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As demand strains supply, will it be corn or conservation?

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BY ART HOVEY / Lincoln Journal Star

Sunday, Jul 06, 2008 - 12:32:42 am CDT

It’s hard to tell if this would be the equivalent of coaching somebody to heave a basketball into the hoop from the other end of the court, or if it’s more like getting out of Michael Jordan’s way as he floats in for a slam dunk.

Nobody in Nebraska seems to know the odds of U.S. Agriculture Secretary Ed Schafer easing the strains on livestock feeding budgets by opening up land in the Conservation Reserve Program for corn production.

What is sure is that the price of corn is above $7 a bushel, livestock producers are suffering more each day, and covetous eyes are being cast on the corn-producing abilities of 35 million acres set aside largely because of erosion concerns.

Story Photo
Ken Tyser stands in one of his CRP fields near DeWitt. This one is 60 acres. (Robert Becker)
Top CRP states

This ranking gives the top states enrolled in the federal government’s Conservation Reserve Program as of April in millions of acres. The annual estimated rental payment in Nebraska is about $70.6 million and the average payment per acre is $56.93.

1. Texas 3.9

2. Montana 3.3

3. Kansas 3.1

4. North Dakota 3.0

5. Colorado 2.4

6. Iowa 1.8

7. Minnesota 1.8

8. Missouri 1.5

9. Washington 1.5

10. South Dakota 1.3

11. Nebraska 1.2

Source: Farm Service Agency, U.S. Department of Agriculture

But Schafer has yet to make an exception that would allow holders of 10-year CRP contracts, including Wilber farmer Ken Tyser, to put their land back into production without paying penalties that go with early withdrawal.

Tyser, 67, wishes it were otherwise. He wishes the secretary would exercise the discretion the law allows him on the CRP program, including 1.2 million acres in Nebraska.

When Tyser signed up several years ago, he looked fondly on the possibilities of regular CRP income. But that was before the price of corn approached caviar proportions in livestock diets and cash rent on crop acres in Saline County reached levels twice as high as what he was getting in annual CRP payments.

Cash rent on unirrigated parcels is in the range of $130 an acre. Tyser gets $65 an acre on one of his CRP parcels, $72 on the other.

“I did like it until now,” he said, “when grain prices went up — skyrocketing — and all the cash rent went up. If the payments went up on the CRP with it, it would have been fine. But they don’t.”

This is more than a personal, pocketbook dilemma.

Over the two-decade history of the conservation program, the national inventory of what is supposed to be fragile ground has grown to include an area 100 times the size of the crop acres in  Lancaster County. 

In some places of limited cropping potential, including Pawnee County in Southeast Nebraska, the program has proven so popular it hit the enrollment ceiling of 25 percent of crop land long ago.

In that same time period, wildlife enthusiasts have come to appreciate what areas typically sown to grass and other cover crops mean for nesting, refuge from predators, hunting and other non-agricultural purposes.

More recently, events have taken a darker turn. As export shipments and ethanol plants proliferate, corn prices have soared, stimulating both coffee-shop debates and major policy disagreements about conservation versus a bigger corn pile.

Ed Christensen, an auctioneer and real-estate presence in Pawnee County, can see why.

“Boy,” said Christensen, “we’ve got a lot of poor-quality ground in the CRP.”

That makes CRP one of the best things that ever happened on his home turf.

On the other hand, he said, “If people could pull out of the CRP now — if they could — they could turn around and rent it and probably get more income out of it.”

The Nebraska Cattlemen and the Washington-based Environmental Working Group are among the institutional voices being heard at a time when many expect corn prices to go even higher.

Michael Kelsey of the Cattlemen acknowledged that some CRP acres need to stay where they are because they are especially prone to wind or water damage.

But not all.

“There’s no doubt in my mind that there’s a tremendous amount of acres that were put in the CRP as well out of convenience or maybe as (grain) supply control,” Kelsey said.

The Cattlemen and members of the Nebraska Corn Board are among those have met with Agriculture Secretary Schafer to talk about the impact of high corn prices on the livestock sector.

