Posted 9:58 pm Friday, November 09, 2012
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Big harvest brings bigger government
How can this be bad news — so bad, in fact, the federal government is being called on to step in with assistance to the “victims”? This year’s peanut crop is breaking records. And some farmers claim the free market is breaking them.
“In Georgia, where nearly half of the nation’s peanuts are grown, the annual fall harvest has yielded a record amount of big, shell-filling kernels that farmers say taste better than average,” the New York Times reports. “The amount of farmland in Georgia planted with peanuts this year jumped to 730,000 acres, compared with 475,000 last year.”
That’s good news for consumers, the Times acknowledges — peanut butter has been one of the leading indicators of food price inflation, rising 24 percent last year alone. A bumper crop of goobers should mean those prices will fall soon.
“Although the harvest is just winding down, the national peanut crop report from October showed that more than 6.1 billion pounds will be harvested this year, compared with about 3.6 billion last year,” the Times says. “Of course, a great crop does not mean that farmers are knee-deep in cash. Farming does not work that way. Peanuts performed poorly in recent years, so prices jumped. Last year was one of the worst, in terms of supply. That attracted farmers who might otherwise have planted cotton, corn or soybeans to focus instead on peanuts.”
But the outstanding yield means those high prices will come down. Growers were hoping for about $700 per ton; they might see payouts of as low as $400 per ton.
Commence the outcry for public assistance.
“In Georgia, where nearly half of the nation’s peanuts are grown, the annual fall harvest has yielded a record amount of big, shell-filling kernels that farmers say taste better than average,” the New York Times reports. “The amount of farmland in Georgia planted with peanuts this year jumped to 730,000 acres, compared with 475,000 last year.”
That’s good news for consumers, the Times acknowledges — peanut butter has been one of the leading indicators of food price inflation, rising 24 percent last year alone. A bumper crop of goobers should mean those prices will fall soon.
“Although the harvest is just winding down, the national peanut crop report from October showed that more than 6.1 billion pounds will be harvested this year, compared with about 3.6 billion last year,” the Times says. “Of course, a great crop does not mean that farmers are knee-deep in cash. Farming does not work that way. Peanuts performed poorly in recent years, so prices jumped. Last year was one of the worst, in terms of supply. That attracted farmers who might otherwise have planted cotton, corn or soybeans to focus instead on peanuts.”
But the outstanding yield means those high prices will come down. Growers were hoping for about $700 per ton; they might see payouts of as low as $400 per ton.
Commence the outcry for public assistance.
“Many farmers are likely to turn to the federal government to keep the bottom from falling out of the peanut market,” the Times explains. “Instead of selling their crops right away, they will store shelled nuts in refrigerated warehouses and take government loans, betting that prices will rise within nine months and that their peanuts will bring enough to repay the loans. If prices stay low on the open market, the government will buy the peanuts for less than it cost to produce them but at a rate that will allow farmers to recoup some of their expenses.”
Those farmers who planted peanuts instead of their usual crops took a gamble. But under the current rules of the Farm Bill, taxpayers will pay off their gambling debts.
That bill officially expired on Sept. 30, but Congress put off voting on a new Farm Bill until after the election. The election’s over, and it’s time to get to work. Washington is more divided than ever, but everyone should be able to agree on some things, such as not bailing out agriculture corporations.
Instead of direct subsidies like buying peanuts at above-market prices, Congress should — at the very least — institute more targeted crop insurance programs, that protect against natural disasters, not the free market.
Remember, it’s not the family farmers of the Farm Aid era we’re talking about now; most agriculture subsidies go to big corporations.
Big harvests are good news. Aren’t they?
Those farmers who planted peanuts instead of their usual crops took a gamble. But under the current rules of the Farm Bill, taxpayers will pay off their gambling debts.
That bill officially expired on Sept. 30, but Congress put off voting on a new Farm Bill until after the election. The election’s over, and it’s time to get to work. Washington is more divided than ever, but everyone should be able to agree on some things, such as not bailing out agriculture corporations.
Instead of direct subsidies like buying peanuts at above-market prices, Congress should — at the very least — institute more targeted crop insurance programs, that protect against natural disasters, not the free market.
Remember, it’s not the family farmers of the Farm Aid era we’re talking about now; most agriculture subsidies go to big corporations.
Big harvests are good news. Aren’t they?
