Ag issues forum shows highs and lows of industry trends
With crop prices looking quite bullish recently -- in some cases, reaching record highs -- the outlook for agriculture in 2008 appears pretty good.
But if you look a little deeper, things may not seem quite so rosy -- because expenses such as health insurance and fuel are also soaring.
That was the general message conveyed at Thursday's Ag Issues Forum in Callaway, sponsored by the Detroit Lakes Regional Chamber of Commerce.
Farm business management instructor Randy Zimmerman of Northland College made a presentation on the projected profit margin for wheat, soybeans, corn and sugar beets in 2008.
As an example, despite having the highest projected price per bushel, at $40, and the highest total product return per acre, of $880, sugar beet producers also have the largest projected expenses per acre, at $935. This leaves them with a net return per acre of minus $38, for a projected profit margin of -4 percent.
Grain producers fared slightly better in Zimmerman's projections, with wheat at .36 percent profit margin (less than 1 percent), soybeans at 16.17 percent and corn at 2.69 percent.
"There is a perception that things are really, really good right now in farm country," said Sharon Josephson of Congressman Collin Peterson's office, who was at the forum to give the audience an update on the progress of 2007 Farm Bill legislation.
In light of projections such as Zimmerman's, Josephson noted that "although things look good on the surface, the need for a safety net (in the form of U.S. commodity programs) is still there... that's the challenge Collin faces every day."
Though the U.S. House of Representatives passed its version of the Farm Bill in Juiy, the Senate's piece of the equation hasn't fared so well; it remains in limbo. If this legislation is not passed, Josephson said Congress is faced with the possibility of extending the 2002 Farm Bill, or even reverting to the standards of the 1949 Farm Bill.
Neither of these alternatives are very attractive, as each has its drawbacks. The 2002 Farm Bill would exclude important provisions for dairy, fruits and vegetables, and energy that are in the 2007 House bill. The 1949 legislation does not contain provisions for wetland protection.
And then, Josephson said, "Looming over everything is perhaps a presidential veto."
Other presentaters at the forum included veterinarian Dennis Lange, who discussed Minnesota's recent loss of its "TB-free" status.
Lange noted that the detection of tuberculosis in six herds of cattle in the Roseau area has led to the need for costly testing in order to sell livestock out of state.
Becker County Highway Engineer Brad Wentz reported on the county's five-year highway plan. Because of state and federal funding cuts for transportation, there's not a lot of reconstruction or grading projects in the plan, Wentz noted. Rather, the emphasis has been on "trying to maintain what we have."
"We need a comprehensive (transportation funding) bill passed this year," said Wentz, encouraging those present to contact legislators about the need for additional funding.
Dallas Flynn, an organic farmer who raises shitake mushrooms, tomatoes and other chemical-free crops on his property, said organic farming is a growing field in Minnesota, with the amount of land being used for organics increasing at the rate of about 15,000 acres a year.
A member of the Detroit Lakes Farmrers Market, Flynn noted that the number of farmers markets in Minnesota is also expanding, from about 50 five years ago to more than 200 this year.
"There is profit to be made (in organics)," Flynn said, adding that more and more people are beginning to realize the importance of growing and eating foods locally, without the preservatives and pesticides used on imported fruits and vegetables.
"I'm not saying organics is the way to go (for everyone)... but it's something to look into," Flynn said.
One key to being successful as an organic farmer, he added, is that "you've got to love gardening."