(January 6, 2009) - No matter where one turns there is news about the economic crisis. What was once thought to be an event confined to some bad mortgages has now engulfed most of the world.
Japan is in crisis, Toyota has announced its first quarterly loss in seven decades; China is wondering how to maintain its middle class now that export orders have slowed; and the US reels from one set of bad numbers, increasing unemployment figures, to another, an increase in the number of mortgage foreclosures.
So far farmers have escaped the worst of it. While crop prices are half of their mid-summer highs, they are still nearly double the farm gate prices of a few years ago. Some farmers got burned with advance purchases of fertilizer and seeds, while others saw their forward contracts of corn sales vanish as some ethanol plants went under, but overall crop agriculture is in a better position than it was in 1999 and 2000.
(January 5, 2009) - As we wrote last week's column offering some key concepts that we hope the new Secretary of Agriculture will keep in mind in developing agricultural policy, President-elect Barak Obama had not announced his choice for that office.
No sooner had we finished the column and sent it to press and he announced that he had chosen former Iowa Governor Tom Vilsack. We congratulate Governor Vilsack on his selection and hope that he will follow in the footsteps of other great Iowans who have served as Secretary of Agriculture: particularly Tama Jim Wilson, Henry Cantwell Wallace, and his son Henry Agard Wallace who developed the New Deal agricultural policy.
This week we are continuing with the "key concepts" theme. The focus in this column is on agricultural trade policy, especially as influenced by negotiations related to the World Trade Organization (WTO).
One of the key objectives of some trade negotiators is the elimination of agricultural subsidies.
(January 4, 2009) - If conventional leadership and bureaucratic competency had a face, it would look exactly like Thomas J. Vilsack: round as an apple pie, chin disappearing under sagging cheeks, graying (and amply present) hair.
President-elect Barack Obama's selection of Vilsack, the two-term (1998-2006) Iowa governor, to lead the U.S. Department of Agriculture is as safe and sound as betting an Illinois governor might be corrupt.
Vilsack's nomination also marks the third, non-farming Midwestern governor in row-first Nebraska's Johanns, then North Dakota's Shafer-to be secretary of agriculture. All are more bank managers than ag innovators.
Indeed, Vilsack is a trial lawyer by training who came to Iowa for love, then got into politics. My only encounter with him came on a sunny, 1997 September day when we both addressed an Iowa Farmers Union meeting. Vilsack was cruising for ag endorsements to boost his bid to succeed then-retiring Gov. For Life, Republican and farmer, Terry Branstad.
As Vilsack spoke, I asked his lone aide if the senator was running as an independent.
(December 29, 2008) - At the time of the writing of this column, the appointment of the new Secretary of Agriculture has not been announced. As the transition team goes about selecting the Secretary and as the Secretary approaches the development of agricultural policy, there are a few key concepts or considerations that we hope the new administration keeps in mind.
Food is different.
First, it touches the lives of every person in the world in a way that no other product does. We need to eat on a regular basis to maintain life itself.
Owning a television set, an automobile, or a pair of shoes may not be a moral imperative, but having access to food is. As a result, people react to food issues differently than other products. As former President Clinton recently said referring to the World Bank, the International Monetary Fund and his administration, "We blew it! We were wrong to believe that food was like some other product in international trade."
(December 16, 2008) - Over the years, we have noticed that stories that make sense on their face often lead to incorrect conclusions. Certainly it is true when it comes to agricultural policy making.
In the 1979 and 1980 crop years US corn exports hit a peak of 2.4 billion bushels, growing from a half a billion bushels just a decade earlier. As a result, many in the US began to take this growth pattern as the new norm. When exports fell in the early eighties, they began to cast about for an explanation.
One of the common explanations went like this: "High non-recourse loan rates keep the price of US commodities above the world price level allowing farmers in other countries to capture export markets that would otherwise go to US farmers. The solution to declining exports, therefore, must be to lower the loan rate (floor price) so US farmers can recapture market share in corn exports."
The story sounds logical. After all, who hasn't gone from one store to another in search of a lower price on a major purchase?
But does the same logic apply in this case? What does the story say about our expectations of others?
If we lower our floor price, will farmers in other countries back off and cede the markets to the US, or do they have the same need to stay in the market as US farmers?
(November 17, 2008) - The election is now over. Well, the majority of races in Minnesota have concluded, except the Minnesota Senate race, which is now headed toward a recount between Senator Norm Coleman, and Al Franken.
The number of votes that separate the two candidates keeps fluctuating as individual counties go over their results one more time. The final election results will be reported by Tuesday, November 18th, and then the individual ballot recount can begin, which itself could take weeks.
In 1989, I was an observer in a State House recount, and it was well-run, by the local officials, as well as by the Minnesota Secretary of State's office. Minnesota is one of the few states that have both an electronic, and paper trail, to make sure that the integrity of each ballot is kept, and as the voter intended.