Big Oil

I am writing in regards to your column of Feb. 28, 2005, titled “Record oil company profits not bringing new capacity.” As with your previous columns directed at “Big Oil,” you make it clear that you are not an industry fan and by the undertones no friend to the Bush administration. That's fine, however, you use flawed logic in supporting your missives.

This most recent column began by admonishing “Big Oil” for reaping generous profits, later described as “obscene,” and in turn sharing these profits with their stockholders. I doubt that you would find any shareholders in these companies complaining about receiving dividends or capital appreciation on their holdings. I would even suspect that many growers probably hold these companies in their portfolios or own them by default through various energy sector funds.

Further on this point, if rising fuel costs were squeezing my bottom, as you allude to, I would seriously consider a hedge with these stocks or oil futures. But you and I already know that fuel is but a small input cost even at these elevated prices.

According to the cost summary on page 94 of the most recent Delta Ag Digest, the average cotton grower in the Mississippi Delta can expect to spend a mere 3 percent of his input costs in fuel; fuel that is non-taxed no less. This same budget assigns 14 percent of input costs to seed/biotech, this would suggest to me that “obscene” profits are being reaped by more than the oil companies… no names here!

Next you malign the industry for its lack of refining capacity, a lack due in large part to the environmental regulations that you give a passing mention to; once again the real culprit, according to you, is greed-driven profits. Anyone in the ag chemical industry could attest to the barriers that the EPA can erect, yet the oil industry is somehow immune to this bureaucratic, nightmare of an agency.

All of these things aside, whether fuel should be cheaper or capacity should be higher, why should the oil industry apologize for its success? I'll ask that another way. If growers could sell their cotton for $3 per pounds or rice for $20 per hundredweight, would they forego those “obscene” profits in the name of fairness? I wouldn't bet the farm on it!
Keith Aiken
Cordova, Tenn.


Net Income

I wish I could say my net income was going to be at a record level, but my cash flow looks just like it did in the late 80s.

For the first time since the last time land was over priced and not relative to its productivity, farmers here in my area are being turned away by their bankers before obtaining their operating loans.

In my opinion when this happens a train wreck is not very far away. I wish I could see how Keith Collins makes the numbers work. When everything we buy to raise a crop is at all-time highs or near all-time highs and we are looking at commodity prices at or near the bottom of the charts, how can anyone make such a forecast?

I wish I had a job where I would not have to be realistic about my numbers. Then it would not matter, Would it?
Mitch Kinnischtzke
Hebron, N.D.


Big Farmers

Why is this farm magazine and publishing company so pro big farm? The agriculture mess we are in now is a direct result of big farmers and their greed. Are people really that short-sighted to not see how bad big agriculture is for America? I guess as long as the big farmers control the agriculture lobby and agriculture organizations this will continue.

It is simple math (that) more big farmers (equals) less rural community directly in agriculture. This equates to less votes, less opportunities for young people, less rural economy, less everything. Why would a big farmer buy from the little feed store in his town when he can just get it at the Wal-Mart on his way to his big house in the big town?

I am tempted to tell you to take me off all of your periodicals. But information and knowledge is power and although most of the articles are just bloated glorification of big farming, occasionally some good information is included.

As for farm policy, believe me bad times are on the horizon. If we don't put some kind of restraint on the big millionaire farmers, we are going to lose the entire farm bill in 2007.

Also, I wish someone would explain to me why it is that they can say on one hand we need the big farmers and that they are so efficient and that bigger means better. Follow this if you can: Big farmer = more efficient = more money = more subsidies.

Why does a big farmer who is “more efficient” making more money via economy of scale need more subsidies? This does not add up.

I am a small farmer and am fed up supporting big farms and big agriculture with my taxes. I would rather not have a farm bill at all than support the increase of anymore big farms.

By the way it is a fitting irony that the big farms in Brazil that are about to dismantle our farm program are mostly big farmers who have invested in Brazil. It is not a good thing to clear cut thousands of acres of forest to plant crops we already have an oversupply of.

I think that Grassley is the only ag senator with a lick of sense and not controlled by the big farm interest.

By the way, I am a Texas south plains cotton farmer trying to scratch a living out of less than 500 acres. But you will never see that idolized because we only care about getting bigger and bigger until we are all just one big Wal-Mart farm.
Ken Gallaway
Texas


Outsource Food?

I am proud to be a fourth generation Arizona farmer. Like other hardworking farm and ranch families, we fortify this country's ability to feed and clothe itself, providing diversity and security, safely and at less than 10 percent of our consumer's disposable income — the greatest bargain in the world.

My pride leads to an understanding that agriculture produces something tangible, sustainable and renewable. You cannot work in agriculture without this direct connection to land and water resources — without an appreciation for the interrelationships provided by agriculture on which we all must depend.

I appreciate, in a rapidly urbanizing society, this connectivity gets stretched and even severed along the way. There are 72,000 agricultural and related jobs in Arizona — a fair number, but about 1 percent of the population, a statistic replicated across our nation. When you are not close to the land, I understand that Americans can take for granted an affordable and abundant food supply.

I claim no great vision or wisdom, but I see what has happened in this country as we outsourced our energy and without a coherent policy for developing our own renewable and sustainable sources. We are slowly doing this with our food security — without even a discussion.

The urban grows to reach the rural. Land values have risen to where a typical agricultural return of 3 to 5 percent on value is no longer possible, especially when there are competing uses for the land. We have developed some programs to protect farmland, but few resources are available to establish anything comprehensive.

Farmers are told to vertically integrate for value added, but this has limits, when the least cost producers exist in other countries. We are told to switch to higher value crops, but there are supply and demand issues, and eventually with our costs of regulation, production and land values, we struggle to compete. And now, even the President is proposing a budget that breaks our nation's contract with farmers by proposing to phase out farm programs, without even a clarion call for discussion of the ramifications.

Of course, there will be successful niches in U.S. agriculture, but not enough to feed our country. I am a great believer in the forces of the market, but I assure you the unfettered forces of the market will leave us dependent upon foreign sources of food, just as we have done with energy.

While import tariffs helped build our national economy, I know first-hand what trade barriers can do in today's world. Some of these have victimized my own family farming operations. But I am talking about a different commodity here — sustenance — the ability to feed and clothe our country. I am not talking about a situation where someone else builds our televisions and we sell them financial services. There is a difference, and we must recognize it.

The United States was recently cited as violating trade agreements with certain aspects of the farm program. Yet, most of the world's agricultural subsidies come from other countries, including those whose pangs of hunger were eased by U.S. food aid.

In a few short years, the children of today — yours and mine — will be asking how we let this happen. They will wonder how we put ourselves at such peril without even a discussion of the true costs of cutting programs that are one-tenth of 1 percent of our federal budget. Our current public investment in agriculture is less than $1 out of every $1,000.

I am not asking for protective tariffs or subsidies at this point. I am looking for support for simple discussion of basic questions: Are we willing to outsource our food production? If not, what are the options and the costs?
Kevin Rogers
Higley Ariz.

Editor's note: Kevin Rogers is the president of the Arizona Farm Bureau.