Missouri farmers having a good year for yields, a discouraging year for rising production costs

While Fruitland farmer Roger Schwab believes this may be one of his best production years on record, he is concerned about the economic climate in which he grows corn and wheat on his 1,600-acre farm.

In 2003, Schwab paid $120 a ton for potash fertilizer. This year it's about $950 a ton.

"This will be a rough year," Schwab said. "While I've been blessed with an excellent crop, I'm discouraged when I begin figuring up my costs."

Schwab and other farmers in the state have been dealing with the rising costs of production, resulting in a shrinking profit.

That's despite an increase in the prices crops fetch. On Sept. 1, 2005, wheat was $3.49, corn $2.22 and soybeans $6.07. On Friday, the price of a bushel of wheat was trading on the Chicago Board of Trade for $8.19, corn was $5.62 and soybeans was $12.52. The farmer does not receive the full amount, as shipping and fertilizer costs are deducted.

"Though farmers in the state for the most part have had an above-average year productionwise, the costs of seed, insurance and fertilizer have created a poor economic picture for them," said Bill Ellis, professor of agriculture at Southeast Missouri State University in Cape Girardeau. "I suspect we'll have a similar situation next year because I don't see costs going down anytime soon."

Ellis said those with large farms such as Schwab will have the best chance of survival compared to farmers with fewer acres. He said the rising input costs -- grain, fertilizers, insurance, seed and equipment -- may endanger the survival of those with the smallest amount of land.

"Down the road a time will come when the price of grain goes back down significantly but the cost of input won't," he said. "That's the year when people with excellent land will survive while the people farming on marginal land will have a tough time."

U.S. Rep. Jo Ann Emerson said she can sympathize with Southeast Missouri's farmers. From Sept. 2 to 5, Emerson heard about their concerns and innovations by visiting their agricultural operations during her annual farm tour.

Stops on her tour included a variety of farms, a winery, a greenhouse and the Missouri University of Science and Technology in Rolla, Mo., for a briefing on biofuels production. Emerson said her position on the Appropriations Subcommittee on Agriculture in the U.S. House of Representatives allows her to keep abreast with the latest technology that keeps the region competitive in farming.

She cited a Sept. 2 tour stop at the Delta Research Center's Lee Farm in Portageville, Mo. There, agriculturalists reported about ongoing efforts to use sweet sorghum for ethanol production and technological efforts to expand production in the world's impoverished countries.

One research effort at the center is using a pivot system to irrigate rice. The system requires less water, energy and labor than traditional rice agriculture.

"The farms and ranches in Southeast Missouri are not your run-of-the-mill agricultural operations," Emerson said. "We have innovations at work here that are literally leading the world, and at the same time Missouri is bringing brand-new crops and products to the market. The producers, the businesses and the families which are hard at work in our agricultural economy deserve fair policies both in Congress and throughout the globe."

Emerson is a supporter of the $290 billion farm bill that earlier this year was approved by Congress over a veto by President Bush.

The legislation, which is passed about every five years, doesn't directly address rising costs of production. It does provide $40 billion in government subsidies for farmers and $30 billion for farmers to protect environmentally sensitive farmland. Direct payments are given based on land acreage.

The bill also includes a $600 million provision that allows farmers to receive disaster payments for crop or livestock losses suffered because of severe weather. Disaster payments must be based on price averages for 2008 crops. It also gives tax credits to increased production of cellulosic biofuels, which are made from wood, grass or inedible parts of plants. The credit is set at $1.01 per gallon.

"The farm bill provides a safety net for farmers who need economic assistance in time of disaster," Emerson said. "Among the other advances are the impact it could have on advancing alternative fuels in this region."

Melvin Brees, a market/policy extension associate with the University of Missouri-Columbia, said the legislation will continue to benefit farmers as with other previous farm bills.

"From a crop-producer standpoint, the bill helps those who have suffered losses by receiving disaster payments," Brees said. "That's needed in a time when our farmers have experienced loss with the drought and excessive rainfall in certain areas of the state."

While the weather and economy are difficult to predict, Ellis said, farmers must do their best to plan for the future.

"We really have no idea of the costs farmers will face this time next year," Ellis said. "Throughout history, farming depended on the weather. That's just a way of life for the industry.

"All we can do is roll the dice and plan," he said. "We'll do all we can and hope for the best in the end."

bblackwell@semissourian.com

335-6611, extension 137

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