Letters to the Editor
The Math Isn't Working for America's Corn Farmers
The views expressed are those of the individual authors and not necessarily those of DTN, its management or employees.
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To the Editor:
I look at a corn field every day from my office window. While much of the work of the National Corn Growers Association happens in our St. Louis headquarters or our Washington, D.C., office, I'm located in the heart of the Corn Belt on my family's farm. My work may be done remotely, but it's also done with the constant reminder of what -- and who -- my effort is for: farming families like mine across the country.
My family feels the impact of the last four years of negative returns, just as corn farmers across the country have. Farming gives me a firsthand perspective on the difficult decisions farmers are facing, and through my work as chief economist for NCGA, I know those same challenges are playing out on farms across the country.
Corn prices are only one part of the profitability equation, and it's no secret they're not where farmers need them to be. NCGA is working to change that. Driving new, long-term sources of demand for corn is our top priority, with opportunities in maritime fuel, aviation fuel and biobased products. We believe corn can play an important role in each of these markets, but building demand at that scale takes time. Groups like NCGA exist to invest in that long-term work, but farmers also need an economic outlook that works today.
That means looking at the other side of the equation: input costs. For too long, conversations about farm profitability have focused primarily on yield and revenue, but today's cost environment has made the expense side of the ledger impossible to ignore.
NCGA is a grassroots organization. Hundreds of farmers from all over the country volunteer their time each year to serve their state corn groups and NCGA. And the message from our grassroots base has been very consistent for several years: input costs are unsustainable, and there's nowhere to turn.
The NCGA board of directors heard this message loud and clear last year and developed a task force to confront this issue. The work of that group led NCGA to release a report (https://ncga.com/…) last month that compared the costs U.S. farmers pay vs. those paid by Brazilian farmers. I don't think it's a surprise to know that we pay more here in the U.S. -- but even I didn't expect the differences to be quite so large.
U.S. farmers pay, on average, 68% more for corn seed, and more than double in some cases for crop protection products. Some portion of those premiums may be due to differences in products, pest pressures and regulatory structures. However, it's difficult to believe those factors alone justify gaps of that magnitude over time.
We're quickly approaching the time of year when farmers start purchasing their inputs for the next season. The July Purdue Ag Economy barometer (https://ag.purdue.edu/…) cited high input costs as the most concerning issue for farmers. Costs remain extremely high and yielding our way to a profit looks next to impossible. Many farmers have burned through any working capital they had and are unsure what comes next.
The agricultural input industry often speaks about its commitment to farmers. Now is the time to demonstrate what that commitment means. Farmers are facing a fifth year in which the economics simply don't work. The math can't be fixed by asking farmers alone to absorb higher costs year after year.
-- Krista Swanson
Swanson serves as the chief economist for the National Corn Growers Association and farms with her family in northwest Illinois.
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