News last update:6 Aug 2012

US farmers see one of the best years ever

Rural communities profit from the sky-high prices for corn, soybeans and wheat, and a jump in the value of farmland across the US heartland, which have boosted the fortunes of farmers this year.

The success on the farm comes at a time when Congress is writing a $286 billion farm bill that includes a first-ever crop revenue guarantee program. Last Friday, the Senate passed its version of a farm program that would guarantee revenue for grain, cotton and soybean growers starting in 2010.

The House passed a similar bill in July and a final House-Senate version of the bill could be sent to the White House by the end of January. However, the Bush administration has threatened to veto the bill.

Rising prices for grain are expected to push income from the country's two million farms to a record $87.5 billion this year, up about 48% from 2006, according to a US Agriculture Department forecast. The average household income - from farm and off-farm sources - of principal farm operators is forecasted to reach$83,622 in 2007 (up 7.7%).

Demand for corn
A key factor is global demand for corn, for food, feed and a raw material for ethanol. Corn prices, at $4 a bushel or more, are up more than 50% from two years ago.
Soybeans, another key food and feed crop, are commanding more than $11 a bushel, levels last seen in 1973. And wheat prices pushed past $10 a bushel this year for the first time in history, double levels of a year ago.

Support still needed
Still, US farmers say they need the government support, which also provides for land conservation, rural development programs and affordable food. Some wheat farmers in parts of Kansas, Oklahoma and elsewhere saw their crops die off due to a late spring freeze followed by summer drought this year. The high prices mean little to them, except chances lost.

As well, many farmers are quick to point out that alongside the rising grain prices, the costs of growing the grain - fertilizer, fuel and seed costs - also have risen sharply and sometimes at a faster pace than prices for the crops.

Across rural America, farmers are using their higher incomes to pay off existing loans, invest in new equipment, and buy more land, according to economists, giving a boost to their communities.

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