Young Farmers Break The Bank Before They Get To The Field

As the average age of the American farmer has crept up to 60, fewer young people are filling in the ranks behind them. That’s prompted some to ask if young people even want to farm anymore.

The quick answer is yes, just not in the same numbers as they used to. And surveys indicate many of them don’t want to farm in conventional ways.

A 2011 from the National Young Farmers Coalition showed access to land and capital to be the single biggest factors keeping young people from getting into farming or ranching. The survey also indicated young people are concerned about the environment — they’re “generation organic” — and interested in small-scale operations.

But it can be difficult to turn dreams of a farm life into reality.

The NPR Article

Another Article on the Effect of ‘No Strings’ Cash to the Poor

Not only do people often know best what they themselves need, but there are huge emotional and health benefits that result from people feeling some degree of control over their lives — agency. The very poor deserve that as much as those of us better off do. I love this initiative — similar to microcredit but more radical.

Now if only we could roll back the enforced helplessness that people in the US often feel in relation to health insurance companies, telephone and internet monopolies, big corporations that don’t respond to individuals and even have machines answer their telephone hotlines, and the paternalism of US nanny-state laws, and we might also do better economically and feel more in control of our own lives.

The Article

Why it is so difficult to develop a robust economy of small farmers…

I’ve not been as much concerned about income inequality in America as I am the lack of opportunity….and the petty use of money that appears to be the result of income inequality combined with government and civil behaviors that enable great concentrations of wealth.

Those petty behaviors – and the resulting wealth concentration – make it extremely difficult to provide adequate capital to rebuild America’s small farms.

I just read a weblog entry from a farm commentator (whom I know to be intelligent) who was suggesting that the only way in the future for young folks to ‘get into farming’ is to become a worker in a ‘farm corporation’.

That is an environmentally and economically hopeless notion!

Is Income Inequality ‘Morally Wrong’?

Monsanto, Soybeans, and an Indiana Farmer

What does a Supreme Court case about the sale of soybean seeds have to do with life sciences? A lot, says the U.S. Solicitor General and life sciences attorneys.

Bowman v. Monsanto concerns farmer Vernon Hugh Bowman who bought seed from one of Monsanto’s licensed seed producers and did a first and then, much later, a second seeding. Monsanto claimed Bowman had infringed the patent and the technology agreement that was in force when he had purchased the seed. The lower courts found there had been infringement.

The “first sale” or “patent exhaustion” doctrine provides that the first unrestricted sale by a patent owner of a patented product exhausts the patent owner’s control over that particular item. Bowman petitioned the Supreme Court for review, arguing that the U.S. Court of Appeals for the Federal Circuit erred by refusing to find patent exhaustion in patented seeds after an authorized sale and by creating an exception to the doctrine of patent exhaustion for self-replicating technologies. Against the SG’s advice, the court granted review.

In his amicus brief to the court filed Jan. 8, the SG argued that the Federal Circuit’s ruling that patent exhaustion did not apply should be affirmed and stated that not affirming the ruling would also affect the “enforcement of patents for man-made cell lines, DNA molecules, some nanotechnologies, and other technologies that involve self-replicating features.” Companies marketing patented recombinant plasmids and transformed cell lines capable of replication “would lose much of their value if purchasers of patented bacteria or other self-replicating products could reproduce and sell those items free from the restraints of patent law,” the SG wrote.

Howard Bremer told BNA that the court’s affirming the Federal Circuit’s ruling would be the best solution and would prompt the continuation of the “motivation factor for the private sector to license self-replicating technologies for development and marketing under the auspices of licensing arrangements with universities and thereby serve the public interest.”

This is a case to watch.

(Source: Bloomberg News)

Social Impact Bonds

I was invited to a discussion this morning on Social Impact Bonds…and the likelihood that Rhode Island might participate in a Social Impact Bond offering.

It’s an interesting idea, hatched by the English, to deal with the cost of social interventions (which are difficult to fund). Most of our social service dollars go to the prison, or treating the disease…not to preventing the problem in the first place.

The idea of the Social Impact Bond is to get socially motivated investors to take the risk that a given social intevention (for example, job training and education to prevent prison recidivism) will reduce government cost in an amount greater than the initial social costs (prison, parole care, etc.). If the social outcome ‘contract’ in the Bond succeeds, investors make an agreed upon return paid by the government (out of a portion of their cost savings). If the social outcome fails, the investor takes the loss as a charitable donation.

