January 3, 2012

Reflecting on 2011

It is hard to believe that we are already entering 2012 when it feels like 2011 had just begun. While 2011 may be over, we won’t forget the memories that 2011 left us. Specifically in the agriculture industry, plenty of memories were made ranging from the high commodity prices to the flooding of the Missouri River. Over all, the majority of corn farmers in Nebraska will tell you that it was not only a good year in agriculture but also a challenging one!

Many of Nebraska’s corn farmers had a good year. The state corn yield average is estimated at 160 bushels, down six bushels from last year but up 32 bushels from nine years ago. Fortunately, for a majority of farmers throughout the state, Mother Nature brought decent weather along with rain that was needed at critical times during the growth stage. Not only were the corn yields good, but we also saw record breaking corn prices this last year. Corn futures hit a historical high of $7.95 last May setting a new record. Many farmers were able to cash in on these high prices before the bottom fell out of the market at the beginning of harvest dropping to under $6.00. Even though high corn prices were a challenge for livestock feeders, they too saw record prices for their livestock.

While things were good on the farm, things were also good off the farm. The EPA approved E15 (15% ethanol) in 2001 or newer vehicles and also dropped the proposed regulation controlling dust. The free trade agreements (FTA) that had been pending for a few years with Panama, Columbia, and South Korea were passed in October with a majority of U.S. lawmakers supporting them. U.S. lawmakers also passed H.R. 2112, which was a bill establishing budgets for the United States Department of Agriculture. Within the bill, there was no language that banned horse slaughter in the U.S. and would allow for the industry to resume.

While there were many positives in 2011, the year didn’t go without having any issues. One of the major problems that not only affected Nebraska corn farmers, but all U.S. farmers was the 2012 Farm Bill. Because of the U.S.’s financial problems, U.S. lawmakers were looking at different ways to get our deficit under control. One of the areas to cut was the Farm Bill and many of the programs that are administered through the Farm Bill were on the chopping block. Unfortunately, the super committee did not achieve anything which has now delayed the passing of the Farm Bill until 2012.

Another issue was that the Federal Motor Carrier Safety Administration (FMCSA) looking at the possibility of increasing CDL requirements, where anyone operating agricultural equipment would be required to obtain a CDL. Luckily, many in the Ag community voiced their opinions about these new regulations, which in turn led to the FMCSA dropping the consideration of increasing CDL requirements. Unfortunately, the FMCSA was not the only agency looking at increasing regulations on the agriculture industry. The Department of Labor is also looking at changing the child labor laws making it difficult for youth under the age of 18 to work on farms that are not owned by their parents. While many in the Ag community voiced their concerns over the possibility of this regulation being instated, the Department of Labor has yet to make a ruling on whether it will change the child labor law that could have a major impact on the agricultural community.

Although it may seem like a lot of the issues in 2011 dealt with policies, Mother Nature also made its impact. Flooding along the Missouri river wiped out thousands of acres of crops and pasture. After the floods resided, fields with great top soil ended up being washed away leaving only debris and sand. It will take several years for farmers in these areas to get the soil back to the production stage. Not only did the Missouri river flooding have an impact on some of Nebraska’s corn farmers, but parts of Southwest Nebraska got hit by major thunderstorms, ruining entire crops. One of the storms that went through the first part of August devastated areas, stripping corn plants down to their stems, making it look as if a farmer shredded their corn crop. Corn that was looking to have above average yields ended up being chopped for silage.

Overall, 2011 was a good year for agriculture! While 2011 may have brought some challenges and headaches, the farmers took those challenges head on and showed that they can still be productive and break production records. As we look forward to the 2012 year, there is no doubt that the agriculture industry will be faced with many challenges ranging from policies to Mother Nature. The Old Farmer’s Almanac is predicting a cool spring with normal precipitation amounts, and a cooler but dry summer with the exception of a couple periods of hot weather in July. While the summer may be dry, it is expected that we will have a wet fall. It is also predicted that we won’t see commodity prices go as high as we saw them in 2011. For corn, it is likely that we will see prices remain around the $6.00 range. However, it should be noted that the prices will heavily rely on weather expectations and supply and demand. There is no doubt that 2012 won’t be like 2011, but it will be a year to make new memories and to overcome new challenges!

Now that I've reflected on 2011, tomorrow we'll feature Nebraska Corn Board and National Corn Board member, Jon Holzfaster, and his outlook in agriculture for 2012.

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