I read an internet rant in April about today’s farm prices compared to our costs. The ranter said that 46 years ago, Jimmy Carter slapped a grain embargo against our best customer at that time, the USSR.
In 1980, corn was $3.49, but today it is $4.30. The ranters point was that today, nearly all our costs are 10 times higher. Yet corn has only gone up 24 percent in five decades.
In 1980, a new John Deere 4440 tractor was $30,000, compared to today’s price of a similar unit at $150,000— a 500 percent increase. If the price had gone up the same percentage as corn has, that tractor would only sticker at $37,000. If corn had gone up 500 percent, it would be $17.45 a bushel.
To say we have lost the inflation battle is an understatement, and we wonder why we have a shortage of young people getting into farming.
I have done some research on my own and the numbers appear accurate. This is just one of many examples that we as producers can relate to very well. As of today, a bushel of corn won’t even come close to buying a gallon of diesel fuel, not to mention all of our other input costs.
Agricultural pricing parity is a useful tool for producers to see how the prices they receive now compare to when farmers were doing well financially several decades ago.
I invite you to take a look on page 6 at the latest price parity chart. You will see most commodities falling in the 20 to 30 percent parity range, with the exception of beef cattle and calves.
From the conversations that I have had, this year’s planting season was a real rude awakening for farmers and bankers. Now comes the rest of the story. Will Mother Nature cooperate, and what will prices be at harvest? As of today, more than 50 percent of our country is in some degree of drought.
Last year farmers said, ‘next year will be better’. That’s why we farm! With no doubt, we are the eternal optimists. Sooner or later— preferably sooner— we all need a good year! Our challenges are many and solutions are few and far between.
Collectively, as a nation, we must do better to embrace the family farm structure for the sake of food security and the security of our nation as a whole.
On a lighter note, we are in the process of planning our all-staff meeting in Ames, Iowa, scheduled for the end of July that will coincide with our summer board meeting. This will allow our Board of Directors to meet our staff from across the country and exchange ideas, while listening to updates from all our departments.
The two-day event will provide workshops where staff can meet to solve problems, talk about new initiatives, and hear presentations from 401k representatives and insurance providers who handle those products for staff and members.
I am very proud of the National Board and our staff. Thanks to everyone working together, the organization continues to see solid growth.
Stay safe and May God Bless you.