“We want and need more acres in production,” Kelsey said.

Iowa Sen. Charles Grassley, who represents a state with lots of hogs and lots of flooded corn acres, has also tried to persuade Schafer to give farmers what many describe as an early out.

“The frustrating part to us,” said Kelsey, “is we floated this concept way back in the winter, long before planting season began.”

The feelings of the Environmental Working Group and Michelle Perez, a senior analyst there for agriculture and natural resources, run very much in the opposite direction.

Perez brought ethanol mandates, their place in national energy policy and their influence on corn usage into her side of the argument almost immediately.

“This was all on the backs of perfect weather,” she said. “Now we see the consequences of that foolish, short-sighted and dangerous policy.”

If adjustments are in order, she doesn’t want to see them in the realm of unexpired CRP contracts.

Early outs are “shorthand for reneging” on the obligations landowners took on in exchange for tax dollars, Perez said. The law says if they bow out early they have to repay everything that was paid to them.

Even though 100 Lancaster counties might seem to be a lot of territory, Perez said bringing a substantial portion of CRP acres back into production would have “a very negligible impact” on the corn supply.

Bearing that in mind, she sees the chance of Schafer being persuaded to exercise his discretion as dim.

You might say it’s in the category of sinking a shot from the opposite end of the basketball court.

But Wilber farmer Tyser thinks the chances are a lot better that the scoreboard is about to light up for those on his side.

“With high-priced corn,” he said, “I think, yeah, it’s likely to happen.”

Reach Art Hovey at 473-7223 or at ahovey@journalstar.com.


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Old-time farmer wrote on July 6, 2008 2:42 am:
" The concerns of the Cattlemen shouldn't even be mentioned when it comes to conservation programs. Talk about catering to special interest groups. CRPs are a commitment to the environment with reasonable benefits to the landowner. The CRP lands are not something as simple as an unemployment check; they are set up to protect the long term interests of land management and environmental protection. Year-to-year crop prices should be weathered like any other environmental condition. The consequences to wildlife, soil conservation, and water resources of wholesale conversion of CRP land to production agriculture is akin to selling ones soul to the devil. Without doubt, the price paid out by this program may need to increase in order to make environmentally-conscious family farms more sustainable, but this article highlights much of the greed and disinformation that exists within the ag community. If anything, higher grain prices benefit diversified, well-managed small family farms. Michelle Perez's words provide a lighthouse in this storm. Let's hope that Ed Schafer is on her end of the court. "

 bono vox wrote on July 6, 2008 7:36 am:
" U.S. farm policy is a joke, it is one constant give-away. Last year, farmer were paid nearly a billion dollars here in Nebraska to grow corn. Then you have all the other incentives (subsidized actions), direct payments, etc. Then you have a heavily subsidized ethanol industry (plus a 100% tariff on foreign, more efficiently produced ethanol). Then you have over-tapped water supplies and NRD-created water messes. Taking large amount of land out of CRP will create more problems (run-off, increased flooding potential, polluted ground water). Everyone ultimately pays for all of the negative consequences current farm policy creates. "

 dale wrote on July 6, 2008 7:48 am:
" CRP is not a fault for the lower amount of corn/production acreage. It has been the ever growing suburban sprawl. CRP can always be turned back into production a few years down the road, but once graders go in, strip the topsoil off and start popping in those "american dream" cookie cutter homes the land is worthless for production.

The title of this is completely biased against farmers (many of whom are older an unable to farm) put land into CRP. I myself have two sections just west of Burchard, NE in CRP and it too is terrible land for production. But land in Lancaster, Sarpy, and western Douglas Counties are prime farmland but people don't see the impact that their one house on a 90x180' lot makes. That is the real waste of land that should be talked about is the urbanization of prime farmland causing less acreage for food production that can never be reclaimed. "

