Home

E-Mail

Back

Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

Bruce Hamnes, Stephen, MN
MWRPC Chairman

You buy a certain amount of hardware and "bricks and mortar," so to speak, when you invest in the penny-per-bushel wheat checkoff, administered by the Minnesota Wheat Research and Promotion Council.

There’s testing equipment and small-plot machinery used in crop research. There’s baking and milling equipment and facilities in countries overseas: bakers and millers trained at using American-based equipment and facilities are more likely to buy American wheat. There’s nutritional pamphlets and information received by consumers, nutritional leaders and the media, to educate them on the health benefits of wheat foods.

But to a larger extent, when you are investing in the wheat checkoff, you are essentially investing in people: the researchers who run the plot combines, the technicians who visit overseas buyers to urge them to buy U.S. wheat, the nutritionists whose credibility is important for wheat foods education.

You invest in the staff who administer the program activities as directed by the producers who serve on the MWRPC board. You invest in representation at meetings where decisions are made that affect the wheat industry.

There are in-state meetings, such as with Minnesota Department of Ag officials in St. Paul, researchers in Crookston, or grain shippers in Duluth. There are national meetings of U.S. Wheat Associates, the Wheat Foods Council, and other entities that are checkoff funded, held in Washington, D.C. and other places across the country.

The nine producers who serve on the MWRPC board are assigned different committee and program areas such as domestic promotion, research, and export promotion. When important meetings come up in these different program areas, they are attended by the designated MWRPC board member or members.

Communication and feedback with decision makers is often best accomplished when conducted by actual producers. It makes sense when decisions are made that affect producers. Program spending of non-profit organizations, including administration and administrative travel, is often scrutinized. This is exactly as it should be. Accountability is needed to ensure that our individual investments are spent wisely.

At the same rate, administration and travel is also something that is necessary to conduct the business of the organization. Someone once said that decisions that run this world are made by people who show up. This is the truth. Decisions are made by people. It is important to develop rapport with decisoin makers. Without the people to meet with decision makers, and without face-to-face dialogue with deicion makers, the mission of any organization cannot be accomplished. Including the mission of the wheat checkoff, to improve the wheat production sector through research, promotion, and communication.

Proof that association involvement brings results

Pete Kappes, Ada, MN
MAWG President

This past year might be the best example yet as to why our association exists, and what can happen because of member support and involvement.

During the 1998 state legislative session, the MAWG played a key role in obtaining an $8.8 million state rebate of 1997 wheat and barley crop insurance premiums. The MAWG also laid groundwork for another $1.6 million that we hope will be allocated in the 1999 Session, to continue scab research at the University of Minnesota in the new 2000-2001 biennium.

If successfully appropriated, it would bring the total amount allocated to the U of M for scab research since 1994 to $4.6 million. We can be proud that this association was the spark plug that got this research engine going.

Not only at the state level, but at the national level. A $3.5 million national research initiative to solve scab in wheat and barley will soon be underway, involving dozens of crop scientists in 20 states, a direct result of our lobbying efforts.

The MAWG helped get Zak Fore, a new extension rotational crops specialist, based in our office in Red Lake Falls. Zak’s mission is to help producers in northwest Minnesota develop more successful and profitable crop systems.

Keep in mind that as a member of the MAWG, you are also an automatic member of the National Association of Wheat Growers. The NAWG helped secure the $6 billion farm economic assistance package approved by Congress last fall. This Congress, the NAWG will be focusing on federal crop insurance reform, and in seeking solutions to unresolved grain trade issues in the international arena.

Communication remains a top priority and the crown jewel of our association. The MAWG has a communications network that is the envy of most state and national associations: a twice-monthly, members-only newsletter; three-state magazine, web site (www.smallgrains.org), electronic updates on FarmDayta and DTN, and part ownership in the Red River Farm Network. This helps us to serve our members well, and a good case-in-point is MAWG's leadership in explaining and posting information about loan deficiency payments last summer.

It is very evident that the MAWG can and does make a difference. But not without successful membership support. New members are important, and so are renewing members, to the lifeblood of this organization.

Even aside from our solid, respected legislative representation in St. Paul and Washington, D.C., the MAWG has put together what might be the best incentive package ever to become a MAWG member. Including discounts on events, free trial market newsletters, entry into a drawing for a 100-hour lease on an Agco R72 Gleaner Combine, even free membership with qualifying purchases of Zeneca products. Full details can be found elsewhere in this magazine or by calling the MAWG office at 1-800-242-6118.

