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Kron: Farmers' Input Needed for Farm Bill Safety Net

by Jerry Goshert

Published: Friday, January 27, 2017

Indiana farmers attending the Fort Wayne Farm Show last week were told they can't afford to be on the sidelines when farm policy is up for discussion.

Congress is looking for input on key topics like crop insurance and commodity programs in the 2018 Farm Bill. According to Indiana Farm Bureau President Randy Kron, those who write the next farm bill want to hear from farmers about the type of safety net that works best for them.

"You're going to have to speak up," said Kron, who offered comments on the direction of agriculture during a luncheon last Wednesday. "Let people know what you want, what's important out of this farm bill. You want to make a difference? Let your congressman, let your senator know what's important."

Unfortunately, Kron said, the farm economy is experiencing a downturn. Farmers need a safety net mechanism that provides a counterbalance to low farm incomes, but Kron said there's very little money available for such programs. So, he said, it's important for farm groups need to speak with one voice.

"I can guarantee you that with a congressman, or no matter who you're talking to, or whether you are in Indianapolis at the statehouse, if they get mixed messages from agriculture, we're not going anywhere," he said.

With these challenging times, Kron expects to see further consolidation in the agriculture industry.

"I can't get excited about that, but I think that's the reality."

Another challenge is helping young farmers survive these tough times. Kron said he has heard of at least two situations where young farmers are not able to continue farming because the banks did not renew their operating loans. If this happens on a wide scale basis, the agriculture industry could lose a generation of farmers because of difficult economic circumstances.

"That's a real concern," he said. "What can we do (and) how can we help to try and get them back," Kron said.

Regarding the farm bill, Kron said Indiana Farm Bureau wants a unified farm bill, keeping the nutrition title, which represents 80 percent of farm bill spending, with the farm program and crop insurance titles.

Kron said Indiana Farm Bureau conducted a survey of its members and found that the No. 1 concern was regulatory overreach, followed closely by the farm economy and the farm bill. Regarding the farm bill, the INFB survey revealed that crop insurance was ranked higher in importance compared to commodity programs.

Kron said the crop insurance programs help farmers survive tough economic downturns, whereas commodity programs are important for the long run. Both are important, but crop insurance is considered a priority when times are tough.

Outside the public policy arena, the Farm Bureau president cited the need for farmers to "tell their stories" to consumers. He stated people are seeking answers on topics such as GMOs, but they're turning to the Internet for information.

"We've got great answers on what we do and why we do it," Kron said, referring to farmers. He added, "We can't let the guy next door do it."

As we head further into 2017, farmers are hoping to see a light at the end of the tunnel. But the official Purdue University price outlook shows that the light may be a couple years down the road.

Chris Hurt, Purdue agricultural economist, said grain prices are pressured by high inventories, as yields for corn, soybeans and wheat all set records in 2016. The corn inventory is at its highest point in 11 years, he said, and the soybean inventory is the highest in 10 years.

The USDA outlook calls for corn prices to average $3.80 per bushel this year, $3.95 in 2018 and $4 in 2019. Soybean prices will average $9.90 in 2017, $9.40 in 2018 and $9.25 in 2019. Wheat prices will average $4.25 this year, $4.65 next year and $5.95 in 2019. Hurt noted that Indiana prices are usually 10 cents higher and possibly more at an ethanol plant.

Returns on a per-acre basis favor planting soybeans over corn in 2017, Hurt said.

Low prices, however, are just one factor affecting the farm economy. High costs and a strong dollar are also working to keep farm incomes down.

Hurt said 2017 will be a period of "continued adjustments" as farmers work with tight budgets and costs gradually come back into alignment with commodity prices.

Also, farmers will have their eyes on President Trump's trade policies. Hurt said the president wants to take a new look at trade with countries such as China, the U.S.'s biggest customer of ag products, and Mexico, the U.S.'s third largest trading partner. Any changes could affect agricultural trade in a negative way, he said.

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