UPDATE ON 1995 FARM BILL

For the first time in many years, row-crop farmers may do their next year's planning (the 1996 winter wheat is already planted) with no knowledge of what the Department of Agriculture will require of them in terms of program crop acres and acreage set-aside requirements. The primary reason for this is that the Congress and the president have the 1995 farm legislation tied up in the budget reconciliation package that is still being debated.

As late as De. 15, Pat Roberts, Chairman of the House Agriculture Committee, felt that all this would be resolved the weekend of De. 15-17 and we would have "Freedom to Farm" legislation. This would have reduced and shifted farm crop payments from a yield and price basis to a seven-year fixed payment scheduled. Obviously this did not happen.

If the budget impasses cannot be resolved before the Congress adjourns for Christmas-New Year's break, then it is very possible that there wil be a simple one-year extension of the current legislation. If this occurs, there will be fewer acres of corn planted. This is in turn could also provide further strength to corn prices, which are already beginning to impact livestock and poultry operations with higher feed costs. Higher grain costs for feeder hog and cattle feeders translate to lower prices for feeder pig and feeder cattle producers. However, if "Freedom to Farm" passes before the recess, there will certainly be more acres shifted to corn and thus the potential for lower corn prices this summer and fall.

This is a classic example of how government farm programs affect farms and ranchers who are not involved in any type of federal farm price support program. It is the result of the manipulation of basic supply and demand due to the acreage restrictions in the USDA feed-grain and wheat programs. Livestock and poultry operators are unable to pass these higher feed costs on to wholesalers because cattle, hog and poultry prices are basically supply and demand driven. Is it any wonder that most hog and cattle producers are not great fans of federal farm programs?

Many row crop farmers (especially in the Midwest) are also becoming disenchanted with USDA crop programs and would welcome the shift to greater flexibility in acres of crops planted.

On the positive side of this mess are strong prices for wheat, feed grains and soybeans. Many farmers are using these higher prices to forward contract portions of their 1996 crops. The specter of reduced yields due to too much or not enough rain tempers the bushels that most farmers will forward contract. Option contracts will be used by some producers to sell more bushels without forcing delivery in a short crop year.

Area feed grain, soybean, rice, cotton and wheat farmers must wait and will adjust to whatever comes out of Washington in the way of new program regulations. All, however, realize that fewer dollars will be spent on price-support programs, and most also understand that some where in the next seven to 10 years we will not have significant row-crop acreage control and support programs.

Peter C. Myers Sr. of Sikeston is a former U.S. deputy secretary of agriculture and currently serves as president of Adopt A Farm Family of America, which is a Christian Outreach to farmers and ranchers.