Do you remember the day after an important exam while in school? The anticipation and excitement you may have felt as the teacher returned the test papers. January 12, 2010 a test was returned to the US grain farmers. Some farmers passed while others may have fallen short. The January report is always one of the most important quarterly reports because it gives the past year’s total production. This year’s report has set the stage for a major downward spiral in the market. This free fall has allowed livestock producers the opportunity to lock in grain for feed at more profitable levels while grain producers have seen their profits quickly erode over the last few weeks.
Last year’s grain production could easily be characterized in one word, tardy. Spring rains delayed planting and a cooler than normal growing season delayed maturity in many major crops. These circumstances forced many farmers to harvest crops at higher moisture levels than are acceptable. Here in Tennessee, we were not immune to Mother Nature as our planting and harvest dates ran a month behind normal. The upper mid-west is currently home to over 180 million bushels of corn which remains in the field waiting to be harvested. Concerns over grain quality have been reported which were not mentioned in the January report. All of these circumstances make it difficult to understand how the 2009 corn and soybean crop could be the largest on record.
In an attempt to better understand the report I have considered many different scenarios. The January report is conveniently released one month before the average price for crop insurance is set. The near dollar decline in corn and soybean prices will lower the average price farmers are guaranteed with their purchase of crop insurance. This adds risk to the farmer’s bottom line while lowering the risk of the insurance company in the instance of a bad year. Farmers could easily invest more in this year’s crop than can be insured. Could this be an attempt by the USDA to lower the financial exposure of their big business? The data gathered to formulate the USDA report was collected by NASS (National Agricultural Statistics Service) which employs a large number of college students. Shouldn’t a report of this magnitude been conducted by more qualified personnel? Have we as a society become so consumed with new records that the data was manipulated to achieve this? These questions arrive as a result of the disclaimer at the end of the report. It stated all corn in the US had yet to be harvested and the results were estimates that would need to be reviewed once harvest is completed in the spring. Reverting back to my school analogy, in my 17 years of education if a teacher did not have ample time to grade an exam they would take the time required to release the grades. If only the authors of this report had the accountability of my former educators.
Perhaps I am taking the USDA report too personally and it actually is correct. Technological advancements in agronomy are increasing the amount of bushels that can be harvested from an acre annually. American farmers continue to addopt better farming practices that translate to higher yields and this past year’s growing conditions were favorable in many areas. With this said, I continue to doubt the current method of determining US production and feel we should be able to build a better ‘mouse trap.’ Concerned farmers must work together and become more vocal an issues that affect our livelihood.