Volatile Nature of Agriculture

May 14, 2008

By: Rep. Kenny Hulshof (R-Mo.)

Excerpt from Congressional Record May 14, 2008:

[T]his bill is a victory for farmers, a victory for communities, a victory for rural America.

I realize that fewer and fewer Americans have a direct connection to the land. One reason is because it’s becoming quite tough to make a living in production agriculture. And certainly that disconnect to rural America is evident here on the floor of the House. Dwight Eisenhower once said, “Farming looks mighty easy when your plow is a pencil and you’re a thousand miles away from the cornfield.”

Or to put it another way, Mr. Chairman, I quote from the saying on the plaque in your office that says, “If farming were easy, Congressmen would do it.”

Well, I am a farmer. I’m the son of a farmer. I’m the grandson of a farmer.

Agriculture runs in cycles, and sometimes those cycles are pretty volatile. In September of 2005 during our corn harvest after Hurricane Katrina, the price of corn at a river terminal in Southeast Missouri was $1.40, and I don’t recall anybody other than yours truly coming to the floor to extol that fact.

Yesterday, that same bushel of corn would have brought $5.97 at least on the Chicago Board of Trade, and even that isn’t a windfall. And because we know that it is 47 percent more this year to plant one acre of corn in Missouri than it was last year, fertilizer is up 112 percent. Grain contracts and loans are getting harder to come by. Debt has increased by 30 percent in the last 5 years. We know farming looks a lot today like it did before the crash of the 1980s.

And we also know with all respect to those who talk about profligate spending, that about three-quarters of the farm bill dollar in this bill will not go to farmers but to the equally noble goal of ensuring that Americans have enough to eat. And quite frankly I expect that most of the farm payments to production agriculture in this bill will never have to be paid because the market price is going to be above the trigger level.

Mr. Speaker, I rise in support of the farm bill…

This, Mr. Speaker, is the last farm bill I will vote on as a Member of this great House. And as I do so, I think of my dad, the founder of my family’s farm. He built our farm using not Government handouts but hard work, business savvy and penny-pinching.

By creating this successful small business he was able to save just enough to plant the next year’s crop and send his only son to college. Many who oppose this bill would probably point to my dad as one of those rich farmers who doesn’t need a safety net. In response, I quote Dwight Eisenhower, “farming looks mighty easy when your plow is a pencil and you’re a thousand miles from the corn field.”

Those of us who actually farm, know farming isn’t easy…We know that farming looks a lot like it did in the 1970s.

For those who don’t remember, during the 1970s we had conditions much like today; healthy world demand took prices to all-time highs. Many farmers cashed in their land’s equity and bought new land to chase these high prices. Then Government policies changed, including the grain embargo to the Soviet Union after their invasion of Afghanistan, and the market crashed.

I remember that policy well; it was the first time I realized that factors beyond our farm gate could determine the fate of our farm. I later learned that it nearly cost us our farm.

Ultimately, the crash of the 1980s caused thousands of farms to go under and when they did they took with them 300 agricultural banks, countless business that depended on farmers, and even some entire rural communities.

The similarities to today are striking. Today farm debt sets a new record every year, increasing 30 percent, or $52.8 billion, in the last 5 years. The price of land has once again risen to 1970s-esque highs, climbing 67 percent since 2003.

Now I am not saying that we can expect a crash, I don’t know what the market will do over the next few years–no one does. What I am saying is that now is not the time to support irresponsible cuts to the safety net…

(Rep. Kenny Hulshof. Congressional Record. 5/14/08. p. H3805-H3806).