“I’ve had to deal with payment limits on my farm,” said the caller from central Missouri, “and it’s going to happen to other growers with 2,500 acres of corn this year unless prices improve significantly. If Congress passes something like Grassley-Dorgan when it returns in September, it will happen with even lower acreages.
Southern cotton and rice producers have the idea that the typical Midwest corn and soybean producer farms 500 to 600 acres mostly by himself or with one hired hand. That’s not necessarily the case.
“There are lots of 2,000 and 3,000-acre farmers in this country,” said the producer, who called about a recent column suggesting Sen. Charles Grassley, the Iowa Republican who co-authored the Grassley-Dorgan amendment, talk to the folks at John Deere about trends in farm sizes.
The column quoted John Deere specialists as saying that their research shows many farming operations adding acres – the opposite of what Grassley seems to be implying in his rhetoric about saving farm programs for family farms.
“We’ve all been adding acres because we were told we had to become more efficient,” said the caller, who farms between Columbia and St. Louis. “Of course, we’ve also had to get bigger to afford the payments for the larger equipment.”
Cotton and rice farmers will still feel the sting of payment limits faster than Midwest growers if Grassley-Dorgan is passed. Some studies show that the Grassley-Dorgan $275,000 payment limit for a farmer and spouse would hit rice growers starting with as few as 480 acres.
For cotton farmers, the break point varies from region to region. Growers in some areas would stop receiving marketing loans and fixed and counter-cyclical payments with as few as 875 acres.
But it’s interesting that more Midwest farmers could see their farm program benefits reduced than the national media seems to think.
“I think more Iowa farmers do support tighter payment limits than those in other states,” the caller said. “But there are plenty of larger farmers in Iowa and the surrounding states.”
During the farm bill debate, Sen. Blanche Lincoln, D-Ark., and others said that if Midwest farmers didn’t have payment limit problems now they would if Grassley-Dorgan became law.
Facing reduced farm program payments for cotton and rice, she argued, Southern growers would opt for cheaper crops of corn and soybeans. As the prices of those crops fell, loan deficiency payments would increase, pushing corn and soybean farmers closer to the new payment limit levels.
Based on conversations with farmers and farm supply dealers, Southern growers may be planting more corn anyway if they continue to experience problems with low soybean yields and frustrating cotton prices
These are uneasy times no matter what region you’re from. With each report that Grassley-Dorgan will be introduced or that members are eyeing the farm bill for disaster assistance funding, more farmers are wondering if they will ever see all of the benefits many of them fought so hard to get.