’d have to throw out to get a farmer to react positively for a portrait picture. It wouldn’t be $4 or $6 or even $8 corn. Those are either old-market numbers or a soon-to-be-achieved number. (See “Is $8 Corn The Near-term Norm?”)
No, I doubt if even a $10 or $12 number would give me the desired effect for a good, farm-portrait picture. What many corn growers have learned in recent years is that a higher price doesn’t guarantee a profit, although this year might be a welcome exception.
Another sharp spike in oil prices, bad luck with weather, continuing land-price surges, increased insect and disease pressure, a change in tax laws and government safety nets, extreme environmental regulations or any number of things, both likely and unlikely, could cause even $8, $10 or $12 corn to be unprofitable. Yet, some things remain positive: the world’s population keeps increasing and demand for corn keeps rising, both for food and fuel. Plus, there aren’t that many good places in the world for growing corn that aren’t already being used.
Still, as the price for corn increases, so does the call to decrease government safety nets for farmers that have long helped keep “food security” a top priority, both for the U.S. and the world. Famine is a common problem in areas where government unrest and high fuel prices keep plentiful food from reaching hungry people. Stop providing incentives for U.S. farmers to produce a lot of food, or make it economically turbulent or difficult to do so profitably, and there would be much more famine in the world, and not just in third-world countries.
Currently, government subsidies and tax breaks for corn ethanol appear to be endangered when considering the most recent U.S. budget-cutting debates. The critics on one side support ethanol, but not ethanol from corn production, which they incorrectly think unduly degrades the environment. Instead, those critics support ethanol production from other organic matter sources that have yet to prove practical or profitable. Other critics simply want to scrap corn ethanol investments entirely to focus on drilling for oil and other fossil fuels in a way that would establish what might be called national “fuel security.”
Instead, I say let’s have both food and fuel security. Let’s ease restrictions and obstacles to U.S. fossil fuel exploration and production, and any other potential energy source, and support this country’s corn producers as they willingly take on the difficult task to feed the world and provide at least a partial safety valve in sustaining national fuel security via corn ethanol.
Just think “long-term, profitable corn.” Picture that.
Whether you agree or disagree about the need to maintain or enhance government policies to ensure corn grower efforts to feed and fuel the world are successful, I’d be happy to consider your opinion. When writing, please let me know your name, where you farm or work, what your comment is and whether or not I have permission to use your comment in a future Corn E-Digest newsletter.
You can contact me (John Pocock) at: [email protected]. You're also welcome to write to me if you have concerns or questions about this newsletter or if you have ideas on topics you’d like to see me write about for future issues. I look forward to hearing from you.