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December 2013 Articles

Just Rambling, December 2013
La. dairy farmers prepare for EPA visits
Workshop focuses on wood-based bioenergy
Cost of Gain Falls as Value of Gain Stays Strong
Students learn about agriculture at the State Fair’s AgMagic
Feral Hogs
• The President’s Column
Care and Storage of Tack During the Off-Season 
Clean Water Act
Record Corn Crop, More Soybeans Forecast
Many plants need winter frost, freeze protection
Plant pecan trees in winter
New Resource Guide Assists Veterans in Agriculture
Our Light...Yours and Mine
Chocolate Thumbprint Cookies

(15 articles found)

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The President’s Column

The President’s Column Source: Louisiana Farm Bureau
Any Louisiana farmer will tell you that in agriculture things don’t always go as planned.
In fact, many farmers I know tell me they never frequent any of the state’s gaming establishments because farming is a big enough gamble in itself. They don’t need to “go to the boat” if they want to engage in a game of risk and reward.
Farmers never know from the beginning of each growing season if their efforts will pay off come harvest. There are many reasons for this, but the two leading causes for this uncertainty are things other business owners wouldn’t dare consider: the inability to control the price they’ll receive for their product and the environment in which it is created.
The first hurdle is climate. No one can control the weather, but since most manufacturing takes place in climate-controlled conditions, weather doesn’t really matter to most business owners. If the rains don’t stop for 90 days GM, for example, would continue to make cars and trucks non-stop. If the rains fail to fall for 90 days, Apple would still turns out iPhones and computers day in, day out. Only farmers and their livelihoods are truly impacted by weather.
The second factor is price. If a manufacturer sees a 5 percent increase in inputs, he can recover much of the cost by increasing his wholesale or retail price by an equal amount. Remember, the consumer always bears the brunt of cost increases. The final resting place for price increases is always the cash register.
But farmers are price takers, not price makers. Prices for soybeans, wheat, corn, sugar, beef, poultry and pork are determined by commodities traders and market conditions, not the farmers who grow and raise those commodities. And while certain pricing aspects are based on supply and demand, the farmer can’t arbitrarily add, say, 5 percent to the price of his product because drought or insects caused him to lose 5 percent of his crop.
Now there’s no arguing that weather, when cooperative, can be a farmer’s best friend. But again, unlike other business owners who work to control and streamline inputs, Mother Nature will always be the one uncertainty that can make or break a farmer. And because profit margins in agriculture are so thin (in some cases less than 3 percent, according to the USDA) one bad weather year can break a farmer or rancher. It’s happened many times here in Louisiana, particularly after hurricane’s Katrina and Rita.
Another uncertainty that many farmers find equally as frustrating as the weather is the constant burden of government regulation. And while just about every U.S. business has to comply with some state and federal mandates, farming often is the target of government and groups who don’t give other businesses a second look.
A few years back the Cato Institute took issue with continued U.S. farm subsidies. And while farm subsidies have, for the most part, gone the way of the dodo, the group accused U.S. farmers of hurting farmers in other countries, particularly “developing countries,” or what we used to call Third World countries.
The logic was that the three-acre cotton farmer in Africa couldn’t compete with the 2,000-acre cotton farmer in Mississippi. The lack of a subsidy, which Cato equated to “farm welfare,” would level the playing field. I smiled when I read this because, subsidies notwithstanding, no three-acre cotton farm anywhere in the world can compare to U.S. cotton production. It wasn’t an apples-to-apples comparison, all politics aside.
Agriculture is, in fact, one of the most heavily regulated businesses in America. The list of federal compliance guidelines in states like California for example, are mind-boggling. I met one California farmer earlier this year who pays a member of his farming operation $100,000 a year just to keep up with environmental compliance issues in his state.
When I asked him how he could justify such an expense, he said the fines for just one environmental oversight could run as high as $15,000 a day. It doesn’t take too many of those kinds of violations to see why paying a guy a hundred grand a year to keep up with those things is just part of the cost of doing business out there.
So why do farmers keep doing what they do? There are as many answers as there are farmers. Love of the land, tradition, responsibility all factor into those answers. The fact is, without agriculture the U.S. economy would look dramatically different. Here in Louisiana farming, ranching, fisheries and forestry account for about $12 billion a year in economic stimulus. But farming does something else that’s almost impossible to measure, particularly where economists and policymakers are concerned.
Farming, in all its forms, feeds us. It affords us the safest, most abundant and affordable food of any country on earth. And not having to spend more than 10 percent of our disposable income to feed ourselves allows us all to stimulate the economy in other ways; paying for our kid’s college tuition, buying that new car every other decade or so, investing in the stock market and generally making life easier for us than any other people on the face of the planet. (No one’s rushing to get out of America so they can spend their golden years inside the former Soviet Union.)
Here in Louisiana farming is still very much a way of life for tens of thousands of residents. The state, for all its economic and political gains, is still very rural, with many communities being supported directly by agriculture, even if many local residents don’t know it. And for that you can thank a farmer.

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