I’ll leave you with the following equation: Legislative success + Excellent Communication/Information + Educational Opportunities + Producer Networking + Great Incentives = all the right reasons to become a MAWG member!

Crop insurance, trade

two top NDGGA priorities

Mark Gage, Page, ND
NDGGA President

Following are ag and trade excerpts from President Clinton’s State of the Union Address last month. Both deal with two top priorities for the North Dakota Grain Growers Association in 1999: crop insurance reform and trade. Here’s the first:

"We must work hard to help bring prosperity back to the family farm. As this Congress knows very well, dropping prices and the loss of foreign markets have devastated too many family farms. Last year, the Congress provided substantial assistance to help stave off a disaster in American agriculture. And I am ready to work with lawmakers of both parties to create a farm safety net that will include crop insurance reform and farm income assistance. I ask you to join with me and do this. This should not be a political issue. Everyone knows what an economic problem is going on out there in rural America today, and we need an appropriate means to address it."

It is significant that the President singled out crop insurance reform in his Union address. But adequate funding to get the job done right is needed, however. The NDGGA is working with lawmakers and others toward the objective of truly meaningful reform, for cost-effective crop insurance that provides adequate coverage. Fixing Actual Production History and finding a policy that more adequately covers cost of production are objectives that will be debated. Another facet of reform we want to see included is a change in quality adjustment factors. A new calculation for settling multi-peril loss claims were put in place for wheat in 1997, and it does not adequately reflect actual marketplace discounts. Also, better malting barley coverage is needed; quality losses need better quantification.

Here is another excerpt that caught our eye:

"We must enforce our trade laws when imports unlawfully flood our nation. I have already informed the government of Japan that if that nation’s sudden surge of steel imports into our country is not reversed, America will respond."

He could have just as easily inserted the words "Canada" and "grain" into that paragraph. The dynamics are similar. The NDGGA is making the point with U.S. ag and trade officials that we cannot effectively negotiate or resolve our cross-border trade dispute with Canada, or effectively prove or disprove that the Canadian Wheat Board is a disruption to U.S. grain trade, until there is full disclosure from the CWB of its acquisition costs, including administration costs, payment structure to producers and for customers, and subsidized cleaning, handling, transportation and storage costs.

We believe the time has come for the U.S. to get tough with the CWB. We are urging the imposition of strict import quotas, or discontinuation of cross-border trade in bulk wheat, barley and durum altogether, to restrict or stop the Canadian flow of grain into this country, until the CWB agrees to full disclosure of all information deemed necessary to assess the fairness and competitiveness of its operations. It is time for the U.S. to get tough in these negotiations: the future of our wheat and barley production depends on it.

Change in ag direction would require action, not blame

The following commentary is from Bob Koehler, University of Minnesota extension livestock systems educator, Southwest Experiment Station, Lamberton. The message focuses on hogs, but strikes at the nerve of many of the broader issues facing agriculture today, no matter the commodity. Note the last sentence:It’s one of the fundamental principles of association involvement.

The record low hog prices of recent weeks are causing extreme stress in agriculture, with many pork producers on the verge of exiting the hog business. Yes, the market has moved upward recently and might again reach profitable levels sometime this year. That’s good news for those who will remain in the business. However, the price crisis will result in lasting changes for many producers. In the longer term, some predict that the industry will eventually be completely out of the hands of local producers and farmers, and integrated in a manner similar to poultry production.

Such a transition probably would not noticeably impact urban consumers. They would quite likely still be able to purchase safe and nutritious pork products at a competitive price, just as they do now with poultry. However, if we are troubled by loss of local control and negative impacts on rural communities, there is cause for concern.

We are in a long-term trend to fewer farms and a more industrialized food production system. This has been going on at least since World War II. Forces such as urbanization, global markets, and new technologies drive this change.

Occasionally, something causes the rate of change to become more acute for a time, and the situation is then labeled a crisis. Much of the current "crisis" in the pork production business has resulted from an insufficient packing plant slaughter capacity. Yes, hog numbers offered for sale are too high when they are 10-15% above a year earlier. However, it’s unlikely hog prices would have plummeted to single-digit levels with more packing plant capacity. Part of this lack of capacity results from recent plant closures. Those in the packing industry contend that the closures are the result of a lack of hogs and high prices in recent years.

