January 4, 2012

Outlook for 2012


By Jon Holzfaster, District 8 Director on the Nebraska Corn Board and National Corn Board Director

DSC_0151Where does one start in trying to define what is happening in agriculture today? Sure there are a lot of exciting trends from record net farm income, to record setting input costs, to land sales that start to resemble Eastern corn belt numbers, to record cash rents, to China entering into the market, and the list is endless.

We have all seen a transformation of production agriculture that is both exciting and nerve racking. From new seed traits, to RTK guidance systems, our ability to grow more grain on fewer acres of land using fewer resources is helping set the pace for a sustainable agriculture.

As a farmer, cattle feeder and ethanol plant investor, I get to see it from a number of different angles. Also as a member of the Nebraska Corn Board and serving on the National Corn Growers Association (NCGA) Board of Directors, I probably am more geared towards making sure the ethanol and livestock industry is equally sustainable and profitable. Each of corn's primary customers of ethanol and livestock face their own unique challenges. I can say as a Nebraska Corn Board member we work hard with checkoff dollars to support both of these value added industries.

Ethanol has been taking it on the chin from some of the other corn users, but in reality we have a real opportunity in Nebraska to take advantage of the corn to ethanol to distillers grains to cattle feeding to red meat processing, and converting much of the livestock byproduct back on the farm for fertilizer. As the nation's No. 3 corn producing state, and the No. 2 ethanol producing state, the No. 2 cattle-on-feed state and the No. 1 red meat processing state, we work hard to promote these industries.

For many of us in ag states it has been agriculture that has kept our economies stronger than states that are more dependent on manufacturing or construction. In fact in a recent editorial, Nebraska's state budget position (now $62 million to the good) was compared to many other states that had to resort to drastic cuts, and our good fortune was attributed to - you guessed it - agriculture.

I have not left out exports. With over 95 percent of the world's population residing outside of the U.S., we cannot overlook the importance of our ag exports. Beef and pork exports have made dramatic improvements since 2003. Now nearly $200 of every beef animal is exported. For pork, over $50 per head goes to exports. Even U.S. ethanol has been finding its way to Brazil, Europe and Canada. Corn and dry distillers grains have seen some growth in the export market, and now, with three free trade agreements getting final approval, we expect more ag exports to follow.

My role at NCGA started with a seat on the Ethanol Committee, and while in that role I witnessed corn ethanol into NASCAR in the form of E-15 and American ethanol. Corn states joined in together to help fund an effort like no other promotion that is now reaching over 73 million fans. We want motorists to realize we can produce a renewable, homegrown fuel that is good for our environment and our economy, reduces our dependence on foreign oil and functions in an automobile whether it is a multi-million dollar race car or the family auto.

I have to compliment the leadership and staff of NCGA for their hard work on this project. NCGA also has worked hard to make sure consumers get the right factual message on corn and corn ethanol. That is why you could find our message regarding the Corn Farmers Coalition in the Washington Metro, and across the D.C. market. There was so much misinformation out in the media and public that the time came for us to get the Corn Fact Book out and in the hands of decision makers.

The future will be what we make of it and how hard we work to stay productive, efficient, sustainable and competitive. The rest of the world is not setting by without change as well. Sure, world population is growing, but so are the competitive markets such as the Black Sea Region and South America. This new plateau that we find ourselves on makes the challenges of the future even more frightening.

Over the last 30 years commodity checkoff programs have played a critical role in the developments of new uses, new markets, new research and a new definition of production agriculture. The new agriculture is still family owned and managed, but it isn't the agriculture of the 1980s or '90s. It has new career opportunities for those that want to stay close to agriculture, it is revitalizing many rural communities, with processing and manufacturing, and it is not afraid to speak up and defend our way of life.

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