 Farmer wrote on July 6, 2008 10:53 am:
" Well Mr. Tyser putting your land into CRP was a choice you made and those farmers that made the choice not to put there land into CRP reap the benefits of there risk with higher prices base on market conditions. I suppose if the prices fall you would want the CRP contract reinstated. This has been the deficiency of government meddling in the market and the farm program for years. For years corn prices were depressed because grain that the CCC had guarantee loans to farmers and the farmer could default with no penalty. That corn was sold on the open market keeping the price depressed and because these policies many farmers were unable to succeed. The nanny government and vote greedy politicians have gone wrong. "

 Sacrifice wrote on July 6, 2008 11:20 am:
" The United Nations Food and Agriculture Organization issued a report a year and a half or so ago stating that the livestock business generates more greenhouse gas emissions than all forms of transportation combined. It disturbs me that you are willing to risk erosion and damage to your land because you see other people making more money. Feeding the cattle industry has such a negative impact on this planet and is so wasteful. I can hardly wrap my mind around the collective logic of so many millions of consumers. Even environmentalists rarely mention the damage caused and the wastefulness of the cattle industry if they mention it at all. Researchers at the University of Chicago determined that switching to a vegan diet is approximately 50 percent more effective in countering global warming than switching from a standard American car to a Toyota Prius. "

 Husker wrote on July 6, 2008 4:50 pm:
" Corn, conservation or starvation?

It seems introduction of an ethanol - corn factor into the market has created a more complex system of subsidies and an excise tax on imported ethanol. Too often those in government, whether a former governor or former Ag Secretary who could have, might have, exercised use of data an commitment to the moral issue of producing agricultural products to feed the world and restore farming as the “bread basket” of the nation. Erosion and significantly the increased demand of water, as a limited resource, can be affected and damaged as an “unintentional consequence “when policy becomes contaminated by irrational exuberance.. Globally, emerging nations are facing destabilization by soaring costs of grains. Change from flawed and harmful policies are not only prudent, they are necessary for stabilizing the economies of many nations who could fall into chaos if there is not change in the party who resides in the White House. "

 whatever wrote on July 6, 2008 6:22 pm:
" Keep in mind before you go bashing the United States farmer that Brazil takes millions of acres of land out of production for human consumption to support their ethanol industry, plus they routinely destroy thousands of square miles of forest land to increase agricultural production of grains and livestock. Lest we forget most of Central and South America use pesticides that even the most irresponsible United States farmer would walk away from. China and India also use herbicides, pesticides and fertilizer in quantities that would make most environmentalist vomit. Oh not to say there aren't problems in this country but to paint the United States farmer as among the most virulent of ag producers is intellectually dishonest and morally bankrupt. You hear very little if anything from U.S. environmental interests regarding the more significant problems elsewhere in the world. Why is this? And I agree with "Farmer" as soon as commodity prices fall below CRP payment levels you will hear the "whining and complaining". Most U.S. farmers now are large corporate ag businesses that line up at the trough of subsidies claiming to be patriots beyond reproach as they cash their checks from enemies of the United States like Cuba. I get family farming but I don't buy into the B.S. of agribusiness in this country. "

 Bryce wrote on July 6, 2008 9:02 pm:
" People are tired of the ad nauseam references to other nation’s lack of environmental stewardship as a way to avoid USA accountability The Bush administration has been fond of finger pointing but not acting to control the behaviors under USA jurisdiction. That hypocrisy is neither justified. or a model of stewardship. Cattlemen do have a legitimate complaint when they find subsidies going to ethanol plants and Brazilian ethanol having an excise tax placed on it because of the noncompetitive costs of domestic ethanol production. Meanwhile the sum of ethanol additions will hardly reduce dependence of the USA on foreign sources, and offshore oil may present greater risks than providing long term security. Facades of alternative energy sources in many cases have great risks of unintended consequences.. "

 Farmer wrote on July 6, 2008 9:11 pm:
" Let's all just not plant for one year and see what happens. There used to be a 30 year stockpile of corn/grains during the cold war using elevators, etc. Now it is less than a 12 month supply.

If people don't want there taxes going to farmers so the price of producing their food is cheaper, lets not accept subsidies etc and raise nothing at all and let's see how much they and the rest of the world has to pay then. Or even if you'll get food on your plate at all. "

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