We asked the Jensens to take a moment and consider the state of agriculture today in America. These are their thoughts about the business they are in.
There are variables that affect every aspect of the business and personal life of the farmer. The risks in agriculture caused by these variables can be managed but never eliminated. Sometimes the producer can manage the risks by her or him self. Sometimes a government agency or public policy helps manage these risks. In the end, what it takes to stomach the risky business called agriculture is hope, patience, optimism and the passion for the land.
Variables uncontrollable by any human -The Way it is….
Mother Nature has ultimate control over the farm business and farm family. Farm economic success is contingent upon moisture and the temperature at the right time, in the right amount and in the right way.
Land available for farming is finite. Since acres taken out of production rarely return to crop production, available farmland is diminishing daily.
Agriculture is a combination of art and science. Even when change in a farming system is executed, the implementation and the outcomes take several growing seasons to evaluate and modify due to the many variables.
What is wrong with agriculture today?
1. Agriculture is no longer a local or regional economy but a Global economy. There are new variables imposed from outside of the United States that impact our local farms.
The leaders of the world use food commodities, and therefore the producers, as political pawns. With each world crisis, direct or indirect sanctions are imposed by and against the United States. For example, before the U.S. sanctioned Iran in the 1970’s, it was Idaho’s largest wheat importer. Markets we have recently regained access to view us as an unreliable food source so go elsewhere. No matter how many trade pacts are signed, there will never be a global free-market system.
Slow recovery of the Japanese economy and the unrest in the Philippines and Pakistan hamper their ability to purchase commodities. All have been large importers of Palouse products.
The strength of the U.S. economy and dollar causes U.S. products to cost more than our competitors in Canada, European Community, Australia and Argentina. Practically every county importing a bushel of Palouse Soft White Wheat priced in U.S. dollars must spend more of their local currency for them. You can purchase three bushels of Canadian wheat for the same price you can purchase two bushels of U.S. wheat.
The surplus of grains in the world was created through the effects of past farm support and subsidy programs not only in the U.S. but in each of the major producing countries.
2. Land and input costs continue to rise while the price for commodities on the global market are at 1940’s level.
Profit per acre for basic food commodities are small therefore producers need more acres to make a viable living. When one farm goes out of business, it is not replaced by new operation, but consolidated into an existing farm operation. The strong competition for these limited acres by existing farmers sets an unrealistic land lease or purchase costs for all farmer.
Poor quality land takes the same amount of time, energy and resource inputs as good quality land, but produces less outputs, therefore less margin.
Due to low farm returns, land is more valuable to landowners as development property rather as land used to produce a commodity. Most farmers do not own farmland but lease it from retired farmers, non-farming heirs, and investors who use land as an inflation hedge.
3. The U.S. public is removed from the production of their food. We have little experience on which to establish public food policy.
Many countries that have had war on their soil understand the link between a consistent food supply and their country security. The U.S. is experiencing a parallel situation with the U.S. dependence on foreign oil.
Many U.S. citizens do not realize that every nutritional food purchased in a grocery store is produced on a farm or ranch.
What is right about agriculture today?
1. Pride in being an independent business.
2. Opportunity for family members to work together toward a common goal.
3. U.S. farmer produces an abundant supply of safe and nutritious food.
4. U.S. farmers are making strides in soil conservation and water quality.