It is an intelligent approach to ‘curing’ social problems, and it could add substantial capital to private social service organizations that now struggle to finance their very respectable, measureable work.

Environmental and Social Issues at Shareholder Meetings

Environmental and social issues were at the top of shareholders’ attention during the 2011 proxy season, according to Ernst & Young (E&Y).

About 40% of all resolutions that proceeded to a vote revolved around environmental and social issues, up from 31% last year, marking the second year in a row that these resolutions comprised the largest portion of shareholder proposals that came to a vote, according to the consultancy firm’s 2011 proxy season update.

The Article

2011 Corn

A number of factors combine each year to determine the U.S. average corn yield. Among those factors, temperature and precipitation during July are the most important. Crop yield models have long confirmed the large yield impact of July weather. The most favorable weather conditions in July in the heart of the corn belt consist of temperatures that are modestly below average and precipitation that is about 25 percent above average. These are the kind of conditions that were experienced in 2009 and contributed to the record high U.S. average yield that year. Historically, such conditions over large areas have been rare.

Weather conditions in July (and earlier) in 2011 have been far from ideal in many areas. Planting was late in portions of the eastern and northern corn belt. Southern portions of the U.S. have experienced hot and generally dry conditions for an extended period. The central and northern growing areas have experienced widely varying weather conditions during planting and the early part of the growing season. These widely varying conditions have been reflected in the USDA’s weekly Crop Progress reports which report crop condition ratings. As of July 10, the lowest crop ratings were reported in Texas, North Carolina, Kansas, and Ohio. The highest crop ratings were in Iowa, Kentucky, Nebraska, and Tennessee.

The continuation of high temperatures in southern areas and the expansion of hot weather to much of the corn belt this week raises additional concerns about corn yield. The high temperatures in the corn belt are occurring during the reproductive stage for a large portion of the crop. There is some indication that the intense heat will begin to moderate in many areas by the upcoming weekend. Still, average July temperatures in the corn belt may rank among the highest since 1960. In addition to the high temperatures, corn yield potential may be threatened by the expanding area of dryness over the last few weeks. For the first half of July, precipitation was well below average in large portions of Illinois and Indiana. Portions of southeastern Iowa, northwest Ohio, and eastern Michigan have also been relatively dry. Precipitation over the past 30 days was below normal in large portions of Iowa, Illinois, Indiana, Ohio, Michigan, Pennsylvania, and southern Wisconsin.

Less than favorable July weather in many areas has reduced corn yield potential in those areas. The overall impact on the likely U.S. average corn yield will be influenced by weather conditions in the last week of July and in August. Some indication of the impact will be revealed in the weekly crop condition ratings. Overall ratings for the week ended July 17 may not decline substantially, but declines could be reported for the week ending July 24 as a result of high temperatures and the lack of widespread precipitation.

The importance of the 2011 U.S. corn yield is underscored by the USDA’s projection of record consumption of U.S. corn during the 2011-12 marketing year. The most recent projection, released on July 12, forecasts consumption at 13.5 billion bushels, 195 million bushels above expected consumption during the current marketing year. Stocks at the end of the 2011-12 marketing year are projected at 870 million bushels, or 6.4 percent of projected use. Based on the forecast of 84.9 million acres to be harvested, a yield below 156.5 bushels would force a reduction in the projected level of consumption. A continuation of relatively high livestock and ethanol prices, along with growing Chinese demand, suggests that high corn prices would be required to curtail consumption.

For now, the corn market is reflecting modest concerns about the size of the 2011 crop. December 2011 futures recovered by more than $1.00 from the low on July 1, but are currently about $.50 below the high reached on June 9. Prices will continue to reflect weather conditions, weather forecasts, and crop condition ratings. As indicated last week, the nature of the 2011 planting and growing season creates a large amount of uncertainty about the size of the 2011 corn crop. Small inventories and strong demand increase the importance of crop size. As always, the USDA’s August production forecast will be highly anticipated as it will establish a benchmark for forming production expectations. That report may have added impact this year due to the possibility of adjustments to the harvested acreage forecast.

It almost goes without saying that corn prices will continue to trade in a wide range. All of the uncertainty makes it difficult to judge the overall price direction, but it appears there is more production risk than currently reflected by the corn market.

Issued by Darrel Good
Department of Agricultural and Consumer Economics
University of Illinois