September 9, 2007 - Enjoy the Moment

In the last week of August, the U.S. Department of Agriculture issued its revised estimate on U.S. net farm income in 2007. The numbers were impressive, encouraging and long-overdue. Let’s look at the numbers before I state my challenge to you.

First of all, the report said net farm income in 2007 will be nearly 48% greater than a year earlier at a record $87.1-billion dollars. That prompted Chris Hurt, long-time economist at Purdue University, to say “This is a great time to be a farmer. Farming may be the healthiest sector of the economy.” In light of the challenges in the auto industry, housing and stock markets, I would agree.

Let’s compare the current numbers with a year ago...total value of crop production in 2007 is estimated to be up 14%; price of corn up 62%; price of wheat up 46%, to all-time record highs; price of soybeans up 36%. The value of livestock and poultry production for this year is up 18% from a year ago, because of production cuts by poultry and egg producers; falling global dairy supplies; U. S. cattle inventory at a 40- year low, pushing cattle futures prices above the $100 dollar mark at the Chicago Mercantile Exchange. So indeed, these are impressive numbers.

But now let me quickly say, I realize that not every producer in America benefits from these higher prices. And after I carried this story on my daily radio show, I received several e-mails; some of them said, “Don’t tell people we are making money. Don’t tell them times are better because then they will say there is no longer a need for government farm programs.” If times are better, why not say so? If city union workers get a contract with higher wages, they shout it to the world and people cheer them. Perhaps in agriculture we have spent too much time talking “poor mouth” and built a mind-set in non-farmers that we should never make money.

Then of course, I heard from others saying “Yes, our prices are higher, but our production costs are way up, too.” Yes, there’s no argument there; production costs are higher. But if you have done a good job of marketing ( and that means not holding last year’s corn, because you knew the price was going to $5.00) I think the balance sheet will show a profit in 2007. And finally this e-mail, “Prices may be good now, but I’m worried about next year”.

Having grown up on a farm, I know farmers always have to worry about something, but may I make a suggestion? At least take a moment to enjoy today’s prices and admit that this year is a pretty good time to be a farmer. Then, before you start worrying about next year, look around you and see what brought these better prices and work to keep those conditions in place to ensure a profitable agriculture for next year and beyond. Enjoy the moment!!

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