FARMING NOTES – DECEMBER 2015
by Duncan Allison, past president (PSPA)
Christmas provides a wonderful opportunity for families to be together and sit round a table and enjoy seasonal food. This usually signals our family’s roots in Germany, Italy, Sweden, UK, Mexico and so on as it influences both the timing – Christmas Eve or Christmas Day – and the food that is traditional to our original culture. These dishes usually signify which foods were locally produced by farmers in those regions. We can be fairly sure that all the food we will be enjoying has been produced in the US on family owned farms. Contrast that to the gifts that we are giving and receiving which have been more than likely produced in China or other countries. One farmer produces food for 155 people and we should also be proud that agriculture now contributes solidly to our exports which now represent on average 20% of U.S. farm income. Every other row of soybeans grown in this country is exported. One day’s worth of the total dairy production every week is exported. USDA Foreign Ag Service. So this is indeed time to give thanks to our farmers and all those who supply the critical inputs, research and information to ensure our safe, varied and affordable food.
The Climate Change Conference in Paris ended the year on an encouraging note that the world is not only paying serious attention to climate change but willing to take action. The science is clear and major global companies are taking definite steps to adapt their business models to the changing climate.
Interesting that the world was experiencing one of the hottest seasons ever recorded while the delegates were meeting. “The combined average temperature over global land and ocean surfaces for October 2015 was the highest for October in the 136-year period of record, at 0.98°C (1.76°F) above the 20th century average of 14.0°C (57.1°F). This marked the sixth consecutive month a monthly global temperature record has been broken and was also the greatest departure from average for any month in the 1630 months of recordkeeping, surpassing the previous record high departure set just last month by 0.13°F (0.07°C). The October temperature is currently increasing at an average rate of 0.06°C (0.11°F) per decade.” NOAA National Center for Environmental Information.
Our own carbon emissions have fallen by more than 5% since 1998 to 10.2%. This is more progress in reducing emissions than many countries subject to the Kyoto binding reductions. We know that higher temperatures and periods of drought have been affecting several regions of the US and in our region we are experiencing more severe rain events which are confirming the value of winter cover crops and best soil conservation measures amongst others.
However, agriculture did not feature much in the talks but the challenges to farming of increasing temperature are well understood particularly in the already dry and hot Southern parts of the country. Input suppliers, particularly seed companies have been very actively developing hybrids and varieties that are better able to cope with higher temperatures and drought. Precision agriculture will also play a critical role. USDA has set up regional Climate Hubs “in February of 2014 to deliver science-based knowledge, practical information and program support to farmers, ranchers, forest landowners, and resource managers to support climate-informed decision-making in light of the increased risks and vulnerabilities associated with a changing climate. These activities further the mission of maintaining and strengthening agricultural production, natural resource management, and rural economic development under increasing climate variability.”
Reduced farm incomes and the impact on suppliers Government statistics were also confirming what farmers have been very aware of for the last year. Farm economics are extremely challenging at the moment. Farm sector profitability is forecast to decline for the second straight year – net cash farm income down 28% and net farm income down 38%. This will mean net farm income at $55.9 billion will be the lowest since 2002 in both real and nominal terms and a drop of 55% from the recent high of $123 billion in 2013. No surprise with $3.78 corn, $16.50 milk as examples. Farmers are reported to have used the last few years of high prices to reduce debt and replace equipment but input suppliers are suffering at the moment too. Farmers are reducing their expenditure on seeds, crop protection chemicals and farm equipment wherever possible.
Reduced purchases of farm equipment have resulted in John Deere laying off 1,500 workers. Major investments in new facilities in Iowa were recently cancelled by Monsanto for a $90 million seed corn plant and revised for several on-going projects by DuPont. Some analysts are thinking that Monsanto’s failed bid for Syngenta for $46.5 billion during the summer and the reality of the merger between DuPont and Dow could be signaling other possible acquisitions/mergers in the scurry to reduce costs by combining work forces. Significant staff layoffs are likely in the Wilmington area.
However input suppliers will still be critical as farming becomes even more dependent on technology to produce crops and raise livestock. Safety of glyphosate confirmed by the European Food Safety Authority (EFSA) in a study released in November. “This has been an exhaustive process – a full assessment that has taken into account a wealth of new studies and data” stated Jose Tarazona, head of the pesticides unit at EFSA. “Regarding carcinogenicity, it is unlikely that this substance is carcinogenic.” The final determination will be made by EU policy makers by June 2016. Too early to know whether the most widely used herbicide in the world will be reapproved or suspended for use in EU countries.
Expansion of the Clean Water Act – The American Farm Bureau Federation and others asked the U.S. Supreme Court to review a lower court ruling that allows the Environmental Protection Agency (EPA) to micromanage local land use and development decisions under the guise of implementing the federal Clean Water Act. Government Accountability Office has recently said the EPA broke anti-lobbying and propaganda rules during its push to promote Waters of the United States rulemaking.