First the drought monitor remains basically unchanged except for a slight expansion of abnormally dry areas. Good progress is being made on corn and soybean harvest. Some grain sorghum is also going into bins. Yield reports are a bit all over but overall fair to good with some excellent yields. There are reports of 130 bushel per acre milo west of Barton County. Excellent progress has been made on wheat planting and overall emergence and early growth has been good to excellent. The weather forecast for the coming week is mostly favorable and progress should continue. Now onto the conclusion of the Fate of Farmers.
The past two weeks briefly described the evolution of the farm economy since the 1930s, Federal programs, and the difficulties faced currently. Going along with this, it would be enlightening to read Dale Hogg’s article from the October 18 Tribune regarding the impact of agriculture on the economy of Kansas and Barton County. Briefly what could help turn around the farm economy for producers. As a side note, nothing here is intended or meant to be political.
• Settle the “Trade Wars” underway. As of this column, nothing has been settled in writing. The ag economy relies on exports to support prices and increase demand. Even in a year with lower overall crop production with the weather and good demand, demand needs to increase. These wars need to be solved yesterday.
• Undo the damage down to export markets with the Trade Wars. Many countries that had relied on us for decades are now leery. History shows that once this happens, it is extremely difficult to recapture them. Herculean work by commodity groups and the Federal Government is needed if there is any hope of recapturing markets. Along with this, these groups need to work overtime to develop new markets.
• The RFS (renewable fuels) need to be fixed. While there has been discussion along these lines, nothing really concrete has happened. Briefly, there are targets for the production and use of ethanol from grain and biodiesel from oilseed crops. Refiners worked successfully to obtain relief from these and many refiners, especially smaller ones, were granted exceptions. This has hurt the ethanol industry, shuttered ethanol plants, and resulted in less demand.
• Simply put, Profits = Total Revenue – Total Costs. Producers have no real control over prices. They either accept or reject the offered price. They can increase total revenue by producing and marketing more but that results in an increase in variable costs. The practical way to maximize profits is to decrease total costs. Not that money shouldn’t be spent but to be spent efficiently. Many producers are already deferring capital expenditures but can’t do so forever. As best as practical, producers must find ways increase efficiency both economically and agronomically.
• The Secretary of Agriculture recently stated that a way to increase profitability and efficiency was to increase farm size. However, data would indicate that not to be necessarily true. The key to efficiency, while adequate size is a factor, also revolves around management decisions and in fact large operation may be in many ways inefficient. It is more logical to find ways to increase efficiency than consolidate, for the overall health of the farm economy.
Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207.
