The big topic at this year’s Beltwide Cotton Conferences was … corn.
In the production conference, the hotel hallways and New Orleans’ restaurants and bars, talk centered on how much corn farmers in the Mid-South and other traditional cotton-growing regions will plant this spring.
$3.50 corn futures clearly have attracted growers’ attention. That and cotton prices that seem stuck below the CCC loan rate no matter how much producers wish they would rally.
Estimates of how much cotton will decline ranged from 10 percent to 30 percent. Those favoring the low side cited reports grain elevators have stopped offering contracts or the supply of corn hybrids has dried up. On the high side, well, $3.50 corn could pay a lot of bills.
Even Agriculture Secretary Mike Johanns got in on the act, talking about the “exponential” growth of the renewable energy industry, which has helped corn prices double since 2005.
“Six years ago 54 ethanol plants were in operation,” he said. “Today, more than 100 plants produce more than 5 billion gallons per year. More than 70 additional plants now under construction are expected to increase capacity by 8 billion gallons. That is a lot of corn.”
Speaking at the Beltwide’s opening session, Johanns said prices are so high that corn farmers probably will not receive a loan deficiency or a counter-cyclical payment again this year.
Such a development for corn and higher prices for wheat, rice and soybeans mean producers may be getting closer to their oft-stated goal of “farming for a profit rather than farming for the government,” he told reporters at a press briefing.
Reports, unconfirmed, said National Cotton Council leaders had suggested that Johanns tone down his remarks from what he said at the American Farm Bureau Federation annual meeting in Salt Lake City two days earlier when he challenged claims that many producers would simply like to extend the current farm bill.
In his speech in New Orleans, Johanns did omit such comments as “15 percent of the largest farms in America, farms with sales of $250,000 or more, collect about 54 percent of all farm program payments” that he delivered in Salt Lake City.
The secretary said the administration won’t be unveiling its long-awaited farm bill proposal until next month, but he indicated he believes the new farm bill must be “unassailable” when it comes to challenges within the World Trade Organization.
The 2007 farm bill should also allow more opportunity for young farmers and ranchers and be predictable. “Under the 2002 farm bill, loan deficiency and counter-cyclical payments were largest during years of record-breaking harvests and record farm income,” he said. “Yet, natural disasters that caused complete crop loss often left producers with no safety net whatsoever.”
Whether they plant corn or not, most farmers hope prices stay high. But, given the vagaries of the markets, they also know corn growers probably will need that safety net again someday.