Farm woes

A few days before Longshoremen began a Sept. 30 strike to close U.S. ports on the east coast and Gulf, the American Farm Bureau warned that the action would cripple American agriculture. The farm bill ($1 trillion funding for the Department of Agriculture ) was set to expire on the day of the strike.

“A port strike would create significant backlogs of exports, denying farmers access to higher prices in the world market,” the Farm Bureau said in a statement. This could lead to oversupply, a crash in commodity prices, continued erosion of farm profits. This, as farmers face rising operating costs and supply chain shifts.

The strike ended Oct. 3. Congress punted on a new farm bill, extending the old one. The plight of agriculture and the nerves of consumers and business managers were left for another day..

Strike worries were focused chiefly on the hit from a massive trade shutdown when inflation is already a worry. Persistent wage inflation is a concern; dock workers managed a 62 percent pay increase (to $63 hourly for seasoned workers…).

And agriculture? Last year more than 70 percent of farm exports, worth $122 billion, moved through ocean ports. The farmer sees less of that money each year, the reasons a tangle of complications. This is no comfort to the farmer who must sell cattle for less than their feeding expense, or with corn and wheat at prices down 30 percent in two years. Farm income continues to slide beneath break-even. And it’s dark news for Kansans who realize that the state’s chief industry is in a decline for which all may suffer.

What’s happened?

Consumers have balked because food prices seem too high. Fingers are pointed in every direction, some not politely.

At least half the cost of a steak is accounted in labor, processing, freight and packaging. Meat packer costs are up. Wages are up all along the line, as the longshoremen have shown. Inflation multiplied by each transaction continues to take its toll. While the price of a critter (or a bushel of grain) may go down, the price of the T-bone or a bread loaf is kept high by these other inflationary factors.

Another component is the import of foreign food to compete with the domestic product. Although imports are a small percentage of our domestic production, they may add insult to injury. At the same time, thanks to some foreign restrictions (Canada and Europe, for example), our exports are subject to occasional limits; this is little help for a glutted market.

In similar crises in the past, the government has proposed to buy beef for school lunches, restrict imports if it can, and provide emergency loans for strapped farmers and ranchers.

These days, Congress can’t even manage a farm bill, which in reality is a food bill. Roughly 75 percent of the measure supports an array of programs to battle food insecurity, including food stamps; crop insurance, subsidies and price supports are available for farmers when prices are low.

These measures may help but they are no cure. Inflation is like cancer chewing at the flesh and bone of an economy. The government’s surgery and econo-therapy appear to have at least stemmed this affliction, but the usual laws of supply and demand remain scrambled. Given our impotent Congress, reasonable answers and better health remain elusive targets