Lamenting $2 Corn: Some Won’t Rest Until We’re There Again

Is the sky falling?  It is one thing to get used to futures prices moving skyward.  It’s like you’re in a first class airline seat being served caviar.  Then when we have a commodity free fall like we’ve had since early July, its like you’re in the movie Castaway.  You might remember that’s the movie where FedEx guy Tom Hanks is flying at 30,000 feet when suddenly the plane drops from the sky.

We’ll see how that all settles out.  Interestingly, now that prices have retreated there are no headlines of corn and soybeans prices plummeting 25%.  That might be sensational for farmers but it doesn’t even register on the radar screen of greater society.   Regrettably much of the media fixation over the last several months has feasted on higher prices translating into hungry stomachs worldwide.

For many farmers this debate is a bit of old hat.  I know this past winter I talked a lot about how the food versus fuel debate was starting to get some traction.  It not only got the traction, but by spring many Canadian farm politicians were getting spooked by an urban public who understood food prices were getting much higher.  With many of us in the field, there hasn’t been a lot of concerted action by Canadian farm groups to counter those media impressions.

I’ve taken my shots.  Everyday I scan through the major Canadian editorial writers in Eastern Canada.  Often I write them, sometimes to pay them a compliment but also to defend farmer interests.  Last week I got a note from David Olive, a great business writer with the Toronto Star.  He had written an article several weeks ago about the fuel vs. fuel debate and was saying all the usual things about biofuel and its effect on food prices and world hunger.  The following are a couple of points I made to David Olive.

“I appreciate your balance with regard to the “the world food crisis.” You cannot feed an ethanol plant with rice, which is a staple in the third world.  Nonetheless, Canadian farmers don’t want a “cheap food policy” built on their back.  That in part is one reason why farmers pushed for biofuel.

Two years ago I MC’d the 10,000 farmer rally on Parliament Hill.  At that time farmers were decrying what we call Canada’s cheap food policy. I find it interesting now that “food isn’t cheap” that society seemingly wants to go back to those bad old days for Canadian grain and oilseed farmers.  Surely there is a balance, and Canadian agricultural policy is part of the problem.  However, that day with 10,000 farmers in front of me, I don’t think we could get any urban Canadian commentators to recognize that.  Now, that there seems to be a problem, my hope is it doesn’t back up on Canadian farms.”

In my mind the important thing to realize is farmers don’t want a cheap food policy built on our backs.  I have many good friends who work for the Ontario Ministry of Agriculture.  A few years ago when we were standing up at farm rallies across Ontario, they couldn’t get around on the fact regarding the Canadian cheap food policy.  However, now that food is more expensive, it seems like greater society looks at that as some type of crime.  My friends also seem to know now, what that cheap food policy was all about.  The following was part of David Olive’s
response to me.

“I might be naive on this but I can’t see a backlash developing in future against local producers; consumers grasp this is a global crisis with the skyrocketing price of a global commodity, crude oil, having a great deal to do with shortages and food-price inflation. And it’s global answers they want, not to punish the local farmer. Which is why a return to a cheap food policy that impoverishes farmers wouldn’t be popular with even urban consumers and would not fly at all with MPs, many of who rely on the farm vote. (Toronto Business writer David Olive)

I thought that to be a reasoned balance response from David Olive, surely many urban writers could take a lesson from him.

However, if it could be so easy?  It’s one thing for farmers to be debating urban opinion leaders but its another thing when agriculture fights agriculture.  I read with interest that a new coalition called the Alliance for Abundant Food and Energy which includes Monsanto, Dupont, ADM and John Deere is arguing that technological improvements can boost crop yields and ease the effect of biofuels on global food supplies.  At the same time companies like Tyson foods are calling for the end of ethanol subsidies.  It’s a fight, which will surely grow more intense as times goes on.

Nonetheless, we’ll see in the coming weeks if the “sky is indeed falling.”  Prices are lower and even lower prices should mollify some of the critics.  However, some won’t be content until we go back to the bad old days of $2 corn.  For grain farmers that means the fight continues. You never know who’ll choose to take a shot at you next.