Recent low prices, while devastating to many pork producers and maybe a final blow for private production as we’ve known it in some areas, still represent a shorter-term market cycle that will correct itself. In fact, the recent USDA Hogs and Pigs Report signals that producers are responding to the market.

Nevertheless, the forces that are causing long-term change are very strong and are likely to persist in all of agriculture. To a great extent, the consumer and lifestyle choices we make cause these trends. More of us live in urban areas, far from where our food is produced. We choose to shop in huge stores that provide consistent quantity and quality and lower prices than their smaller competitors. These are only some of the ways we drive the change to an industrialized and coordinated food production system.

However, if you read letters to the editor, listen to call-in shows, or attend farm meetings on the topic, it’s far more fashionable to blame big farms, corporations, factory farms, packing plants, processing plants, food retailers, etc.

Yes, they may be part of the problem at times, but the people who run these businesses are doing what they are hired to do. That is trying to make a profit for their owners and investors and heeding the signals from consumers and the marketplace.

If we want to keep as many people in pork production as possible in our region, it could be argued that we should encourage all forms of production. Based on resources and values, some will choose to carry out production for others under contract. Some will join together to produce in networks. Others may be successful at remaining more independent in structure and finding a niche market.

However, if we want to change the structure of agriculture and actually have many more farms that are locally owned and independent, major policy changes would be necessary. The natural economic forces will not take us there. We would need to do more than complain and blame. That hasn’t worked yet, other than to occasionally cause the government to fund bandage programs that may help some in the short-term but don’t alter long-term direction. The situation is much like that of the many individuals who complain about gaining weight but never take the step to eat less or exercise more.

Are there ways to increase the number of small farm operations in today’s food industry? Frankly I’m not sure. But to be successful, the approach would probably need to resemble one or more of the following:

A two-tiered pricing system

This would be some type of arrangement in which farm commodity prices are supported by a government program that pays a subsidy for the first base amount of production. An additional $10 per head over the market value for the first 2,000 pigs a producer raises each year would be significant. This would encourage more small/medium-sized producers to be in business. Yes, it would be a nightmare to set up and control and it would cost taxpayers some money, but there’s always a cost for benefits.

Small farm-identified products

Many consumers say they would be willing to pay more for products produced by small family farmers. Can we help more farmers set up systems to process and brand their products in order to receive a premium in the marketplace? Again, this would be challenging to arrange and set up. But if successful, it would have the most staying power, since its support would come from the marketplace. Also, it’s not certain that substantial numbers of consumers would back up their words with actions.

No doubt there are still other ways to influence the structure of agriculture. Strong tax incentives and other direct payments for small producers are possible strategies. If actions of this type seem difficult and expensive to implement, some less sweeping actions might at least influence agricultural structure. Ideas include:

Helping local farmers operate in a high-tech business-oriented world

This approach assumes that the change to farming as strictly a business will remain in place, and that the best bet for local producers is to learn how to play the game. Helping and encouraging smaller producers to cooperate and work together to gain efficiency and market clout is key in this scenario. Swine networks are an example. Potential programs to help local small/medium-sized produces purchase swine facilities that may be available as a result of the current pork industry calamity are also a possibility.

Of course, this approach has risks too. As in all other businesses, not all investments in pork production are successful. For instance, there is the risk that small producers who invest in some co-owned or networked entity might find themselves unable to compete under certain conditions. They might be forced to sell the facility to a better-financed mega-producer.

Insuring accurate market reporting and requiring disclosure of contract terms might be other ways to ensure that all producers regardless of size and structure have the information necessary to make informed decisions.

Helping producers establish niche markets

Especially in areas near population centers, it might be possible to fill various direct marketing, natural, organic, and other "concept markets" with production from small farms. Of course, this approach is in place to a degree already, but not enough to influence the long-term structure of agriculture. This "assistance" might involve help in connecting consumers with producers.

Possibly some type of "active citizenship" process could help society identify still more approaches.

The point is, we could possibly influence the structure of agriculture and assist small producers. However, it most likely would be a complicated and fairly costly process, since we would be conflicting with global economic trends and forces put in place by modern lifestyles. Yes, the cost might be more than offset by the impact of healthier rural communities. But the question remains, "Does society really have the will if there is a cost for individual people?"

The agriculture we say we favor won’t exist in the future if we continue to blame others for its decline without committing to significant action.